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Key Takeaways

  • Success in complex fields requires the ability to adapt skills and knowledge to diverse cultural and industrial landscapes, highlighting the value of versatility and global awareness.
  • Professional evolution often involves transitioning across different roles and industries, indicating that growth and expertise are fostered through diverse experiences rather than a linear career path.
  • Achieving outstanding results in any professional field demands thorough preparation, strategic planning, and setting ambitious goals, underscoring the importance of foresight and high aspirations.
  • The ability to persist through initial setbacks and creatively navigate challenges is crucial in achieving desired outcomes, emphasizing the value of resilience and innovation in problem-solving.
  • Viewing rejection not as a setback but as an opportunity for deeper engagement and growth suggests that true progress often comes from challenging situations.
  • Recognizing and adapting to the unique dynamics of various professional situations, such as crisis management versus regular business negotiations, is key to effective decision-making and relationship-building.
  • Core skills such as negotiation and communication hold universal relevance, transcending industry boundaries and playing a pivotal role in both professional success and personal relationships.
  • Emphasizing personal interests and activities alongside professional achievements reflects the importance of a well-rounded, balanced approach to life and career.

Executive Summary

Ladies and gentlemen, thanks for joining us on the NEGOTIATEx podcast. We are privileged to host Mike Inman on our show today. Mike is a renowned negotiation trainer and managing partner at Table Force. He is celebrated for his global expertise, having trained over 7,000 negotiators across six continents and more than 30 countries. 

His vast experience spans various industries like manufacturing, defense, airlines, technology, publishing, and hospitality. Mike has led negotiations for deals worth over $1 billion, leveraging his academic background from prestigious institutions like MIT, Harvard Business School, Kellogg School of Management, and USC.

Beyond his professional achievements, Mike enjoys family time, international travel, critical thinking exercises, and beach volleyball. With that said, let’s delve into the insights Mike shares from his impressive career in negotiation.

Mike’s Journey Through Sales, Purchasing, And Mastering Negotiations

Nolan sets the tone for the conversation by asking Mike to shed light on his career. Mike shares his professional journey from aerospace engineering to becoming a negotiation expert. Initially unable to find a job in engineering, Mike, influenced by his grandfather’s success in sales, started his career at Kenmar, a manufacturer’s rep agency. 

After realizing he was average in sales, Mike conducted a survey among his peers, discovering a common trait among successful salespeople: they had all worked in purchasing roles before transitioning to sales. This insight led him to pursue a role in purchasing at General Motors.

Mike highlights how his experience in sales helped him understand the buyer’s perspective in negotiations, giving him an edge in his new role. However, he soon realized that the aggressive negotiation tactics used at General Motors were not sustainable and could be damaging to suppliers. 

This prompted him to study negotiations more deeply, leading him through a career path that included roles at America West Airlines (now American Airlines), IAC Interactive Corp, and MGM Resorts International. 

He emphasizes that being a skilled negotiator is essential across various industries and can lead to both professional success and better relationships. His journey reflects his passion for negotiations and the desire to help others improve their skills in this area.

Mike’s Insights On Key Principles And Skills For Success In Negotiations

Next, Aram discusses the complexities of internal negotiations within organizations, acknowledging that aligning internal stakeholders can often be more challenging than external negotiations. He then prompts Mike to share his insights on the key turning points and essential skills for a successful negotiator.

In response, Mike outlines three foundational principles for exceptional negotiation:

#1 Effort 

Negotiators must be willing to put in the effort, not just issue ultimatums or take a passive stance. This involves being proactive, flexible, and accommodating, even in a global context where this might mean adjusting one’s schedule to accommodate different time zones.

#2 Planning 

Mike emphasizes the importance of having a solid negotiation plan. He counters the common misconception that negotiation is about improvisation, underscoring the necessity of preparation. 

Effective planning can vary in complexity, from a simple strategy that fits on the back of a business card to more elaborate, multi-page plans, depending on the organizational culture and the negotiation’s complexity.

#3 High Expectations 

The final principle Mike discusses is setting high expectations. He encourages negotiators to aim for the best possible deal, pushing beyond mere satisfactory agreements to strive for exceptional outcomes. This approach involves challenging both oneself and the counterpart to explore how a good deal can be transformed into a great one.

These principles, according to Mike, are vital in shaping a negotiator’s approach and are integral to achieving success in both the professional and personal realms of negotiation.

Navigating Beyond Initial Refusals For Optimal Price Agreements

In a similar vein, Aram delves into the concept of perseverance in negotiations, differentiating between a superficial effort (“the good old college try”) and true, deep perseverance. He asks Mike to elaborate on this, particularly in the context of price negotiations.

Mike explains that perseverance in negotiation, especially for sellers, goes beyond just asking for a desired price increase. He illustrates this with an example of a CEO instructing salespeople to aim for a 12% price increase from customers. In this scenario, a typical sales approach might be to simply request the 12% increase, often without a solid strategy, and accept the buyer’s refusal as final.

However, Mike argues that true perseverance involves not accepting a “no” from someone who isn’t authorized to give a final answer. A skilled negotiator should seek discussions with those who have the authority to agree to the increase, such as the buyer’s superiors or other relevant stakeholders. This approach involves engaging the buyer in the process and exploring creative solutions rather than bypassing them or breaking trust.

Aram and Mike further discuss the importance of exploring alternative avenues to achieve the desired outcome. This could involve negotiating different aspects like product specifications, volume, or contract length to create a deal that is equivalent to the desired 12% value increase. 

The key lies in finding mutually beneficial solutions and being persistent and creative in the negotiation process rather than simply accepting the first response.

Mike’s Insights On Leveraging Rejection For Greater Success

Moving on, Aram inquires about becoming comfortable with rejection and hearing “no” in negotiations. Mike mentions that fear of rejection is common and suggests that embracing “no” is crucial for successful negotiation.

He shares an anecdote from his time at IAC to illustrate the power of “no.” He recounts a negotiation with RR Donnelley, a major printing company, where he unexpectedly secured a $3 million rebate by leveraging information about their Six Sigma initiative. 

While his boss was thrilled with the quick concession, Mike reflects that an immediate “yes” made him question if he could have negotiated an even better deal. This experience taught him that a “no” can be an opening for deeper negotiation and may indicate that you’re pushing the boundaries effectively.

He advises the listeners to see “no” as a starting point rather than an endpoint. If you never hear “no,” it might mean you’re not asking for enough. Once one learns to be comfortable with rejection and uses it as a tool, one can explore more creative solutions and potentially achieve better outcomes. 

Mike’s story underlines the importance of perseverance and strategic thinking in negotiations, where initial resistance can lead to more fruitful discussions and better deals.

Distinguishing B2B Negotiations: Mike’s Comparison With Crisis Negotiation And The Role Of Emotional Intelligence

Nolan asks Mike to explain B2B (Business-to-Business) negotiation and how it differs from other types of negotiation. Mike begins by sharing an enlightening encounter he had with a retired crisis negotiator, which led him to explore the differences between crisis and business negotiations.

He outlines the following key differences:

#1 Emotional State 

In crisis negotiation, the person you’re negotiating with is typically in an irrational state, which requires a different approach compared to business negotiations, where participants are generally rational and strategic.

#2 Negotiation Training 

Crisis situations often involve individuals who haven’t been trained in negotiation, necessitating different techniques and tactics than those used in business negotiations where participants are more likely to be experienced or trained.

#3 Stakes And Relationship 

Crisis negotiations are typically high-stakes, dealing with life-and-death situations, and involve building a relationship quickly for a short-term goal. In contrast, B2B negotiations focus on long-term relationships and have different stakes, often revolving around financial and business objectives rather than immediate life-or-death outcomes.

Mike also discusses the role of emotional intelligence and authenticity in negotiations. He notes that in B2B negotiations, emotions do play a role, and how negotiators express these emotions can significantly impact the negotiation process. Authenticity is crucial; negotiators need to be true to their character. For instance, Mike uses his natural demeanor effectively in negotiations but also keeps a reminder to smile to maintain a positive and approachable atmosphere.

Thank you for listening!

Transcript

Nolan Martin : Hello and welcome to the NEGOTIATEx podcast. I'm your co-host and co-founder Nolan Martin, and with me as always, good friend, co-host, co-founder Aram Donigian. Aram, how are you doing today, sir?

Aram Donigian : I'm doing great, Nolan. It's good to see you as always. And let me go ahead and get to introducing our guest today. Folks, today we're joined by Mike Inman. He is a distinguished negotiation trainer and managing partner at Table Force known for his extensive global experience and expertise. He has trained over 7,000 negotiators across six continents. I'm going to guess that Antarctica is the one that might be missing.

Mike Inman : I'm looking for that client. Yes, I'll negotiate a great deal if I can get seven, absolutely.

AD : There you go. And more than 30 countries. His experience encompasses a wide range of industries including manufacturing, defense, airlines, technology publishing and gaming hospitality. Mike has personally led negotiations for over $1 billion in deals making him adept at presenting real world examples and in-depth analysis. His academic credentials are equally impressive, having studied at some of the world's leading institutions like MIT's, Sloan School of Management, Harvard Business School, Northwestern University's, Kellogg School of Management, and the University of Southern California.

His education background includes a focus on negotiations for executives, change management, finance and lean operations. In addition to a bachelor's degree in aerospace engineering from USC, which is obviously the natural lead up to becoming a world class negotiator.

Mike's professional journey includes significant roles at major corporations. He was the Head Of Global Procurement at MGM Resorts International, the senior vice President of procurement and production at IAC interactive core and the director of purchasing at American Airlines. He also held positions in purchasing and supply chain management and General Motors.

These roles have seen him responsible for over $2 billion in spend negotiating a variety of complex strategic deals. And outside his professional life, I can't believe you have any time for anything else. Mike enjoys spending time with his family, traveling internationally, engaging in critical thinking exercises and playing beach volleyball. Maybe we can find out if you were in the top gun in the volleyball beach volleyball scene or not.

MI : I was not, but that was definitely influential.

AD : Mike, thanks for joining us today. I can tell this is going to be a lot of fun.

MI : Yeah, I hope so. Thanks guys. Thanks for having me.

NM : Absolutely. So Mike, can you walk us through your journey from starting an aerospace engineering to becoming a negotiation expert?

Mike’s Professional Journey [3:17]

MI : Yeah, yeah, this is a fun one. So I started with a degree in engineering and I couldn't find a job as an engineer. I spent a lot of time on the beach playing volleyball and not enough time studying. So I wasn't at the top of my class engineering wise, and if I couldn't find a job as an engineer, my next favorite profession was to be in sales. My grandfather was in sales, he always had a nice new car, didn't work a lot of Fridays, played a lot of golf, the life of the salespeople.

So, I joined a company called Kenmar. Now, Kenmar is a manufacturer's rep agency. They're located in Detroit and they represent manufacturers from around the world selling in into Ford, Chrysler, General Motors, some fairly large sophisticated purchasing organizations. And I did that job for about three years before I realized that I was average and I didn't want to be average, nobody does.

So I decided as an engineer, I needed to get some data. So I developed a survey and I passed it out to all my peers and sales and the results came back. And I was really disappointed because the survey that I'd spent so much time creating and passing out, there was only one common data point that I could find across all these world-class sellers. And the common data point was this. They had all been in purchasing roles before they went into sales, and that did not make sense to me.

So went to my boss and I said, Hey, you know the survey? And he rolled his eyes. He said, oh, I've heard all about the survey. So do you know that everybody here has been in purchasing before they went into sales? And he looked at me and he said, duh, I could have told you that before the survey.

And I said, I said, no, not duh. Why is that so critical? And he said, Mike, it's because we understand the other side's sheet of paper. And I said, I have no idea what you're meaning. And he said, okay, let me explain. We understand when we have a relationship with the end user community, when we're specked in, when we've got relationships, when we have the only capacity or intellectual property or one of very few companies that actually produce the part.

And on those deals, we work to close 'em at high margin because that's what we're paid to do. And on the other side, we understand if we're the third or fourth or eighth bidder, we're just being brought along to create fear, uncertainty and doubt on the real preferred vendor. And on those deals, we're still polite, we're still professional, we're building a relationship for the future.

But he said, Mike, I've noticed you come in early and you stay late. And this was my technology use at the time. I had the fax machine programmed to dial my beeper so that I could hurry up and quote. He said, Mike, you're working really hard but you're not working really smart. And I said, yeah, you know what? It would be beneficial to know when I probably had the order and could focus on those deals and it would all be equally good to know when I didn't have the order so that I could lose fast and not chase my tail, spending a lot of time on it. Well, how do I know? And he said, well, you're a smart guy. Eight or 10 years in sales, you'll probably figure it out. Or I know a hiring manager over General Motors, they're hiring buyers right now.

If you'd like, I could get your resume in the stack. And I said, well, if I was a buyer, how long would it take me to figure out? And he said, A year or two tops, you've definitely figured out. And this little voice in my head said, that sounds efficient. Eight or 10 years in sales may be figured out one or two years in purchasing. Definitely figured out would you please make the phone call for me? So here's the Vice President of sales, takes his young protege and he gets me a job at General Motors. And now most people think that helped him because he got more inside information, but we actually put up a firewall where we would never negotiate against each other because of the formal relationship. He did it out of the kindness of his heart to help me because when I went in from sales working really hard but not working very smart into purchasing, my life changed.

And that's kind of what we'll talk about here. So my first, I'll say job experience, was negotiating with General Motors because I had been on the sales side, I understood the sales sheet of paper, so this is how it went. I would go to meetings, I'd collect specifications, I'd meet people, end user community, assemble it into a bid package, and then I'd send it out to all the suppliers and then I'd go play Mahjong and Solitaire. Those are the only games they'll us have at the time. Those were our apps.

So I'd go to meetings and stuff, don't do yourself that I'm not saying, but I kind of let the bids come in, let 'em stack up on my desk playing Mahjong and Solitaire. The due date would hit, I'm playing Mahjong and solitaire. Then after the due date, I'd get a phone call from a supplier and it would go like this in a high stressed voice.

They'd say, Hey Mike, we submitted our bid a few days ago and we were just wondering how do we look without even looking at the bid? I would just say, are you kidding me? You're way too high. Do better. Click back to Mahjong Salter. The next day I'd get a phone call from that same supplier and they'd say, Hey Mike, we sharpened the pencil. We talked to finance and you were right. We can take an 8% discount. We will give you an 8% discount. If we can have the order, how do we look? And I'd say, again, without looking at their quote, 8%, you got to be double digits if you're serious about this order. Or I would call a meeting with supplier. I had no intention of doing business with someone that was weak and desperate, a new entrant into the market, and I would abuse them in the negotiation.

Then I'd call a meeting with supplier that I really wanted to do business with, well, that preferred supplier. And I'd say, I've met with your competition. I've got all this stuff and if you can't beat this, you're going to lose this order. And I was really good at it. But here's the problem. As a negotiator, that abusive type of negotiating is not sustainable. General Motors drove hundreds if not thousands of suppliers out of business with those type of practices. And about six months after doing that, I woke up one day and I said, you know what? You're better than this. You just can't go beat people up for a living. So I decided to study negotiations, read books on negotiating, took classes on negotiating like the one I now teach. And from that point forward, my career went from a buyer to a manager to a director in the GM system.

I moved over to America West Airlines, which through acquisition is now American Airlines. I had all the indirect spend there. I moved to a company called IAC Interactive Corp where I was the head of procurement there. So we owned Expedia, hotels.com, Ticketmaster, Home Shopping Network, Match, industry leading companies. My job there was to get all the heads of purchasing to negotiate internally so that we could then go negotiate with our suppliers with one voice, kind of get that aggregation of spend.

And my last job before joining Table Force was with MGM Resorts International. So it's 10 strip properties, 50,000 hotel rooms, global company. I tell that story to people because the negotiations is the thread that weaves through them all, whether it's manufacturing, hospitality, direct, indirect, if you're a great negotiator, you can have success no matter what company, what culture, what country you operate in. And that's what my passion for. It hasn't come across already. Shame on me. I want people to light bulb to go off that they can just be a better negotiator. They can have better results and have better relationships.

AD : And as you listed that out, I'm also thinking about the internal alignment. That's a negotiation before we go do externally, and I'm sure we'll get to that, I want, I really want to discuss because that's something that people often find more difficult than the external is getting that internal alignment. Well, we'll get there.

Listen, as you shifted from this abusive, and I loved how you laid it out, I was, where's he going here? Is he going to tell our listeners, Hey, the way you do this is play a lot of video games and ignore and beat 'em over the head. So as you think about the shifts you've made in terms of key turning points in your own mindset thinking, the behaviors that you find critical to being a successful negotiator, what are those skills? What do you think is the key things that negotiators to be successful need to be focused on in developing?

Three Pillars of Exceptional Negotiation: Effort, Planning, and High Expectations [11:24]

MI : Yeah, that's a great question. I think we've got three foundational principles and I think they're key to being a great negotiator. You got to be willing to try to negotiate to put the effort in, not just say, do better. You've got competition from the buy side and as a seller, not just say, well, we've got the best product in town. Here's our offer. Take it or leave it to be able to say, you know what? I'm willing to do better. If you can do better to say, listen, we're not in agreement right now, but I want to get to yes. How do we do that?

Sometimes you got to come in early. Sometimes especially in this global world we live in, you got to take a meeting. My calendar is set up where I can take meetings on my Sunday night so that my counterparts in Australia can have it easy to meet with me. Now I take other liberties and other time off, but to be flexible with the other side. So be willing to put the effort in to try second to actually have a good negotiation plan.

So many people think that negotiations is about winging it and be an entrepreneurial. They see it on TV, they see it in the movies and they're like, oh, that was really sharp. There's a lot of planning that goes in and it can be boring and it can be frustrating, but it's that old saying, those who plan better, do better. And to know how to have a negotiation plan, and it does not have to be complicated.

We've got one planning tool that can be done on the back of a business card, and then we've got a one pager electronically. Now we have one client who's a six Sigma global manufacturing operations, galore approval processes. They took our one pager and they made it a six pager. Now that's a lot of planning and that's a lot of frustration on a lot of people's part, but that's their culture.

Every moment that you put into planning is going to produce a return on investment in that negotiation. So to plan and then the third thing we teach is we call it raise the bar. Have high expectations of yourself, expect that you're going to get a better deal than anybody else on the planet and maybe you won't, but if you try to get that better deal than anybody else on the planet, you just might fall short and still wind up with a great deal. So to challenge the other side to say, Hey, this is a good deal, but I'm looking for a great deal. How can we do better? So those three things are kind of fundamental to everything that I do as a negotiator.

AD : Yeah, those really resonate, don't they? Nolan? Absolutely. With some of the mindset things we think about. Can we dig into just two? I know we've got a great lot of questions to go through with you, Mike, but if you said try, we kind of joked before we started to record this episode about just the technology and kind of persevering. Can you talk the difference between the good old, give it the good old college try or whatever, versus really deep perseverance on behalf of a negotiator and what that means to you?

Navigating Price Negotiations: Strategy, Persistence, and Creative Solutions [14:10]

MI : Sure. So I see this a lot with sellers for the past couple of years trying to get price increases and the company will say, the CEO will say 12%. Go get 12% from all of our customers. Now, what that really means is 12% average or that's the raise, the bar 12, and the CEO is hoping to get 10, something like that. But a salesperson will plan a little bit. Really their plan is I'm going to ask for 12 and I hope they'll grant it to me. Hope is not a strategy, but it is for a lot of salespeople. So they'll meet with their buyer and they'll say, Hey, listen, I've got really bad news and I'm pulling for you, but my boss says that I need to get a 12% increase. The buyers are trained to say things like, no, get out of here. Get out of your mind.

Don't you understand that prices have now started going down or now is a really bad time for us. We don't have the budget, or You're surprising me with this. How dare you? No, you can't have your 12 and a weak seller who doesn't have a plan, who doesn't know how to negotiate, who doesn't know how to try. We'll go back to their boss and say, it threw me out. They said, no, we can't have 12. In fact, we can't have anything. Sorry, I tried, to which I say no you didn't. There's a saying in negotiations, never take a no from someone not in a power to say yes.

So if the customer says, no, you can't have 12, a seller, strong seller will say, who can approve 12, can I talk to your boss? Can I talk to your boss's boss? Can I talk to the end user community? Can I talk to finance? I got to have a discussion with somebody who's empowered to give us a price increase to be willing to push back on that customer. Don't hear something I'm not saying, I'm not saying be rude or disrespectful. I'm not saying go around them. A lot of sellers try to do that. I kind of coach once you go around your buyer, you've broken trust, but engage your buyer in the process of finding who can say yes to some level of price increase, but you got to just keep trying.

AD : As part of that, I certainly hear the finding the right authority as part of that. Also testing the legitimacy or the under what circumstances could you go 12 or better? And then some of it under the other guys would be the creative aspect of are there other ways we could piece together something that creates 12% value for us or on average over time? If we start thinking about volume or length of contract or those sorts of things.

MI : There you go. You can say, listen, I need to get 12 on this spec, but if we can change the spec, maybe I can do 11, maybe I can do 10. If you give me more volume, I can spread my fixed costs over a larger volume, maybe I can reduce that 12. What's on your sheet of paper? I can do better. If you can do better. Can we make one plus one equal more than two?

AD : I love these three principles. The other one I wanted to dig into I love is I assume the ability to persevere and really try hard is also rooted in what you said. Second was like having a good negotiation plan. I appreciate, Mike, how you said it doesn't have to be complicated, right? Sometimes keeping it simple, stupid is a good approach. Can you say a little bit more about when you prepare personally for a negotiation, something that's really important, what are some of the steps that you take to ensure that you are well prepared so that you can show up and really try well?

The Bracket Method: Opening, Target, and Bottom Line in Negotiation Strategy [17:22]

MI : We teach a methodology called the bracket where you have to have an opening position and raise the bar. It's the most favorable to you. You're probably not going to get it. In fact, you should expect to hear no. Whether it's price or payment terms or delivery schedule, just about every term or condition can have an opening position that's the most favorable to you. The other side will likely say no too and no is okay. Then you have to have a target position where it's your happy place, it's a good deal.

And anywhere between the opening position most favorable to you and the target, you should negotiate freely. You're happy with that. And whether we show the other side we're happy or not. It's a tactic sometimes, but you should internally be happy. Once you go below your target, you have to have a bottom line, your walkaway point, and that's when I tell people, start to slow down your pace.

All of a sudden it's not as good of a deal as you would've hoped for. I'm not saying it's a bad deal, and I'm not saying that you won't take it but really slow it down. I've got to talk to somebody else, or I've got to check with myself. I'm not so sure I'm not so comfortable with this. You can still come back and say yes, or you can say yes if, but have those three positions for every term or condition that you are about to negotiate, you should understand the values of those things.

And sometimes you can quantify them financially. It could be on raw material, it could be on cost of travel, it'd be lots of things. You can actually have a physical financial cost or it could be high or medium or low value value of a reference. So if you asked me to introduce you to somebody over at Caesar's, one of our biggest competitors at MGM, I would say, well, I think I met this lady Sally at a conference and she works in maintenance or yeah, I'm not really sure where she is.

That would be a low value reference introduction. But if you said to, Hey, can you interest me to someone over at Boyd? I'd say, well, yeah, I got this guy that I played fantasy football with for the last 12 years. His name's Frank Sheridan. When I was at MGM, Frank and I shared an office, and by the way, Frank's their Chief Procurement Officer. Now that's a high value reference or introduction over there.

So, having understanding the values of what you're negotiating I think are important and then be able to write down the things that are low value to you. We refer to them as yields and the things that are high value to you now, low value to you could be high value to the other side. It's not always a one-to-one relationship, but I worked with this lady named Debbie Morton, and Debbie's one of the best negotiators I've ever worked with, and Debbie could win every term or condition in a 68 page agreement.

I've seen her do it. But if I could change something about Debbie, and I would only do it if this is the one thing I could change, is she was ultra competent at negotiating and ultra competitive. So her deals might take three months to negotiate instead of three weeks or three days because she really had to win. To be able to give the low stuff to your side that might have value to the other side to make them happy with the deal, I think is a good healthy thing.

So long as you're getting the most important, most critical things for your side, and then we say get in the habit and create the loop. It's a simple repeatable process. You say, yes, if yes, I can do that low value thing, yes, I can contribute that if I get something higher value in return. And then if they ask you for something, you can't give something on your shield list, something your boss has said, you're going to get fired if you do that again, you have to say no.

But if you just say no, you've deadlocked the deal, you've dared them, take it or leave it. So what we say is say no, take it off the table and then say, but I can do something else for you if I get something in return. So it's yes if and no, but if or just a simple repeatable process that we found can grow the pie, make deals bigger, can make the other side happy with the deal and make sure that you're happier with the deal.

AD : Yeah, the idea of repeating, making it a habit. You said something, I want to drill in and Nolan's eventually going to say, Hey, quit asking so many questions. Let me jump in here anyways, but I have to ask because you said a no's, okay. I think that a lot of folks, they're like, I'm not comfortable with a no. How do you get comfortable with maybe hearing that no? And the positive aspect, the view that you take in when you hear a no, maybe it's not permanent. There's something to learn there. How do you coach folks who are very uncomfortable with rejection and that no.

Embracing 'No' in Negotiations: Leveraging Silence and Rejection for Successful Outcomes [21:58]

MI : So first of all, they're not alone. It's silence. People hate silence. We all know this in negotiating and hearing, no, it's a rejection, it's a negative word, and people don't like to be rejected. So this is where we have to override that voice in our head and understand that no is absolutely okay, and I've actually learned that no is a good thing, positive thing. Lemme give you a quick power of no story. At IAC, we were sourcing a hundred million dollars in print and RR Donnelley, one of the world's largest printers at the time, was really the only company that could fit our spec.

We brought 'em down to home shopping network and we had 10 business leads and they had 10 print experts, big big table. And Bob Nelson is their president at the time. Bob was given a passionate, persuasive speech on why we should select RR Donnelley.

Now, what Bob didn't know was we'd already selected them. They were the only company that could actually fulfill our needs. Bob says, and by the way, not only are we great today, we're going to be better in the future because we've just rolled out a six Sigma initiative. Now, what Bob didn't know about my sheet of paper at the time, this was before we had LinkedIn and stuff like that, is I'm a six Sigma expert, trained, certified, and I know that when you roll out a Six Sigma initiative, generally speaking, there's some cost savings attached to that.

So, this is how fast the negotiation went. Bob said Six Sigma, and I interrupt him. I said, Bob, when I hear you say Six Sigma, I'm assuming there's a cost savings. And he said, yes, there is. And I said to, is it about 6%? I just threw out a benchmark number.

And he said, as a matter of fact, our target is to hit 6% savings every year. And I said, I want half of that back in a rebate every year. And Bob said, done, yes. Now my boss was ecstatic. Remember, 6% on a hundred million is $6 million year. We just got back $3 million in 15 seconds. My boss lit up because we got that concession. But I tell people, how did I really feel when he said yes? I mean, he said yes to make me feel good, but the negotiator in me says, oh, maybe I could have got a little more, was six really eight and was 50-50, really? 60-40. That's 4.8 million for our side that pays a lot of bonuses and salaries and a lot of extra stuff. So he was in such a rush to make me feel good. He said, yes.

And I'm not saying you have to manufacture all this stuff, but if you just say, Mike, do you realize you asked me for $3 million? And I would've said, uh-huh and he would've said, I got to check with some people. That's a big ask. He could have still come back and said yes to the three. If he would've delayed the yes, I would've felt better. And if he would've come back and said, no, 3 million, you're out of your mind.

I can offer you 500,000 and I would've said 500,000, you're out of your mind. How about a million? And I would tell the story about how I worked really hard to get $750,000 and instead I tell the story about how we got $3 million in 15 seconds and I'm unsatisfied with that. So I always think, no is where we start this. If I don't get a no, maybe I haven't asked for enough in that negotiation.

AD : Interesting. Thank you.

MI : Does that resonate?

AD : Yeah.

NM : Could you explain for our listeners what B2B negotiation entails and how it differs from other types of negotiation? I know this is something that you have all over your LinkedIn page and so was hoping you could help elaborate on it.

Embracing Emotional Intelligence And Authenticity [25:24]

MI : So I was enlightened to this recently with about a year and a half ago, a crisis negotiator reached out to me on LinkedIn, and I have a standard thing when I have no connection with somebody, I always say, how may I be of service? I want to see if they're going to put a little effort into having a relationship or if it's one of those LinkedIn bots that we see more and more of. So I said, how can I be of service? And they said, Mike, I'm retired and I've been negotiating for 20 years crisis negotiations, and I'm finding out business negotiations are so different from what I've done. I'd like to learn from you. And I remember thinking they're different. What I thought, it's all about influencing people. And so I started to really pay attention. So this is what I've come up with from a crisis negotiations.

It's the highest form of negotiating. You're negotiating over a person's life if you can't feel a passion for that. If I lose a business deal, it's a million dollars. It's a hundred million dollars. It is what it is. But if you don't bring home that life, that's just a horrible feeling I could never live with. So this is where I've looked at some very specific differences. Number one, the person you're negotiating with is generally speaking in an irrational state, whether they've taken a hostage and then gotten caught or whether they are on a bridge, they're not in a critical thinking state of mind. So you have to approach a person very differently when they're in that situation.

Number two, they likely have not been trained in negotiating, and they probably have very little experience negotiating. So you're going to use different techniques and tactics in that situation versus someone who has been trained.

For example, Chris Voss has some very famous techniques that are very powerful mirroring when you repeat the last words that someone says or he talks about slipping into his late night radio DJ voice. Now as a business negotiator who's been trained, who's read the books, when the other side does that, I almost kind of giggle like, really, you're going to slip into your radio DJ voice and I'm going to make a concession or I don't think so. So the fact they haven't been trained has some advantage to the negotiator themselves.

Third thing, they're operating from a can't lose position. They bring home an arm. That's a bad day for everybody. And lastly, there is no relationship. They have to show up onsite and very quickly psychoanalyze that person, develop a very quick relationship, but it's a one and done. They can take some liberties that a business to business negotiator would add a lot of risk because in a business to business sense, you're going to see that other side a lot, maybe daily, weekly, monthly at the quarterly review at the renewal process.

So a business to business negotiator has to put a higher level of respect toward building the relationship for the long term. And a crisis negotiator has to put more focus developing the relationship for the very short term. Do those things make sense to you guys? Resonate with you guys?

AD : So, contextual differences between the two, the end state goal between the two is different. So the nature of timing deal gets done in the next 12 hours, pretty critical for life and death versus this could last the next 12 weeks. And as long as we get it done before the next fiscal year quarter, a little different there. And then the idea too, and I think that Gary Noesner gets to this a lot in his book, Stalling for Time, which is we are sometimes creating the conditions until a strike force, which would be an alternative move, is ready to go into play.

And yet we know from crisis negotiators too that there's a lot of valuable skills, a lot of the active listening, a lot of the dealing with empathy. I would assume you've seen some emotions even in B2B negotiations, that emotions occasionally show up. Maybe I'm crazy. So there's still those skills that are very transferable and useful, and I think it's helpful to kind of say, Hey, there's the context's different. Some of the gold desired instincts different, and those things are helpful to understand.

MI : Let me piggyback off on something you just said. The emotions that can come out. And in a negotiation, sometimes there's a role of the bad cop. And what I tell people is you can see right through somebody who's not authentically upset. If I pound the table and that's not really in my character, I think I'll do a bad job of acting that way. But what I've discovered over the years through feedback is when I relax, I have the male version of resting B face. So I've learned that if my role in the negotiation is to be the bad cop to just read the proposal. And I've found sometimes people make concessions when I do that. But see, I don't like to be scary. I don't like to be mean. I like to build a relationship.

So, behind this camera right here is a sign that says smile. So I don't get in a relaxed state or my face can scowl. So I use that as necessary in a negotiation, but I don't really want for that to be the natural state. I want for people to be happy and think that negotiations are a positive good thing.

AD : And it sounds like if I heard you right, when you are consistent with who you are in your character, you show up and negotiate more powerfully.

NM : Hey everyone. Nolan here. I have to jump in and end today's podcast for part A of the show. Be sure to rate, review and subscribe to the NEGOTIATEx podcast if you haven't already. And also join us next week for part B of this awesome interview.

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