Leading@Google: Stuart Diamond


Uploaded by AtGoogleTalks on 12.01.2011

Transcript:
>>Rachel Kay: Thank you all so much for coming.
My name is Rachel Kay. I work in our Centralized Training Function here at Google, and it is
my honor to introduce to you Professor Stuart Diamond who is the author of "Getting More:
How to Negotiate to Achieve Your Goals in the Real World".
This book has just very recently been published and is already off to incredible critical
acclaim. It has been named number one on the Wall Street Journal's blog as the best business
book and the number one book to buy in this year.
It is the number one on the USA Today. And next week we'll see that it's number five
on the New York Times Best Seller List.
So it's really a pleasure to have Professor Diamond here.
I would love to run through all of his accomplishments, but then you wouldn't hear from him, so I'll
just give you a few highlights.
He has a law degree from Harvard and an MBA from Wharton. He teaches Wharton's most popular
course, the negotiations that this book is based upon.
And he has experience in academia, he's taught at Columbia at NYU, Berkeley, Harvard, and
more and he has experience in the real world.
The reason that this stuff works is that he uses it every day.
And as the President of the Global Strategy Group, his business, Professor Diamond helps
many other clients around the world achieve what they need through his techniques.
A few quick highlights: it was Professor Diamond's tips and techniques that helped end the writer's
strike in 2008 in Hollywood that many of you in this country will remember; he's also the
CEO of an airline in St. Thomas; and he's the Pulitzer Prize Winner journalist of the
New York Times.
So yeah, he's covered all the bases.
But on a more personal note, this course, this content has actually changed my life.
I had the privilege of taking his course; semester long course and have been working
with Professor Diamond here for over three years as he brings this material to Googlers
and watch them use it every day.
But I have to say that the thing that is most striking is how Googley he is. Professor Diamond
is very intent on respecting others; growing the pie rather than cheating others out of
their fair share in order to get what is best for everyone.
He respects and admires diversity and looks to surround himself with that in everything
that he does. And fairness and collaboration are a central thread to all of his business
efforts.
So with that, I'd like to turn it over to Professor Stuart Diamond.
Thank you so much for being with us today.
[applause]
>>Prof. Diamond: Thank you all very much. It's an honor to be here.
I wanna talk to you about something today that you do all the time. Every single interaction
you have in your life involves negotiation, whether talking to your friends, walking down
the street and passing somebody, negotiating for a job in business, and everything else
that you do.
And most of the instructions that you have been given about those interactions since
you were little are wrong, which is to say that they don't meet your goals very well.
And that is true not just in daily life, but in diplomacy, in business, and in everything
we do.
The climate that results from following a series of wrong instructions supports what
happened in Tucson, supports Congress pushing through and then repealing, trying to repeal
the Health Care Law, and focus on all the controversies that we have in the world come
from the wrong instructions.
And so what "Getting More" provides is a new and different method of human interaction;
one that will be familiar to you and that I'm sure you support, but one within the pages
of "Getting More" lays out in a structure that you can replicate in everything you do.
And this new form of human interaction, different way of thinking says that "perceptions and
emotions are more important than power and logic;" that the pictures in the heads of
the other party is more important than any collection of facts, evidence, or resources
that you can possibly muster. That making a connection with another person is the most
persuasive thing that you do. And that force, power, win-win, my way or the highway, BATNA,
good cop/bad cop, walking out, generally do more harm than good.
In addition to that they get only about 25 percent of the value of doing it a different
way, which is something I'll talk about in a few moments.
And of course, the focus on people and relationships does not mean you have to be a patsy. This
is a very strong way of negotiating and protecting yourself, but it's a way that protects yourself
in a humane and ethical way.
And so I wanted to talk just a little bit about this process and then I'll entertain
some questions.
In addition to being something you do every day, it's hard to find this stuff 'cause it's
buried in ordinary language. In fact, the difference between success and failure is
very, very small.
I like to use a baseball analogy. If you're a 280 hitter in baseball and you get one extra
hit every nine games you become a 310 hitter in baseball and that's worth two things to
you: one, a place in the Hall of Fame, and two, ten million dollars more a year.
And so you can't find these tools; they're mostly invisible unless you already know them.
And let me give you a couple of examples: one, from another company; one from Google
to show you what I mean.
I had a student, a former student who works at Exxon flew up to Philadelphia a couple
of weeks ago on a Southwest Airlines plane; plane was four hours late; the rest of the
passengers were snarling at the flight attendants and all the other airline personnel.
And this former student of mine thought about the pictures in the heads of the other parties.
He went up to the flight attendants and the other airline personnel; he apologized for
everybody else's behavior, and he commiserated them that they're workday was gonna be four
hours longer. And when he got off the plane they gave him $600.
[laughter]
The only one on the plane for that to happen to 'cause he understood that it was about
them not him that he needed make the connection with and he needed to step out of the emotion
of the moment.
Second, and it's invisible unless you were to know how to do that.
I had a student at Google here, Francois Sterin, I don't know if Francois' here today. Francois
was doing , is still head of one of the heads of network administration here and in network
sales. And he was in Southeast Asia doing a deal with a client and the client couldn't
afford Google's pricing; couldn't do the deal.
And so Francois probed a lot more deeply into what this other party was about; in the deal,
outside the deal, what are your hopes and dreams? Who are you as a person? And found
out that the client was having a lot of trouble financing another venture that had nothing
to do with Google.
And the client also had a whole bunch of fiber-optic cable that had been sitting around for a while
that it really could use the cash flow for and really didn't care that if it got rid
of.
And so Francois went to the Senior Management of Google and got a loan for this company
at favorable rates to finance his other venture, and in return got a 96 percent discount on
the fiber-optic cable --saving Google $500 million.
That is also invisible; the notion of making a connection with them no matter what the
deal is and finding something to get more with.
Now you don't have to devote your life to negotiation actively, but the more you know
about what's going on around you, the more you can make critical interventions. And so
my students learn to be exquisitely more conscious of the world around them.
A simple analogy is there's an old maxim about the difference between expert and non-expert
knowledge. A non-expert looks at a field and sees flat land. An expert looks at the same
field and begins to see little peaks and valleys; little bits of relief.
It takes no more time or energy for the expert to collect the greater amount of information
from that landscape than the non-expert, but the expert can make much better use of that
information to pursue opportunities or minimize risks.
So what we're talking about is getting you to be much more conscious about the topography
of your life and what's around you. Because let's face it, you cannot avoid negotiations;
they hit you in the face whether you like it or not; you can do 'em well or badly.
You saying, "I avoid negotiations," means you stand on the sidelines and they get to
score touchdowns all day long.
And so you have to decide how much to use it, but once again once you have it in your
arsenal you always see it. But before, it's invisible.
And so what I wanna do, before I show you the specific tools, I just wanna point, to
have a little menu of people and companies that have benefitted from this.
I had three women the last one here in my class from India who could have their own
arranged marriages in India using course tools with their parents blessing after the invitations
had been sent out and daddy paid for the wedding. With somebody from a different sect which
is almost unheard of.
Of course four year old, brushes teeth, goes to bed, no problema. And we'll talk about
that a little bit too.
And so these things are meant to be used in any kind of a situation.
I had somebody named [Mahul Treveti] who was a student of mine at Wharton and he took my
course because he got dinged, rejected by 18 companies. So he came to see me before
the course began and I said, "Fine. We're gonna get you offers from the same companies."
And he said, "Professor I'm with respect, you're crazy."
And I said, "Well let's see."
And so I told him, "What I want you to do is not send the same resume to each firm.
I want you to write 18 different resumes each one catering to the pictures in the heads
of the department that you're interviewing with and the people who are interviewing you.
What are their hopes, dreams, fears. Talk to alumni, talk to former employees, ask HR,
ask the people themselves as you do repeated interviews."
Well he gave up after 12 final interviews, a fist full of job offers, and he just took
one and says, "The rest is obvious. I'll get the other six. Okay."
[laughter]
So again, pretty invisible, but again focused on the model that I've talked about.
So this is a comment by one of my former students from Microsoft and this is a comment from
Patrick Grandinetti at Google from taking the course. About, I guess, 300 people or
so have taken the course here and they have benefitted widely.
Okay.
Well let me talk about the four different levels of negotiation and to tell you what's
wrong and what we can do about it.
The first level, the traditional level, is getting people to do what you will them to
do. Threats, leverage, power, my way or the highway, take it or leave it, BATNA alternatives
to agreement, walking out, etc.
The problem is not that it doesn't work. It works. With $20 trillion the United States
can do whatever it wants in the Middle East. The problem is it's really expensive, it takes
a long time, and it's not self-enforcing.
In addition to that, it tends to cause retaliation and resentment. And so that means the kids
kicking and screaming on the floor, malicious obedience at work, or terrorists in the Middle
East. It's not a real happy situation.
And if you think that BATNA, Best Alternative To a Negotiated Agreement works, the next
time you're out to dinner with your spouse or significant other in the middle of dinner
pull out your little black book and say, "You know if this doesn't work out I got these
whole bunch of alternatives here." See what happens!
[laughter]
So that also tends to piss people off.
And so but this is a tool of choice in work, at play, in the world. The United States can
have sanctions on Korea and Iran like it has with Cuba until the end of time. All it's
doing is promoting what I call, "The Alamo Strategy." They will fight to the last man
standing.
And so that's the problem and it's not a way to approach negotiations effectively. It gets
about 25 percent of the value of what you can get by the model I propose.
And as evidence of that, I'd like to call your attention to the work of John Nash, a
Princeton mathematician who won a Nobel Prize for a bunch of theories including this work
who was played by Russell Crowe in the movie "The Beautiful Mind".
What Nash did is he proved mathematically the 1755 theorem of Swiss philosopher, Jean-Jacques
Rousseau. And what Rousseau hypothesized is when parties collaborate the overall size
of the pie expands to such an extent that each party gets much more than it could get
alone with a smaller pie no matter how big that smaller pie is and how much of that smaller
pie the person got.
And the really good example that he used is four hunters individually could only get a
rabbit; together they can bring down a deer.
And that's a different way of thinking of.
You think that the Congress, the Democrats forced a health plan down the Republicans
throat and then the Republicans got in office and they're tryin' to repeal as much of it
as they can. Would you say that's consistent or inconsistent with what I've just said?
The result is we're not getting a very good health plan.
And so that's the problem with that attitude.
So let's go, and these are examples of how people act: the people on the left get four
times as much as the people on the right. They get twice as many deals and each deal
gets twice as much.
Now if you're a hard bargainer and you do the one on the right and you say, "Well I'm
doin' just fine" and that's what until now hard bargainers have been able to say if they
didn't have the comparison; so the column on the left. They were in a vacuum, but now
there's a comparison.
I've taught 30,000 people in 45 countries over the last 20 years. I've read more than
1,000 studies; half a million pages of journals and resource material.
And it wasn't until 1998 that I began to see that people weren't meeting their goals very
well. And over the last dozen years I began to develop this based upon what happens in
the real world, including my own ventures.
Okay. Power also is unstable and unpredictable.
This is in the Middle East; people don't like when I mention what the nationalities are,
but you can figure it out. But this tank is not about to run over this little boy.
Not with the whole world watching.
So you might lose your power in an instant; you might appear extreme if you use your power
too much. The way to use power is to use just enough to meet your goals and the other person
shouldn't be able to feel it.
That's the way one should look at this.
Okay, let's go to the next level.
This is what people have done, the [cognizenti] for the last 30 years: win-win, interest-based
negotiation, rational actors, etc. That's better; people see a rational benefit to them
and they're willing to go along with it. And that works with really rational people with
no emotions sitting with their spreadsheets in a conference room; everybody's really calm.
That doesn't work very often.
And so it's either irrelevant or not reflective of what goes on. We live in an irrational,
emotional world and the more important the negotiation is to the parties, the more irrational
they are. And that means world peace, a billion dollar deal, or my kid wants an ice cream
cone.
And so, therefore, you've gotta take people's emotional temperature and deal with their
emotions.
If the local school board municipality has raised taxes, I don't wanna know from win-win,
I wanna know how you're gonna make my life better. I want an emotional payment: empathy,
I understand, some compassion, some way to make me feel better. The right answer to the
statement, "I hate you," is "Tell me more, 'cause you're obviously exorcised and you're
not listening if you're exorcized. I need to get you to listen to me."
These are really powerful tools to use when people are emotional; not telling them to
calm down, but listening to what they have to say whether they're crazy or not. It is
obvious that the President of North Korea mostly wants love. He wants to join the trade
committees, he wants people to respect him. Every time some American shows up he rolls
out the red carpet, he releases prisoners, he talks to the South; he's like Danny Devito
in that movie with the beautiful woman and other people's money. He gets himself all
gussied up and ready. Don't we get it?
So these are emotional payments.
I once told my class at Wharton that I tell my wife sometimes that's she's right even
when she's not to preserve marital harmony.
[laughter]
And then I thought, "Well that's not fair to keep it from her." So I went home and I
said to my wife, "You know honey I told my class today that I tell you sometimes that
you're right even if you're wrong." And you know what she said? "That'll work."
[laughter]
So people want emotional payments and that's the first thing you need to do in negotiations.
And so it brings us to the third and fourth levels: to perceive what you want them to
perceive and to feel what you want them to feel.
Almost nobody goes there and I think the story of the writer's strike will prove instructive
here.
I was called about three years ago by Ari Emanuel who is a leading agent in Hollywood,
the role model for entourage, and the brother of Rahm, who was the White House Chief of
Staff, to help them with the writer's strike.
The writers had been on strike for three months, they'd been without a contract for a year,
no new TV material, nobody was talking to anybody, they had finally scheduled a breakfast
with the studio reps for that Thursday morning; it was a Tuesday afternoon.
So I got on the phone with the Writer's Guild people and a bunch of other people and they
wanted to know what the priority of the substantive issues are. What the royalty rate should be
and other contractual issues.
And I said, "Forget all that stuff. Go to the breakfast and ask the people from the
studios three questions. Question number one: "Are ya happy?" "We're not happy." Question
number two: "Are you makin' money?" "We're not makin' any money." Question number three:
"If you had to do this over again, how would you guys do it?
It took 30 minutes to restart the negotiations. It took two days to get an agreement.
Now there's two things I can say for sure about this. One, it's not rocket science.
And two, unless you already know how to do it, it's completely invisible.
And so that's what we're talking about is learning this stuff that's invisible to the
other party. Things like are my actions meeting my goals?
Of course they have problems in the Middle East because the wrong people are negotiating;
people that are emotional. They already have peace in the Middle East, 600,000 Palestinians
and Israelis live together. They should be negotiating.
And so those are the kind of things that come up.
This is a model based upon a lot of research that supports what I've been talking about,
and this has particular relevance to Googlers. And when I mention this it would take some
getting used to, because it's very different from probably the model that you've seen in
your own heads in terms of Google's success.
Less than 10 percent of the reason why people reach agreements has anything to do with the
facts and the substance; has almost nothing to do with how good your engineering is, with
the substantive knowledge you have.
More than 50 percent has to do with whether the people like you or not. And another almost
40 percent has to do with what process you use. Do you deal with emotions? Do you get
commitment, etc?
And if you think this is the, this top blue triangle, is the negotiation, sadly you're
gonna be right more than you're persuasive. This is very hard for people who are substantively
based to grasp, but it's absolutely true based upon a ton of research.
Why was O.J. Simpson found not guilty by the first jury in Los Angeles despite a yard of
DNA evidence including his blood at the site? It's because the jury, the inner city jury,
didn't like or trust the Prosecutor. And if they don't like you and they don't trust you,
they won't hear you.
Now Google has been wildly successful because of this blue triangle up here. That you have
so, you're so far ahead of the pack that you've done great.
I read this treatise in business school called "The Myth of U.S. Industrial Supremacy" and
there's a line in there that stuck with me. It said, "There is no human enterprise, organization,
or civilization that cannot given enough time be ruined."
And so what I'm thinking about is it's fantastic, but it doesn't last forever; that additional
skills are needed.
I gave a presentation at Microsoft about four or five years ago to the Business Development
and Legal Department and the first thing I did was that I told the 300 people there that
I had googled Microsoft and that I typed in three words, "Europe Hates Microsoft." And
I said, "Why did I get five million hits in a tenth of a second?"
I said, "You think that costs you money? You think the fact that people don't like you
means they won't buy your products even if it's the best on the market for their application?"
And so this is something that one needs to pay a lot of attention to. Which means that
the characteristics and sensibilities of the person sitting across from you so dwarfs every
other part of the negotiation.
It's not even worth talking about race, religion, gender, culture, creed unless you know who's
sitting across from you.
If you bring three people to a negotiation on Monday and so do they and you bring a fourth
person on Tuesday, it's a completely different negotiation.
Even with the same six people somebody's kid might be sick, some may have had a bad commute.
So the first thing I've gotta do is take the emotional temperature of the person sitting
across from me even if, and perhaps especially if, I'm married to them.
There is no Google way to negotiate. There is no American way to negotiate. There are
just individuals and the pictures in their heads.
I've had the opportunity to read the titles of all 2200 negotiation books written since
1950 as well as 400 or 500 books themselves, and I found some doozies. Here's one of my
favorite: How to Negotiate with the Japanese.
What's wrong with that? "What you're negotiating with 130 million Japanese? How interesting."
You're negotiating with a person or a couple of people who may be more or less the same
as the cultural norm.
So I wanna figure out what are the pictures in their heads.
A more dramatic example: if you were a Jew in Poland in 1944 and you thought the Nazi's
were monolithic and you met Oskar Schindler you lost your life. Because you didn't realize
that Schindler, although a Nazi, was willing to save your life but you never asked him
because you thought all Nazi's hated Jews.
What a source of competitive advantage it is to know who's really the same and who's
really different. And so that is a tremendous competitive advantage for you.
You may have more in common with somebody who is your sworn arch enemy than you do with
somebody who sits next to you at Google, if you just took the time to find out.
Once you do that, you then have to figure out whether your perceptions match. And if
they don't, what do you do about it?
And I put this up in my classroom when I teach and I point to the red dot and I say to people,
"Okay, what do ya see? Two words or less." And I get these answers and hundreds more.
I get vast disagreement about what people saw from a simple picture. Only less than
a half of the answers contain the word "red" in it. And in addition to that, most people
process a small amount of the available information. Clearly there's more white space than red
dot.
And so what you think is the perception doesn't mean that they think it's the perception.
And for example, we did a role reversal and this is in the book at Google with one of
the attorneys. I had him play a salesperson. He played a salesperson for five minutes and
he said, "You know I was amazed after five minutes of how much I hated lawyers at Google."
[laughter]
And so because there are different perceptions that you have to find out based upon different
ways that people have been brought up, on influences on them, and you need to find out.
So every time you have a disagreement with somebody you need to check your perceptions
and theirs.
This is even a much more serious problem than that.
I'm sure you've all seen this picture. I'm not gonna go through the details of it for
time, but if you wanna ask me after you can.
There are two women in this picture; a young woman to the left of the picture and an old
woman which is sort of the whole picture; one's mouth is the other's necklace; one nose
is the other's chin and so forth.
I've given half of this picture to a class, the young woman and the old woman to the other
half of the class and I've asked them to stare at their half for five minutes while I took
this off the screen. Then I put the combined picture back on the screen. What do you think
happened?
Well almost nobody could see the other one.
So the question is: if people have trouble seeing an image they know is there after seeing
a contrary image for five minutes, how much trouble does one culture have seeing another
culture's point of view that has seen the same picture for a thousand years?
And when I say culture I mean production versus marketing; legal versus sales; Mets versus
Phillies. I don't just mean Arabs and Jews.
So this issue is much more serious. They're not being stubborn. They're not being recalcitrant.
They're not being stupid. What you see so clearly is not there for them at all. It doesn't
exist.
And so you've got to start at the beginning. What are the pictures in their heads? And
what I think is black they may think is white. And you've got to find out friend or foe or
you don't have a prayer to persuade them willingly, only by force.
So there are some things in the book that talk about this.
The next point I wanna make which is related to this should resonate with you very much.
There's two studies I wanna commend to you; they're both in the book to think about.
The first study said that work groups in which there are varying perceptions, where people
disagree with each other produce three times as many marketable ideas than consensus groups.
The second study shows, it's a study of U.S. cities that for each 10 percent of diversity
added to an area, net income of people in it goes up 15 percent. That is an enormous
figure.
It is no magic that Silicon Valley is outside of San Francisco which is the most diverse
city in the United States, and has been the quickest major city to come back from the
recession.
So if someone, if you stand for diversity, if somebody says to you with some frustration
that you disagree with each other, you've gotta say, "That's great. We're gonna make
money.
Homogeneity not profitable; differences profitable. Let's disagree with each other some more so
we can make some money."
[laughter]
So I want to turn the paradigm on its head and value differences and from that get creativity.
So how do they value things? Do they value things different from you?
I had somebody at Google that I taught who couldn't get a client. He found out about
the client; the client's life. Found out the client had a daughter, was having computer
problems; high school age daughter. Guy from Google took his own time, went over to the
guy's house for a Saturday morning, tutored the daughter, fixed the computer, got a multi-million
dollar account.
And so that's trading items on equal value; time for a multi-million dollar account. The
client thinks, "Here's somebody who cares about me."
As long as you deal, and this is also different from interest-based negotiation, 'cause it
uses all of the synapses in each party's head.
The CEO of a major company in Philadelphia once told me the most important thing he ever
did for his major client in a 20 year business relationship was to pick up the client CEO's
mother-in-law at the Philadelphia airport one Saturday night. Has nothing to do with
any deal, but it affects every deal.
Had another Googler in one of my classes here who a vendor raised prices on him to a significant
extent. And so he thought about the pictures in the vendor's head and realized it's very
hard for vendors to get into big companies like Google.
And so he said to the vendor, "I'll tell you what. You hold the price and I will provide
you introductions to other departments at Google. What you do after that is your concern.
You get the job, you don't get the job, but I wanna provide you the opportunity." For
the provision of the opportunity alone the vendor held the price.
And so that's what I mean about a different way of thinking about how people interact
with each other.
I do wanna talk for a minute about kids. This is my eight year old son, Alexander; my favorite
negotiating partner; soon to be my co-star on YouTube.
[laughter]
But I wanna mention something about kids. Kids are very negotiable if you learn the
language of children.
Couple of examples: kids have little power. They want power and so give them stuff, proactively.
I tell Alexander he can pick the restaurants, his room can be a little messy, he can go
to bed a little bit later, and so as a result of that Alexander is constantly in a debtor
position with me. He always owes me stuff.
[laughter]
And so when I ask him to do things he does them for me.
[laughter]
Also I tend to respect Alexander. I come home from work; he's watchin' TV again. I don't
shut off the TV. I think to myself, "Well sometimes I come home, I'm stressed out, I
have a drink. Maybe the kid's stressed out from elementary school."
[laughter]
I mean kids get stressed out. So I wanna have a conversation about it. "How's your stress
level? Do you need to watch TV to relieve stress?" Even if that's not the reason, he
respects the question and we'll have a better relationship.
The third thing is kids are very incremental. So you wanna be incremental. "If you won't
clean your room will you clean a quarter of your room? Will you clean a half of your room?"
Couple of months ago my kid wouldn't do his math homework. It was 7:30 at night, my wife
said, "Do your homework now." He said, "How about 8:30?" My wife went ballistic. I said
to Alexander, "How 'bout 7:33?" He said, "Okay."
[laughter]
My wife said, "What?"
[laughter]
And the thing was, kids are incremental. "Could I have a cookie? Could I have a half a cookie?
Could I have a quarter of a cookie?"
[laughter]
And so what I was trying to say to Alexander is, "I speak your language," and in return
for that he gave me a 57 minute concession.
[laughter]
And so those are ways to deal with kids; there's a chapter in the book about kids.
I wanna mention not to walk out of negotiations unless it's a mutual agreement because the
signal to the other party is, "I don't even care enough about you to give you the time
of day." It's a bad signal.
The last major point I wanna make to you, and there's more of it in the book and I like
to commend it to you, is to deal with hard bargainers in particular, learn their standards.
Learn how they make decisions. What are their policies. Quote their stated policies.
If their website says they care about their customers and they're late delivering your
cable TV box or they overcharge you on the phone, you wanna say to the customer service
rep, "Well I read on your website that customers are the most important part of your business.
How does that dovetail with this situation? I was just curious."
[laughter]
And you will find that they will be nicer to you.
Along with that, what are the exceptions to policy? Has the airline ever made an exception
to its $200 change fee? Have you ever allowed after a one o'clock checkout in the hotel?
Fit within one of the exceptions; asking for exceptions should be hardwired to your brain.
I wanna mention just three very quick examples of this.
I had a student went to McDonald's five 'til eleven on a weeknight; French fries were soggy;
five minutes before closing time; clerk wouldn't make any more French fries. Without going
ballistic the student picked up the freshness guarantee which guarantees fresh French fries
during all business hours; showed it to the clerk; got fresh French fries.
[laughter]
No muss, no fuss.
In a million different ways your life will be better.
Had another student rented a car from Avis in Albuquerque for spring break. He got 100
miles from the shop and realized he'd paid too much for the car one class higher than
he got. Didn't wanna drive back; at the end of a week handed in the car and said to the
clerk, "I need a one class credit." And she said, "You can't have the credit because it
says in the contract that you pay for the car you sign for when you leave the lot."
And she turned over the contract and there was his signature on the bottom on the contract.
So he immediately looked at this contract and said to the service rep, "It's not my
responsibility to read this contract." And she said, "Why not?" And he said, "Look at
this contract. You can't even read this contract."
And if you know what rental contracts look like, they're eight point lead grade type
on light pink paper. "Why?" he said. "If it was my responsibility to read this contract
your slogan would not be 'We try harder,' it would be 'You try harder.'"
[laughter]
He got the credit.
One more example: I had a student from Wharton who got a job at McKenzie and she thought
she deserved a $30,000 extra signing bonus because she had eight years of experience
in the media/entertainment department of PricewaterhouseCoopers in L.A. and she was going to that department
at McKenzie. Her boss-to-be agreed with her, but said, "I'm sorry I can't do it. My hands
are tied. McKenzie's got a one firm policy."
She thought about her goals which were: get more money soon. So she said to her boss-to-be,
"When is the first time McKenzie is allowed to pay a bonus to a new hire?" And her boss-to-be
said, "Three months." And she said, "Why don't you just give me the $30,000 in three months?"
And her boss said, "Sure."
That negotiation took less time than it took to tell it to you.
The one thing you can't do is make yourself the issue using standards. The more outrageous
they become, the more calm you have to become.
Mahatma Ghandi, Martin Luther King, Barack Obama in the second Presidential debate.
It's very, very powerful.
I tend to say, "Be extreme or come to me. If you will come to me we'll be collaborative.
If wanna be extreme without making myself the issue, you can drive yourself off the
cliff."
So if they cheat me, I'm happy we just made money. "Well tell me about what you've done
here and do you think this is a good way to operate?" "We've tried to reach you 20 times
in the last week; we apologize for doing something wrong. What have we done wrong?"
Those are irresistible questions.
Or, "What do you like most about our competitors and hate the most about us?"
Those are questions that should be part of your stock in trade.
Whatever these tools are, none work all the time and some don't work half the time. But
they work more than if you don't use them.
[laughter]
And so let's say we're working on an easy case, you say, "It doesn't work over here."
And I say, "Forget about it. It never works over there."
But if you could increase your hit rate a few percent in your life you'll be fabulously
more successful.
And so did I mention to you the baseball analogy? There we go: 280 hitter; 310 hitter; that's
basically it.
So here is in a nutshell the three questions to ask: What do I want at the end of the process
I don't have now? Who are these people? And given the first two, what will it take to
persuade them? Different in every situation.
I wanted to end with a little anecdote based on this notion of being incremental; asking
for something smaller.
The world should follow, the technology industries lead. Start small; put in the scalability.
Had they done that 30 years ago with one health care facility or one factory in the Middle
East, we'd have a great health care plan and peace in the Middle East.
So many politicians don't know from the concept of scalability you can make the difference
in your own life by shortening the question whatever you do and scaling it up from there.
The anecdote I wanna mention to you is I had a woman in my class some years ago who's five
year old daughter fell in the kitchen one Saturday morning and gashed her forehead on
the sharp corner of the kitchen table.
The child was hysterical; the child's grandfather, the father of this student, was hysterical,
and the student was about to become hysterical when she suddenly stopped herself and said
to herself, "Wait a minute. I'm taking a negotiation course. I'm gonna negotiate this."
And the issue was the child clearly has to go to the hospital and get stitches; she eventually
got 12; she wouldn't go; she was clinging onto the table for dear life; and nobody could
pry her little fingers off the kitchen table.
So her mother walked over to her daughter and said to her daughter, "Does Mommy love
you?" Her daughter said, "Yes." Her mother said, "Would Mommy do anything to hurt you?"
Her daughter said, "No." Her mother said, "When we get to be big people do we have to
do things sometimes we don't like to do?" Her daughter said, "Yes." Her mother said,
"Mommy had stitches." Showed her scar. "Grand daddy had stitches." Showed his scar. And
within five minutes her daughter picked herself up and walked to the car by herself.
[laughter]
And so think about this in the concept of being incremental. The mother thinks the daughter
feels alone and in pain and so she asks, "Does Mommy love you?" An emotional payment; the
first increment goes right into the daughter's brain. The daughter then realizes that she's
not alone, but still in pain. The mother then says, "Would Mommy do anything to hurt you?"
And so step by step you can bring somebody a vast distance in a short period of time
if you start with the pictures in their head; give them emotional payments and take them
step by step.
And if they say, "Are you being incremental with me?" You say, "Absolutely. Is there anything
wrong with us pursuing a less risky path?" If they say, "You're using standards on me."
You say, "What's wrong with your standards?"
And so this is a transparent process, not a manipulative one.
The best that you can do is share these tools with others; you'll all bring down a deer
together.
Now some people say, "How do I replicate this? It's seems extraordinary." And so for some
situations in the book I give more than one example from extraordinary situations and
this is one of them.
About a year ago when I was going to a Google workshop in India I was in a car on the way
to the airport and somebody called me, Craig Silverman, a Long Island Investment Council,
who had taken the course and he said, "I just wanna tell you somethin.' I thought you might
be interested in.
This morning I went for a routine blood test at a blood lab and before I could get the
test there was this blood curdling scream from the next room; a young girl; my nurse
left me hanging there and went into the next room. This went on for several minutes and
finally I decide to investigate."
He said, "I went to the next room and there was this poor little girl five or six years
old. Her mother was holding her shoulders back and pinning her. One of the nurses had
pinned her arm to the table and the other nurse was trying to stick this needle in her
arm."
And so Craig walked over to the girl's mother and said, "Could I talk to your daughter for
a minute?" Mother said, "Okay." Craig went over to the girl and said, "Look at me. Do
you think your Mommy loves you?"
[laughter]
Girl said, "Yes." Craig said, "Do you think your Mommy would do anything to hurt you?"
Girl said, "No."
And within two minutes she had calmed down and was ready to get the needle.
He said, "They looked at me like I was a magician."
[laughter]
They said, "Where did you learn that?"
[laughter]
And to his credit he asked them to buy my book.
[laughter]
Thank you very much.
[applause]
Questions anybody? I'm here to answer questions on any subject involving negotiations.
I'm sure somebody has a question.
Who's tried something that hasn't worked? Who's tried something that's frustrated you?
And so forth.
>>male #1: Um.
>>Prof. Diamond: Yes.
>>male #1: So we're in the negotiating process for a house right now.
>>Prof. Diamond: Yes.
>>male #1: Probably a common situation.
And there are, of course, several layers of people in between us and the sellers. How
can we apply your tactics if we don't even have communication directly --
>>Prof. Diamond: Sure.
>>male #1: with the sellers?
>>Prof. Diamond: The reason that there are several layers between you and the other party
is that brokers feel fear that you'll steal the client. That's why.
And so you've gotta address that explicitly and to say, "I think you probably don't want
me to talk to the other party 'cause you're afraid that something will happen with the
commissions. So I'd like to sign the most draconian non-circumvention agreement you
can come up with to protect you. But doesn't it seem to you that making a personal connection
with the other party would be better? Tell me what they're thinking and feeling. We'll
bake their favorite bread; we'll wear their favorite color, etc."
If you can't do that, you've gotta train them to be your advocate. They've gotta find out
the pictures in the head of the other party and they have to do it for you.
>>male #1: Thank you.
>>Prof. Diamond: Yes.
>>male #2: Hi, thanks for coming; really enjoyed the talk.
>>Prof. Diamond: Yes.
>>male #2: So while I generally think the approach that you're advocating is really
good and I try to employ very similar, what about a negotiation for a new car? I mean
does the person on the other side of that really have any interest in my caring about
--
>>Prof. Diamond: For a new car.
>>male #2: Um-hum.
>>Prof. Diamond: Couple of things and there's a section about new cars in here.
First of all you do wanna use standards, of course; what these things cost. But the other
party cares a lot more than price. When you look up at the leader board at a car dealership
you'll see that the sales reps are rated not on price, but on units sold. So the faster
you tell the other person you're ready to buy a car, the better price you're gonna get.
"Here's my contract. I will buy that car for $300 over your cost right now. Here is a certified
check."
Your commitment makes you more powerful.
In addition to that, there are all kinds of other things I mention in the book that you
can ask for: discounts on options; better servicing. "I want a rental car for free every
time I bring my car in for servicing."
I negotiated that with my dealership and I'm one of the few people who gets that.
And so there's various things. "That's another department." "That's okay. You know them better
than I do. Go talk to them. I'll wait."
[laughter]
So.
>>male #1: Thanks very much
>>Prof. Diamond: Yes.
Okay.
>>male #3: Thanks for coming.
I wasn't sure exactly how to phrase this question, whether I should say, "How do you negotiate
with incompetent people?" Or maybe a better way of asking the question is, "How do you
negotiate with bureaucracy when you're faced with dealing with a wall of bureaucracy --
>>Prof. Diamond: Yes.
>>male #3: and kind of --
>>Prof. Diamond: Sure.
>>male #3: get beyond that?
>>Prof. Diamond: Several responses: first, use their standards. Second, make a connection
with the person across from you who wants to feel their power.
When a cop stops you, you apologize. When you come to the window of a bureaucrat at
the motor vehicle department you ask them how their day was.
Those are things that you should do with bureaucracy. You acknowledge their power or you use their
standards. Those are the kinds of things that I would do with bureaucracies.
Do you have a specific example in mind I can address?
>>male #3: Well I'm currently in the process of negotiating with a Board of Education for
services for my daughter for special needs services so it's a lot of bureaucracy that
you have to navigate. And we're exploring getting an advocate, a special needs advocate,
which is interesting. Well it's useful in that it gives us additional information, but
I also realize it's gonna up the stakes once we kind of go into a meeting --
>>Prof. Diamond: Alright. Has this bureaucracy before ever done this
more quickly so the child doesn't have to wait? How you give a vision for somebody:
"My daughter has these needs. How long should she wait?"
Bring her with you when you ask people that question. "How long should Judith, Allison
have to wait? What do you think Judith?"
[laughter]
It's really hard for them. The more you paint a picture for somebody else, the more persuaded
they're gonna be.
>>male #3: Thanks.
>>Prof. Diamond: Yes.
>>male #4: Hi. Thanks for coming today.
So I got from your talk that when you're making a negotiation you should first take the emotional
temperature of the other party --
>>Prof. Diamond: Yes.
>>male #4: and then make an emotional payment, right?
Now does it make a difference whether the other party can sense that you have an ulterior
motive for making the emotional payment?
>>Prof. Diamond: A good question.
I wanna do things that are gonna seem fair tomorrow as well as today. So I'm not gonna
do anything to hurt them. I'm also, in fact, going to get them to do things they would
otherwise not do.
I don't define manipulation as getting people to do things they would otherwise not do.
I define manipulation as hurting people.
So if they say, "Are you making an emotional payment?" I wanna say, "Absolutely. Don't
you want one?"
[laughter]
In other words, this is a transparent process. You have an ulterior motive. My ulterior motive
is to make sure we both benefit from this negotiation. That's not win-win; it's both
benefit. You benefit by trading items of unequal value. You benefit by giving each other emotional
payments. It's much more specific than win-win. But "I wanna make sure that we both get something
here that benefits us and so I think that I owe you something, some empathy, some apology,
please tell me whether I'm right or wrong?"
So I'm gonna be very explicit about it.
>>male #4: Thank you.
>>Prof. Diamond: Yes.
>>male #5: Hi.
How do you negotiate with a party where there's a huge disbalance in trust? And --
>>Prof. Diamond: A huge imbalance?
You need to say, "There's a huge imbalance in trust. --
[laughter]
What do we do?"
>>male #5: Yeah. Well as a matter of fact there's also a disbalance in understanding
of what we're negotiating.
>>Prof. Diamond: Okay.
>>male #5: The subject is difficult enough so the other party doesn't understand it and
couldn't make a coherent proposal to counter yours.
>>Prof. Diamond: If you cannot understand what you're negotiating, you should not start
the negotiation. The first thing you have to do is know where you're going. If you don't
,it's like getting into the car and saying, "I'm driving to San Diego. I don't know where
it is. I don't have a map." You're not gonna get there very well.
So you really have to spend time discussing what the parties understandings are and yes,
the less skilled they are, the more differences there are between the parties, the more time
it's gonna take. But if you don't do it this way, you'll never get there.
>>male #5: So you think the education of the other party of their goals is the most important?
>>Prof. Diamond: These tools are morally neutral. You can help people; you can hurt people.
You've gotta decide how much help you wanna give to them. I tend to help people as much
as I can otherwise it's like an amateur driver in the Indy 500 race, you crash a lot.
>>male #5: Okay. Thank you.
>>Prof. Diamond: Okay.
Yes.
>>Rachel Kay: Hi. A quick question from Ann Arbor.
>>female #1: Can they hear?
>>male #6: Um-hum.
>>female #1: Ah. okay.
>>Prof. Diamond: Where are you?
>>Rachel Kay: [inaudible]
>>Prof. Diamond: Okay.
>>male #6: No we can't --
>>Prof. Diamond: I'm sorry.
Okay. Go ahead.
>>male #6: There's a [inaudible] usually.
>>female #1: Oh, okay.
>>male #6: So --
>>female #1: Can you hear us from Ann Arbor?
>>Prof. Diamond: Yes, perfectly.
>>female #1: Oh you, oh okay.
A quick question.
I was wondering if in your book you cover how to handle mother-in-law/father-in-law
--
>>Prof. Diamond: Oh --
[laughter]
You look up mother-in-law you'll have lots of citations. We don't leave mother-in-laws
out of any book on negotiation.
[laughter]
>>female #1: [laughs]
Okay, great. Any --
>>Prof. Diamond: And that includes mother-in-laws and weddings.
[laughter]
>>female #1: And what?
>>male #6: And weddings.
>>female #1: And weddings, okay.
>>Prof. Diamond: And weddings and other things.
Okay?
Yes.
>>female #2: Hi. Thanks for coming.
My question is what if we try our best to use your tools to sort of drive across the
point we wanna make with another party and yet it's just not succeeding?
>>Prof. Diamond: Alright.
>>female #2: The other party is unresponsive --
>>Prof. Diamond: Okay.
>>female #2: What do you --
>>Prof. Diamond: Alright.
>>female #2: suggest would be the best?
>>Prof. Diamond: This is again, I wanna try to drum this in your heads. This is really
key. The best thing you have is your credibility and you wanna be real. You wanna say, "You
know, I'm a failure. I have tried to convince you. I've been totally unsuccessful. I've
tried all these things. Do you have any advice for me?"
>>female #2: Hum.
[laughter]
Yeah.
>>Prof. Diamond: That's what you wanna do.
[laughter]
>>female #2: Thank you.
>>Prof. Diamond: Yes.
It's disarming when you do that.
>>Rachel Kay: Last question.
>>Prof. Diamond: Last question. Okay.
Anybody?
I, okay. One more.
[pause]
Not one more.
[laughter]
Okay, thank you all very much.
[applause]