Negotiations are a fundamental
part of business and of life in general.
When people sit down to negotiate a deal, whether
for a business or a house, some of their best and
worst characteristics come to the fore. There is a
greater focus on the art of negotiation due to our
45th president, who is believed to be the ultimate
dealmaker. His bestselling book, The Art of the
Deal, reveals some of his negotiating tactics, which
may very well be in play in the White House nowadays
in every aspect of managing the foreign policy
of the U.S.
I was once involved in the sale of a business
where the buyer was apparently most anxious to
do the deal. He liked the terms and especially the
fact that his son could grow the business. The seller,
on the other hand, was far more reluctant, still
hoping that his younger son would take it over. The
buyer volunteered a price for the business that, on
the surface, appeared to be beyond the business’
real value. The seller went even higher, hoping the
buyer would back away from the sale, and perhaps
in this way the business would not be sold.
What was so striking is that the buyer seemed to
broadcast his being so anxious to do the deal, while
the seller’s reservation was similarly apparent.
Contrast that with the obvious tactics of President
Trump. He seldom broadcasts his real intentions
and uses brinkmanship, a bit of twisting of the truth
(yes, he might say that he has another buyer ready
to pay double when he doesn’t) and, of course, persuasion
(“a deal like you’ve never seen before”).
There is a consensus among business
consultants that parties in negotiations
have to be ready to walk away from a deal,
even if they really would like the deal. If
they are not ready to walk away, chances
are that they will wind up with a less than-
Remember Trump’s walking out on
Kim Jong Un in Hanoi? It was designed
to simply set the stage for a third summit
and the possibility of a deal. The president
was simply conveying the message that he
would not hesitate to walk if he does not
like the terms. It was obvious that, similar
to the scenario I was involved in, this seller
(North Korea) wanted a deal. The sanctions
were suffocating them, and I am sure
that Trump’s promises of prosperity were
not lost on Kim Jong Un either.
One rule the experts counsel is to
always negotiate from strength, meaning,
do not advertise that you are desperate,
but that you in fact have options. Also,
never talk about how anxious you are to
sell. On the contrary, talk about how difficult
it is for you to sell.
Another Trumpian tactic is to establish
a good rapport with the “antagonist,”
like he did with China’s president, Xi Jinping. Even
as the trade war heats up, Trump maintains that he
has a great relationship with Xi. It’s much easier to
negotiate a deal when there is a warm “relationship”
prior to tough negotiations. It sets the right tone
when buyer and seller have a good rapport.
And it is always destructive to convey the impression
that you are out to get a bargain or whatever the
seller feels would be cheating him.
The art of negotiation is important at every level
of business. Whether you are an owner coming to
terms on a deal to sell or simply a buyer of office supplies,
knowing how to negotiate can make the difference
between success and failure.
One businessman who has been involved in myriad
deals notes: “People simply talk too much and do
not listen enough.” You’d be surprised how much better
the negotiations go if you simply listen and pick
up nuances that you wouldn’t otherwise know about.
The more the seller talks, the more information you
will gather towards successful negotiations.
The recent U.S.-China talks are an example of
negotiations that are not taking place on a level playing
field. The U.S. wants China to stop stealing its
technology, and China would like nothing more than
to keep the advantages it has had for decades. So the
strategy is to stall. Who knows? The Chinese may be
hoping to wait out the Trump presidency, even while it suffers, as does the U.S. Negotiating on a level playing field is the best kind of
negotiation, especially when both sides
feel that they got the better deal.
When the parties respect one another,
the chances are that they will reach a
fair deal for both sides. I have observed
negotiations that begin with each side
showering praise on the other. No one
likes to feel inferior to the negotiating
A good negotiator will always
attempt to make the negotiations head
toward a win-win situation. The buyer
and seller I was involved with were
obviously headed in a positive direction.
The seller wanted to retire and move on;
the buyer wanted to get into the field to
realize his vision of a broader empire.
What is truly important is to
research the other side. The more one
knows about the other party, the easier
the negotiations will be.
It is extremely comforting to a seller
to know that the buyer appreciates
what he is buying. I have seen this time
and again in family businesses, where
there has been a decision to sell. The
family is almost always extremely emotional
about selling a business that may
have been founded by grandparents or
great-grandparents. What they would
like to hear is that the buyer will somehow
maintain that legacy. Demonstrating
respect for such a heritage goes a
long way in reassuring the family that
the business is transiting to good hands.
Not everyone is fit for negotiations.
People with quick tempers should avoid
it. People who have little patience for
details may overlook an important
nuance of the sale. People who do not
have patience and are not prepared to
invest the time should not be negotiators,
whether they are buying pencils or
buying a business.
The term “the art of negotiation” is
exactly that. Knowing how to negotiate
is using common sense, but also appreciating
that there are two parties in
the deal. Win-win always works when