There’s both a magic and a mystery to negotiating winning deals. You’re in charge of the magic. The mystery is that sometimes you do everything right, and it still doesn’t happen.
As an executive and entrepreneur, I led or participated in negotiations in an enormous number of agreements in sports, entertainment, new media and real estate. Whether you’re negotiating against formidable competition to acquire an NBA franchise like the Golden State Warriors, or a storied organization like the Los Angeles Dodgers, or a global entertainment enterprise like Dick Clark Productions, or hiring new executives, working out arrangements for partnerships, or negotiating your own employee contract, the do’s and don’ts of the process are strikingly similar.
Know exactly the outcome you want. You must describe it, write the script, and say it out loud so it’s clear to anyone on a foggy night at 60 miles an hour, or don’t go in the room. If there are others on your team, make sure there’s complete alignment on this goal. There may be different roads to Rome, so to speak, but there’s still only one Rome. Know what elements constitute what you must actually get for your win. Have a menu of concessions of items that might be “what’s in it for them” in this deal for bargaining chips. Now get yourself in state. Completely vision the outcome like a great athlete or performer. Audition yourself. Look in the mirror and articulate your proposition until you own it so your authenticity shines through.
Do Know Your Counterparts
Do your emotional homework. Gather the psychological insights about the individuals with whom you’re negotiating before you get them in the room – or get them on the phone or connect with them digitally. The more you know about how they operate, their hopes, fears, and pain thresholds, the better you’ll be able to navigate the process. Know which environment they’d be most comfortable in and provide it. And, most importantly, know “what’s in it for them.” The key is knowing not what they’d like, but what they must have. If you can’t give them what they must have, the negotiation will fail and you shouldn’t be in the room regardless of the worthiness of your offering.
Do Focus On Being Allies Rather Than Adversaries
If you get what you want and they get what they want, the emotional quotient of the transaction and its halo effect will be invaluable to the success of the enterprise. There may be pain and discomfort in navigating the challenges of getting “there,” but if you can focus the parties on being allies rather than just adversaries so that the results are mutually beneficial, then the purpose of the deal will have a better chance of succeeding. The beauty of this is that if in the negotiation you can’t conclude a deal that is satisfactory to you or the other party, this process itself can yield a positive relationship for later interactions.
In a negotiation itself, you must empathetically listen. You must not just hear their point of view, but get it – fully understand what it’s about so they know you’ve got it. Have acute sensitivity to as much of what they’re not saying as to what they are saying and what that might mean. Be prepared to drop your script and be spontaneous. By talking too much and listening too little, you’re putting yourself at a great disadvantage. Prepare ferociously, but deliver spontaneously.
Don’t Get Emotional
Check your ego at the door and focus on the task at hand. Take nothing personally. If you’re uncomfortable with a response, my trick is to say out loud, “Mmm, that’s interesting, let me think about it.” Give yourself a chance to recalibrate and respond.
Don’t Overestimate Your Counterparts Or Underestimate Yourself
If you enter a negotiation thinking they hold all the cards, then you’re giving your counterparts psychological advantage that could be devastating to your success. Know what your value proposition is before negotiation takes place and “pride it, don’t hide it.” If it’s not going to really add value to them, don’t waste their time. They’ll likely remember that experience and not be receptive to another meeting in the future when you may have something new to offer.
Don’t Think “No” Means “No”
Be dyslexic and think “no” means “on.” “No” is merely your first step to get “yes.” Nothing is as fixed or unchangeable as your counterpart may want you to believe. Don’t be intimidated by this “no” technique. Asking questions around it can help you align your offering with the “what’s in it for them.” Be ambidextrous. With this unique information you can focus on other benefits of your offering to capture their attention and intention.
Don’t Have Tunnel Vision
Remember this first encounter may not deliver the intended results, but could deliver the relationship. On individual points, know when to hold ‘em and when to fold ‘em. Being passionate doesn’t mean you can’t be flexible.
Don’t Jump Right Into It
Build momentum. All the points taken together may seem insurmountable to accomplish at the outset, but if you can get some mutual wins under your belt, it will create the magic ‘mo (momentum) to help yield an overall agreement.
The magic to making winning deals is not sleight of hand or an illusion or a hidden rabbit. It’s learning the technique and practicing and practicing. The mystery is that as good as you get, there still is no guarantee.