Two Keys to a Successful Negotiation

“So it is said that if you know your enemies and know yourself, you can win a hundred battles without a single loss.
If you only know yourself, but not your opponent, you may win or may lose.
If you know neither yourself nor your enemy, you will always endanger yourself.”

“The Art of War” by Sun Tzu

“The Art of War” by Sun Tzu may be more than 2,000 years old, but that Chinese general knew a lot about the art of negotiation. I particularly like this quote as it contains one of my keys to a successful negotiation: educating myself as much as possible about my opponent.

I negotiate constantly. To be successful as a turnaround authority, I have to know how to negotiate with CEOs, bankers, employees, union workers, vendors, lawyers and emotional relatives.

When I’m involved in a tough negotiation I need to be prepared. Part of that preparation involves finding out as much as possible about the motivations of my opponent for that particular deal.

Let’s say I’m talking to a lender about settling an outstanding balance my client owes. Before I negotiate I’ll talk to my client to find out all the details on the outstanding balance and what he can afford to pay.

Then I try to assess what the needs of that lender are. Does he need to get this loan off his books quickly? Has he been trying to collect for a long time and he has a bad case of lender fatigue? Or maybe he’s new in his department and is trying to build a reputation as a tough negotiator.

I enter into negotiations with as much knowledge as I can and then as I began negotiations, try to determine more about what is driving the other person. Is it money, timing, company reputation?

While I consider myself an aggressive negotiator, I also negotiate in what I consider a positive and open way. I don’t go around behind the parties’ backs to try to undermine or manipulate the process by currying favor with the senior management or others involved in making decisions. I don’t make any implied promises on behalf of the companies I work for that I know they don’t plan to honor. As Otto Von Bismarck said, “When a man says that he approves something in principal, it means he hasn’t the slightest intention of putting it in practice.”

That is the second key to what I consider a successful negotiation: to come up with an acceptable deal for both parties. When possible, I try to follow the advice J. Paul Getty’s father gave him. “My father said, ‘You must never try to make all the money that’s in a deal. Let the other fellow make some money too, because if you have a reputation for always making all the money, you won’t have many deals.’”

Sun Tzu covered that topic in “The Art of War” as well, in a more poetic fashion. “Build your opponent a golden bridge to retreat across.”

For more business advice, including a story of how creative negotiation involving a $3,000 mobile office saved a $15 million deal, please check out my new book, “How Not to Hire a Guy Like Me.”

 

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