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Never Split the Difference

Book Notes and Takeaways

  • Chris Voss is a former FBI hostage negotiator
  • The five big takeaways from this book
    • Negotiation begins with listening
    • Use mirrors to encourage your counterparty to empathize and bond
    • Tactical empathy can help get a deal done
    • Label the other parties emotions by naming them
    • Receiving a “No” gives you the opportunity to understand what the other party does not want
  • The universal rule of negotiating is that people want to be understood and accepted – feed this simply by listening to them
    • Listen sincerely, it shows empathy and goes a long way
  • Great negotiators:
    • Use their skills to ascertain the hidden surprises they know exist in every negotiation o Question given assumptions
    • Stay open emotionally
    • Treat negotiation as a process
    • Never in a hurry
  • Negotiation is a process of discovery – those who look at it as an act of battle are overwhelmed and often lose far more than they gain
  • When negotiating, focus entirely on what the other party is saying and the tone they are using to communicate – this will tell you what their motivations are
    • Your objective is to ascertain what your counterparty really needs and then find a way to meet their needs
  • Three voice tones available to negotiators
    • Late night DJ voice
      • Use selectivity to make a point
      • Inflect your voice downward when making a point – this done correctly triggers authority without triggering defensiveness o The positive playful voice (Default)
      • Voice of easy going, good natured person ” Attitude is light and encouraging
      • Relax and smile when you are talking
    • The direct or assertive voice
      • Used rarely
      • Will tend to cause problems and create pushback
  • Smile – when you are smiling you generally tend to think more quickly and collaborate more efficiently
    • Tone of voice can allow you to be very direct and assertive without coming across as brash or bullying
  • When using a mirror you are going to attempt to mimic their posture and look and continuously repeat the last three words back they just said
    • Mirrors are the art of “insinuating similarity”
    • People like people who are the same as them – when you employ this tactic is subconsciously tells them that you are like them
    • Use mirrors to try and keep the counterparty talking and draw out their thinking and their strategy
      • People want to tell you their thinking and often can’t help themselves if you lead them there
    • Repeating back to the counterparty what was just said encourages them to elaborate, and thus like a chain, continues to build and extend
  • As an aside, in a study, waiters who mirrored were tipped 70% more than those who did not mirror
  • The right mindset going into a negotiation is absolutely key
  • To get your way without confrontation follow these five steps
    • Use late night DJ voice
    • Start with “I’m sorry”
    • Mirror
    • Silence (At least four seconds) o Repeat
  • Tactical empathy means understanding a person’s feeling, and also what is motivating those feelings
  • Don’t feel pain, label it
    • Labeling is a way of validating someone’s emotions by acknowledging them o After labeling an emotion, be quite and let the counterparty do the talking
  • When you spot an emotion, look to put a label on it
    • “It seems like”
    • “It sounds like”
    • “It looks like”
    • If counter party reacts unfavorably,
      • “I didn’t say that was what it was. I just said it seems like that.”
  • Use downward inflection to state a point, and use upward inflection to ask a question
    • Both can be used for labeling
  • Labeling can help de-escalate angry confrontations because it highlights feelings versus continuing to act out
    • The fastest way to establish a working relationship is to identify the negative and work to defuse
  • Pushing too hard for a “yes” does not progress towards winning, instead it often upsets the other side
    • “No” on the other hand clarifies what the other party does not want, so makes it easier to determine what they do want
  • “No” generally means
    • I want something else
    • I don’t understand
    • I need more information
    • I don’t feel great about this
  • Ask solution based questions
    • “What about this does not work for you?”
    • “Is there something here that bothers you?”
  • There are three kinds of “yes”
    • Counterfeit – they truly mean “no,” but feel guilty about saying no
    • Confirmation – Simple answer to yes or no question, generally with no intended action
    • Commitment – a true agreement
  • Your counterparty most always feel like they are responsible for their own outcome
    • When people do not feel in control in a negotiation, they tend to be adversarial and it generally does not go well
  • Ask “Is now a good time to talk”
  • To force a “no” ask the other party what they don’t want
  • If the counterparty is ignoring you, contact them with a clear and concise “No”-oriented question
    • Suggests you are ready to walk away o “Have you given up on this project?”
  • You should strive for “That’s right” in negotiation – this shows that you are speaking the same language as your counterparty and connecting
  • The most powerful word in negotiation is “fair”
    • In any negotiation you should strive to be perceived as being fair
    • The phrase “We just want what’s fair” destabilizes the other side – Instead of conceding irrationally, apologize, and offer to go back to where the unfairness began and fix things
  • The phrase “We’ve given you a fair offer” is nefarious
    • Mirror with “Fair?” and label with “It seems like you’re ready to provide evidence to support that” 
  • To get real leverage, you need to persuade your counterparty that they will lose something if they have something to lose if the deal falls through
  • Splitting the difference, or a “win-win approach,” at best satisfies neither side, and at worst fails against an adversary with a win-lose approach
  • If you internalize “No deal is better than a bad deal,” then your patience can become a powerful weapon
  • Six steps to negotiations
    • Anchor their emotions
      • Start with empathy
      • Start with an accusation audit of acknowledging all their fears
      • By anchoring for a loss you are instilling your counterparty’s loss aversion
    • Let the counterparty go first
      • Let the other side anchor a monetary number
      • You may get lucky with them going for lower
      • Must be prepared to withstand their first offer
    • Establish a range
      • Counter with a ballpark range that you wish to be in
      • Use a similar deal or other data if possible
    • Move to non-monetary terms
      • This is one of the easiest ways to change your counterparty’s reality
      • Have something that you know is big for them, but unimportant to you
    • Never use even numbers, always use odd ones
      • Numbers that end in 0 seem more like a placeholder and guess versus a true offer
      • A specific number comes across as a thoughtful calculation
        • Ex: $344,956
    • Surprise with a gift
      • After a rejection of an offer, surprise them with a totally unrelated thoughtful gift
  • How to negotiate a higher salary
    • Be “pleasantly persistent” on non-salary terms
    • The more you talk about non-salary terms, the more likely you are to hear a full range of options
    • Ask: “What does it take to be successful here?”
    • Once you’ve negotiated a salary, define success for your position, as well as metrics for your next raise
    • By selling yourself and your success as a way your boss can validate his own intelligence and sell it to the rest of the company
  • Create an illusion of control
    • Do this through calibrated questions
      • The calibrated question forces the other party to pause and actually think about how to solve the problem
      • The counterpart solves the problem, and so it gives him the illusion of control
    • The calibrated, or open-ended, question acknowledges the counterparty, while letting you introduce ideas and requests without sounding pushy
    • The greatest calibrated question is “How am I supposed to do that?”
    • Other great calibrated questions include
      • What about this is important to you?
      • How can I help to make this better for us?
      • How would you like me to proceed?
      • What is it that brought us into this situation?
      • How can we solve this problem?
      • What are we trying to accomplish here?
    • How to say no four times without saying no with calibrated questions
      • How am I supposed to do that?
      • Your offer is very generous, I’m sorry, that just doesn’t work for me?
      • I’m sorry but I’m afraid I just can’t do that
      • No
    • Calibrated questions avoid can, is, are, do, and does because they can easily be answered with yes or no
    • Rather, start questions with what, how, who, when, and where
    • A well designed calibrated question will imply you need the counterparty’s intelligence to solve the problem
    • Using calibrated questions requires self-control
      • Know when to stay quiet and bite your tongue
      • Ask your counterparty
      • How will we know we’re on track?
      • How will we address things if we find we’re off track?
  • “How” questions are some of the best ways to say no and move your counterparty towards helping solve the solution themselves
    • “How am I supposed to do that?”
    • “How could I make that happen?”
    • “How are we going to make this work?”
    • “How” questions help the counterparty think through how a deal may be implemented
    • “How” questions make the counterparty think they are the ones who come up with the final solution as they are solving the question
  • If you hear “You’re right” or “I’ll try”, dive back in with how questions until you get a “that’s right”
  • Beware of parties and individuals who may not be directly involved in the deal but have influence and may be deal killers
  • Many negotiations hinge on something other than money, often having more to do with self-esteem, status, and other non-financial needs
  • Remember the 7-38-55 rule
    • 7 percent of the message is words
    • 38 percent of the message is tone
    • 55 percent of the message is body language
  • Pay very close to body language of the counterparty – if it does not align with the words being spoken, it is quite possible they are lying
  • The rule of three
    • Get someone to agree to something three times in the same conversation
    • Use this to test if someone actually means what they say and are going to commit to it
  • The Pinocchio effect
    • Liars use more words than truth tellers and often use far more third-person pronouns
      • He, her, him, it, they, I, me, my
  • Basic rule of keeping your emotions calm is to bite your tongue
    • Never counterattack a verbal assault
  • Your job is not to get to an agreement, but to get one that is feasible, and making sure it happens
  • The bargaining step is often the one that is mishandled and can screw up the deal
    • Never look at your counterparty as the enemy
    • Say, “I’m sorry, that just doesn’t work for me”
    • If it gets really heated, deescalate by calling a timeout
  • Bargaining 101
    • Set your target price as a nonround number, then offer 65, 85, 95, 100 percent o Use empathy in between offers
    • On your final offer, throw in a non-monetary item
  • There are three types of negotiators o Analysts
    • Accommodators
    • Assertives
  • Analysts are methodical and diligent. They are not in a big rush, and their self-image is linked to minimizing mistakes
    • Analysts work alone, rarely show emotion, extensively prepare, are hypersensitive to reciprocity, are skeptical, value silence, and don’t value apologies
    • As an analyst, smile when you speak, so that you are not cut off from an essential source of data, namely your counterpart
  • Accommodators value most the building of a relationship. They value the time communicating and want a win-win
    • If your counterpart is an accommodator, ask calibrated questions to translate their talk into action
    • As an accommodator, do not sacrifice your objections, and beware of excessive chitchat, especially if your counterpart is one as well
  • Assertives believe time is money. Their image is linked to getting things done, and getting things perfect isn’t paramount
    • Focus on what assertives have to say, because until they are convinced you understand them, they won’t listen to your point of view
    • Mirrors, calibrated questions, labels, and summaries work well with assertives, who see every silence as an opportunity to speak more
    • As an assertive, be conscious of your tone. Use calibrated questions and labels to make yourself more approachable
  • Every negotiation, every conversation, every moment of life is a series of small conflicts that can rise to creative beauty. Embrace them

The financial consultants at Arrow Point Wealth Management are registered representatives with and securities and advisory services offered through LPL Financial, a registered investment advisor, Member FINRA/SIPC

This material has been prepared for informational purposes only, and is not intended as specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results.