I'm entering the point of my career where I am increasingly in charge of negotiation. Looking for advice from those that consider themselves very good at negotiation. I specifically work in real estate acquisitions, but negotiation skills are negotiation skills.
I read the Chris Voss book which was good and actually took his Master Class (kind high level but more practical than the book) and his classroom session pack included with Master Class which I found to be amazing (most of MC is junk but this was filled with a ton of practical stuff). His whole shtick is to get the person on your side through tactical empathy by using a few different techniques (mirroring, labeling "it sounds like", using what/how questions rather than why, accusation audits, summaries, and prob some others). I'm also going through 48 laws of power, but not sure how practical that will be.
So, those that are good negotiators.
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Why do you think you are good?
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What separates you from others?
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What did you do to get there?
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What advice do you have?
Negotiate about what?
Just asking generally. Maybe it's setting an acquisition price/structure, hammering out PSA items, agreeing on fees, etc. I excluded salary because there is a ton of info on that and it's not particularly relevant for me.
Most people in these types of positions have a general philosophy and strategy that is universal to all types of negotiation.
Oh ok cool
I have been trained by two industrial psychologists early in my career - the nuggets they've shared with me helped me a lot in both my professional and personal life. Best to figure out a person's innate behavior. Their innate behavior and set of biases often appears when that person is under stress or is tired where they're not engaging in their learned versaltitilty. Majority of people are unconsciously competent in their learned versatility of dealing with other people in order to get what they want. The best way to get what you want and deal with other people that may have a different innate behavior from you is becoming consciously competent in your skills in dealing with them so, if you're a driver talking to an analytical, you will need to slow down and ask questions to build rapport to make them feel comfortable and this will help you get what you want (negotiating); also analyticals are rarely wrong they like to take their time figuring out all the possible angles. For example, if you're dealing with an expressive, they like to be the center of attention so the best approach is stroking their ego but they're also very impulsive, brash people. Drivers like to be in control and make decisions quickly once their mind is set and move fast physically in curt moveouts (like nodding their head quickly when listening). Amiables are naturally empathetic and easily see everyone elses side before their own. The innate personalities are driver, analytical, amiable, and expressive. I am trying to find my notes on the topic but to get to the point, model their behavior and pay close attention to what they say and how they say it to help you figure them out. Practicing this stuff changed my life.
I've gotten to the point in my career where negotiating has become more important. A few quick suggestions: don't overcomplicate things. I see the nature of negotiating as "muitual problem solving". Buyer wants one thing. Seller wants another. A few good guiding posts:
- What is "market"? If you've done deals in the past, you have a good idea for where the goal posts are and what the extreme buyer and seller friendly positions are and what common comprimises are made and why.
- Anything that relates to numbers have implicit rationales behind them - negotiating an escrow? It's not just about what's market, but also what you are trying to solve for in terms of providing a buyer with protections.
- Planning - What positions can you take that are seller/buyer friendly (depending on which side you sit on)? Which chips can you put down that are reasonable asks that you can give on? What are things that are true deal breakers? And why? Also, pre-draft a purchase agreement early in the process so buyers know where you stand on all initial positions. Shows that you are serious, professional and organized. Also signals experience, preparation, and an appropriate level of transparency.
- Materiality - How important is this? Big deals sometimes get scuttled by small numbers because people are trying to "win". What can you give on?
- Solutions - Again, a bit of an experience topic, but what other solutions are there that can fix problems? Are there deal structures that can help bridge value gaps? Simple example: company's growth is tremendous (a good problem to have), but buyer doesn't want to pay all on day one. Can they increase equity component? Put together a reasonable earnout? Is someone having a heavy ask because they aren't comfortable? Is there a way to solve this through appropriate diligence vs. language in a legal document.
Business needs need to drive deals and give guidance to legal. If legal is driving your deal, you're dead.
Also, these are all short term. In the long term iterative sense, who you are and your reputation go a long way. All my clients and counterparts have liked working with me and genuinely like having me involved. My short term win is defined as a closed deal. My long term win is building a good reputation and relationships with people in the industry. Short term pays the bills. Long term builds a career.
Strategically, I can't stress the "mutual problem solving" approach enough. Good negotiation is give and take and ideally everyone walks away happy. A win at all costs tough/hardo mentality is a short term win, but the world is small and reputations matter. You would be surprised at how often I find parties on the other side looking to reconnect and work together because of my conduct during the process.
Tactically, a lot covered in TorontoMonkey's great post + Chris Voss has some good pointers, lots of little tricks. On a high level, I like to be VERY prepared. None of this shoot from the hip type shit, really having a game plan going in on (a) what outcomes I would like, (b) what are key priorities and dealbreakers, (c) points willing to concede on. I find the best approach is to be "solution oriented" or give off that vibe at least.
Materiality is one I've seen come up a lot. A point that may be important to the counterparty (i.e., a punitive debt covenant that a lender insists on) but isn't as important to you (because there's only a tiny probability that it's actually triggered), so you concede on it to make them feel like they "won," then pick your battles on the points that matter to you.
Try and expand the proverbial pie. In real estate it could be increasing certainty to close, for a job it might be taking non cash compensation. Try and understand what your counterpart is seeking and see if it can be accommodated in a mutually beneficial manner. Sometimes thought it is just a win-lose situation.
I'm a junior guy so don't have too much actual deal experience. What I have is having read quite a few negotiation and persuasion books.
IMO, the best book out there is "Starting with No" --- actually it's called "Never Split the Difference".
You only hear what someone truly thinks after they say "No". There are too many Yes people in this world and people are often reluctant to say what they want. I fall victim to this sometimes.
Fwiw, I'm also considered a master of the board game "I'm the boss"...although my buddies are often too watchful to give me many deals to win. I'm always like the 2nd after all deals close.
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