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Key Takeaways

  • Negotiations are often mistakenly perceived as just a series of manipulative tricks. An introduced “strategy assessment metrics” highlights the importance of choosing between a collaborative or zero-sum approach based on the situation.
  • Recent advancements in Artificial Intelligence (AI) have significantly influenced the negotiation landscape, heralding a revolution in the field. This is coupled with a decline in trust between negotiating parties over the past decades and an increased legal focus, overshadowing value creation in negotiations.
  • AI tools can significantly aid negotiations by providing clarity, preparation, and value identification. However, the efficiency of AI tools depends on the user’s expertise, with trained negotiators benefitting more and novices possibly misinterpreting the advice.
  • While transparency, openness, and honesty are universally valued, trust levels vary significantly worldwide. High trust can reduce transactional costs, but misunderstandings about trust and socio-economic disparities can influence negotiations.
  • A substantial percentage of negotiators admit to dishonest practices like lying or bluffing, leading to challenges in establishing trust in negotiations.
  • Reading a single book isn’t sufficient to master negotiations, and a diverse range of sources is recommended for a comprehensive understanding.

Executive Summary:

Hello everyone! Welcome back to the NEGOTIATEx podcast. We are continuing our conversation with Keld Jensen, a renowned negotiation expert, award-winning author, and the founder of SMARTNERSHIP.  

In Part A, Keld unveiled the intricacies of effective negotiation and underscored the need for treating negotiation as a distinct discipline. He also introduced his signature approach, SMARTNERSHIP, emphasizing strategy, the value of trust, clarity in negotiation rules, and a unique perspective on asymmetric value.

Additionally, Keld championed the pillars of strategy, meticulous preparation, unwavering integrity, and the indispensable role of trust in negotiations. We highly recommend you check out Part A if you haven’t already.

Now, without wasting any more time, let’s jump right in. 

The Golden Rule In Negotiations: Universal Ethics VS. Practice Discrepancies

Firstly, Aram questions Keld about the ethical considerations in negotiations, specifically focusing on the role of honesty and integrity. 

In response, Keld delves into the idea of the “golden rule”: treating others as you’d want to be treated. He highlights that while many of his religious clients are familiar with this rule through scriptures like the Bible, they often don’t apply it in negotiations. This often results in a discrepancy between their beliefs and actions. 

Interestingly, Keld mentions that the golden rule is present across the major religions of the world, emphasizing its universal significance. He further recounts an experience with a competitive client in Germany who failed to apply the golden rule in his negotiations. 

Keld concludes by emphasizing the importance of this rule, regardless of religious beliefs, noting that the vast majority of people agree with its core principle.

From “Negotiator Hats” To SMARTNERSHIPS In Business Deals

Next, Aram discusses the “test of reciprocity” and shares his observation from teaching that students often compartmentalize their behavior, attributing certain unethical negotiation tactics to their “negotiator hat.” He questions Keld if he’s noticed similar behavior.

Keld highlights that many people are “unconsciously incompetent,” believing that negotiation revolves around tricks and manipulation techniques. He introduces a model called “strategy assessment metrics” that helps identify the importance of each party in a negotiation. 

In situations where both parties are highly important to each other, they should operate under a “SMARTNERSHIP” approach for collaboration and mutual benefit. In contrast, if the relationship is unimportant to both sides, perhaps due to being in a commodity market, a zero-sum negotiation approach might be fitting.

On that note, Keld warns against many trainers and books that advocate for the zero-sum negotiation approach as the default, even when most long-term business deals benefit from a “SMARTNERSHIP” approach. 

From Human Trust To AI-Driven Transparency And Back Again

Moving on, Nolan asks Keld how the landscape of negotiation has evolved over his 30 years of experience, especially in the context of global business and technology.

In response, Keld highlights that in the recent past, there has been a dramatic change in negotiation dynamics due to advancements in Artificial Intelligence (AI) like ChatGPT. He strongly believes this is setting the stage for a revolution in negotiation since 1776. 

Keld is optimistic that technology will enhance negotiations by fostering better collaboration, transparency, and openness. However, a notable shift over the past decades is the decline in trust between negotiating parties. Studies indicate that people trust each other less now than they did 30 years ago. 

Another significant shift is the growing influence of legal departments in negotiations, which has overshadowed value creation. Keld references the World Commerce and Contracting organization, pointing out that the majority of the top 30 most negotiated variables are more focused on legal terms than on creating economic value.

An interesting study that Keld cites during the conversation demonstrates the inverse relationship between the length of a contract and the financial success of the involved parties. Shorter contracts, which emphasize personal relationships over legal minutiae, tend to lead to more financially successful outcomes.

Keld concludes by highlighting the essential human element of business negotiations. He argues that negotiations are fundamentally human interactions between individuals representing their respective companies. 

According to him, the human touch is vital, and parties should not forget the personal relationships that drive business negotiations. Interestingly, despite this human-centric view, Keld sees potential in AI tools like ChatGPT to return negotiations to a state of improved transparency and trust.

The Promise And Peril Of ChatGPT’s Role

Aram follows up by asking Keld about the risks associated with using AI, like ChatGPT, in negotiations.

Keld reveals findings from a recent international study where pairs of negotiators used ChatGPT in different configurations: both teams not using ChatGPT, one team using ChatGPT vs. a team not using ChatGPT, and both teams using ChatGPT. The results indicate:

  • Teams without ChatGPT didn’t conclude negotiations due to a lack of preparation and value identification.
  • When one side used ChatGPT, misunderstandings arose because they were better prepared and clearer than their counterpart.
  • The most successful outcomes occurred when both teams used ChatGPT and knew how to use it. They concluded negotiations efficiently and collaboratively.

Keld notes that top-performing teams simply uploaded their negotiation content to ChatGPT, asking it to identify questions, valuable variables, and potential macroeconomic advantages. Furthermore, he stresses the significance of ChatGPT’s familiarity with his negotiation philosophies, “SMARTNERSHIP” and “NegoEconomics,” which aids in preparation.

That said, Keld cautions that ChatGPT is valuable only for trained and experienced negotiators who can discern the relevant advice. For novices, using ChatGPT can be detrimental as they may not distinguish between useful and non-useful suggestions.

Navigating Global Negotiations: Trust, Cultural Nuances, And The Thin Line Of Dishonesty

Subsequently, Aram inquires about the impact of cultural differences on negotiations and the strategies to navigate them. Keld shares his experiences from working in more than 30 countries annually.

The following are Keld’s observations:

#1 Human Commonality 

Everywhere, humans value transparency, openness, and honesty. These traits resonate universally.

#2 Trust Variance 

Trust levels differ significantly worldwide. A study highlighted the Nordics (Finland, Denmark, Sweden, Norway) as having the highest trust levels, allowing smoother business interactions. Conversely, South America, especially Brazil, ranks at the bottom.

#3 Transactional Costs & Trust 

Higher trust levels reduce transactional costs (contracts, guarantees, etc.), making interactions straightforward. The misconception is that high trust can lead to deceit when, in fact, the opposite is often true. People equate opportunity with a reason to cheat, reflecting a lack of understanding.

#4 Socio-Economic Disparities & Trust 

Trust correlates inversely with the economic gap in society. Countries with a higher difference between the rich and poor tend to have lower societal trust. The USA, surprisingly, has a very low trust level, which Keld believes has declined over the last 30 years.

#5 Trust As A Competitive Edge 

While being naive isn’t recommended, fostering trust is essential, as it drives profitability and smooth transactions.

#6 Misleading Practices 

A recent study indicated that 49% of negotiators admit to lying or bluffing. However, some individuals distinguish lying from bluffing, viewing the latter as a more acceptable strategy. Keld humorously points out that one can’t lie “just a little bit” and highlights the problematic mindset of rebranding dishonesty.

Aram relates the findings to an infographic he saw, emphasizing the alarmingly high percentage of negotiators who admit to dishonesty. He notes how some students claim to be “strategically misleading,” emphasizing the challenges in establishing trust.

Keld Renewed Exploration Into The Complex World Of Negotiation

As the conversation draws to a close, Nolan inquires about Keld’s motivation for authoring his newest book, “Negotiation Essentials,” especially since he already has over 20 books on the subject under his belt. Keld responds by highlighting that he hasn’t penned a book in five years. From 1998 to 2017-18, he released 24 books across 38 countries. 

Initially feeling that he might have exhausted the topic, he later finds inspiration, believing there’s still more to explore in the realm of negotiation. In “Negotiation Essentials,” he ambitiously aims to encapsulate the core aspects of negotiation within 13 chapters, covering a diverse range of topics from strategy to AI.

However, Keld emphasizes that reading just one book, even if it’s his, isn’t enough to master negotiation. He cautions against the mindset of becoming proficient in negotiation by reading a single book. Instead, he advises readers to delve into multiple books, each offering different angles and expertise on the subject, to truly grasp the art of negotiation.

Keld, Aram, and Nolan delve into a wide range of topics. We invite you to share your thoughts on this highly informative podcast by emailing us at team@negotiatex.com.

Thank you for your time!

Transcript

Nolan Martin : Hey everyone, thanks for joining us on NEGOTIATEx podcast. We are continuing our conversation with Keld Jensen, an internationally renowned negotiation expert. If you haven't already checked out part A of the show, be sure to do that first. Let's jump into the conversation with Keld.

Aram Donigian : Trust needs to be on the agenda. You've written about honesty as well as a consideration for negotiation. What are the ethical considerations that negotiators need to keep in mind and how do you ensure they negotiate with integrity? How do you train that, teach that coach that?

Religious Or Not: The Universal Value Of Ethical Negotiations (01:12)

Keld Jensen : Great question. I'm working with other clients with a lot of clients who claim they are religious. Some of them are Christian, some of them believe in something else. Some of them go to church every Sunday. The funny part is that if you're Christian, there's the Bible. And in the Bible there's the golden rule that says ‘only do to others what you like others to do to you’.

And the funny part is that I have clients who are religious, go to church every Sunday, believe in the content of the Bible, but Monday morning they demand threats or require something from the counterpart they would never accept themselves.

And then I get confused because where is that a mismatch between what you believe is a value in life and what you're doing out in reality? So I'm often saying the golden rule should apply in negotiation as well. And it's not a question whether you're religious, a Christian or Buddhist or Hindu or Jew or whatever. And the fun part is actually, I don't know whether you guys are aware of it, but the 13 biggest religions in the world are all sharing the same sentence. They write a little bit differently, but they have the same value in all of the biggest religions in the world ‘only do to others what you like others to do to yourself’. Imagine for a second, this sentence was written thousands of years ago by our ancestors that were sitting round the globe without internet, without any possibility of talking to each other. They all came up with that value sentence. So, if you're not religious or spiritual already, you might be when you suddenly realize that humanity has shared that sentence for thousands of years.

So, anyway, back to what I was saying about ethics, really just do what you like others to do to you. So my advice to client is if you would be okay with the client asking, demanding or requesting this from you, well go ahead. You should ask and demand and require that from the counterpart. If you're not okay with that, well perhaps you shouldn't ask that yourself.

I had a funny experience a year ago. I was in Germany sitting with a client and he was the procurement officer and I was advising him obviously, and he was, how can I put it nicely, a rather competitive, aggressive individual. He was really trashing the supplier. He was demanding stuff and requesting stuff and threatening and he used every tool in the book in a very competitive, aggressive way to gain what he wanted. So, I'm a very curious individual. So when we're done with that negotiation, we were out on the parking lot and I walked up to my client who was standing by his client and said, I have to ask you this question. How would you have felt if the counterpart had that approach towards you if he had the same approach towards you as you had towards him? Well then he said that, I apologize for my English, but then he said, well he would've been a true son of a [beep]then if he had that approach to me.

And then I said, so why would it be okay then that you had that approach to the counterpart if you would never accept that approach towards you? And then he looked very confused to me and said, but I don't understand your question because I'm the buyer. And then I got a little bit confused. I actually walked back home and looked in the Bible and do you know what? The Bible has no excuses for bias, so there's no exception to the hindsight or sell side. The golden rule applies for everybody. So that's your question about ethics, and I don't want to turn it into a very religious thing because it really isn't, and you don't have to be religious. Just think about it for a second and when I ask people, do you think that sentence, ‘only do to others what you like others to do to you’. You think that's an okay sentence that you know what, 99.9% of everybody I'm asking that question would say Yes.

AD : Yeah, I'll tell you, I call it the test of reciprocity. Everything what you're talking about, and I'll tell you, as I've taught this, Keld, now for 15 years, I find that students, and I think this goes back to what you were saying before, but the mindset we have about negotiation, students tend to struggle with that because sometimes the excuse is, well, it's not really me, it's just my negotiator hat. That's what you're supposed to do. Do you get that?

SMARTnership vs. Zero-Sum: A Strategic Approach To Negotiation (4:53)

KJ : Yeah. And again, I don't want to offend anybody, but again, it's about being unconsciously incompetent because you think negotiation is about using all these techniques and tricks. You think it's about mirroring people. You think it's about creating an agenda that is hiding something. You think it's about questioning techniques to manipulate the counterpart. You think it's about winning at the expense of the counterpart. And it could be in certain situations. I'm not ruling that out, but you should be very careful in knowing exactly when to apply what tools at what point.

We have created what I call the strategy assessment metrics, which is a very simple model. It's a quadrant that basically just evaluate how important are you to the counterpart and how important is the counterpart to you? Now, if you can imagine this quadrant here, right? If you go way up north, that means the counterpart is very important to you. If you go on the horizontal line to the right, you are very important to the counterpart. So if the counterpart is very important to you and you're very important to the counterpart, you end up on the top right corner. If you are up in that quadrant, you have to, and I repeat, you have to work in SMARTnership. Not working in SMARTnership is directly unintelligent because you're just losing value.

On the other hand, if you're sitting in a negotiation where the counterpart is not really important to you and you're not important to the counterpart, you're in a commodity market, right? Well, go ahead. Perhaps you should purposely choose to work in a zero-sum negotiation approach because you shouldn't waste time creating all of these things I'm talking about. Just go in there and kill everybody. You might be on a commodity market with hundreds of suppliers and hundreds of customers. It may not make sense to work in a more collaborative way, but you have to think this strategy through before you just step in there.

And a lot of books and trainers out there are basically just training you to deal with that zero-sum negotiation all the time. Because we think negotiation all the time is down at this box down here where the counterpart is not important to you and you're not important to the counterpart. But listen guys, the majority of long-term business deals are up here in SMARTnership where you should not use any of these funny tools that is really exciting and fun to play around with.

AD : It's an intentional choice too, an intentional decision. An intentional act there.

NM : So Keld, got another question for you. So do you ever get surprised in negotiation? Have you ever encountered a unique or innovative negotiations approach where you thought, that's good, I'm going to adopt that?

Negotiation Team Discipline: Keys To Effective Collaboration (07:19)

KJ : Oh yes. Oh God, yes. I think most of my learnings is coming from mistakes I make myself. That's how we learn, isn't it? And I made thousands and thousands of them. Well, the list is actually very long and I met some great negotiators in my life that I learned a lot from. I have a tendency, I don’t know whether you can sense that already. I have a tendency to talk too much. And that goes in negotiations as well. When I get excited, I start blabbing along and I had a mentor for many years who kept repeating to me, you have two ears and one mouth that I just said, oh, okay cool.

And I moved on and then he repeated that again and said, you've got two ears and one mouth. I don’t know how many times he told me that before I suddenly realized he wants me to shut up. And I met some great negotiators who were doing really well by not saying anything, just shut up and be quiet, ask a question and shut up and be quiet. And it's a very useful tool.

I would say that and taking time out because whether you are in a collaborative negotiation or you're in a zero-sum negotiation, you need to gather your thoughts and often you can't do that at the negotiation table. Back to the Hollywood presentation of this impressive negotiation or the hostage negotiation where you're on all the time.

A commercial negotiation is not like that. You are very much welcome to take a break saying, you know what, we just need 10 minutes to go outside, discuss what we have learned so far. I need to call the office. We have to do calculation, do whatever you need to just leave the conference room, that stressful environment, just stepping outside sitting down with yourself or your team just for 5-10 minutes and go through what you just learned, this can be so useful and you could actually save or make millions just by using these breaks or being quiet during negotiation.

What I always recommend is that we negotiate as a team and that becomes even more difficult because there's a tendency that if you have three individuals in the team, there's a tendency that you might sometimes have three head of negotiations because everybody want to join in, everybody want to participate, everybody want to say something. So let's assume that you have one individual in the team asking a question to the counterpart and then you have his or hers colleague on the team that can't wait for the answer. Then jump in and ask another question. So that's down to team discipline. How do you set up the team before you actually step into a negotiation?

And I'm just mentioning this one because that's one of the major mistakes I see from a lot of negotiation teams. They don't respect each other and they don't have set up that discipline. Just ask the question, be quiet, just sit there because I'm sure you've taught that as well, guys. Just being quiet often pushes the counterpart to start talking because we are not good with silence, are we?

AD : No, we're not. I just demonstrated that I am so glad you went through. That was such a nice bonus for our listeners, by the way. This idea of team alignment, you used the word discipline. I was going to ask you why we don't pause. I think discipline, the need to fill the gap is one where we tend to fall out and I'm just so glad you went there with the team piece too, Keld. I think that is hard.

Internal alignment is really difficult. And then to execute our negotiations in a way that's coherent probably goes back to corporate strategy and everything else or negotiation strategy.

NM : Given your 30 years of experience, how has the landscape of negotiation changed particularly in the context of global business and technology?

The Human Side Of Business: Rediscovering Trust In Negotiation (10:28)

KJ : Very important and great question. I would say in the last 6, 8, 9 months it has changed dramatically due to AI and ChatGPT and it will change even more. I think we are on the edge for the first time since 1776, and I'm getting back to that number in a moment, but I think for the first time since 1776, we are going to see a revolution in negotiation and I think it's going to happen through technology. I am myself a big fan of technology rights. I think it's going to improve negotiations. I've seen that from studies we've conducted already. I think we're going to utilize and create more value by using technology. And funny enough, I also see it actually improved collaboration, transparency and openness by using technology.

Having said that, back to your question, what is it that basically have changed the most throughout the years? I would actually say, and this is bad news, I think trust has, I don't think I know because studies have proven that. Trust has declined in the last 34 years. We trust each other less than we did 30 years ago. That's one thing. Another thing I also see is that legal have gained more power.

So, quite often the legal department in an organization, the one that is telling the rest of the organization what they're supposed to do in negotiation, there's an organization that you may know that is called World Commerce and Contracting, which is a nonprofit organization with about 80,000 members globally, which obviously from the name they a focus on contracting and everything around contracting.

And a huge part of that is negotiation. And every year they release the, I think it's top 30 most negotiated variables. And every year I read it as a horror story because the top 10 is something that have no value creation purpose. It is just legal mumbo jumbo that doesn't move anything forward. It basically is one step forward, two step backwards and out of the top 10, there's only two variables that is generating economics. And my first advice to anybody negotiating is start negotiating variables that create macroeconomics.

Because if you can create value between you and I, the asymmetric value, that's free money and it just makes negotiation easier going forward. But the most negotiated terms every single year is everything but those variables. And the reason for that is, as I said, trust is declining, contract has increased in size and we are more negotiating legal stuff than actually business content and value.

There's a very interesting study that was done, I'm sorry, I forgot right now who did it, but there was an individual who studied, I think it was 5,000 contracts and he clearly identified that the shorter the contract was, the more financially successful both parties were, the bigger physically the contract was the least, the less successful the party was. The reason was that if it's a big contract, it's all based on legal stuff and less on personal relationships. And if it's a shorter contract, it's less based on legal stuff and more on personal relationships.

So, I think one of the things just talk about how the landscape have changed. I think we have moved away and forgot that all business is human. I normally say that because we have to remember it's not company A and company B that is negotiating with each other, right? It is Mr. Johnson that is sitting across the table from Mrs. Anderson and they are the one negotiating. If Mrs. Anderson was replaced by Robert, the whole thing could fall apart because the relationship wouldn't be, the trust wouldn't be there and they couldn't figure out how to talk to each other.

So, we have to remember that all business is human. And funny enough, just connecting that to chatGPT or AI in general, I actually see that we are kind of returning, funny enough, back to that improved transparency and honesty with the help of technology. So again, very long answer. I'm sorry about that, but that's really the major change I've seen in the last 30, 40 years that trust is declining and we actually are more focused on legal content than actually commercial value.

AD : Yeah, I was going to ask you as a follow-up kind of risks posed by AI and I was going to ask if you saw exasperation of the decline in trust, you've already kind of addressed that, it's you actually seen improving. Does the AI put a threat of we're going to continue to negotiate around non-value creating variables, but what do we you see as the risks involved with the use of AI negotiation? Let me ask that first and pause and then I've got a second one I'll come back to.

ChatGPT And Negotiation: A Winning Combination For Skilled Practitioners (14:54)

KJ : We have since February this year been running an international study. We have had people from around the globe, Argentina, France, Italy, US, you name it. People from everywhere in the world. We have had them team up in groups of two and then they've been negotiating across the table, everything online, across the table from another group of two individuals. And we had three scenarios.

One scenario is where everybody is negotiating without the usage of ChatGPT. We had a scenario where one team was using ChatGPT negotiating towards a team that wasn't using ChatGPT. And the third and final one obviously was where both teams were utilizing ChatGPT. And we've been repeating this study over and over and over again and we have had lots and lots and lots of negotiation and lots of people participating in the study. They were all negotiating the same content, it was the same simulation. They all had the same time to prepare. And lemme just share a few of the highlights. I'm sharing some of this in the book and how you can actually conduct negotiation really well with the use of ChatGPT or AI.

What we learned very quickly was the two teams not utilizing ChatGPT ran out of time, never managed to read a deal ever because they're spending too much time, they were not as prepared and they did not identify and utilize value whatsoever. When we move into the next category where one side was using ChatGPT and the counterpart was not using ChatGPT, we actually saw a lot of misunderstanding because the teams using ChatGPT were more clear, better prepared, and they were negotiating talk to counterpart that was not at the same level.

So, we just had too big a difference in understanding what the whole simulation was all about. There was one exception though where we could see that the teams utilizing ChatGPT wasn't as good and it's a very simple one. If they didn't know how ChatGPT worked or couldn't figure out how to utilize ChatGPT, obviously they failed big time. And then we have the third group where both parties were using ChatGPT , and I can say without any doubt, that was the most successful negotiation. And as I said, we repeated it a number of time and every single time the best negotiation outcome for both parties were the one where both team were utilizing ChatGPT. And both team knew how to utilize ChatGPT.

They concluded way before time ran out, they utilized all or most of values. They were very transparent and collaborative and the whole thing was just running way more smoothly. I can actually tell you that what we saw, the teams that was doing the best utilizing ChatGPT actually did it very simply. It doesn't have to be hard workers, I'm using ChatGPT myself a lot and my wife says I'm lazy, but I have to think to take a shortcut instead. That's what they say, who knows. But it's like the calculator, right? Why would you use a calculator? Why would you use Google to find information? Why wouldn't you use ChatGPT to shortcut and save time?

And anyway, back to the team, we did really well. What they did was they took the simulation I wrote. Uploaded the whole thing to ChatGPT and just asked ChatGPT, could you please list the question I should ask? Could you identify the variables that could generate value? Could you come up with the ideas about potential macroeconomics? ChatGPT actually knows my philosophy and SMARTnership and negoeconomics, so it can help you tremendously just preparing and conducting your negotiation.

Now, I just want to add one thing, and this is a warning that is this works if you are already an experienced, trained, well-educated negotiator, then ChatGPT will help you greatly. If you are an unskilled, untrained, unexperienced negotiator, please don't use ChatGPT because that's going to be a suicide mission because you're not able to filter what you should be using and what you shouldn't be using.

So, it's like a blind leading a blind, right? You'll just be diving in there and doing all the wrong things. So ChatGPT is not a help for the one who doesn't know what to do. Okay? You need to have an understanding and experience and education being a negotiator and then ChatGPT or Google Bard all the other ones is a great tool.

AD : Beautiful. That has been my conclusion as well, and I'm still trying to investigate how I'm going to integrate the use of ChatGPT into teaching and training and negotiations. It sounds like you're doing that already. Is that true? It's in your book as well.

KJ : Oh yeah, yeah, absolutely. I think not using ChatGPT , Google Bard, I'm not especially fan of ChatGPT, but AI in general. I think it's just really, really essential to use it. I've copied a phrase and just added into negotiation why I'm saying I don't believe AI will replace negotiators anytime soon. But negotiators using AI will replace negotiators not using AI for sure.

AD : You've done work all over the globe. Could you talk a little bit about cultural differences, how they impact negotiations and advice you give to others for how you navigate negotiations across diverse culture?

The Trust Factor: Negotiating In Diverse Cultural Landscapes (19:44)

KJ : That's a great question. I think we could spend hours on that by itself. Yes, I have the privilege of, I'm working in 30, at least 30 countries every single year. Visiting most countries on the globe. And it is remarkable to see how different we are and how similar we are. Humans are humans, we relate to human beings. So back to what I said earlier, if we are believed to be transparent, open and honest, that relate to everybody around the globe, everybody can relate to that openness, to the transparency, to being honest. That works everywhere.

What is a big difference around the world is the level of trust and a big trust study was actually done looking into which areas in the world had the highest level of trust and what areas in the world had the lowest level of trust. And let's start from the positive end. The highest level of trust was in the Nordics. So that will be Finland, Denmark, Sweden, and Norway. They have by far the highest level of trust in the world and they're doing really well, financially and the trust is really high. I mean, if one company call another one in Scandinavia and say, “Nolan, I really love your product, could you send me for $300,000 and just include an invoice and I'll pay you in 30 days?” That will happen. Nolan will say, okay, and he will ship the goods because he believe and trusts that I will pay.

If you do that in other countries, even here in North America, you'll have a counterpart who will be saying, yeah, but can you have to prepay? You have to put up a guarantee or you have to give us some kind of guarantee that you're able and willing to pay. What I'm normally saying is that back to what I said earlier, we have a high level of trust. We reduce transactional costs and transactional cost is everything that stands in the way because we don't trust each other. If we trust each other, we don't need contracts, we don't need bank guarantees, we don't need prepayment, we don't need all that. Things become so simple because we just trust each other. I know for some it just sounds like, oh God, they are very naive.

I actually need people when I share the story from Scandinavia saying one company could just buy from another one and then they get the shipment. Some people are saying, well, now they're going to get cheated. And then I also ask a question, why would they get cheated? And I actually hear some people say, well, because they got the opportunity. And then I'm saying, this is interesting, so you should cheat somebody because you've got the opportunity to cheat somebody. Is that what you're saying?

So, back to your question, trust is really a thing that is very different from one region to another. So Scandinavia and the Nordics are very high and South America, especially Brazil, is actually rock bottom. And what we can see is that this is one interesting study as well, that the higher the difference in social layers, the difference between wealthy and poor, the lower trust in society, and the less difference between wealth in a nation, the higher trust in general actually findings.

So the bad news is when I'm asking this question, who do you think is at rock bottom in trusts? And people get very surprised when it's actually in Brazil, and then everybody says Russia, Russia must be pretty bad and China must be pretty bad. And then I say, yeah, but who else do you think is at rock bottom and which country? Nobody ever guessed right? United States of America trust is actually terribly low in this country, which I love and adore by the way, but trust is actually terrible and we can become so much profitable, not becoming naive, but actually start verbalizing trust because as I said, trust is a requirement to generate NegoEconomics and move into SMARTnership.

And I don't know why that low level of trust is actually coming from, I believe if we stepped 30 years back, it would be higher. So it's something we have to focus on because it's actually a competitive edge, being able to create trust. Now, I'm not saying we should become naive, that's the opposite, right? So we shouldn't step in there and just saying, okay, well I'll ship you the codes and you can just pay me whatever. That's not what I'm saying we should do, but we have to work on trust simply not because it sounds nice, but because we can actually make money out of it.

AD : And I saw an infographic that you posted on LinkedIn just in the last week or so that gave some fascinating numbers. I found them surprising. One that stuck out that half of negotiators, I think admit to lying in a negotiation and just talk about something that's very damning in terms of the state of trust in negotiation here in our own country. That was pretty powerful.

KJ : Yeah, we've been asking and 49% of negotiators based on our study admits that they are lying or bluffing. It's fun, by the way, when I ask people if they lied, they say, oh, nope, I never lie in the negotiation. I bluff occasionally and then I get curious, because what's the big difference here, right? It's a little bit like walking up to a pregnant woman and ask, are you pregnant? And she says, only a little bit. Either you're pregnant or you're not pregnant, right? You can't be lying just a little bit. Either you are lying or you're not lying.

So, I think some people know what lying is, but the second they step into negotiation, they just rename it bluffing. So yes, back to your comment, it seems that there's a huge amount of people who think it's okay to bluff or lie in negotiation.

AD : Occasionally get a student and say, I was just strategically misleading them.

KJ : Yes, yes, exactly.

NM : Keld, you've authored more than 20 books on the topic of negotiation and you're releasing another “Negotiation Essentials.” Why'd you feel the need to write this book and what do you hope readers will take away from it?

Keld’s Complete Guide to Negotiation Mastery: Essential Techniques Through Variety And Learning (25:07)

KJ : Well, it's actually my first book in five years because I thought I was done. I have written and published 24 books that has been released in 38 countries in a short time from 1998 to 2017-18. And I was kind of done thinking, you can't really write anything new about negotiation at this point. There's so many good books out there, not mine, but everybody's, there's a lot of good books.

So, I'm thinking, what is there, what is left? But then I got inspired about a year ago thinking about, you know what? There's so much stuff we can still talk about. There's still so much stuff that we can summarize. So I feel, and I'm the author, so obviously you shouldn't ask me, but I feel we have accomplished that in negotiation essentials, thereby the title Negotiation Essentials. We have really in 13 chapters try to summarize what is the essential of negotiation.

And it's a very ambitious project because I've really tried to stuff a lot in there. Everything from why we need a strategy, why we need to rethink negotiation, toolbox to identify the five different negotiation styles, checklist, preparation, talking about AI. So it's a bit of a mouthful. Having said that, I would obviously love people to buy my new book, but having said that, it's not enough that you buy and read my book because it's not covering everything. It's impossible.

And that goes for every other negotiation book out there. Because I see online all the time, people say, “well, I bought and read this book and now I'm a genius in negotiation.” That's a load of BS. You can't read one book on negotiation. You have to pick 3, 4, 5, 6, 7, 8 books because they're covering many different aspects of negotiation. So just reading one book is giving you one angle, it's giving you my approach and my philosophy and what I'm thinking, but I'm not covering everything, of course, not partly because I don't know everything. And secondly, because this is my field of interest, this is what my knowledge is all about. So you have to pick another author and another great book on negotiation to cover another topic.

So unfortunately, I think that people out there would just read one book and this is the greatest book ever. That's again, a lot of BS because that's not the greatest book on negotiation because you would have to read a number of books in order to get the full picture of what is a great negotiator.

AD : That is humbly said, for someone who has authored almost, it's going to be 25 books if my math is right. That's humbly said to encourage people to go out and read others. I look forward to reading your book very much when it comes out here shortly. What parting advice do you have killed for professionals who are responsible for leading corporate negotiations within their organizations, but may not have formal negotiation training or experience themselves?

The Hidden Cost of Skipping Negotiation Training (24:47)

KJ : We recently did a study where we were asking 7,000 executives from around the world how often they felt that departments and organizations should have negotiation training. Only 3% of everybody said they didn't feel there was a need for negotiation training. A surprising huge number of about 50% said that everybody should get negotiation training at least once a year. I repeat once a year. And we actually have organizations that repeat negotiation training for the same individuals and the same organization once a year. The difference between the 3% and the more than 50% are in between. They said, well, we need it every second year, every third year, but negotiation training is really essential. I'm not saying it because I'm in the business. You don't have to buy our training just buy training. You really, really need it.

I saw, I love the organization, I think they're called Contract Nerds, and they released a study as well recently where she came out and she done a study among their members. I think it was 55%, please excuse if I got the wrong number. It was more than 50% of all the members they had who have never, ever, ever had negotiation training. And I fell down my chair, I was completely shocked. So you have people that are dealing with contract, contract negotiations and have never ever taken any negotiation training. I mean, talking about my mission here, and you are asking me if I still are full of energy, just listening to a number like that makes me wake up in the morning and go 200 miles an hour because that is insane.

And if you are an executive sitting out there listening to this, I would ask myself immediately, have my members of my organization taken any negotiation training. And if they haven't, my God, you are wasting so much money. It's just pouring out the window right now. So I can always say, you have to do it, and you don't have to call us. You can call anybody. Just get some negotiation training. There's so much good training out there. You have to be trained in the world of negotiation.

I have to add a funny story. I talked to an individual a few months ago and he said, yes, I agree with you. Negotiation training is really important. I had such a great training 18 years ago, my God, that was useful. And I was thinking, oh wow, okay, well I have to salute you for getting training 18 years ago, but you really, really think that carries any value today. I actually reread, I don’t know why. I reread my first book on negotiation from 1998. I just read that in connection with writing my new book.

And do you know what my conclusion was, reading my book from 1998. I felt it was terrible. I really didn't like it. I thought it was a book full of old school, outdated advice, and I was embarrassed of reading it today. But you know what? I hope it was a good book in 1998, but it just taught me that the negotiation has actually changed. It developed over time. So, what we are talking about in 1998 is not valid today. There's a book, I don’t know if you heard about it, guy's called Getting Into Yes. It is actually written and published in 1980s and it's still, it was a great book in the 80s, outstanding book. But you know what? Especially now, introducing AI, even books that came out five, six or seven years ago are now old school, outdated.

So it is a moving target all the time. So anyway, back to what I said, training, training, training. If you not want to do training every year, write, read at least a couple of books every year, then do training every second year.

AD : Well, I'm going to say that one of the reasons I love doing these podcasts, and as our listeners know, this was Nolan's idea. He talked me into it. The reason I love this is getting to talk to people just like you, Keld. It is my training. It's my, what we've call in the army, reblooming. Getting refreshed and saying, ah, there's some new ideas. And I have taken so many notes here. I'm not even going to try to go back and summarize the conversation we've had.

I just want to say thank you for your time. Thank you for your insights. Thank you for the work you continue to do in the field. Can't wait to see this new book to read this new book, and just want to wish you the very best going forward. Thanks for being with us today.

KJ : Thank you for having me.

NM : Thanks, Keld, really appreciate it. So that is it for us on today's podcast. If you haven't already, please rate review and subscribe to the NEGOTIATEx Podcast. We'll see you in the next episode.

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