Good day, everyone! We welcome you to a fresh installment of the NEGOTIATEx podcast. Our guest today is John Dieffenbach, a renowned negotiator with 30 years of experience under his belt..
Dieffenbach began his career at IBM and has since led professional negotiator teams, closing billions of dollars in complex global technology services and licensing deals for various renowned companies.
Additionally, he played a key role in establishing specialized negotiation teams at Accenture and Ernst & Young and currently leads a team of 12 negotiators at EY. Dieffenbach, who has academic credentials from Binghamton University, Northwestern University, and Cornell University, runs a globally acclaimed blog titled ‘Running the Room.’
When asked about influences on his approach to negotiation, Dieffenbach credits his law school professor, Robert Kent, and a class on alternative dispute resolution, which introduced him to collaborative, win-win negotiation concepts.
He also recounts his career trajectory, from his initial intention to become a litigator, inspired by his experience as a newspaper reporter covering court trials, to joining IBM without a technology background. There, he leveraged his skills in collaborative negotiation and avoiding positional behavior, which he had acquired from his class with Kent.
Dieffenbach highlights the similarity in both professions’ need to ask questions and gather data, discussing the relevance of his journalistic skills in his corporate negotiation practice. He suggests that being a good listener is essential in both fields to understand the narrative and gather the right information.
Drawing parallels between different professions, Dieffenbach identifies the core commonality of influencing others using words. Whether as a negotiator, stand-up comedian, or litigator, the goal is to use the right words at the right time to change someone’s emotions or perceptions to achieve the desired response.
Continuing the discussion, John emphasizes viewing negotiation as a conversation of influence rather than a combative exercise. He highlights the importance of using the right words at the right time with the right person, as any misalignment of these elements could hamper negotiation progress.
Furthermore, John elaborates that successful negotiation often involves influencing an individual’s current perception or choices by providing alternatives that meet their interests differently. This process involves understanding their interests, offering options, asserting legitimacy, building relationships, and effectively communicating—all elements from the principles established by Roger Fisher and Bill Ury.
Dieffenbach strongly believes that improv is a valuable skill in negotiations as it allows negotiators to be dynamic and adapt to changes in situations or strategies. Drawing on a friend’s quote, “If you’ve done one negotiation, you’ve done one negotiation,” he emphasizes the uniqueness of each negotiation due to the different people and issues involved.
He credits the seven elements of negotiation for providing a framework to manage these variables, enabling negotiators to anticipate potential issues and strategize, improvise, or pivot when necessary.
Next, Aram asks John about the role of humor in negotiations. The latter affirms the importance of humor, stating that it can lighten the atmosphere and break down potential barriers. He shares a recent example where he and a known associate, who ended up on the same deal, used humor to ease the negotiation process.
John often employs self-deprecating humor to dispel any intimidating impressions as a “big bad negotiator,” emphasizing that his role is primarily a problem-solver focused on meeting the client’s needs. He believes humor can provide a release, making the negotiation process less tense and more engaging.
Moving on, Nolan asks John about his experiences in cross-industry negotiations. In reply, John highlights that the key to successful negotiation lies in understanding the specific environment you are in. Whether it’s a financial services firm concerned about privacy or a retail company with seasonal concerns, it’s essential to listen and be aware of the unique factors at play.
Aram then brings up the issue of negotiating with stakeholders who aren’t physically present. John shares his experience, describing scenarios where an ’empty chair’ symbolizes decision-makers who aren’t at the negotiation table. He acknowledges that while these ’empty chairs’ can be an escalation point in the negotiation process, they can also pose a challenge if the decision needs to be escalated.
Additionally, he highlights the importance of identifying who the real owners are and understanding their perspective. He warns of the ‘salami slicing’ risk, where the value of the deal can be gradually eroded due to multiple small concessions. Dieffenbach refers to the concept of ‘3D Negotiations,’ suggesting that a holistic, rather than linear, approach is crucial. He highlights the importance of considering the broader context beyond the negotiation table, including the emotional context and any key stakeholders not present at the negotiation.
Lastly, he stresses the importance of preparation and team discipline during negotiations, mentioning an instance where an executive, who was a latecomer, disrupted the negotiation process with an unexpected concession. His rule: “If you’re not in the rehearsal, you’re not in the show,” serves as a reminder that everyone involved must be prepared and synchronized to achieve a successful outcome.
Next, John shares his insights on what one should do when they face a difficult team of negotiators. He mentions that understanding the dynamics within the team is essential, like identifying the decision-maker, influencers, and disruptors. If the whole team is problematic, it could be a strategy, cultural issue, or internal pressure.
Solving this might involve finding common ground with one or two members of the team or escalating the negotiation to higher management levels.
In certain situations, however, it’s best to walk away, especially when your Best Alternative To a Negotiated Agreement (BATNA) is more favorable. This should be done without burning bridges, clearly expressing your reasons, and leaving room for future negotiations. Walking away can occasionally lead to better outcomes, as the other party might return with a more reasonable offer.
Subsequently, Aram asks John to highlight a few strategies to handle negotiations in scenarios where trust is minimal or has been previously compromised.
The latter mentions that when negotiating, building functional or transactional trust is crucial. He suggests that trust is seldom present at the negotiation table from the start, and building it is key. This can be achieved by demonstrating competence and warmth, creating a sense of familiarity. Ensuring high-quality communications and documents helps showcase competence.
Meanwhile, warmth can be exhibited by coming across as approachable yet assertive, akin to a panda bear – someone who is friendly but not to be trifled with. Finally, establishing a sense of familiarity or “likeness” helps lower defenses and builds trust. This likeness can be achieved by finding common ground or shared values.
John strongly believes that negotiation starts as soon as the other party becomes known to you because their reputation begins shaping your negotiation approach even before you enter the room. In today’s world, you can research the other party, build a profile of who you’ll be dealing with, and find common points that may help create a connection. Your company’s reputation also influences how the other party prepares for the negotiation.
There are some companies that adhere to positional negotiation, aiming to gain as much as possible for themselves without considering the value they can bring to the other party. This approach doesn’t generate the most value and can lead to frustration and a lack of trust. John illustrates this with an example where a client asked for reduced rates and then accused his company of overcharging them, indicating a lack of good faith.
Overall, the negotiation process should be about value creation, not getting every possible advantage at the other party’s expense.
John, Aram, and Nolan discuss a lot more on this episode of the NEGOTIATEx Podcast. Write to us at team@negotiatex.com and share your thoughts on this very informational podcast episode.
Thank you for listening!
Nolan Martin : Hey everyone, welcome to the NEGOTIATEx podcast. I am your co-host, Nolan Martin. With me today is my good friend, co-host, Aram Donigian. Aram, want to kick off?
Aram Donigian : Yeah, happy to do that, Nolan. Folks, today we're joined by John Dieffenbach. John started his career as a deal maker and negotiator for IBM in the early 1990s. And for the past 30 years, he has built and led teams of professional negotiators, successfully sell, negotiate, and close billions of dollars in complex global technology services and licensing deals with clients such as AT&T, Pfizer, Exxon, Citibank, American Express, JP Morgan, Chase, Telstra, Cellcom, Aramark, and Bristol-Myers Squibb.
The challenges of navigating the personalities and emotions of executives to get to signature have helped him develop the strategies, tactics, and skills required to run the room and get the deal done. At two of the world's largest technology consulting firms, Accenture and Ernst & Young, John was a founding member of their specialized negotiation teams, which worked exclusively on those companies largest business deals and disputes.
He continues to lead a team of 12 full-time professional negotiators at EY. John has a BA in English from Binghamton University, a Master's in Journalism from Northwestern University, and a Juris Doctorate from Cornell University. He has published his blog Running the Room to World Acclaim for over 10 years. And folks that's at runningtheroom.com, he currently resides in Los Angeles. John, thanks for being with us today.
John Dieffenbach : Thank you very much for having me. It's a real delight to be here and see you guys
NM : As a professional negotiator for 30 years. Who or what have been some of your biggest influencers or shapers to your thinking around the negotiation process?
JD : Wow, I have to go back and probably say it. It goes to when I was in law school and I took a class in alternative dispute resolution. At the time, my goal was to become a litigator, which is why I went to law school. I'd been a newspaper reporter. I'd covered the courts, I'd watched the trials and said, wow, it looks like the trial lawyers are having more fun than me.
So, I thought, that's what I want to do. And, I took alternative dispute resolution with my professor, Robert Kent, and that was kind of the epiphany we read, getting to, yes, we talked about discipline negotiation, collaborative negotiation, the concept of win-win, etc. And I thought, holy cow, there's another way to do this where you can generate value for both parties.
So, I ultimately ended up not going into litigation. I took a job with IBM out of school, despite the fact that I had absolutely no technology background whatsoever, had never even taken a coding class as an English major and a former newspaper reporter. So, I learned technology on the job and then just started to use what I had learned about being collaborative in an approach to negotiation and avoiding positional behavior. So it really all kind of started, I guess I have to say, started with Robert Kent.
AD : So, I would love to dig into a little bit more of your background. You said you started your career as a newspaper reporter. How have you seen those journalist skills show up in practice as a corporate negotiator? Or do I guess, do they, and I guess as a second part to that question, as someone who trained, who went to law school, I know you can handle multiple questions at one time without [laugh] while we're on the topic, what are some of the, what do you see as the most critical skills for negotiators to develop?
JD : I think I got lucky having come up through the newspaper business because the business of being a reporter is the business of asking questions and gathering data. And negotiation is very much the same way when you sit down with the other party. If you are trying to be collaborative, and if you are trying to expand the zone of potential agreement, bring more value to the table and do all of those things, you have to ask a lot of questions. You have to be diplomatic in how you ask those questions so it doesn't feel like you're prying or, or being too invasive. And then you've gotta listen. And you can't write a good story as a reporter unless you listen and you hear what happened.
And so a lot of times when I'm doing a negotiation, I'm working with a team, I will say to them, what's the story of the deal? What do we think it is right now? We're going to sit down with the client, we're going to throw out some questions, comments based on what we think it is, and then let's listen and see if we're hearing things right or wrong. And then from there, you know, together build the story of the deal and potentially, what's the story with the happy ending, you know, for everybody. Everybody is happily ever after, if we can find collaboration in the work that we do.
And the same thing, you know, when you get into the law, it's a lot of the same disciplines. You're asking a lot of questions. You're, you're constantly testing, is this true? Are these facts right? And so on. So it's about gathering data and fact finding in both of those disciplines. And so I think I got lucky having had those two backgrounds. My own nature is, I do enjoy speaking and performing. I joke that I was either going to be a standup comedian or a litigator was going to be one of those two.
AD : We won't tell any lawyer jokes. [laughs]
JD : I'll be impressed if you can tell me a lawyer joke I haven't heard. That would be good. But those disciplines, whether you are a negotiator, whether you're a standup comedian, you're a litigator, they're all roles of influence. I mean, a standup comedian, believe it or not, is acting in the guise of influence by trying to use words to change your emotions and to laugh at the jokes. I mean, that's all a comedian has are the words and the reaction. And a negotiator is in the same exact position. When you're negotiating, all you're using are certain words to the right person at the right time to get that. “Yeah, I think that makes sense. Let's do that.” And so they're all very, very similar in that regard.
AD : Yeah. It's interesting. We had a guest on recently talking about the power of improv and why that's, that's a valuable skill for where if you're going to be an influencer or negotiator, leader, it sounds like you're saying we should practice some standup comedy to John [laugh].
JD : So taking a step back, a lot of people when they think about negotiation, they're afraid, they think it's going to be combat, it's going to be difficult. And what I tell people is no, think about it as a conversation. It's a conversation of influence because all you're doing is you're using words to try and influence the way that somebody's thinking about their currently perceived choice. What's going on right now? What do I think is going to happen?
This person has said something. You're trying to almost move their brain from here to here. I mean, when you come down to it, a lot of times negotiation is literally trying to get somebody who is saying white to say black. You've got somebody who's saying no, you're trying to get them to say yes. The only way you're going to get them to say yes is if you say the right things and somehow, you know, leveraging all of those seven elements that we all learned from Roger Fisher and Bill Ury, how am I going to understand their interests, talk about their interests, offer them options that may meet their interests in a different way, stand on legitimacy, build the relationship, communication.
It's all there. But it first starts with using the right words with the right person at the right time. Yeah. Because if you have any one of those three things wrong, then it's not going to work. You could be talking to the wrong person at the right time with the right words. You're not going to get anywhere, or it's the, the right person and the right words, but it's the wrong time because, you know, God forbid you're having a conversation trying to influence somebody, and you've just had a service failure, right? That's not the time to talk about the next deal when you've had a service failure, it's the wrong time. So all of those things have to balance out.
I do like the notion of improv, though. I do like the notion of improv. I hadn't thought about that. Just in the sense that the more that one can be free and dynamic in a negotiation and not feel like this is the lane I've gotta be in, because stuff can come in from all over the place. You know, you never know. And that's why I always say the beauty of the seven elements is it gives you a framework. You can never control the variables, right? A friend of mine once said, if you've done one negotiation, you've done one negotiation, because they're all different. They're all different. It's different people, different issues.
And so you've got so many variables, you can't control variables, but you can figure out how to manage them when they arise, and you can figure out what could come up next. And so, the seven elements allow you to sit down and build that framework and say, I can see where the variables are going to come from. Now let's figure out a couple strategies. And when that strategy doesn't work out, then we're going to have to improv and we're going to have to pivot and go to something else quickly. And you've gotta be fast on your feet.
Let me as a kind of a, as a follow up question here too, and this has been fabulous since you thought you were going to be a comedian, and you're talking a little bit about that. Is there a role for humor, appropriate humor? I mean, is there a role for humor in negotiations? Have you seen that?
JD : Absolutely. And in fact, as I mentioned, I just came from a negotiation and the person who I'm negotiating with is somebody who I actually know from quite some time ago, just by coincidence. We ended up on this deal together. And he and I are both injecting humor into the negotiation to really kind of keep it light. He fortunately has a good sense of humor as well. I will always use self-deprecating humor as a way to kind of break it down, try and reduce that notion of, you know, I'm the big bad negotiator or something like that, right. I'm not, I'm a problem solver and most of all, I'm here to solve the client's problem in the best way I possibly can. And so I always try to find a way to use humor one way or another in there because it does give a release to people. Yeah.
NM : So you've been involved in negotiations that involve companies from many different industries. How different or similar are those negotiations in terms of the challenges you and your team faced and or the solutions and outcomes that you're able to reach?
JD : That's a great question because even though one can be well-versed in negotiations, one also has to be sensitive to the particular environment that you're in. So for clients like financial services firms and healthcare firms, there are big issues around privacy that you have to deal with that really get very detailed and often you have to bring subject matter experts in to handle when you're dealing with retail companies. I've had this happen many times where you have to understand the issues around their business cycle because Christmas season changes everything.
And when you're doing retail Christmas season, actually they'll shut down any kind of new technology in September in preparation for Christmas season. So if you've got a deadline where they say, we gotta finish this thing by August 31st, they're not kidding because if you don't get it by August 31st, then you're going to pick the conversation up in January because they're not changing any technology in those times. So I don't have to know all of those things going in. I do have to listen for them and be aware of them when the client says, for example, well this has gotta be done by August 31st. And I say, well, help me understand why that's an important date for you. What happens if we go past August 31st? Well, we just can't because, and then they tell me we shut down because it's Christmas season. Got it. Okay.
AD : You mentioned the environment there in terms of being aware of the environment. Another challenge we often hear is the idea that you're negotiating with stakeholders that aren't necessarily at the table.
How do you think about tackling that challenge, especially when it's obvious that the decision maker isn't the person across from you and that a situation ordeal is going to have to get escalated if you're going to get it done?
JD : That's a great question. And I've had that come up a couple times in some different and funny ways. We had one negotiation where when issues would get to be like a big deal, we would say, well, that's something that we're going to have to have Tom Morrisey weigh in on. And then we'd go off a while, oh, you know, Tom Morrisey's going to have to look at that. And the next day when we came into the conference room back in the days when we used to be in conference rooms, the client had created a little tent card and put Tom Morrisey on it and put it in front of an empty chair, and said, this is where we want Tom Morrisey to sit so he can be part of the negotiations. You know, kind of teasing us about the fact that you guys don't seem to have the authority to make these decisions.
So there is that notion sometimes that you do have an empty chair at the table and it's advantageous to each party to have an empty chair as an escalation point. So that when, if you get to a point where you say, we can't work this out, we've gotta escalate this and bring somebody else in, gives you that ability to walk away and handle the issue, talk internally, and then come back and deal with it.
At the same time there often are parties who are the deal owners and they need to be identified. I always refer to it when I work with teams to say, do we know the voice of the deal on the client side? Because I've had deals where there were multiple executives on the client side who had a point of view about the deal, and they're in different areas and we have different relationships with them, and we're trying to funnel all of that information and their points of view to our table.
And so if the voice of the deal are two different voices, we have to figure out how to synthesize those two voices. Because the problem you can run into is you run into what we call salami slicing, where you're going along with the deal and you say, okay, here's what we're going to do. Here's how we're going to do it, we're aligned. And somebody says, well, I need this. Okay, make that change. All right, we'll move. Oh, but I need this too. And you keep going up the ladder and everybody keeps taking a slice, taking a slice, taking slicing before you know what the value of the deal starts getting drained away. And there actually was a great Harvard Business Review article about this, and I think there's a whole book on it called 3D Negotiations that, and this is the approach I've always taken, especially after reading that article, it became that much more crystallized in my head, is you have to be a holistic negotiator.
There are a lot of people who are linear negotiators where they go issue, issue, issue, issue, signature, and in fact, the negotiation is at the table. It's above, the table is behind the table. There are parties who are relevant to the negotiation, who are not in the conversation. There's a motion that's involved. All of this stuff has to be taken into consideration, which is why I use the phrase running the room, because it's not enough to come in and sit down and negotiate with somebody across the table. There's a whole room full of people. That you have to address when you're doing a negotiation. You have to sit down with your team and say, okay, who's the MC here? Who's running the conversation and handing things off as we go?
And let's see if they do the same thing on their side, or if everybody's kind of talking here and there. Because if you don't manage that, if you don't manage who is at the table, or somebody who's not at the table, who decides to drop in for the day to provide what I call “help”, somebody comes in and says, oh, you guys seem to be struggling here, let me come in and provide some help. And I had help show up one time in the deal where we had sat down, we had this issue, we said, okay, here's what they're going to say. Here's how we're going to respond, here's where we're going to go to close the issue. And then a senior executive came and they said, well, let me sit in on the negotiation and see if I can help. He said, okay, you stay down there and we're going to handle this. The issue came up and out of nowhere, he said, well, I think we can agree to that, and we all did what I call a collective Scooby-Doo [laugh]. We all went, “what” [laugh]? Because it was like, where did that come from? You know, who told you to talk?
So I always, as a ironclad rule with a team, when we're preparing for a negotiation, I say, if you're not in the rehearsal, you're not in the show, because I can't have somebody show up at the last minute, you know, walk on stage for a cameo appearance and say, Hey, we can agree to that and throw all of our planning completely out of whack.
NM : Absolutely. First, I love the approach there of the holistic negotiator and then kind of tagging onto something that you just said. So what is the most difficult, or maybe even the most insane behavior you've ever witnessed when negotiating? And how did you or someone else respond to it? Was it intentionally a dirty tactic or just unintentional? And in general, what's your advice for dealing with dirty tricks and disruptive tactics?
JD : Well, that brings a lot of stories to mind. I'll tell you my, my favorite tactic story, but first of all, I call 'em out/ When I see the tactic, I'll say, wait a second, are we trying to, you know, everything from a, the you know, the low chair type of thing, or [laugh], you know whatever. It's sort of like, come on guys. We're trying to work together and do this. My favorite tactic story was, I was doing a deal where we had finally come down to the last issue, and I was working with a guy from procurement, and I said, okay, Mike, I said, so you said you were going to go away and look at this issue and come back to me with a response? And he said, yes, and I decided that you need to go away and look at the issue and come back with a response.
So he, like, had nothing for me. He wasn't going to move on the position. And I said, well, Mike, I already told you, you know where we are. I mean, we've done everything we can. We can't move on this anymore. And then I just stopped talking and he wouldn't say anything. And we literally sat there in silence and he was doing the silent treatment, like, you know, like from the office. I'm choosing not to talk if you've ever seen that [laugh]. Which is brilliant, right? It's a brilliant, brilliant little bit of negotiation education in that, that the skit they do. So he would not talk. And I'm sitting there and I'm thinking, oh my gosh, he's doing the silent thing.
And I wanted to laugh because I thought it was funny that he was doing it. And I said, I've got to distract myself somehow. And so I went to Catholic school, I said, you know what? I'm just going to start doing a rosary in my head, [laugh]. So in my head I started saying, Hail Mary's, just to distract myself from the fact that I was sitting in this awkward situation and the business guys, my guys across the table, and he's looking at me like, you're going to say something? And I'm like, “mm mm [laugh].“ And finally he said, he said, all right, fine. I think we can go, you know, the way that you guys want to go, or something like that. And we closed it out and I thought, oh my gosh, that was just so fun to actually experience that life [laugh].
But, there have been other crazy tactics that people have done. I had a procurement guy at a large, financial firm who was notorious for pulling tricks. He actually said to his team, let's not pay anybody this month and let's see what they do. He just liked to test things out [laugh]. And so he proved to be so difficult that when you get somebody who is really challenging like that, a lot of times you've gotta escalate to get them out. You can't tell the other side, this person's being bad. You need to take 'em out. That'll never work because they'll always, they'll always come in around and rally around their own people.
So, what you've got to do is you have to keep giving updates, status reports, here's where we are, here's where we are. And you keep demonstrating and it's your person that is slowing things down. And that took me literally two months of no progress on this deal before his leadership sent in somebody else to negotiate with me instead as a proxy.
So, when you have those kinds of things with a dirty tactic, call 'em out. Particularly if it's something that is going after your integrity. I've had that happen where somebody says, you guys are lying now. That's not what you told us. Or This is a lie. And I would say, whoa. All right, let's just pause for a second. That's a very powerful word that you've used. If you are questioning our integrity on something this fundamental, then we should wonder why we're doing this deal together. Because you guys have to have a lot more trust in us for us to do this work for you for the next five years.
And if you think we're a bunch of liars, then I don't know why we're sitting together here. And a lot of times when you call those things out, somebody yells. I've had people start to yell at me and get very emotional and as soon as they do, and this took a while to do, because I'm from New York, so I have, you know, grew up with kind of a quick fuse on things. You react right away. I go quiet when somebody does it. I literally will sit back in my seat, I will put my hands out open on the table and just look at them and listen and wait for them to finish.
And then I will respond in the softest voice I can. It sounds like there's a lot of information you've given me there I wasn't aware of. This is a big issue for you. Let me take a break with my team. We want to talk about this and then we leave. And what I'm trying to do there is demonstrate to the rest of that team. This is the emotional person, this is the problem.
In fact, I learned this from my boss at IBM years ago. Yeah. This is a great story. This was back in the days before the Internet. If you can imagine the time before the internet [laugh] and back in the early nineties. And we flew out to Silicon Valley and we were going to license a patent from a small company that was out there, small startup. So it's him and I sitting on one side of the table with our business guys, their business guys and their lawyer. And they had hired an outside law firm.
So they had a senior partner and then they had an associate and the partner. So I was a junior guy at the time. The partner was, everything was a big deal. Everything he was yelling about, he just, you know, no, we're not going to do that. No, you guys can ask that, da da da. And would just keep berating my boss. And my boss would sit back and he kind of put his hands on his, on his stomach like this, like Buddha and just listen to the guy [laugh].
And the guy kept going and kept getting worse and getting worse and getting worse. And then eventually the client, you could see they were getting upset by this guy's behavior. So they called for a break and then they came back. Now during the break, my boss said to me, so, did you see what I did there? I said, no. He said, when you have somebody like that who's difficult, find out what sets them off, find out the things that you say that push their buttons and then smash that button.
Just keep smashing that button and set them off in front of their people and they'll take care of the problem for you. And that's exactly what he did. So they came back [laugh], and this was my favorite part. The associate then starts in and starts in with the same thing acting like this towards my boss. And my boss just leans in and says, your boss tried that. It didn't work out well for him. Maybe consider a different way of communicating. And that was it.
Everybody was like, whoa, you know, this guy who just kind of sat quietly there, he was running the room. He knew everything that was going on. So I learned from that. That's how you get rid of a difficult person, is you light 'em up and let their team take out because they're not helping anybody. It's not devious. It's, we've gotta get this impediment out of here. We're not going to be able to work together. You put the wrong guy in the first chair. You got to get somebody else in the first chair.
AD : You mentioned in there kind of this, this questioning, which sounded like it was being used as a tactic of integrity and trust. In situations where you've had to negotiate where there really was this, you know, a genuine lack of trust. Maybe it was a brand new relationship, maybe there'd been a breach of trust in the past. How did you handle that situation to restore at least a functional working or create a functional working relationship so that you could tackle the negotiation effectively?
JD : You said it exactly right. It's functional or what I call transactional trust that you have to build. If you've walked into a situation where you don't have it or you've lost it, I can't think of anything that's more difficult than to negotiate a deal where there is not trust, some form of trust there. And, you have to, you know, think about the fact that, would anybody do a deal with somebody who they don't trust? Because there's got to be something in there where you're, you're relying on them doing something or else are they going to somehow find a way to, to cheat you and, and take away the value of what you've done there?
So rarely is there trust at the table, what I call the transaction table when I show up, because I'm usually meeting everybody for the first time. Once in a while I get lucky. There's somebody who I've worked with before, or you know, we know people because I've been in the industry for a while, but most of the time everybody's new. And so I have to find a way to build that trust very quickly.
Now, presumably there's some level of trust that's been built up at a higher level where the deal was sold, where whoever in our executive suite sold the deal to their executive suite, that those guys shook hands and said, yeah, we're going to do this thing together. Let's bring in the negotiators and the lawyers and the finance people and have them kind of make the sausage down in the basement and get the deal done.
So for me, the key in building that trust is the notions of competence and warmth that Amy Cudi writes about. The fact that when, when you walk into a room and you're seeing somebody for the first time, and all of those animal instincts are on high alert in terms of fight, flight or freeze. You have to somehow build those two senses of competence and warmth for yourself in order to begin the ability to build that trust with the other party. And she's absolutely right on that. And so, the first thing that I try to build is I try to build warmth.
I tried to come across the, there was a professor who talked about the panda bear effect that you kind of come in like a panda bear, sort of like that can see that you are a bear, but you're kind of a friendly bear and you know, so you're not somebody to be messed with necessarily, but you're also not somebody that they need to fear. And so how do you create that kind of panda bear feeling of I'm an okay person, we're going to do fine, this is going to be great. Just don't threaten me. And, you know, don't take away my bamboo leaves, we're all going to be fine.
And then it's getting to the competence part. Is this somebody who actually knows what they're doing? And that comes in a whole, you know, in a whole bunch of different ways. It actually can be very granular that it's in your communications, it's in your documentation. I hate to be fussy and be an old copy editor as I used to be when I was in newspapers, but you gotta send quality documents around. You can't send sloppy stuff, especially a company our size. People expect that you've got quality stuff coming out. And so that's the first thing you gotta do is what are the deliverables? What are the things we're sending? They've gotta be the best that we can make 'em because we're trying to demonstrate competence in what we're doing here.
So, when you start to get those things, you start to build a little bit of that trust. For me, the real piece of it is when you can somehow demonstrate familiarity to them that there is something about you that is familiar, which is the same root as the word family, that somehow your family, and this goes to the, Robert Cialdini's concept of liking. That somehow you need to find some kind of a connection with them, not so that they like you, but that they think you are like them. That's the concept of liking. Somehow we are alike, you are familiar, we are family. And when you can find those connections, that's when you really start to build trust because their defense system starts to drop down and they say, this seems like somebody who is like me. We should be okay.
AD : You know, John, as you kind of discussed that, what was interesting to me, and I hope our listeners picked up on this, is most of us jumped to the second part of the connection between us and our counterpart. You started with Amy Cudi’s work around competence and warmth and said, this is on me. If I'm going to build this, this genuine relationship and trust, it starts here and you put it, yeah, for myself or for self. I just find that an interesting thought that people should have.
JD : Yeah. it is, the negotiation starts, I would say the negotiation starts as soon as the other party is known to me, which sounds kind of Aristotle in or something that, you know, or Yoda, you know, what's known to me, you are the negotiation begins. But, it's true because the reputation of the person will start the negotiation before you actually get in the room. If I find out I have to, or let's say you guys found out you're going into a negotiation and you're going to negotiate with Vladimir Putin, there's something inside of you that'll go, whoa, wow, this is interesting. I wonder how this is, and right away you're starting to prepare. Whereas if I say, okay, and the person you're negotiating with is the Dalai Lama, oh, and you relax a little bit and say, this should be interesting, and I may actually learn some things here, but your orientation, which direction you went in changed just by hearing the name, even though you've never met those people because their reputation is known to you.
So once the party is known to me. And these days, obviously you can do a lot of research because of the internet. You can find out a whole bunch of stuff about people on social media and LinkedIn and everything else. You can kind of build a profile of who it is you're going to be encountering. And you can also find some of those moments of liking because you can see their schools or where they've lived. You know, I've lived in Nashville, I've lived in Tampa, Florida, I've lived in Boone, North Carolina, now I'm in LA. So I've been around a little bit. And so if I see this, it's like, oh yeah, I lived there, da da da, I went to here. And you know, you kind of build a little, get a little bit of that going.
So the reputation will start the negotiation as soon as you hear the name, if that name is identifiable or even your company's name. There are certain companies in industry that if I have to negotiate with them, my immediate reaction is, oh boy, They are known to be very difficult to work with. There are some companies that are not enlightened to the notion that positional negotiation does not generate the most value for you. Not me. It's not about me. It's what more can I bring to you? But if you're going to be positional and if you're going to take, I had a client one time, for example, who said, can we do something about the rates? Can we reduce the rates that we have here?
And we did some things, we changed the way we're operating and we said, okay, we're able to reduce our rates to this. Well, the next week they said, okay, you owe us 10 million because you only reduced your rates now and you've been overcharging us for the last year. That's just bad faith. I did things to make this cheaper for you. I asked you to do some things to make this cheaper for me to deliver. And now you're going to tell me, I've been nefarious and overcharging you all this time we just changed our operating model. But there's some people who want, some companies that want to take every inch they can that way and keep you on your back heel all the time. And that's just very frustrating to deal with.
NM : Hey everyone, Nolan here. I have to jump in and in today's podcast for part A of this show, be sure to rate, review, and subscribe to the NEGOTIATEx podcast if you haven't already. And also join us next week of part B of this awesome interview.
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