0:00 who are you and where are you going what do you [Music] want hello and welcome to people making money I'm your host Kevin bemel and we're here every Wednesday at 10:00 a.m. Pacific time to talk about all the matters related to business professions wealth building the whole financial uh realm of life and uh and and all the all
0:39 the the um uh issues that uh play into it so we talk about relationships how to build professional relationships uh we talk and today I'm going to be talking about um negotiating so um it what I found um especially over over the the last year that I've been working on this large estate and there's so many uh different aspects to it and so many different people involved that uh really my my ability to uh talk with
1:15 people negotiate with them in order to find solutions to um you know problems that come up has has has never been uh more in demand uh than than it is uh lately and and and so uh you know I I've had a chance to really exercise my skills I guess is the best way to put it uh and in in thinking about it uh I I I realized that the way I handle these things dates back to my reading of a
1:50 book uh and and and this is it and it's original copy you can see it's it's you know it's it's battered you know um but it's a book called The Art of negotiating um by uh Gerard I nanberg and this book was originally written in 1968 I think it was let me double check here yeah 1968 um and th this this particular um version was was published in 1984 that's I I think that's when I read it I say mid1 1980s when I was going through I
2:25 was was getting ready actually he probably I bet actually it's probably 1986 when I started my first company and I realized I needed to improve my negotiating skills uh and um this is really one of the classic books on negotiations and so I thought I would uh spend a spend a show talking about some of the principles that uh Mr nurenberg uh espouses um and and and and and as I was saying much of the way way I handle
3:00 things is I realized based on the principles that I learned from reading this book so we're talking you know 40 years later that's the impact that that this book had on me that I still look at this as the fun foundation for how I handle things and and uh I I was talking with uh one of my colleagues I believe it was last week and I was expressing frust a with the unprincipled way that uh another party was handling a
3:37 negotiation with me the you know frankly just flat out lying is the only way to put it um and it's so counter to the way that I pursue a negotiation and very frustrating and and so what I had to do was figure a a figure out a path that would allow me to continue the negotiation in a principled way which
4:14 was important for the you know the party that I represent um with without but not having to deal frankly with this person who had shown me that he could not be trusted right um so and and and I think that that's that's a this is a core principle of of not just negotiations but relationships um you know in in a broader sense is when all is said and done especially in a I mean not especially but in any relationship but
4:49 in a business relationship if trust isn't present so there's not a whole lot that can be a lished very easily uh I just I just had a meeting with a colleague um prior to starting the show it's why I was a few minutes late starting and you know again I'm I'm I'm in negotiations with someone who frankly I I don't trust the person has given me ample reason not to trust him and and so as principled as I want to be in the
5:26 way I negotiate uh I I also have to keep in mind that whatever solution is reached it has to be one where uh there are uh strong guards in place so that I don't have to rely on the Integrity of the other party in order to be reasonably assured that whatever agreement is reached is is going to be acted on uh so and and and this is really the the the
6:03 challenge with a negotiation and um when when I meet someone with whom I'm going to be negotiating and they start out by seeking to build rapport then I I I almost always get a sense that okay this is probably a person who um is is more are likely to be a principled negotiator because they understand the value of the underlying relationship the underlying sense of
6:39 trust that's necessary uh or I shouldn't say necessary but that will uh Drive uh is more likely to drive a better outcome I guess is the best way to put it so um all of that is is by way of introduction of I'm going to take you through um the core principles um that uh nerenberg um uh you know talks about in his book The Art of negotiation um you
7:15 know the show is too short for me to you know take you through a 200 plus page book what is it how many pages are here yeah 240 or so page book uh but um you'll get hopefully you'll get a feel for what um uh nurenberg is uh trying to teach or is working to teach us and that will um motivate you to you know get your own copy of the book and and study up on it so um I and and
7:51 um the the whole basis of of his art of negotiation is that negotiation is a process not a battle now there are there are people who look at negotiations as as a battle um and and I I I think we have a a you know a prime example of that as we look at how um president Trump handles international relations so you know he Stakes out a position uh and and then he
8:29 says if you don't do this um I'm going to hit you with big tariffs and the other side um you know Bluffs and blunders about it and and says nasty things and and then you know basically they end up capitulating right that's negotiating as a battle now um certainly when one is negoti negotiating in the you know geopolitical realm and when one is negotiating with um opponents or or
9:04 even enemies um the idea of having a sort of you know collegial negotiation probably is not you know going to happen um and it may not be possible even with with allies because in the end geopolitical negotiations or international relations are fundamentally based on the power position of the parties um and and and you know we can we can see for the United States how when we um deny the
9:43 you know the inherent strength of the United States so then or when we signal to the world that we're not going to use our strength for our own benefit so then we end up basically being you know smoked at the negotiations table um we we we don't get anything like what we want we end up in very difficult uh situations internationally um and I think that's because most if not all other countries
10:21 look at look at it from the standpoint of if if I'm negotiating with the United States or some other country I'm in it for what's best for my country um and that's and and that's you know just how we're going to to deal with things that's number one and number two because there isn't um continuity of leadership so for example the United States there's a new president elected every four years the longest a president can serve is eight years so uh you know a a geopolitical opponent knows that um
10:58 to have a person relationship of trust with an American president or a member of the president's cabinet um is is is only a temporary situation uh and and and and and when the administration inevitably changes and and even even if it's a two-term president and that president is succeeded by uh another president of his own party still that's a different person right and it's a and it's a different person with whom trust would have to be established etc etc etc um
11:33 and and the assumption that all members of each party are exactly the same as as the other members of their party is is is also not true right so um by their nature negotiations in international relations are probably more like a battle a verbal battle um than they are a process but in in business where there is much greater continuity of people involved uh so then negotiation should be a process because
12:10 um to you know beat up the other side until they finally submit to your will it will while you may in the end get the agreement you want um you're unlikely to get cooperation um in the execution of that agreement M okay and and then um you know people drag their feet etc etc and then maybe the agreement is breached and now you're faced with potentially having to litigate all all of that from a business perspective is is a drag on the success of the business
12:48 and so um while excuse me so while there certainly are uh businessmen people in business who um view negotiations as a battle um for for building long-term relationships and um you know I I believe that that's not the best way to go because it's it's it's
13:23 terribly hard on the people um and it doesn't engender um a sense of cooperation in the execution of the agreement which in the end the the the end result of the ne negotiation isn't really the agreement per se it's the benefit that comes from the agreement so to blung in our way into an agreement only to you know not have it executed uh well or executed at all the negoti at that point has has
14:00 yielded little if any value so um you know we we um um uh nerenberg talks about the idea of a win-win outcome and and and that's why negotiation negotiation as a process is one where both sides have a sense that they have won at least some of the um some of the issues they sought to gain uh and and that wasn't necessarily at
14:36 the expense of the other party right so um I you know someone I've known for many many years uh gave me his philosophy his philosophy is if both people come out of a negotiation feeling somewhat dissatisfied then then that's probably been a good negotiation and it's an agreement that's uh going to hold and in a way I think he's saying something similar to to what I'm saying in terms of a win-win situation if if one party feels
15:12 that the other party has won at at a big expense to his perspective that that uh agreement is less likely to hold if both parties feel like well listen I got some things um and and I was willing to give them away for the things that I got I was willing to give away other things for the things that I got and the other party feels pretty much the same way and there was a there was some give and some take but neither side feels that um the the other side's winning came uh
15:48 primarily uh you know at their expense um but but that they got a reasonable amount out of it so that's that is probably the best outcome that you can get if one party feels like I won right and the other party feels like wow I lost that that's not a good outcome okay so so the idea is is to is to think of negotiation as a process that that that seeks to create a win-win outcome as opposed to a win loss
16:25 outcome right so those are the those are the two sort of Keystone principles that nerenberg uh talks about uh you know in in in his book The Art of negotiating okay so the the next thing is that um we need to understand human behavior so successful negotiation requires an insight into how people think human psychology if you will so you know when we're negotiating with another person and and and by the way it's it's it's
17:00 it's why it's better to negotiate in person or if not in person um in in some sort of virtual meeting where you can see as well as hear the other party because there's many verbal clues that I'm sorry there's many visual clues that we can get that will help us assess where the other party is coming from that we wouldn't pick up if we're on a telephone conversation where all we have is is verbal Clues right so we want
17:35 the visual and the verbal together and and and why I say um you know face to face in the sense of live that's even better because there are you know not to sound too you know woooo 1960 is but there are Vibes that we can get from another person are are they nervous are they anxious are they excited that that can also give us some insight into their thinking into their mindset uh and and and so we we need to practice
18:10 recognizing these uh these visual um nonverbal uh cues that uh another person gives and by the way we can practice this we don't have to be in a negotiation to practice these things we can be you know out to dinner with with our spouse or with our friends we can be observing them as they speak and seeing you know what other information can we pick up on besides the words that they're saying and the tone of what they're saying you know what kind of body movements are they making uh where are they looking how
18:45 focused are they um you know what what Clues do we have about what they're feeling inside so we can practice all of those things and and and and they become useful for us when we're in uh a negotiation okay so we want to we want to do we want to become students of human behavior or studiers of student behav studiers of human behavior right to to understand the uh the other sides
19:20 uh the other side holistically not just listening to what they say okay next um act we want to listen and observe actively okay so the you know if if if we're doing all the talking we're probably not doing much listening and well we're not doing much listening and we're not probably not doing much observation as well so we want to allow the other side to talk so that we can listen to them we can watch them and we can gather these clues about
19:58 where the person is coming from Beyond just what they're saying okay so um I you know again I spoked about you know body language tone of voice again this the the understanding of human behavior is coupled with um active listening and and observing right so the two go hand and glove um one is what we're looking for and the other is is is is is how we're going to gain that information okay so uh again this is something we can practice anytime we're with someone else
20:34 it doesn't have to be a negotiation but we can practice sitting back and listening to them uh observing them assessing as we're listening what what might be going on with that person um and then the next step in that is is the power of questions so one of the good ways to be a good listener is to listen to what the per person is saying thoroughly enough to be able to ask them questions that will necessitate their expanding on what it is that they're
21:09 saying so and and and and this the the ability to ask good questions is a key component of being an active listener but it also uh impacts the other person by saying to them wow this person is really interested in what I have to say they're really listening to me right so by asking good questions we're not just gaining additional information we're sending a message to the other party a message of mutual message of respect and
21:47 a message of a desire to really understand their perspective right it's it's a much more powerful way to questions are a much more powerful way to do that then to say I hear where you're coming from I mean that's fine you know to to to say that there's nothing wrong with saying that or I I I I think I understand where you're coming from that's fine uh but but to ask a question that demonstrates that you have some understanding and are seeking more understanding is an even more powerful way of of doing that okay now the key
22:24 thing about asking questions is we want to ask open-ended questions so to ask a question that has a yes or no answer actually tends to cut off communication right as opposed to asking a question where they have to expound further on on their topic so um I'm let me think of an example here um so let's say you're in a negotiation with someone and they're asking for a
23:01 particular let's say it's a negotiation over the sale and purchase of a property and and and they they say to you well um you know I uh I I need to um have 60 days in order to inspect the property review all the records of the property etc etc okay so 60 days to months and you may be um you may be in a position where you
23:36 you really need to be able to close the sale in 45 days so if the person has 60 days just to do their review it's going to take another 15 to 30 days to close it so we're talking 75 to 90 days which is you know roughly double the the time that you have so one thing you could say it to them one question you can ask them is um can you do it in less time okay and the answer is yes or no that's a closed end question yes or no rather than asking that question you might ask how could we create a
24:12 situation where you would be comfortable with a shorter review period so that the transaction could happen more quickly okay now that's saying to them I I on the one hand I understand I I understand your desire to thoroughly understand the property before you commit to buying it um on the other hand is there a way we can reach that point more quickly and and what what role could I take in that to help you get there right this is by this is the
24:47 nature of a win-win negotiation right on the one hand you're acknowledging it's a reasonable request on the part of the buyer to to want adequate time to satisfy himself that the property is as it's represented represented on the other hand you're explaining look I don't I I need a shorter time frame to sell the property so how can we get together on this so your need can be met to do a proper review of the property and my need can be met for a shorter closing time frame right so
25:23 that's that's the power of asking open-ended questions to get the person think thinking well you know is is my need really that I that I you know need 60 days or is it really that um I want to make sure that I I've reviewed the properly thoroughly and the person might might respond by saying well you know I I guess if I had all of the information on day one and it didn't you know trickle in so I could I could you know uh get the review done in 30 days right
26:00 and so maybe the compromise is that the review period will begin 30 will will be for 30 days once all the information is received right and so now you've got a list of documents that you have to provide um the buyer and and in the while the negotiation is going on you can get your staff working on collecting all those documents and so should you be able to come to an agreement you know within a day or two you can say okay here's all the information you wanted now the 30 days is running and
26:36 and you know We're Off to the Races kind of thing right and that that you know hopefully you know would be a the working out of a situation that's beneficial to both parties okay so again the power the ask questions but ask open-ended questions that that stimulate discussion as opposed to cutting it off okay next we want to be flexible and adaptable right and and the example that I just gave is one of flexibility and
27:11 adaptability and and by asking that open-ended question you'd be conveying to the person that you're flexible and adaptable so you're you're you're flexible enough to acknowledge that they have uh that they're you know that the what they're asking for is reasonable and you're willing to adapt to it to the extent that they that they exercise some flexibility as well right and so this is how um we can potentially avoid a deadlock or if a deadlock occurs
27:46 hopefully figure out a way around the deadlock or through the deadlock um by looking for opportunities where whereby each party uh you know adopts a little more flexibility um in in order to get to a resolution now this is where by the way a mediator can be particularly useful so if a if an important negotiation has reached an impass rather than give up on it an option would be to bring in a neutral
28:23 mediator and what that mediator is going to seek to do is understand understand each party's perspective and then look for areas where each can exercise some flexibility and adaptability in order to meet each other's needs um with you know but in in some way that hasn't been uh considered before or maybe it's been considered before but it hasn't been presented in a way that encourages the parties to exercise that flexibility so we want to be looking for
28:59 Alternatives uh Alternatives give us an opportunity to be flexible um and and we want to be looking not only for Al alternatives for the other side to try and convince them but we also need to look at Alternatives that may be acceptable to ourselves because one way around a deadlock may be to suggest an alternative uh way to handle something that we want to show that we're willing to be flexible in exchange for the other side exercising some flexibility right so the
29:37 flexibility uh flexibility and adap and adaptability they're they're key qualities to bring to a negotiation um in accordance with nurenberg um uh you know philosophy of in the art of negotiating okay and then finally we want to prepare so we want to understand our objectives we want to understand all our Alternatives we want to know what what limits there may be um before we enter the
30:12 negotiation so that we can be confident in presenting our position um but also we can be as responsive as possible to what what the other side is is proposing and we we want not only to be prepared on our side we want to do as much research about the other parties uh needs and constraints as we can the the better we understand the other side's situation the more effective we can be in com in coming up with
30:48 Alternatives that will uh help us reach the win-win outcome for which we're searching okay so um you know it's obviously it's much easier to prepare our side because you know we are we working with our colleagues we can figure out what the constraints are okay it's more difficult to figure out what the other side wants but it's by no means impossible so um I'm I'm in a negotiation right now where
31:24 I I asked the other side a number of questions to try and understand their situation um and the the person I was negotiating with would not respond um and so in talking it over with a colleague he mentioned to me well you know there's an underlying court case they're involved with or they're involved in um that that this negotiation is an outgrowth of and you can go look at the court record um and probably get a lot of information and indeed that I I was I I was able to get documents from the
32:00 court that I think pretty thoroughly uh um briefed me if you will on what their situation was and what their position uh where where their position is coming from Vis AIS the the issues on which we were negotiating um and and um that made that that put me in a more confident uh position when when when I continued the negotiations number one and interestingly enough um what I found was
32:37 I I I I had to um essentially bypass the first person I was talking to and and and go to his Superior when I started talking to his Superior I realized that the background I had gotten from reading the court documents indeed you know the assessment I had made um about their situation was was pretty accurate right so um you know look it's not always the case that there is an extensive court record that we can research in order to understand the other side um but we can contact people um who who may know the
33:15 other side and may have some familiarity with with dealings with them um these sorts of things and uh and and and that can give us some insight into where they're coming from okay so so those are his those are um nber's uh you know core principles um and and then he also um he also mentions some techniques or strategies um and I just I just want to um mention um a couple of them because I
33:50 think they're very powerful so one of them is silence as a tool okay um the ten Y is to say something and and if the other party doesn't respond immediately to fill in the silence and to be a good negotiator we have to get comfortable with the silence okay so if we've said something that requires a response the longer we're willing to sit silently the more pressure is on the other side to say something
34:27 okay and and and it's it's it's a it's a beautiful technique okay um because the other party if it kind of smokes them out so if indeed they really are serious about negotiating they can't sit there forever not saying anything okay so if they don't respond at all to what you said you're also receiving important information which is they really don't care about the negotiation and that and so that kind of flows into another tool or another strategy if you will which is
35:02 walking away so if if you've sat silently for you know a couple three minutes after making uh you know making a statement that requires a response and the person does not respond so then a good thing to say is oh okay I I I guess you're not interested in continuing okay well you know fair enough you know we'll we'll we're going to move on right um and and and again if if they're not really that serious so then they're going to say okay fine we'll move on right and and better to know that than to Crowbar into
35:38 some kind of agreement that the other side doesn't really want to perform on the other hand you're demonstrating that you are willing to walk away shows the other side that um unless they're going to negotiate in good faith they're not going to get what they want right so um when we signal to the other side that we have to have an agreement at all costs we've basically weakened our position dramatically okay so I think in any negotiation we need to be very careful
36:15 not to put ourselves in a situation where we have to reach an agreement okay because once we're in that position the other party is going to have a lot more leverage and we're not going to get nearly as much out of it as as we would have so um there are there are times when we feel like I I I have to get this there's there's just no other alternative rarely if ever is that the case Okay rarely if ever and and and it's usually some something we've created in our minds or it's something we've invested our egos into and we
36:52 don't want to take the the hit to our ego um by not having it come to pass and and and and so we need to deal with those issues internally in order to make sure that we don't trap ourselves so I highly recommend to you um the art of negotiation Again by Gerard L nurenberg I think I said nurenberg before it's nurburg uh and and and there are a number of other wonderful books um on on negotiation there's there's books by the fellows who
37:27 um were part of the Harvard negotiation project I I've read their book as their books as well so it's it's a it's a a musthave skill in business and and professions and and it is something we can learn it's not there's there's I mean there may be natural negotiators like children they're natural negotiators right because they're very focused on what they want but in terms of negotiating in in the in the business World um this is a skill that we can definitely um gain and improve throughout our
38:02 careers okay so I thank you very much for joining me today especially my live guests I see my my faithful Folks up there um I have a little calendar up here that's why I say up here I they're not on the screen where you can't see them um but I but I always a treat for me to uh to see you there uh so um this if you have oh if you have a any thoughts comments criticisms um please feel free to drop them in the social media always happy to hear from you um my email address is there as well you can always reach out
38:38 to me and uh this is my last show for this week so um we I will be back next week on Monday at 10: am with trust and Estates weekly my guest is Hillary Cooper and we're going to be talking about preparing for downsizing um it's one thing to deal with all the accumulation of personal property after somebody has passed away but it's a good idea to get ahead start on that while the PE person or people are still alive and so Hillary and I are going to talk about that on Tuesday is
39:13 my at 10: am Pacific time is my show business lessons from the military and what is my topic it is ah yes I'm going to be talking about uh uh Billy Mitchell one of the strongest advocates for air power in the United States he had a very interesting life he basically um well I'm not I'm not gonna I'll let you find out about it um NE next week so uh that again that's business lessons from the military 10: amm Tuesday uh 10 a.m. uh Tuesday
39:49 Pacific time and then uh 7 days from today I'll be back for the next edition of people making money and then next week at on at Thursday on Thursday at 5:00 pm uh Pacific time uh is my every other week's show uh jigger's place and I'm going to be talking about relationships so we're gonna have a cocktail and sit back and talk about relationships and I'm gonna ask you the question that I've asked so many times when I've done uh seminars on
40:24 relationships and that is what do you think think is the most important thing about relationships okay and I I I have a I'm guessing what you have in your head and it's probably it's probably wrong so uh join me next uh Thursday of next week 5m Pacific time at jigger's place we'll have a cocktail and talk about it so thanks so much for uh tuning in joining me and wishing you uh a wonderful rest of the day and week and signing off as I always do Marie darling you are my bell
41:02 courage at all