What I have learned about negotiation

Han could use some lessons on modern negotiation.

Han could use some lessons on modern negotiation.

Full disclosure: not much. But I have picked up a few things here and there that I thought were worth sharing.

Put the gun in the other person's hand

I heard this principle on a podcast. I think it is a Mungerism but it could also be a Buffetism. The concept is to let the other person drive your negotiation. Put them in a position of power and just ask them to do what they think is fair. Two reasons for this. One, this can often lead to better outcomes as the person you are negotiating with tries to live up to the trust you have put in them. Two, if they take advantage of the situation to screw you, you now have a crystal clear window into their character and can reevaluate your relationship moving forward. you now have someone you trust to work fairly with you in the future or you have someone who you know is only in it for them selves. Either way you're better off.

Negotiate from the ground up

I take this from a wonderfully simple post from Max Niederhofer on what he has learned about negotiation. I loved this post so much I hung it up on my wall! The strategy is commonly sited in negotiation how-to's, but bear's repeating. The key takeaways are to treat people on the other side of the table like the humans they are and that the more you prepare, the more likely you will get a good outcome. Start by knowing exactly how much you want to buy/sell something for. Then start 35% higher/lower in the applicable direction. Move 20% closer. Then 10% closer. Then 5%. Finally throw in something non-monetary that you have identified earlier that could be seen as a "win" for the other party. The decreasing intervals of this framework will signal you are getting closer to your break point. The kicker at the end will make the other party feel as if they have walked away winners. I very much align with Max’s view that negotiation is not winner take all. The key is to act emphatically and come to a scenario everyone around the table can feel comfortable with.

Make them blink

The most audacious and least widely applicable of the three strategies in this post. I take this from the podcast I highlighted earlier this week with Nick Kokonos. Nick describes his most recent book negotiation. He got together a bunch of publishers on the call (they had all agreed to this before hand so weren't completely blind sided.). He then starts off at a LUDICROUS number and slowly starts counting down. Eventually someone blinked at a point 2-3x what they were willing to offer one on one. This high pressure situations ramps up the fomo (fear of missing out for my non-millennial friends) faster than a Friday night in high school. Eventually someone will blink and offer you a good price because they are worried that someone knows something they don't since the price is so much higher than they were willing to offer initially. This strategy only works when you  a) are bargaining from an existing position of strength b) are able to get several similar buyers together in an auction setting and c) the negotiation is more transnational in nature and less about building a lasting relationship. 

One important caveat. This should all be taken with a healthy dose of salt grains. I am early in my career and haven't exactly been negotiating international joint developments protocols in my free time. The most high stakes negotiation I face on a regular basis is figuring out where to go to dinner with my wife (we are one of those couples where the negotiation centers more around wanting the other person to decide than actually feeling strongly about somewhere in particular.)

That being said, each of these strategies really resonated with me and when I am negotiating the name for Mars colony 3, these will be the paradigms I lean on.