How To Negotiate Like A Pro

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After hearing some great negotiating stories on Mixergy from angel investors, entrepreneurs and business leaders, a few people emailed to ask for more specific negotiating techniques. So I invited Jim Camp, whose “Start with No” negotiating methods have been trusted by over 500 multinationals and have been taught to over 100,000 students, to teach us.

Jim Camp

Jim Camp

Jim Camp is a leading global expert on negotiations and has trained and coached over 100,000 people through thousands of negotiations in more than 500 multinational organizations, including Texas Instruments, Intel, Applied Materials, Merrill Lynch, IBM, Cisco Systems, Prudential Insurance, and Nationwide Insurance.

 

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Full Interview Transcript

Andrew: This interview is sponsored by WuFoo, where you can get embeddable forms and surveys on your site for free. And you can even get beautiful reports, like this one, so you can analyze the results you get. It’s also sponsored by Shopify. If you go to Shopify.com, you’ll be able to create and manage your own online store. And they even have an apps store, which lets you enhance your store with powerful plug-ins. And this interview is sponsored by Grasshopper, which has unlimited extensions. And here, let me let them explain them to you.

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Andrew: All right. Here’s the program.

Hey, everyone. I’m Andrew Warner, founder of Mixergy.com, Home of the Ambitious Upstart. And today we are going to learn how to negotiate. How to negotiate properly. And to learn how to do that, I invited Jim Camp. He is a leading global expert on negotiations. And he’s trained and coached over 100,000 people. He’s worked with more than 500 multi-national organizations, including Intel, IBM, Cisco Systems. His site is full of companies that he’s worked with. I’m going to limit it to these three, and encourage you to go check out his website to find the rest. He’s also been featured on CNN, CNBC, the Wall Street Journal, Harvard Business Review, and many, many, many other shows and publications, including today, Mixergy.com. Jim, I refer to the website. What is the website?

Interviewee: Startwithno.com

Andrew: Startwithno.com. Let me ask you this as the first question. And this is a selfish question, but it needs to be asked. If we learn what you’re about to teach us here today, and what you teach in your courses, and what’s available on your website, what’s in it for us?

Interviewee: Well our last client we tracked, where we actually tracked every negotiation that we coached, we returned $400 to $1 of coaching fees.

Andrew: Because they were able to negotiate so strongly, they ended up with $400 more per dollar than they invested in the program.

Interviewee: That’s right. They had a gain. On 76 million dollars in negotiations, they had a gain of a little over 11 million dollars.

Andrew: OK. You know what? I really respect that. A lot of times when people teach, they don’t have a way, they don’t have a feedback loop, a way of measuring how successful what they’re teaching is out in the field. And I like that you’re measuring it in dollars and cents. So let me get an overview of what we’re going to learn here. And ask you, how about this? You say, ‘start with no”. Why start with “no”?

Interviewee: Well start, the word, one of the biggest challenges in the world today is what the word “no” really means.

Andrew: Hmm-hmm.

Interviewee: I didn’t find an audience, when I talked with an audience, say, and you’ll be shocked at the different thoughts people have about the word “no”. No one brings up that it’s just a decision to be changed. They talk about rejection. They talk about the fear of hearing it. They talk about all these negative connotations with “no”. “No” is the ultimate negative word. But in reality, “no” is nothing more than a decision to be changed. And it’s the safest decision to be made. It maintains the status quo. So, there’s a lot of dynamics around the word ‘no’, so that’s why we’ve encircled ‘no’. My best selling book, ‘Start With No’, gets into that heavily.

Andrew: But Jim, [??] we’ve got a bit of an echo, all right, there we go, it went away. Jim, aren’t we supposed to, if somebody says ‘no’, aren’t we supposed to just let them move on? Aren’t people who don’t stop at ‘no’, who see ‘no’ as a decision that needs to be changed, aren’t they considered obnoxious in the world? We don’t want to be seen as obnoxious, we want to be seen as likeable, smart, successful businesspeople.

Interviewee: Sure, we want to be likeable, we want to be smart, we definitely want to be successful. But if you think for a moment, the entire audience that I reach out to today can say ‘no’ to anything I say today. The important part might be just, just reject what I’m saying, and be comfortable with that. It won’t hurt me in any way. It won’t just happen.

Andrew: Did I just, you were…

Interviewee: Say ‘no’…

Andrew: I see… Sorry, there’s a little big of a lag, I’ll let you speak, and I’m sorry, I shouldn’t keep interrupting because of this lag.

Interviewee: You want me to keep… OK, you see, so how did I appear, how do you appear to the audience when you’re comfortable hearing them? You appear confident, effective, you feel comfortable, you appear comfortable.

Time Start: 5:00

Interviewee: So all those things allow apply to allowing someone to say no comfortably. It’s a very powerful dynamic in negotiations. Very Powerful

Andrew: To allow somebody to say no is a powerful dynamic? How do you mean?

Interviewee: Well when’s the last time someone said to you: Look I’ve got a great idea for you and I’d like to show it to you, and when I’m finished it’s ok to reject it you won’t hurt my feelings. Is that fair, would that be fair?

Andrew: Yeah?

Interviewee: So would the party now have the barriers come down a little, spend a little more time looking more closely at the proposition.

Andrew: I see what you’re saying, yeah.

Interviewee: So that’s just negotiating an agenda is all we are doing. Of what’s going to happen.

Andrew: I see. Ok, so before we get started, before we start negotiating we say look it’s ok for you to say no. And by doing they we let the other person reduce his barriers and listen and take in what we’re saying without feeling like they have to find a way out of it just in case.

Interviewee: That’s exactly what we’re doing. We’re allowing that person to be comfortable saying no and being engaged because we’re not pushing them to change, we’re asking them to maintain status quo and just take a look so it’s a whole different dynamic.

Andrew: Ok. Alright. One of the other things I’ve read about you is that you reject the idea of win-win which everybody else talks about is the goal of negotiating. Why?

Interviewee: Well let’s talk first of all you never win a negotiation. And you never lose a negotiation. What happens is all you do is maintain your mission and purpose your long term aim or you advance it. So there’s no such thing as winning and losing. The other thing that really drives me to attack win-win is that it’s steeped in compromise. Collective bargaining requires compromise. Negotiation does not. Yet you take a look at the win-win philosophies and all the books out there, the hundreds of books we take advantage of those mind-sets because they believe they have to give something up in order to be liked, or in order to have a win. So they falsely use compromise to manipulate the negotiation and they end up giving up far more than they should. So between compromise and making assumptions. What do we do? We prepare a BATNA Now a BATNA is ridiculous. That’s the Best Alternative Negotiated Agreement, whatever, they come up with a BATNA. A fall back position, before we ever get into a negotiation so they are compromising before they ever begin. And then they get in a negotiation and someone says, look lets cut to the chase, what’s your bottom line. Well we’ve already prepared a bottom-line. We already have a BATNA. And what’s the savvy negotiatior say? Once they’ve given up that bottom line? Gee, that’s not quite good enough. So now the negotiation really gets serious. Because the bottom line number is already there and now they’re asking for more. And then the assumptions and fear step in. Oh my goodness I’m going to lose this deal. Oh My Gosh. And they start guessing again and assuming oh well I’ll give up 3 more percent and I’ll get this deal. You see it everyday. I see it every day in coaching.

Andrew: Actually would you mind then giving us an example from one of the people you’ve coached? I’d like to see what this looks like in action. How somebody starts to compromise before the negotiating starts, how they make assumptions and how they back off before they’ve even begun.

Interviewee: Sure, I’ll give you a great story. This is a true story: One of my chairmen called me to California, to Silicon Valley, for a meeting. And it was with Pacific Rim Senior Vice President and his team and they were trying to move the technology into Korea and the Senior Vice President and his entire team–now you’re going to love this–believed that, they truly believed, that to Korea, the first round of technology had to be given to the Korean corporation, you would know the name of, and it was eighty million dollars in hardware to be given to Korea just to get into the marketplace and the senior vice president actually said: I truly believe they’ll like us if we do that. And there’s an example, that’s an extreme BATNA. I mean we hadn’t even engaged that company yet and here was the senior vice president arguing, convincingly…

Time End: 10:00

Begun 00:10:00 (minute 10)

Here is the senior Vice President arguing convincing to the board of directors and to the Chairman to the leadership that the fall back position was to give them 80 million dollars in equipment, in order to penetrate the market place and when the Chairman asked ëHow do you know this?’. Well, we have been in Korea we have been in this area a long time and we know from the past experience this is the best way to do business, they will like us. That is an extreme but it’s bizarre what people will give away, not even have a meaning.

Andrew: Okay now you have theseÖ let me adjust the microphone here We keep getting here we go. If we have these assumptions how do we avoid them by getting real information by getting solid data before we go into negotiations. So that we are negotiating intelligently and not making things up.

Interviewee: Well there are a couple of things we have to do one we have to do research, which very often we don’t do. And then this is going to sound little we have got to do research but then we have to also reject the research. Now you are going to say wait a minute, How do you reject research? Here is what we do we take the research that we have dug into and then we reject it and then we do our own research at the point in the sphere negotiation. So by asking the proper questions, outlining the proper questions, we can do our own research during the negotiation to find out what is really true and what is really not true. Because see a lot of times let us take for example websites, websites are usually a sales tour and I don’t mind in my website we try to get the vision of coaching to get people interested in what we are doing? And so I would encourage and I do encourage people to read my book first, then I encourage people to call me on the phone like we are doing today with you. I encourage people to dig into what we are doing now, so that is how we eliminate assumptions by realizing that is what they are.

The greatest strength for professional negotiator is to not know. So you have to ask because if we don’t know. When someone asks a question we need to train ourselves. I don’t know if I don’t know, I don’t know, so I have got to ask. That is really how we eliminate assumptions that is it, a rapid overview.

Andrew: I am going to take this a little deeper but let us make sure I have an understanding and the way I get a good understanding is to use an example. So let us suppose that I see that you are teaching classes and I say the mix of audience could learn negotiating skills beyond what we are doing here. I would like to get paid for offering gym’s negotiating classes. Why don’t I call them up and work out an agreement where for every class that I sell to my audience I get a cut of what they page in. You are saying the first thing I need to do is go and do my research which might mean calling up other people whose sites you are listed on. May be a taking a look around your website and reveal some kind of a affiliate fee and so on. May be do a little bit of research to see who is upset with you for dropping them on a past or for underpaying them or excited about you for over paying them and then you’re saying reject that research.

By that you mean come into negotiations we are thinking of selling or reselling your classes on big city dot com. How do you structure your deals, what do you pay out referrals? What do you a website how would you get us up and running is that what we are talking about here?

Interviewee: Let me first start off with why would you want a affiliate with me?

Andrew: You are saying I would ask you that. Or you’re asking me?

Interviewee: I would want to try to gather your vision and you should be trying to gather mine.

Andrew: So before we try to get into the tactics you are saying understand Jim’s vision and Jim’s is going to want to understand Andrew Warner’s vision. And that’s why is the decision’s are made in your vision on the emotional side of the brain. So if I can get an idea of your vision and why you might want to affiliate with me. I then can begin to get a picture and make decisions for myself and then I might ask you Andrew why would you think I should affiliate with you? So now I can begin to do my research on your world and your accomplishments and all the thing that you just talked about.

Andrew: What about this if you were to ask about what is your vision why would you want a partner up with me I might

End at 00:15:00 (minute 15)

Andrew: …partner up with me. I might, if I hadn’t already been open in past Mixergy interviews. I might say, “Well, all I want to do is help people. I don’t care about money. I just want to help.” Or I might, actually maybe I’d do that. Maybe I’d say all I want to do is help people. And I’ve misled you because I’ve told you about the view of myself, and of my work, that I want the world to know. And then when you’re negotiating with me, you’re only dealing with this view of me, with this facade that I’m putting up. How do you get past that? How do you get to the real goal?

Interviewee: We have a rule called Three Plus.

Andrew: Hmm-hmm.

Interviewee: And I might say, and we also have a behavior called Strip Line. And I might say to you, Andrew, I might say, “Andrew, I’m really troubled here. I know a lot of really great people like yourself want to help the world, but why would you want to affiliate with me?” Now that’s the second time I ask that question.

Andrew: OK. Why is the second time significant? You’re saying…

Interviewee: Because we have to peel the emotional onion, and create a more complete vision. Has someone ever asked you a question, just off the cuff, very quickly, and you weren’t able to connect? You weren’t able to get a picture of how to answer. And that’s how the brain works. So we have to ask more than three times. The more important the question, the rule is, the more important that we. That’s what we call Three Plus. Now, and we talk about that in the book. Both my books, and all of our training, practices that. But then I would come back and say, “But seriously, Andrew.” I might even change up on you a little bit. I might come back with another question. “Here’s the problem, Andrew. I don’t know really, truly why you would want to affiliate with me. How important is it that your client, your affiliates, all the people you get to touch, how important is it that they find something that really changes their life to the better? How important is that?”

Andrew: I would say, “Very important. That’s the reason why I’m here.”

Interviewee: OK, so you’re really serious.

Andrew: Hmm-hmm. Yes.

Interviewee: Are you really serious about this?

Andrew: Very serious.

Interviewee: That’s a pertinent question, that brings about three possible answers. Yes, no and maybe. If I hear maybe, I’ll continue. If you say, “Yes”, I’ll say, “Are you sure?” If you say, “No”, “Geez, Andrew, I’m falling short here. Where am I falling short?” So our system enables you to go any direction you have to go, all the while knowing that we have to create vision in the other party. Because that’s where their decisions will be made. Their decisions to give up valuable information are made right there. And so I actually had a client one time, and here’s an example. I had a great client one time, CFO of a company at the time. He’s in Korea. And we couldn’t figure out why this adversary so much wanted this contract. It was really uncomfortable, very, very uncomfortable. And Bob, his name was Bob, when I said, “Bob, we may have to Twenty Plus this question. Why this contract? Why do you want, why would you want this contract?” And we asked it of the Korean CEO. And Bob said he asked it nine times. And in the ninth answer, the Korean CEO said, “The contract, I’m just going to break it anyway. So you’ll have to sue me.” He actually gave that up to Bob. So of course, we wouldn’t, they wouldn’t, sign the contract, because his intention was to break it anyway.

Andrew: I see. I see. You know, I’ve had reporters do that to me. They’ll ask me a question. I won’t answer. They’ll ask me a question. I won’t answer. They’ll ask me the same question again, and maybe I’ll come up with a phrasing of the answer that feels comfortable to me, but doesn’t reveal what I don’t want to reveal. But by the fifth time that they ask it, somehow something slips. It’s amazing that it does. And you know, the other thing that I noticed, earlier you said, sometimes when people answer the first time, they’re not giving the right answer. They’re just giving an answer. I’ve noticed that in interviews. I’ll interview somebody, after having done a pre-interview with them, I know I’m thinking of one person specifically, we talked in the pre-interview. We agreed to certain things that were facts. He comes on here. I’ve got them, facts on his website. He comes. I ask him a question, and he gets the facts wrong, about his own company!

Interviewee: [Laughs]

Andrew: I have to come and re-phrase it. It’s because it’s not a natural situation to be sitting here facing the light, facing the camera…

Andrew:because It’s not a natural situation to be sitting here facing the light, facing the camera, having the live audience her to interact, knowing that people going to watch afterward, and i can imagine too a negotiating situation isn’t a normal situation for most people

Interviewee:no your exactly right, here’s the trick, and i call it the secret sauce, there are rules and fundamentals to negotiation that cannot be broken, and so often they are broken or people don’t know what they don’t know and those rules for example we were talking about 3 plus and that’s a very powerful psychological rule because you have to give the brain a chance to catch up and create division I do a journal in workshops and i don’t do many workshops anymore when we did do workshops and i would do an example where i would have everyone close their eyes and bow their heads down and i would ask three questions and as soon as you had a vision put your hand up and invariably i would take people within 3 questions to the golden gate bridge. I would ask what guards the gate, that would be the first question what is international orange on the west coach, that would be the second question and the third question is windy all the time and invariably someone would have a picture of the golden gate very quickly some would have it immediately with the first question but the point is that you have to give the brain time to process the question and if the reporter and I’ve done a lot of interviews like yourself the reporter is going to push very very hard with one single question you have to have a tool another principle of ours called reverse and you might not be able to see it but i used a reverse with you when you first asked me about why would you want to be an affiliate with me, and i said to you thats a great question i was wondering kinda the same question why you would want to be an affiliate with me and that’s a reverse so you have that tool in your tool kit but its a rule it’s a principle its not a tactic it’s nt a trick it’s designed to create vision and you have to use it properly in order to be able to move the negotiation forward

Andrew: ok ok you talked about getting the other sides vision, what about our side. I know that, well should we walk into negotiation with a vision of where we want to go out or should we just be open to having a dialog and try to figure it out there.

Interviewee: no this is really very very important we develop, we spend a lot of time in our training in our lessons we spend a great deal of our time on mission and purpose Andrew. long term aide, continuing task and responsibility, and what does that look like. For example, I always tell the story and here’s the example of Thomas Edison, now the world will tell you Thomas Edison invented the light bulb but that’s not true, he purchased the rights to the light bulb from a Scotsmen who he also hired to come into his organization, but Thomas Edison purchased the rights to the light bulb not to sell light bulbs. He knew that the light bulb would be the greatest method of allowing discovery in our society of what the power of eccentricity could do and what electric appliances could do. so it was a vehicle to help create vision in others, cause his mission and purpose was to provide electrical energy to the world and he did that very successfully it’s called GE today and that mission and purpose is that vision that long term aide so we have to have that ingrained in us when we enter the negotiation, it’s also the secret sauce to decision making. It will allow you to make decisions “no” because it doesn’t advance your mission and purpose or “yes” because it does. Now the other thing that’s very important here is that we have to have a vision of the problems we see, what are the problems we see, and by preparing those problems we’re able to attack those challenges and get those negotiated to completion, so again it moves the negotiation forward, so those are things that have to be in place

Andrew: Ok by the way people, people hearing a little bit of noise in the background, that’s outlook

Andrew: By the way, people hearing noise/chime in the background that’s okay thats fine. That’s outlook. You’re on a PC. I used to have that sound all day on my computer.

Interviewee: Unfortunately that’s what I have. I guess I could shut it down couldn’t I?

Andrew: Yea sure. Go for it.

Interview: Yea, I’ll just shut it down that way…

Andrew: While you do that I think most people know I do my interviews via video Skype. I happen to be in Buenos Aires right now but I started out doing these interviews when I was in California. There’s not an elaborate setup (well maybe on my side) with all the different recording equipment that I attach to Skype and make the interviews go live on the internet. We do them on Skype which gives me access to a lot of people.

Interviewee: The age of technology.

Andrew: I love it. So you walk in there with a vision. Can you give me an example of who didn’t walk in with a vision and what happened when they didn’t have that vision?

Interviewee: Their decision making is completely lost. They have no anchor and there’s no foundation for their decision making. Negotiation is a decision science. Can you imagine the number of people that go into a negotiation and have no vision of what they are trying to accomplish so they don’t have that advanced decision making and it’s completely ineffective. Hence you get terrible compromise. Some of the compromises are bizarre.

Andrew: Like what?

Interviewee: For example, how many people in your audience need to make a deal and they have no need of taking that need away? All they have in their repertoire is the lowest possible number they can stand. I’ve even had clients when I first started coaching say to me “It’s OK if we take a loss in this negotiation. At least we have a customer then we can put the PR out and we have a customer.” What a terrible position to be in.

Andrew: What do you say to that person? I’ve been in situations where I felt i needed to make a deal and I needed to get a break because I needed a break from work. We’ve all been in situations like the one you’re describing where you want to make a sale to a company just so you can get them on your website in the PR section. What do you do?

Interviewee: First thing I do is say to you “Andrew, What’s your mission. Your purpose? What is your long term aim and continuing task responsibility. What are you delivering in your proposal to the other party? What is the long term vision you have here?” The first thing I would do is help them establish that and that becomes their anchor and enhances their decision making rather than having fear and needs set in. If nothing else it makes them say “No I can’t go any lower. I hope you’ll allow me to come back and revisit this.” Just to compromise out of fear is just tragic.

Andrew: So you’re saying if you’re feeling fear where you have to do a deal the first thing you should do is anchor yourself by what you want not what you have to do. Get back in touch with the original vision and goal is. I can still see somebody freaking out about that. Let’s suppose I’m running an internet company always running close to nothing and you need to make a deal just so you can get the pr pop so people can see you growing as a viable company. Maybe even so there’s revenue coming in the door to help you stay alive. You want to walk in there and get that deal and you have to. To walk in that person’s office and say get in touch with you why you started an internet company. Get in touch with why you’re an entrepreneur in the first place would freak them out because they would think if I don’t get that deal then everything I’ve worked and started this business for would go away.

Interviewee: As a coach I would say before you panic and give away the store, I would question you what are you delivering to your customer?

Andrew: I see. If it’s an internet company, I’m delivering to my customer eyeballs. I deliver to them a solid brand to connect with. I’m delivering to them possibly traffic.

Interviewee: Interesting. What should traffic do for them?

Andrew: Not that huge. They already have a growing business and they have a lot of traffic. That’s why I want to do business with them because they’re so giant. Associating with my small brand might give them credibility so even if it’s a bigger audience it might be a more targeted audience.

Andrew:That’s why I want to do business with them, because they’re so giant. Um, but associating with my small brand might give them credibility in this space, associating with my website might bring in new people that they hadn’t had, so even if it’s not a bigger audience it might be a more targeted audience.

Interviewee: Oh okay, so what would that target audience possibly deliver to them?

Andrew: Reputation, maybe because they’re leaders in the space other people might follow them, maybe some credibility that they couldn’t buy that they couldn’t get with their current audience. I see what you’re doing. You’re pushing me towards recognizing the value that I have, because when I’m in fear mode, I’m not recognizing that I have any value. I see myself as a big loser who failed at this business who’s gonna drown any minute now, and you’re saying “No, no, you have something. Stop, recognize that and walk into the meeting with that.

Interviewee: Right, but andrew, but now. We dig into that deeply, and then we structure the proper statements and questions to create vision in the big player of all the credibility that you’re going to deliver to them in that space. So they’re going to have your vision when we finish. You’re going to have laid it out in such a way, in such a bright positive way, that they’re going to see value, and then instead of you proposing a price, you’re going to ask them what, would they, what would they budget to have this. What would they budget for this.

Andrew: I see, I see. Let’s break that down a little bit. And by the way, I see that you have one of your fans here in the audience, DJ Wolf. DJ Wolf if you uh, I know you’ve read the books, I know that you’re a big fan of Jim’s. If there’s anything that I’m missing here, bring it up. If there’s anything especially is important for us to talk about with internet entrepreneurs, bring it up in the chat room, and I’ll do my best to include everything you say here in the conversation. Okay, so let’s unpack what you said earlier. You said we’re going to take the value that we’ve recognized and show it to the person who we’re negotiating with. How do we do that?

Interviewee: Well, first of all, we have to have the vision ourself, which we were working on just a moment ago, right?

Andrew: Mm-hmm.

Interviewee: Okay, okay. Now what are the problems you see with this?

Andrew: Um.

Intervieweee: Now I ask, what are the problems you see with going to this internet giant, what are the problems you see holding back your success?

Andrew: Umm. That I’m a nobody. That they don’t need to do a deal with me right away. That they don’t, that I don’t have much size, that they might be thinking I’m going to go out of business any minute now, that they might have more bigger, pressing, more important things on their plate.

Interviewee: So that’s, we call that baggage

Andrew: Okay.

Interviewee: That’s your emotional baggage you’re carrying.

Andrew: Okay.

Interviewee: Now what’s the real problem?

Andrew: The real problem, if I wanted to make a deal, someone’s throwing the name Microsoft out there in the audience, so if I were running a small website, and I wanted to make a deal with Microsoft, my real problem is… Are you saying that it’s lack of confidence in that case?

Interviewee: No.

Andrew: Then what?

Interviewee: You have a bigger problem.

Andrew: What? Does anyone in the audience see it? Let me know.

Interviewee: Stay with me on this one, who were you talking to at Microsoft?

Andrew: Umm. Who am I talking to at Microsoft? I’m talking to their biz dev person, I’m assuming.

Interviewee: You’re talking to who?

Andrew: Their business development person. The person who makes deals that are bigger than ad buys.

Interviewee: Okay, so that, so is that the proper person to be talking to?

Andrew: I see, I imagine it would be

Interviewee: Okay, so what would you do? Or did you just make the assumption that’s the right person.

Andrew: Ahh, interesting. Okay, yeah I guess so. I guess we, I guess so. So you’re saying the first thing I would do is check and make sure that the person

Interviewee: (interrupts)

Andrew: Oh, sorry go ahead, we’ve got a bit of lag here.

Interviewee: No you are right, so your guessing on who you should talk to and the real problem is that this is very dangerous. Cause that could be a blocker. So who are you talking to? Who should you be talking to? So maybe that person is the person you negotiate with to find out how they make decisions at Microsoft about small providers that give great credibility in a very targeted environment.

Andrew: Okay. So first thing I would do is challenge, is challenge even those small assumptions, those basic assumptions like the one that I’m talking to the right person. I may not be. Second, find out from that person what they, what their criteria is for making a decision.

Interviewee: Right, who are they? Are you even talking to the right person?

Andrew: Okay, okay.

Interviewee: Pardon me. Are you even talking to the right person?

Andrew:

Interviewee: Are you talking to the right person, right?

Andrew: I see. Let’s assume I am.

Interviewee: OK, then, what’s the second problem you have?

Andrew: The second problem, I don’t know.

Interviewee: How do they make decisions? You don’t know how they make decisions on such a small space, such a targeted space.

Andrew: So, how do they make decisions, and how do they make decisions in this specific case.

Interviewee: In a very targeted space.

Andrew: OK.

Interviewee: And one of the criteria, third problem, you don’t know the criteria they have for working with a company in a small, targeted space. What are they looking for? What does it look like?

Andrew: I see. All right, I can see how this would help, and I can see how intellectually, how this makes sense, and I try to information from the people I’m negotiating with. But, at the moment, I sometimes forget. There’s a deal on the table and I want to jump on it and hammer out the details…

Interviewee: Andrew, you don’t forget, with my coaching, because it’s written down in front of you. You have what we call a checklist. You go through every item on the checklist.

Andrew: There’s a checklist for negotiation?

Interviewee: Absolutely. We do everything with a written checklist.

Andrew: OK, and I can see doing that maybe here on Skype. You don’t know what kind of checklist or paper I have here in front of me. I can see doing it on the phone. What happens when you meet somebody in person?

Interviewee: You have a checklist in your brain, just like a pilot. See, I was a trained pilot in the military, in another time, a long time ago. And we had a checklist. And every time we took the runway when we had bombs on the wings, we had three things we said to ourselves before we took off. Engine, flaps, and trim. We check those three items before we would release the brakes. Now, one is the checklist for negotiation: mission purpose, problems, what we want, what happens next, and script. We have to have those five things. If I bumped into you in the hall and you said ‘Jim, I want to discuss x, y and z.’ If I don’t feel prepared, I would say, ‘Andrew, I could do it in 20 minutes. I’ve got something else I got to do right now.’ I would make the conscious decision because I wasn’t prepared, I would say ‘no’ to you for 20 minutes. I would be nice about it. I would go prepare my checklist, literally write it down, if it were that important. If I couldn’t do it just from my memory, I would go write it down and then execute it.

Andrew: Can you give those five points again for the transcribers, who sometimes need it a little bit slower?

Interviewee: Sure. Mission purpose, problems, what we want, what happens next, and script.

Andrew: OK, what do you mean by script?

Interviewee: What I’m going to say.

Andrew: So, you put down what you’re saying going into negotiations

Interviewee: Absolutely. The problem statements you were making to Microsoft, those would all be written out for you. You could practice them long before you ever went in there. So, any of our behavior rules would be outlined in the script. If Three Plus were called for, you’d be reminded in the script, be sure of your Three Pluses, Andrew. Be sure of your Three Plus List, or be sure you nurture before you reverse. Or, if you do a Strip Line, be sure you put it in a proper place. So, actually write in the strip line what you’re going to use. So, the whole script is prepared before you ever enter. Now you practice it numerous times, you go over it numerous times. The more complicated, the more number of team members, you practice together, but then you execute properly with the checklist.

Andrew: Now, I used to have a checklist for doing my interviews because there’s so many pieces here that go into doing it. Like I have to make sure that the screen doesn’t dim, I have to make sure that I record, I have to make sure that all these different things are in place. I gave up on it because I do these interviews now every day, and I figure I know everything. This morning, I forgot to plug in a mic when I interviewed Seth Godin. That’s not the end of the world, you can hear me, and we have it recorded, because there’s a mic built into the computer. But the special mic that people prefer me to be on wasn’t plugged in. [laughter] So, I would say, checklist. Now I understand, I’m going to go back to using a checklist. Do you find, by the way, that people use the checklist when they’re coming out of one of your courses for a week, maybe for a month, religiously, and then they start giving up on it, or are they sticking with it?

Interviewee: Andrew, I have plans, once they’ve been in coaching with me, 20, 25 years of use. The results are so staggering, if you look at the back of my book…

Interviewee: ÖYou know, if you look at the back of my book, you got guys like T. J. Rogers, saying ‘I forgot more about negotiation all the others ever knew.’ There, I mean, the checklist is very, very powerful, the most powerful tool in the whole industry, I assure you.

Andrew: Oh I’d like to go through that a little bit more but let me see if I can read the, the question here from your number one fan in our audience, and I see that you’ve got a few fans here but, number one fan, D.J. Wolf is saying, ‘are you saying unless you have a true value to deliver don’t even bother negotiating safe receipt capital for start ups? Does negotiating prematurely make you needy and therefore is the biggest killer of all deals?’ Are there times when you, I guess basically to sum up his question he’s asking, are there times when it doesn’t make sense to negotiate because it’s too early, because you don’t have enough, capital, or you don’t have enough to offer?

Interviewee: Well, if you, you know, that’s, that, really is a business decision. If you feel that you don’t have the objectives in place, to go into the business, it would be prudent not to, prematurely go into a negotiation. But, ask very, I would ask that, we really spend some time going over the vision, and what’s being delivered, or what could be delivered, if the proper ingredients were involved. Let me give you an example, we’re starting an institute. I’m starting a credentialed institute, that will be coming out in about ninety days. We’re in the process of building the credential courses. They’re going to be offered, I’m already talking universities here in the states that are talking to me about, offering courses at their universities that are credentialed. Now we don’t have the courses, they’re not completed, they’re in process, but if someone wanted to prebuy the course, would I sell it to them, would I enter into a negotiation to do that? I believe I would. I believe I would. So, it really is how you see it. It really, truly is how you see it. Now for example, my advisory board. I have eleven, very distinguished people who, I’m talking about them being with on the advisory board. Should I introduce an advisory board to the university I’m, discussing the courses with? Well I think I should because I can see the advisory board, I’m not quite sure which eleven, which of the eleven will be involved right now, but they’re all very distinguished so I’m very comfortable some of them, will be with me. So, I hope that helps, answer the question as how you really see it, and how you envision it.

Andrew: Okay, actually I think it does. Let me know in the audience what you think. Let’s see if we can go through the five points that you said earlier. I know we don’t have much time and we can’t get deep into it, I’ll save anyone who wants to go deeper into it, I’ll suggest that they go to the course or that they come to your website and find another option for learning it. But, for now, let’s, let’s just go over, mission and vision. That meansÖ.(inaudible). Excuse me.

Interviewee: Mission and purpose.

Andrew: Mission and purpose. That means walk into a negotiateÖ Sorry, we’ve got the lag so I’ll give you the floor.

Interviewee: Please. I didn’t mean to interrupt.

Andrew: Oh no, no, when I say the we have the lag, I honestly mean, it’s, it’s not that you and I are interrupting each other, it’s just that there’s always, there’s always these weird little lags when your doing interviews this way. Which is fine, we just deal with it. So, can you explain that a little bit?

Interviewee: Sure. Mission is defined in Webster’s Dictionary as a ‘long term aim.’ Purpose is defined as ‘a continuing task and responsibility of a person or an institution.’ So, we have a long term aim, my long term aim, is to increase my clients income, and elevate their level of success. Now that’s been with me for 25 years. If I can’t increase their income, or I can’t elevate their level of success, I don’t participate. So that drives my decision making with them as an individual or an institution.

Andrew: I see. Okay, what was number two?

Interviewee: Number two, was problems.

Andrew: Problems.

Interviewee: Now I know the problems in my industry. I know the problems that I face, with your audience individuals. The number one problem is, I may not have the ability orÖ

End of transcription.

Interviewee: I might not have the ability or the time to create the vision of what a coach like myself delivers to them, I may not be able to do that. The second thing is, I may not be able to create a vision of the value to them. So therefore, the cost will seem extreme. So, that’s a second problem I have. A third problem I have is, unfortunately, not everyone has my work ethic. And so, when they find out how much work it is, to truly be great at something so important, often times they will tend to shy away. It’s just too tiring, too much work, too much detail. So, those are three of the problems I face.

Andrew: You drew the problems out of me earlier when we made up that fake negotiation with Microsoft. Why are you drawing these problems out of me, why are you drawing them out of yourself, what’s the point of doing that?

Interviewee: IT’s so critical in our planning, in our business planning, in our daily life planning, in our planning in general, our plans must solve the real problems.And we must continue to face up to those real problems and deal with them everyday. We have to attack the real problems in a negotiation. If we don’t, our plans will never be successful producing the results we desire.

Andrew: Ok, Alright. And number three?

Interviewee: Number three is what we want. Now, you would be shocked Andrew at the number of people that I coach, who haven’t really thought through what they want from a negotiation. They haven’t thought about it at all. And they’ve never thought about allowing…all I want is for someone to reject what I am purposing or to embrace what I am purposing. They never really thought about it on those terms.So therefore, when someone tells me what you really want. Well, I really want the business. Well, what does that mean? Well, I really want a relationship. Well, what kind of relationship? Friendly? So without knowing exactly what we want based on our mission and purpose, and without solving the real problems, we are all over the map with decision making. We’re back to compromise and assumptions, which is a terribly weak way to negotiate. Terribly weak.

Andrew: You know Jim, I am someone who always knew what he wanted. And, people around me who as a kid would see that would keep telling me, Andrew you need got go of what you want and be more open to the universe and more open to the possibility in a conversion and negotiaion and in life in general. To me, that didn’t feel right, at the time especially. What do you answer to that, in this situation?

Interviewee: You’re an upper one percent’er, Andrew.

Andrew: How do you mean?

Interviewee: You know what you want. I knew what I wanted, I’ve hung on to it my whole life. I know exactly what I want. And if I don’t know what I want, I’ve got to find out what I want. In all the listening audiences, if their not doing that everyday, they are cheating themselves. They’re truly cheating themselves. I remember, as a little boy growing up, I grew up in a steal town in Pennsylvania, I always wanted to be a fighter-pilot. All my family were steel workers and farmers, and they used to laugh at me. They used to say, Jimmy, you can’t do that. They’d steal your dream everyday. If were showy enough to bring it up to them…as I got older in life, I realized don’t share that with anyone, just keep it to yourself. And, of course, I became a fighter pilot, and of course, I did all the things I wanted to do. And, I just quit sharing it with people around me who tried to steal it. SO, I always believed in what I want. And I coach people to what they want in a negotiation.

Andrew: That could actually be a whole interview on it’s own, how to figure what you want and go after it.

Interviewee: Absolutely it could. Thousands of hours have gone into that. From a coaching perspective, I’ve probably coached 25-30,000 hours of deals. Probably, 20 billion dollars in deals. Today already, we’ve coached over 200 million in deals.

Andrew: How do you measure that, how do you know it’s 200 million?

Interviewee: Well, because I know what the value of the proposition is going in.

Andrew: Oh, people come to you and say we are about to go in and do this size deal? Can you help us?

Interviewee: Yeah, I had a CEO this morning, “Jim, this is between 48 and 88 million dollars,” and away we go. So, I tried to push him to 110 million this morning.

Andrew: [laughs] I love it! Alright, let’s go to point number four.

Interviewee: Okay. What happens next? So often times people have no vision, Andrew, of what they want to have happen next. They don’t even think about it. They get so excited in the moment, you’ll hear things like, and I’m sure you’ve heard, “Oh this meeting, what a great meeting. I really enjoyed this meeting with you today. I’m really looking forward to talking with you again next week. We’ll move this thing forward next week. I’ll give you a call.” And that’s the end. Well no, that’s wrong. What’s gonna happen next? At one o’clock, on Tuesday, next week, I’m gonna have my team assembled. I’m gonna call your team, we’re gonna go over documents, and be sure that we’re moving in the right direction. So we actually negotiate what’s gonna happen next, to fine detail. It’s just not, “Hey, thank you very much, let’s have a beer.” It’s, “Here’s what we’re gonna do.” It’s a very critical step. It’s absolutely critical.

Andrew: I see, I see. And the last point we talked a lot about, which is, the Script.

Interviewee: The Script.

Andrew: Okay. And what to you call these five points?

Interviewee: I’m sorry?

Andrew: What to you call these five points?

Interviewee: Checklist.

A: The Checklist. Okay, let’s see, from the audience here again I’m gonna go to D.J. Wolf. Am I pronouncing your name right, by the way? D.J. He’s saying, “Why isn’t this taught to kids? How do we teach negotiations to kids? Is this something that’s important?” It’s asking a handful of questions and I hope I’ve summed them up for you right there.

Interviewee: I gotta tell you, I have 5, and 7 grandchildren, and I just learned today that my oldest grandson is just been accepted to the University of Chicago, and I’m very excited about that, but that’s not an accident. He’s negotiated his way through high school with our program, with our training. Negotiations are critical. In fact we’re thinking about, the institute is talking about coming up with a senior high school course for aggressive seniors who want to do well in the world, an elective course on negotiation, so that they can be better prepared for their college years and the job market, so, I think it’s critical. I’ve given talks to audiences where I’ve offered free books to every child of the audience. You know, 300 or 400 books I’ve given away to children, so I believe strongly in it. I think it’s the greatest think we can do for our society.

Andrew: You say that your son negotiated his way through high school. You mean, he did what I did, which is if you get a B+ you negotiate for an A. If the teacher wants a report by Tuesday, you see if you can make …

Interviewee: Absolutely. What extra credit, Andrew, what can I do? What can I do to get that B+ to an A? Mr. Jones, I’ll do whatever is required, just tell me. I mean, when a student has that kind of enthusiasm, the teachers are there for a purpose. Teachers have a purpose. It’s ingrained in their heart. They’re very easy to negotiate with if you really are a student, dedicated, so just like you did, exactly right.

Andrew: I actually, that’s exactly what I did. That’s one of the most fun parts of school for me. I think I was gonna graduate with honors, and I was just shy of graduating with high honors, and I went to my Professor and I said, “Look, if you give me an A instead of this A- I’m gonna graduate with high honors. And you know I did the work in class. Is there anything I can do to earn that A from you. What do we do now?” And, she worked it our with me and gave me the grade that I needed. It was awesome. It’s amazing, they really will negotiate with you. People will negotiate with you anywhere.

Interviewee: Oh, absolutely. World’s is full of negotiation. There’s no question about it. The world is absolutely full of negotiation. Every moment of every day, we’re making agreements.

Andrew: Alright, well, you’ve given us so much information here, I know people are gonna want to learn more. Where do we send them? Where do they go?

Interviewee: Start with know.com. If they want to reach out to me personally the email address is there, and my phone number is there, and they can certainly do that.

Andrew: Okay. By the way, when you say your phone number, and I think you said it a couple of other times here in the interview, you mean your personal phone number? The phone that was ringing there?

Interviewee: Yeah, I always answer my phone, yes.

Interviewee: Yeah, I always answer my phone, yes.

Andrew: If I knew that, I would have had somebody in the audience, while we were doing this interview, call the number to see if it rang.

Interviewee: I unplugged it because I thought I was disturbing you.

Andrew: I thought I saw you unplug it.

Interviewee: Well, I can give the audience my number if they want to call. It’s not a problem. I take my calls, I learned that a long time ago from my old college coach, Coach Hayes. Always answered his own phone.

Andrew: I hate phone calls, but you know what, go for it. If you have a phone number, and you’re happy giving it away over here, let’s do it.

Interviewee: 614-764-0213.

Andrew: Wow, wow. All right, and start with no.com, that’s personally what I would do. I would start with the web site, I wouldn’t start with the phone number. And then, if you absolutely, positively need it, do it. And if you do call him, and it’s not absolutely, positively critical, don’t mention Andrew, don’t mention Mixergy, say you’re just a cook on your own. Mention this guy, Doug Wolf, from the audience. Give him the blame. All right, well thank you, I’m going to, of course, link to you from Mixergy.com. I’m also going to ask everyone who’s listening to this interview to come back to Mixergy, give me your feedback. And one other thing, we’re experimenting here. We got an audience now that’s growing, a lot of smart people in the audience. I’m setting up a way for them to all help each other. We’re trying something new. It’s called foundersmix.com. If you have any questions about negotiating, any questions about what we said here before, go to foundersmix. Somebody else from the audience or a future guest on Mixergy will see that question, or I’ll ask them, and we’ll get it answered for you. So, check out that site, and give me feedback on that. Check out startwithno.com, and I’ll see you in the comments.

Who should we feature on Mixergy? Let us know who you think would make a great interviewee.

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