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Secrets of successful business negotiation

Secrets of successful business negotiation

If you’re in deep trouble, the person you want on your side isn’t some real-life Jack Bauer; it’s Chris Voss. He’s been trained in negotiation by Scotland Yard, Harvard University and the FBI, where he was a negotiator from 1992 until 2007, when he retired from his position as the bureau’s lead international kidnapping negotiator. He had a key role in creating and teaching the FBI’s national negotiation course and was responsible for recruiting, training and leading its 90-person corps of emergency negotiators.

Voss has taught business negotiation at Harvard and is currently doing the same at Georgetown University’s McDonough School of Business. He is head of the Black Swan Group, a firm that specializes in business and security negotiations.

Voss and other negotiation experts say many of the same principles apply when you’re negotiating a contract or business agreement of any sort, whether you’re dealing with customers or co-workers. Here he shares the secrets of effective negotiation.

CSO: What is the key thing to know before starting a negotiation?

Chris Voss: You want to use it to gather information. You need to find out everything you possibly can through the negotiation process. You’ve got to take all of your assumptions and test them. That’s why I don’t even call the assumptions “assumptions” any more. I call them a hypothesis, because that requires you to test it.

Also see the companion article “Seven essential business negotiation skills”
Now, there’s nothing wrong with making assumptions. The problem with assumptions is people never test them. For instance, they just assume the other person has the same beliefs they do. If you start from there, then there’s always going to be things you believe to be true about the other person which are slightly off. If that accumulates on you, then it’ll be like building a foundation that’s out of line—you know eventually everything’s going to fall. So your first rule is find out what their assumptions are.

The way to do that is be credible, treat the other side with respect and be patient. If you do those things, then that enables you to build a relationship. It lets the other side feel comfortable because you’re credible, you’re trustworthy, you’re respectful. You will help them discover what the problems really are and what the answers really are.

A negotiation is really a discovery process for both sides. That’s one of the reasons that really smart people have trouble being negotiators—they’re so smart they think they don’t have anything to discover.

I have one minute before a negotiation starts and I’m clueless. Give me something I can use.

One of the most effective tools in negotiation is the open-ended question. That’s a question that the other side can respond to but that has no fixed answer. The secret to gaining the upper hand in negotiations is giving the other side the illusion of control. And that’s exactly what an open-ended question does. It makes people feel powerful and in charge, and they have no idea how constrained and bound they are by it. You really frame the conversation for them, but they feel very powerful.

Here’s an example: One time there was a kidnapping of a drug dealer’s girlfriend in Pittsburgh. And for whatever reason, this drug dealer came to the FBI for help, which kind of seems contrary to his best interests, but he did. So the agents were working with him and coaching him, trying to get his girlfriend back. There was a struggle over the issue of proof of life, whether or not the girlfriend was alive. At that time, in kidnapping, what we always used for proof of life was something like, “What was the name of the girlfriend’s teddy bear when she was a little girl?” You know, your typical computer security question.

That seems to the listener like an open-ended question, but it actually has a very specific answer. One of the problems with that particular type of question was that at the time, it had sort of become a signature of law enforcement in the kidnapping world. When a family starts asking a question of that type, there’s a pretty good chance that they’re being coached by the cops, which makes kidnappers very nervous.

But in this kidnapping, this unsophisticated drug dealer hadn’t had the opportunity to be coached up to be sophisticated and ask the right proof-of-life question, so instead he asked the kidnapper, “Hey, dog, how do I know she’s all right?” Which is a much broader open-ended question and it’s actually the perfect opening question. The kidnapper just hesitated and stopped, and his tone of voice changed; he was completely taken aback. And he said “Well, I’ll put her on the phone.” And I thought, “Wow, that unsophisticated drug dealer just pulled off a phenomenal victory in the negotiation.” To get the kidnapper to volunteer to put the victim on the phone is massively huge.

Whether it’s kidnapping or whether it’s a business negotiation, an open-ended question forces the other side to take an honest look at you and answer your question.

I actually didn’t appreciate the power of the open-ended question until I ran across a business book called Start with No, by Jim Camp. I already knew about open-ended questions, but Camp has a great chapter in that book that really lays out the power of open-ended questions. It woke me back up to how effective they could be. It got me wondering if it was possible to take those business-negotiation skills and make use of them in what we did.

Are there things a CSO can do to prepare for a possible kidnappingor other type of security negotiation? What sort of plans should be in place?

You want to know which U.S. government agencies you need to deal with and if they have any experience with negotiating this sort of thing. A lot of them don’t, and they can give you terrible advice. At the same time, you need to be totally transparent with the government so you don’t get into trouble with the Foreign Corrupt Practices Act when dealing with things like ransom.

Also see “How to act if you’re kidnapped”

So what made you go from hostage negotiator to business negotiator?

It started one time after we had a case that hadn’t gone particularly well. I was in the process of searching for answers to try to figure out if we could do better. One of the first places I went to was Harvard, because I wanted to start looking outside of the normal hostage-negotiation community for ideas.

I went to a Harvard Executive Education class that focused on dealing with difficult negotiators and negotiation for senior executives. The instructor, Bob Bordone [director of Harvard’s negotiation and mediation program], stood up, and the first words out of his mouth were, “Active listening is a stealth weapon of effective negotiation.”

They turned out to be very big believers in active listening. That showed me they knew what they were talking about. That’s the cornerstone of hostage negotiation. And it was the main basis of the class they were teaching. I had written the active listening deck for hostage negotiators at the bureau, and when I heard Bob say that, I knew I had to put that quote in the very first slide.

It really intrigued me, because I’d discovered somebody outside of the hostage-negotiating world whose thinking was along the same lines as mine. It made me want to learn more.

What is active listening?

Active listening means listening to the person you’re negotiating with to find out what’s driving them, what’s important to them, what’s motivating them. This way, you’re really fleshing out where they’re coming from in a three-dimensional way. A lot of times, the person you’re talking with isn’t completely aware of it themselves. There are things they’re expressing indirectly.

Active listening is a bunch of relatively simple skills. One is asking questions to clarify what the other person said. These are questions like, “How many&?” or, “What did you feel?” That gives us more information and it lets the other person know we are going to work with them and want to understand them.

What else?

There’s paraphrasing. That’s saying back to the other person, in your own words, what you think he just said. It means repeating back in a succinct manner. That’s really useful in trying to understand what the other person means—instead of mind reading.

Paraphrasing really helps you build that trust. The other person gets to hear how their communication was received and whether or not it has been heard correctly. You ask questions that start with, “Let me see if I understand,” or, “Am I right in thinking.”

That lets them tell you stuff, because they’ll want to give you more details about something you left out or they don’t think you got right. You can get more information and they get the feeling that you really want to understand where they’re coming from.

Also see “How to change people’s minds”
There’s also something called emotion labeling. That’s reflecting on the emotion of or what’s really implied by what someone is saying.

So if someone sounds angry, you have to look at the real question, which is, Why are they angry? What’s driving them or what’s driving their reaction? Anger is the result of something else. It’s the result of frustration and it’s the result of disappointment, it’s the result of a failure of some sort. So when you hear that somebody’s angry, you have to begin to think, “All right, there’s a failure here someplace, there’s a frustration here, there’s a fear of loss.” So you know to ask questions that show you understand their anger and want to know more about it.

Your job as a negotiator is to help them feel safe enough to tell you what that problem truly is, to really expose themselves. And that’s a dangerous thing to do in business negotiations because, many times, if business negotiators lay their cards on the table and truly expose themselves, they’ve opened themselves up to really being taken to the cleaners in a negotiation. So you’ve got to earn that position by building a good relationship in the negotiation, and by being credible and being trustworthy.

But how did all this get you into business negotiating?

After talking with Bordone, I knew I wanted to study with them some more. So I talked them into letting me come to their winter negotiation workshop. It’s the same negotiation course that they teach during the semesters, but it’s an all-day, every-day course over like a week. I initially went up there thinking hostage negotiation was different than business negotiation.

I thought maybe it would be a more refined and gentlemanly endeavor. I looked at hostage negotiation as really sort of like bare-knuckle brawling—and in many cases, if it’s a kidnapping, over a ransom.

In an international kidnapping, you really use the negotiation process to just beat the kidnappers into submission. Part of the reason for that is that if a ransom ultimately gets paid, it means you get the victim back. You also use the process to try to create opportunities for the victim to either escape or be rescued.

The other thing is, you use the process in an international kidnapping to gather as much evidence as possible—by taping the negotiations for example. In many cases, the evidence gathered in negotiations is the only evidence you get.

Sometimes that pays off big. We had a kidnapping in Trinidad and the authorities picked up the guy we suspected did it. They were pretty sure that it was him on the tape, but they weren’t completely sure. And the tape was the only evidence. So they played the tape for the kidnapper, and they just sat there and stared at him. And he said, “OK, that’s me.” Which gave them the confession they needed because it was their only chance of getting him. He was an idiot.

So I thought that business negotiation would be really different than that.

I went through the course with my bare-knuckles approach and, in all the bargaining simulations, I pretty much slaughtered the people on the other side. Then, on the very last day, we were given our most complicated exercise. It was a multi-party, multi-issue exercise. During the review of that, I realized that it was all the same thing. It was just that the stakes were different. I went through that course in 2006, and that was about the time that I was starting to think about retirement anyway. It made me think, “This is the direction that I want to go in.”

It’s interesting that you say that you want to beat them into submission, but you also need to establish trust.

That’s a good observation.

Having done negotiations where someone’s life is at stake, does it ever irritate you when people are treating a business deal as if it’s a life-or-death thing?

Not really. I understand it’s the most important thing going on with them right now. It makes sense that it feels intense to them.

You’ve got a unique set of skills here. I’m guessing you always get what you want when you buy a car.

Pretty much. Except when I went to get my son a car. Then I had this emotional stake of wanting to do good by my son and maybe wanting to show him how good I was. I had an agenda that got in the way of all my active listening. The sales guy was in charge. He’d ask a question and just sit there, silent, waiting for me to answer. When we drove away I was like, “Son of a [gun]! He got me.”

For many of us, the most regular negotiation we face is who has to do the dishes after dinner. So in your house, who usually winds up doing the dishes?

(laughs) Me.

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