Trump-Style Negotiation: Powerful Strategies and Tactics for Mastering Every Deal by George H. Ross

www.WhatILearnFromReading.com

Trump-Style Negotiation: Powerful Strategies and Tactics for Mastering Every Deal

by

George H. Ross (Author)

Teerawat Issariyakul

Thursday, June 13, 2013

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Outline

Introduction

Begin with Yourself

The Other Side

Strategies, Tools, and Tactics

Wrap-up

“Skilled negotiators are easy to deal with, but

they get what they want.”

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Donald Trump

A successful businessman

Real estate business (e.g., 58-storey Trump Tower, NYC)

The Apprentice: “ You’re fired!”

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George H. RossA real estate lawyer

Trump’s advisor since 1970s

One of Trump's two advisors on The Apprentice

A lecturer at NYU: Real estate and negotiation

The author of the book!

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Why: Resource scarcity or Conflict of Interest

What is Negotiation?

“Negotiation is a process in which people learn to accept an available compromise as a satisfactory

substitute for that they thought they really wanted.”

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It’s not all about money. It can also be ego, prestige, recognition, and, most of all, satisfaction

Mindset

Negotiation is not science: You can’t quantify satisfaction

Winning is not everything

Continuity is important

What is Negotiation?

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Your Weapons Are

Words

Concessions

Actions: e.g.,

Being late for a meeting

Not returning a phone call

Cutting a meeting short

Scheduling conflicting schedule

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The Best Negotiator

is

…

Your Kid!

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Negotiation Strategies

I winYou lose

I winYou win

I lose, You lose

I loseYou win

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Trump-Style Negotiation

Focus on “Win-Win”

Long-term benefits

It’s not ALL about money

Protect your reputation

Be TOUGH but FAIR

“He [Ross]'s tough, firm but fair, a very brilliant lawyer, and I trust his judgment.”--Donald

trump

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Rule#1: There is no rule in negotiation

Rule#2: Lying and cheating is OK!

Rules of Negotiation

That’s doesn’t mean that you have to lie and cheat

You just have to be aware of them

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Begin With Yourself

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Begin With Yourself

Mindset

Hone Your Skill

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Why Do We Negotiate?

Money (Prime) and other benefits

Learn something new and gain experience

Build up reputation

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What Do You Want?

Focus on build trust and rapport

Find out:

Satisfaction: What both sides can live with

Constraints: e.g., time, authority, regulation

Information: Personality, education, knowledge, morality, style, etc.

“If you listen well, and are open-minded in your

discussion with the person on the other side, you will

broaden your knowledge. Everyone can learn something from everyone else. And, you will definitely be smarter going into your next negotiation, and

those that follows.”

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Prepare Yourself

Rapport means ‘relation marked by harmony, conformity, accord, or affinity.’

Mindset Skill Set

• Be nice• Build trust and rapport• Be skeptic• Make (not break) deals

• Gather information• Communications (Listen)• Creativity and Flexibility

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http://www.merriam-webster.com/dictionary/accord%5B2%5D

http://www.merriam-webster.com/dictionary/accord%5B2%5D

http://www.merriam-webster.com/dictionary/affinity

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Begin With Yourself

Mindset

Hone Your Skill

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Gathering Information

Information is power!

Hard and laborious, but worth doing

Information about

Both sides and the deal

E.g., Constraint, motivation, weakness (e.g., details, time)

“God is in the details”

Ludwig Mies van der Rohe

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http://en.wikipedia.org/wiki/Ludwig_Mies_van_der_Rohe

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Gathering Information

Yourself

Weakness: Admit it and find strategies to address it

Strength: Exploit it

People

Remember names and roles (e.g., Key man v.s. Messenger)

Ask politely when seeing a new face

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Knowledge

Actual Knowledge Apparent Knowledge

Nature

Benefit

Accomplished by

General Knowledge Appear to be ...

Support your position

Create credibility

Experience, Reliable source, Accuracy

Aura of legitimacy

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Aura of Legitimacy

People tend to believe in

What you show them, e.g., printed document, Signs like “Clearance sale”

Powerful/Knowledgable people, e.g., the president of the U.S., professors, buzz words

Principle of least effort

Use it and don’t be fooled by it

“People are inclined to give you the benefit of the

doubt until they have compelling proof to

contradict that belief.”

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Communication

“Seek first to understand, Then to be understood”

Steven R. Covey

Listen

Invite other to listen to you

Raise your voice to take control

Lower your voice forcing the other side to listen to you more carefully.

Learn to read body language: Voice, gesture, look at friends for approval

“Just hear me now. I think you are going to like my idea.”

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Flexibility and Creativity

Know where your line and the others’ line are.

Set out with multiple objectives ➠ More flexibility

Make wise concession:

Cash is only a part of it

Others are marketing budget, payment term, quality of project, delivery date, etc.

“You always have negotiation power, if you can force yourself to walk away from a deal, either

temporarily or permanently.”

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Be a Good SalespersonRapport: Relationship first

Enthusiasm: Fire up the other side

Showmanship: Dress well, Proof of Concept

Preparation:

Least Effort: People don’t like spending too much effort

Tenacity: 100 “no” before a “yes”

“People want to believe. They want to believe in you. They want to

believe in your company. And, your job is simply to give them the

opportunity to believe.”

Bill Murphy Jr.24


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The Other Side

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Human Nature

Envy

Ego

Fear

Nobility

Greed

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Greed

Invested time (and money) principle

Pride

Tendency not to change

Friends or foes forever

Envy

People like free stuff and exclusivity

Make a list of give-away and must-have items.

Dead dog on the table: Give unimportant items for important ones.

Fear

Superiority

Be dumb and make friends

Complexity

Nobility

Mutual exchange

Forgiveness

Greed


Pride



Envy




Fear

Superiority


Complexity

Nobility

Mutual exchange

Forgiveness

Human Nature

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Greed


Pride



Envy




Fear

Superiority


Complexity

Nobility

Mutual exchange

Forgiveness

Greed


Pride



Envy




Fear

Superiority


Complexity

Nobility

Mutual exchange

Forgiveness

Human Nature

“I know I made a mistake. But if you

don’t help me out, it will cost my job.”

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Pride



Fear

Superiority


Complexity

Nobility

Mutual exchange

Forgiveness

Greed


Envy




Pride



Fear

Superiority


Complexity

Nobility

Mutual exchange

Forgiveness

Greed


Envy




Human Nature

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Nobility

Mutual exchange

Forgiveness

Fear

Superiority


Complexity

Envy




Pride



Greed


Nobility

Mutual exchange

Forgiveness

Fear

Superiority


Complexity

Envy




Pride



Greed


Human Nature

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Nobility

Mutual exchange

Forgiveness

Envy




Greed


Fear

Superiority


Complexity

Pride



Nobility

Mutual exchange

Forgiveness

Envy




Greed


Fear

Superiority


Complexity

Pride



Human Nature

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Envy




Greed


Nobility

Mutual exchange

Forgiveness

Pride



Fear

Superiority


Complexity

Envy




Greed


Nobility

Mutual exchange

Forgiveness

Pride



Fear

Superiority


Complexity

Human Nature

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Envy




Greed


Nobility

Mutual exchange

Forgiveness

Pride



Fear

Superiority


Complexity

Envy




Greed


Nobility

Mutual exchange

Forgiveness

Pride



Fear

Superiority


Complexity

Human NatureSIMPLE SOLUTIONS:

1. Split the difference

A buyer asks for $100

A seller wants $150

Difference = $50

Let’s settle at $125

2. Maybe later: Leave when the conversation get so heated

3. Third party: Let another person decide

4. Be creative and think outside the box

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Exploiting Human Nature

Be skeptical

Fundamental Rule: Do not accept anything for the face value.

When someone say “trust me”, be careful!

Stay away from dirty negotiation

“Don’t believe everything someone write or say. Listed

price is usually made to test the market. It is

much higher than actual price.”

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Difficult People: #1 Intimidator

Traits: Big, loud, higher status

Tactics: Scare the other side

Advice:

Play defend and stand your ground. If you succeed, this person will be nice to you

Establish rapport (perhaps after the meeting)

Let him think he’s winning

Use details

Be good with his subordinates

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Difficult People: #2 Know-It-All

Traits: Know a lot, Arrogant, Listen to no one

Problem: No communication

Advice:

Be humble

Do not confront him head-to-head

Get people on his side to help you

Do not give him new info. or tell him what to do because he won’t believe you anyway.

If you’d like to give info., just give what he’s already know.

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Difficult People: #3 Waffling

Traits: Undecisive

Problem: Never move forward

Advice:

Be slow and patient

Building up his confidence (e.g., compliment him)

Be stingy in concession

Don’t give too many choices

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Strategies

Documentation

Tactics

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POST

Know All

What to do to achieve

objectives

Resource allocation

Person

TacticsObjective

Strategy

Know all people and objectives,

what to do to achieve objective

Tactics = resource allocation

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Example Strategies

Enthusiasm

Good Cob, Bad Cob

Silent Notetakers

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About the Meeting: Before

Gather information

Prepare agenda

Expect the other sides’ reaction, and plan strategies

Ask yourself these questions:

What are you going to say?

How are you going to react to what the other side says?

What will you say if the talk come to a stand still?

What concession are you able/willing to make?

What do you expect from the other side?

Who will you be negotiating with and what motivate them?

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During the meeting

Create positive negotiation atmosphere; Let them know why your proposed solution is best for them.

Aim high and hold back your concession

After the meeting, IMMEDIATELY sit down with your team and

Prepare documentation (e.g., minutes)

Review the negotiation:

About the Meeting

New info. about people or the deal

Revised assumptions

Did you get what you want? Why? and Why not?

Is there any strategy to get what you want?

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Documentation

It’s boring. It’s hard. It’s IMPORTANT!

Reminder and Evidence

Control the document! ➠ Aura of Legitimacy

What documents?

Contract and Minutes

MoU and LoI

Deal books

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Contracts and Minutes

Put what you want

Leave out what you don’t like

The other side may not even read it.

It’s ok if they want revision

Send the minute to the other side for confirmation (by email or in the next meeting)

‘I’m so glad we’ve agreed on these items:

.....

If you disagree with this, please let me know

immediately.”

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MoU and LoI

Not a contract (i.e., non-binding)

Reminder of what’s been agreed

People tend to stick to MoU/LoI. Why?

Nobility

Invested time principle

Concise (2-3 pages)

Real decision maker signs the document

A template for drafting subsequent legal document

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Deal Books

Very powerful tools

1. General deal books:

• Record everything

• Eg., What, Who, When, Where, How (commun. means)

• Use it as a reference

2. Deal-specific deal books:

• One book for one deal

• Plan, Agenda, Strategies

• Issues classified by type (opened, agreed, pending, strategy to resolve)

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Deal Books

3.We-They List:

• The difference of both sides (e.g., constraint, authority, time)

• Show a part of it to the other side

4.Wish List:

• What we want and what they want

• What we can give

• Prioritized list

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Example TacticsTactics Countermeasure

#1: “You’ve gotta do better than that”(Until you hear “this is my absolute best deal.”)

“I offer you a very good price. Why do I have to do better than that?”

#2“That’s all I can do”(Do it like an apology)

Verify the line

#3: Nibbling(Do for concession as if it is a general practice)

- Put the price on every item- Give discount instead of free

#4: A Change of Pace(Work at your own pace)

Stay focused

#5: “Take it or Leave it”Change parameters and look for

alternatives.

#6: Force Revision(Revise the contract after it is signed)

Nothing you can do

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Control the Pace

Slow:

You need time to gather information

Do not accept anything right away

Be dubious and indecisive

Fast:

You don’t want the other side to do research

Stay focus; Verify everything the other side ask for

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Delay

Esp. when there are several people (e.g., large organization)

Invested time principle ➠ Drag the negotiation

Example usage

Pressure the other side (e.g., I’ll give you two days to finish or I’ll go somewhere else)

Verify (e.g., why two days? I allocate all the time for you. Isn’t that enough?)

Use delay as a concession (e.g., I can do it faster, but I need to put more people into work. Can you help me out with the extra expense?)

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Deadline

Not all deadline are equally important

Test all the deadline

Missing deadline v.s. Worse Deal ➠ Most deals are closed near the deadline

The worst deadline = imposed by your side

You also need to be aware that when a

negotiation fails, it is usually caused by people

on your side, not the other side.

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Deadlock

Both sides put their feet down

Initiating deadlock

To show your confidence and to test the confidence of the other side

To gain concession

To show people on your side that you are really on the same side

To change the pace of negotiation

Smile and be friendly when doing so

Always leave a way to come back

“Think it over. And, if you change your mind, call

me.”

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Deadlock

Big organization fears deadlock because every decision involves many departments.

Resolving deadlock

Move to other issues and come back later.

Offer small concession and ask the other side to do the same.

Go off the record and ask other people (who are not in the meeting) for help

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Get Tough Strategy

Put you foot down. Don’t make compromise.

Set the tone. Let the other side know that you can be tough too!

Don’t back down. You cannot afford weakness when using GTS.

Manage concession properly; Be reasonable

Don’t burn the bridge

Aim high

Don’t succumb to simple solution

Use deadline

Patience and Stingy

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Telephone

Bad for negotiation. If you want a ‘no’, use telephone.

Interruption is deadly, caz you are not ready.

Guidelines:People do not talk long on telephone

People believe most calls are important. They drop everything when they’re on the phone

No body language

Cannot show the document

Who’s on the other sides?

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Telephone

Be the caller.

Prepare a written agenda before you call

Prioritize them. Go through them one by one.

If someone calls you,

Ask to call back later

Otherwise, try one way communication. Do not make any deal.

Listen and make note. Only ask for clarification

Write a follow-up letter to confirm the info. in the conversation

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eMail

eMail leaves paper trails.

Make impression ➠ Spell check!!

Always provide sufficient information

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Wrap-up

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Dos and Don’ts

Dos Don’ts

Trust your instinct Talk about your weaknesses

Adapt your negotiation style Believe in bogus theory

Tell your team to say as little as possible

Use all the power you have

Aim high but be realisticWaste your time for

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TAKEAWAYS

1.Rapport and people, not benefits and the deal

2.Documentation

3.Use time and company policy as your weapons

4.Take calculated risk

5.Commit to gain concession

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Business

Trump-Style Negotiation: Powerful Strategies and Tactics for Mastering Every Deal by George H. Ross