IWTL How to become a master negotiator

I'm not a master negotiator (I never get the chance to practice) so take this with a grain of salt.

I believe that what Bernie Ecclestone, Carl Ichan, Kirk Kervorkian and other great deal-makers and negotiators had in common was surprisingly not master skills of persuasion, or charm, or rhetorical re-frames (although they had all those too). The single most important attribute they all had was they could very quickly make an assessment of how much value a deal, contract, asset had to them. They instantly knew if it was worth negotiating or walking away.

I think more important than any of the soft personal skills and rhetoric typically associated with negotiating, your first priority should be to be able to quickly size up value.

I think this scene from the Simpsons illustrates the principle very well for a off-the-top-of-my-head example: https://www.youtube.com/watch?v=SORcoPD49K4

Apu doesn't charm Homer, doesn't do the old 'there was a guy eyeing it this morning' shtick. Nope, he just hums and Homer unprompted pays up the full amount after emphatically saying he wouldn't and that it was 'highway robbery'. What happened? Apu quickly sized up just how much value it had for Homer (doesn't help that Homer has a terrible poker-face and screamed "you saved my life"). Other posters have mention Chris Voss, who speaks about an important lesson here, that value isn't always financial, for example Homer just wants to avoid conflict - that's more valuable to him than 100 dollars cash. But the principle remains, the most important skill you can have as a negotiator is to quickly assess value - what you can afford to pay or lose, and what they can afford to pay and lose. At the end of the day if Homer did indeed walk off, Apu doesn't lose anything, it's just a dusty box of chocolates.

To return to these old sharks like Bernie, Carl, and Kirk: Kirk Kerkorian said that all the figures he needed could fit on one sheet of paper, Carl Ichan says his son tells him he's a great 'reductionist' who can simplify things. It reminds me of Warren Buffett and his 'margin of safety' which is loosely the difference between the price you pay for a security and the long-term value of it, or as Bernie Ecclestone said "I rarely buy anything without a discount". If you can quickly figure out that margin of safety it means that in a hypothetical battle of attrition, you know if you could hold out longer. Obviously the definition of bad negotiation is getting into a battle of attrition in the first place, but that's why you learn how to identify it - so you can walk away.

/r/IWantToLearn Thread