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We don’t compromise because it’s right; we compromise because it is easy and because it saves face. We compromise in order to say that at least we got half the pie. Distilled to its essence, we compromise to be safe. Most people in a negotiation are driven by fear or by the desire to avoid pain. Too few are driven by their actual goals. So don’t settle and—here’s a simple rule—never split the difference.
Chris Voss
I have never been a good negotiator. I always avoid difficult conversations and agree with whatever is put on the table.
When I was initially given an offer by PwC back in 2015, most of my friends told me to negotiate the salary and the joining bonus. “It is very simple, you just start really high and tell them what you want!”, they said. I called my HR and asked them for an additional $10,000 on the salary they had offered. She said no. I said okay.
And that was that.
We use negotiation for so many things in our daily life.
When interviewing, we negotiate for a job. Annually, we negotiate for a raise. We negotiate in our relationships. When you’re trying to convince a friend to join you for a drink, you’re negotiating. If you’re buying vegetables in India, you can even negotiate the rate!
Negotiation is part of our life and yet we avoid it. It’s not the guy across the table who scares us: it’s the conflict itself.
And yet, it is one of the useful skills that you will develop. Thus, I started reading about negotiations and was able to implement a few tactics rather successfully. But more on that at the end.
WHAT DOES NEVER SPLIT THE DIFFERENCE MEAN?
One of the most recommended books to start learning about negotiations is “Never Split the Difference” [BUY IT FROM AMAZON] by Chris Voss.
Chris is a former FBI Hostage Negotiator who then founded Black Swan Ltd. which helps businesses and individuals with negotiations. The home page for Black Swan states, “Everything we’ve previously been taught about negotiation is wrong: you are not rational; there is no such thing as ‘fair’; compromise is the worst thing you can do; the real art of negotiation lies in mastering the intricacies of No, not Yes.”
The book is filled with anecdotes of the time Chris was working with the FBI and they were some really tense situations. They literally were negotiating for people’s life.
These strategies are helpful even for everyday people. Helpful to us. And Chris has put them brilliantly in this book.
You could use these ideas from negotiating to enter a visa center without an appointment (more on that below) to bargaining for a $500K house.
I have recently started taking copious notes of the books I am reading so I can better reflect on the learnings later. So below are my notes, summary, review, whatever you want to call it, for Never Split the Difference.
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EMPATHETIC LISTENING
Listening with an open mind is the first step to any negotiation. If you don’t listen to what the other party wants, you don’t understand what the other party wants. It is as simple as that.
But listening isn’t as easy, right? Even when we enter a conversation, we are always thinking about what we will say or what we can ask.
And to top that, we have our own biases. We engage in selective listening, hearing only what we want to hear, our minds acting on a cognitive bias for consistency rather than truth.
We look for patterns that match with the delusion of reality we have created in our heads.
When deliberating on a negotiating strategy or approach, people tend to focus all their energies on what to say or do, but it’s how we are (our general demeanor and delivery) that is both the easiest thing to enact and the most immediately effective mode of influence. Instead, focus on just listening with an open mind.
Chris Voss
It all starts with the universally applicable premise that people want to be understood and accepted. Listening is the cheapest, yet most effective concession we can make to get there. By listening intensely, a negotiator demonstrates empathy and shows a sincere desire to better understand what the other side is experiencing.
So why does empathetic listening work? Because you are removing your selfish desires, wants from the equation and focusing on the other person.
Empathy helps us look at things from a different perspective. The perspective of the person you’re listening to; why their actions make sense, what do they want.
We are removing our animalistic urge of “I want” and trying to honestly understand “what they want”.
MIRRORING
Mirroring is a technique where you mirror the other person’s behavior and words to build empathy. It should be subtle.
A good way to start mirroring is to repeat the last 3 words or the keywords that you understood while listening.
I do this subconsciously when I drift off in a conversation; I just repeat the last sentence.
But in negotiation, you shouldn’t drift off. You should consciously mirror the other person to let them know you’re listening and are following.
When mirroring, a warm smile goes a long way. It radiates confidence and lets the other person know that you are with them.
LABELING
Labelling is a technique of validating someone’s emotion by acknowledging it.
It literally means giving the other person’s emotion a name and you show you identify with how that person feels.
It gets you close to someone without asking about external factors you know nothing about.
A good way to label is to start with these
It seems like….
It sounds like….
It looks like….
A label usually ends with silence. In negotiation, silence is your friend.
PARAPHRASING
Paraphrasing is basically repeating what the other person said in your own words. This again shows that you have been listening to what they have been talking about.
It encourages them to talk more to you which could reveal more information that can be helpful for the negotiation.
SUMMARIZING
Summarizing is paraphrasing + labelling. You are essentially summarizing the entire conversation including their emotions and what you understood from them.
Summarizing comes before you are hoping to ask a question. A calibrated question.
A calibrated question is an open-ended question starting with “what” or/and “how”. You should avoid asking “why” questions in most instances because why is accusatory in most languages.
Also avoid close-ended questions, any question where the response can be Yes or No. It won’t help you in negotiation.
The end goal of summarizing should be having them say “That’s right!”.
NEGOTIATING
Till now we have covered all the listening and understanding pieces. Chris has a lot of good tips on talking as well. Because it’s not a negotiation until you ask for what you want, right?
ANCHORING
I have talked about anchoring in my logical fallacy and cognitive bias post. It is also written about in great detail in Thinking, Fast and Slow by Daniel Kahneman (BUY IT ON AMAZON HERE).
Anchoring is a cognitive bias where an individual depends too heavily on an initial piece of information offered (considered to be the “anchor”) to make subsequent judgments during decision-making. Once the value of this anchor is set, all future negotiations, arguments, estimates, etc. are discussed in relation to the anchor.
How to use this bias in a negotiation? Bend the counterpart’s reality by anchoring their starting point; set an extremely low offer, so that your actual offer sounds reasonable. In simple terms, low-ball.
For example, if you anchor the starting price at $11 for a $50 item, the next bid will be at a ballpark of $30. But if your initial anchor is at $30 for the same $50 item, the next bid will be at $45.
LOSS AVERSION
Loss Aversion is a cognitive bias. People have a tendency to prefer avoiding losses to acquiring equivalent gains.
Effective negotiators have long known and psychologists have repeatedly proved, potential losses loom larger in the human mind than do similar gains. We would rather not lose $5 than find $5.
Use Loss Aversion to create a sense of urgency. Make the other party feel they are losing something by not agreeing to your offer.
Remember the online ads? Offer only valid for the next 10 minutes. Book now!
BE SPECIFIC WITH AMOUNTS
Asking for $1239 is better than asking for $1250. Why? Not because it costs you $11 less but it makes the other party feel like you have done some research and asking for a specific amount based on your calculations.
Being specific with the amount
LEVERAGE
What leverage do you have on them? As part of the listening process, were you able to find any new information? Do they have an upcoming deadline, do they have to hit a certain sales target?
Use that to your advantage.
Even if they are in a powerful position (such as your boss), remember leverage is situational. Donald Trump has tons of power, but if he’s stranded in a desert and the owner of the only store for miles has the water he wants, the vendor has the leverage.
HOW TO NEGOTIATE – DIRECTIVES
If I had to explain the key lessons from the book in a form of action items within a minute, here it is:
- Listen silently, empathetically to understand their perspective
- Use minimal encouragers, simple phrases such as yes, okay, oh, nice, uh-huh
- Mirroring is important; smile warmly and mirror the keywords or last three words
- Label their emotions as you have understood them. “It seems, it sounds, it looks like” are examples of starting a sentence with a label
- Effective pauses are necessary; silence is powerful
- Paraphrase in your own words so that they know you understand
- Summarizing is labeling + paraphrasing, use it before you ask a question or put down a proposal
- Utilize open-ended calibrated questions such as what, how; avoid yes/no type of questions
- Get them to “that’s right!”
PERSONAL EXPERIENCE – NEGOTIATION IN ACTION
Negotiation requires years and years of practice. Reading one book doesn’t make you a master in negotiation. But it provides important information that you can use in certain situations.
I tried my hand recently with my newly acquired skills in negotiation. And I must admit it worked. Here is a boiled down version.
I have had my passport submitted at the visa center for the last 15 days and I hadn’t heard back. I also didn’t get any form of acknowledgment. Naturally, I was worried.
So I went to the visa center to find out, the only issue being I didn’t have an appointment.
I approached the guard and started with a warm smile, “How are you? I was looking to get in to talk to Mr. X”.
Guard asked for the appointment. I explained I don’t have an appointment but have my passport submitted.
Guard, “We don’t let anyone in without an appointment. You should leave.”
“I understand I should leave but I really need to talk to Mr. X. It has been 15 days and they haven’t responded back. What to do?”. I was smiling throughout and talking in a calm tone to not agitate him any further.
Guard, “Sir, I can’t let you in! They get angry if I let anyone in without an appointment. There have been so many people trying to get in ever since the visa centers have opened up. We can’t let anyone in.”
“It seems you are worried that they will be angry if you let me in. I had emailed them before and I have already submitted my passport. Mr. X knows me by name and I believe it won’t be a problem.”
Silence.
Guard, “You can go in.”
I just used a few of the ideas from the book consciously such as mirroring, being calm, smiling, labeling, and using calibrated questions. It took me around 10 minutes to talk to the security guard. But I was able to get an answer from Mr. X at the end of the day. Worth it.
Now I understand, this seems like an everyday conversation for most of you’ll. But look at it from the perspective of a person who has the persuasion skill of a bee. For me, it is huge progress from when I was talking to my HR in 2015!
QUOTES
- We fear what’s different and are drawn to what’s similar
- “It is self-evident that people are neither fully rational nor completely selfish, and that their tastes are anything but stable.” – Daniel Kahneman
- We are easily distracted. We engage in selective listening, hearing only what we want to hear, our minds acting on a cognitive bias for consistency rather than truth
- [In a negotiation,] don’t commit to assumptions; instead, view them as hypotheses and use the negotiation to test them rigorously
- Negotiation is not an act of battle; it’s a process of discovery
- “No” is the start of the negotiation, not the end of it
- We don’t compromise because it’s right; it is done because it is easy and because it saves face. We compromise in order to say that at least we got half the pie. Distilled to its essence, we compromise to be safe. Most people in a negotiation are driven by fear or by the desire to avoid pain. Too few are driven by their actual goals. So don’t settle and—here’s a simple rule—never split the difference
- No deal is better than a bad deal
- We must let what we know—our known knowns—guide us but not blind us to what we do not know; should remain flexible and adaptable to any situation; we must always retain a beginner’s mind, and we must never overvalue our experience or undervalue the informational and emotional realities served up moment by moment in whatever situation we face
