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Notes from "Never Split the Difference"

These are my notes from the book "Never Split the Difference" by Chris Voss. Chris Voss is the former lead FBI hostage negotiator and he teaches what he's learned from real world experience in life and death negotiations. It turns out, a lot of the traditional negotiating advise doesn't work well most of the time. Chris Voss also has a Masterclass where he explains his negotiation techniques on video, and it's fantastic.

Knowledge and Power by George Gilder

Without a deep understanding of human psychology, without the acceptance that we are all crazy, irrational, impulsive, emotionally driven animals, all the raw intelligence and mathematical logic in the world is little help in the fraught shifting interplay of two people negotiating.

"It is self evident that people are neither completely rational nor completely selfish, and that their tastes are anything but stable.” - Daniel Kahneman

Kahneman proved that humans are victims of cognitive bias. That is, unconscious and irrational brain processes that literally distort the way we see the world. Kahneman and Tversky discovered 150 of them.

It all starts with a universally understood principal that people want to be understood and accepted. Listening is the cheapest yet most effective concession we can make to get there. By listening intensely a negotiator demonstrates empathy and shows a sincere desire to better understand what the other side is experiencing. Psychotherapy research shows that when individuals feel listened to, they tend to listen to themselves more carefully, and to openly evaluate and clarify their own thoughts and feelings. In addition, they tend to become less defensive and oppositional, and more willing to listen to other points of view, which gets to them to the logical place where they can be good “getting to yes” problem solvers.

The whole concept, which is the centerpiece of this book, is called “tactical empathy.” This is listening as a martial art, balancing the subtle behaviors of emotional intelligence and the assertive skills of influence to gain access to the mind of another person. Contrary to popular opinion, listening is not a passive activity. It is the most active thing you can do.

Life is negotiation. The majority of the interactions we have at work and at home are negotiations that boil down to the most simplistic animalistic urge: “I want.”

Negotiation serves two distinct vital life functions: information gathering and behavior influencing. It includes almost any interaction when a party wants something from the other side. Negotiation as you’ll learn it here, is nothing more than communication with results.

In negotiation each new psychological insight or piece of information revealed heralds a step forward, and allows one to discard one hypothesis in favor of another. You should engage the process with a mindset of discovery. Your goal at the outset is to extract and observe as much information as possible.

The relationship between an emotionally intelligent negotiator is essentially therapeutic. Getting to this level of emotional intelligence demands opening up your senses, talking less, and listening more. You can learn almost everything you need, and a lot more than people want you to know, simply by watching and listening, keeping your eyes peeled and your ears open and your mouth shut.

The more you know about someone, the more power you have.

Tactical empathy is the ability to recognize the position of a counterpart, and the vocalization of that recognition.

Labelling is a way of validating someone’s emotion by acknowledging it. Give someone’s emotion a name, and you show you identify with how that person feels. It gets you close to someone without asking about external factors you know nothing about. Exposing negative thoughts to daylight makes them seem less frightening.

“No” is the start of a negotiation, not the end of it. When you preserve a person’s autonomy by giving them permission to say no, their emotions calm, the effectiveness of the decisions go up, and the other party can really look at your proposal. Great negotiators seek “no” because they know that’s often when the real negotiation begins.

There are actually three kinds of yes: counterfeit, commitment, and confirmation.

You can be sure that everyone you meet is driven by 2 primal urges: the need to feel safe and secure, and the need to feel in control. If you satisfy those drives, you’re in the door. Primal needs are urgent and illogical.

When someone has been ignoring you via email, you provoke a “no” with this one sentence email: “Have you given up on this project?” The “no” response this question demands gives the other party a feeling of control and encourages them to define their position and explain it to you.

Humans have an innate urge towards socially constructive behavior. The more a person feels understood and positively affirmed in that understanding. The more likely that urge for constructive understanding will take hold. “That’s right” is better than “yes”. Strive for it. Use a summary to trigger a “that’s right”.

A good summary is re-articulating the meaning of what is said plus the acknowledgement of the emotions underlying that meaning. Paraphrasing + Labelling = Summary

While our decisions may be largely irrational, that doesn’t mean there aren’t consistent patterns, principles, and rules behind how we act. And once you know those mental patterns, you start to see ways to influence them. By far the best theory for explaining the principles of our irrational decisions is something called Prospect Theory. Prospect Theory describes how people describe chose between options that involve risk, like in a negotiation. The theory argues that people are drawn to sure things over probabilities, even when the probability is a better choice. That’s called the Certainty Effect. And people will take greater risks to avoid losses than to achieve gains. That’s called Loss Aversion. That’s why people who statistically have no need for insurance, buy it.

We don’t compromise because it’s right. We compromise because it is easy and it saves face.

Compromise, “splitting the difference”, can lead to terrible outcomes. Compromise is often a bad deal, and no deal is better than a bad deal.

Early on in the negotiation, say “I want you to feel like you’re being treated fairly at all times, so please stop me at any time if you feel like I’m being unfair and we’ll address it.” As a negotiator you should strive for a reputation of being fair. Your reputation precedes you. Let it precede you in a way that paves success.

In a tough negotiation you it's not enough to show the other party that you can deliver the thing you want. To get real leverage, you need to persuade them that they have something concrete to loose if the deal falls through.

Anchor their emotions. Start out with an Accusation Audit, acknowledging all of their fears. By anchoring their emotions in preparation for a loss, you inflame the other side’s loss aversion so they’ll jump at the chance to avoid it.

We are emotional irrational beasts who are emotional and irrational in predictable, pattern-filled ways. Using that knowledge is only rational.

We (the FBI) learned that negotiation is coaxing, not overcoming. Coopting, not defeating. Most important, we learned that successful negotiation is getting your counterpart to do the work for you and to suggest your solution himself. It involves giving him the illusion of control while you in fact are the one defining the conversation. The tool we developed is something I call the calibrated question. What it does is remove aggression from conversations by acknowledging the other side openly without resistance. In doing so it lets you introduce ideas and requests without sounding pushy. It allows you to nudge.

“He who has learned to disagree without being disagreeable has discovered the most valuable secret of negotiation.” - Robert Estabrook

Ask for help with one of the all time greatest calibrated questions: “How am I supposed to do that?”

The real beauty of calibrated questions is that they offer no target for attack like statements do. Calibrated questions allow you to educate your counterpart about the problem is, rather than causing conflict by telling them what the problem is. But calibrated questions are not just random requests for comment. They have a direction. Once you’ve figured out where you want the conversation to go, you have to design the questions to take you in that direction while letting the other guy think it’s his choice to take you there.

Calibrated questions avoid verbs like “can, is, are, do, does.” These are closed ended questions that can be answered with yes or no. Instead they start with “what” and “how”, and sometimes “why”.

All negotiation is an information gathering process. Here are some great standbys that I use:

“What about this is important to you?”

“How can I 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 am I supposed to do that?”

The implication of any well designed calibrated question is that you want what the other guy wants, but you need his intelligence to help you overcome the problem.

Calibrated “how” questions are a surefire way to keep negotiations going. They put the pressure on your counterpart to come up with answers and to contemplate your problems when making their demands.

The 7-38-55 rule says that only 7% of what you say comes from the words, while 38% comes from the tone of your voice, and 55% from the speaker’s body language and face.

Liars tend to speak in longer more complex sentences in order to win over their suspicious counterparts. This is dubbed the “Pinochio Effect” because the number of words grows along with the lie.

The more a person uses first person pronouns, the less important they are. The more they use third person pronouns, the more important they are to making a decision. Smart negotiators will defer to people away from the table to keep from getting pinned down.

When it comes to negotiating, the golden rule is wrong. The Black Swan rule is “don’t treat others the way you want to be treated, treat them the way they need to be treated.”

The Ackerman method - if you have to negotiate over price.

  1. Set your target price.

  2. Set your first offer at 65% of your target price.

  3. Calculate 3 raises of decreasing increments to 85%, 95%, and 100%.

  4. Use lots of empathy and lots of ways of saying no to get the other side to counter before you increase your offer.

  5. When calculating the final amount, use precise, non-round numbers to give the number credibility and weight.

  6. On your final number, throw in a non-monetary item that they probably don’t want to show that you’re at your limit.

So when someone puts out a ridiculous offer, one that really pisses you off, take a deep breath, allow little anger and channel it at the proposal, not the person, and say “I don’t see how that would ever work.” Such well timed offense taking, known as strategic umbrage, can wake your counterpart to the problem.

Black swan theory tells us that things happen that were previously thought to be impossible, or never thought of at all. This is not the same thing as saying that sometimes things happen against one in a million odds, but that things never imagined do come to pass.

The black swan symbolizes the uselessness of predictions based on previous experience. Black swans are events or pieces of knowledge that sit outside our regular expectations and therefor cannot be predicted.

Most people assume that black swans are proprietary or closely guarded in some way, but in fact often the information is highly innocuous. Either side may be completely oblivious to its importance. Your counterpart always has pieces of information whose value they do not understand.

Black swans are leverage multipliers. They give you the upper hand. There’s always leverage. As an emotional concept it can be manufactured whether it exists or not. If they’re talking to you, you have leverage.

The party who feels they have the most to lose and is afraid of that loss has less leverage. To get leverage you have to convince your counterpart that they have something real to lose if the deal falls through.

Negative leverage is the ability of a negotiator to make his counterpart suffer and is based on threats. You have negative leverage if you can tell your counterpart, “if you don’t pay your bill, I will destroy your reputation.”

A more subtle technique is to label your negative leverage, and therefore make it clear without attacking. Sentences like “it seems like you strongly value the fact that you’ve always paid on time” or “it seems like you don’t care what position you are leaving me in” can really open up the negotiation process.

Normative leverage is using the other parties norms and standards to advance your position. If you can show inconsistencies between their norms and their actions, then you have normative leverage.

The Paradox of Power - the harder you push, the more likely you are to be met with resistance.

The moment when we’re ready to throw our hands up and declare “they’re crazy” is often the best moment to discover black swans that can transform the negotiation. It is when we hear or see something that doesn’t make sense that a crucial fork in the road is presented.

The people operating with incomplete information appear crazy to those operating with different information. Your job when faced with someone like this in a negotiation is to discover what they do not know and supply that information.

With the style of negotiation taught in this book, an information obsessed, empathetic search for the best possible deal, you are trying to uncover value, period. Not to strong-arm or humiliate.

Don’t avoid honest, clear conflict. It will get you the best car price, the higher salary, and the largest donation. It will also save your friendship, your marriage, and your family.

One can only be an great negotiator, and a great person, by speaking clearly and empathetically. By treating counterparts and oneself with dignity and respect. And most of all by being honest about what one wants and being honest about what one wants and can, and cannot, do. Every negotiation, every conversation, every moment of life is a series of small conflicts that, managed well, can rise to creative beauty. Embrace them.

What we don’t know can kill us or our deals, but uncovering it can totally change the course of a negotiation and bring us unexpected success. Finding the black swans, those powerful unknown unknowns, is intrinsically difficult, however, for the simple reason that we don’t know the question to ask. Because we don’t know what the treasure is, we don’t know where to dig. Keep pushing, probing, and gathering information. Let what you know, your known knowns, guide you but not blind you. Every case is new, so remain flexible and adaptable. Black swans are leverage multipliers. Work to understand your counterpart’s religion and world view. Exploit the similarity principle.


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