Well, aside from planning and preparation. Within that, I think you first
need to think about what is it that we're trying to create? Right,
we had that at the beginning, But then how am I going to get
there? Because you may say to me Mark, I want a quote unquote
good deal, to which I'm going to say to you, cool story.
So does the other person what does a good deal mean for you? What
constitutes a good deal? So you might say, well, I want to
make more money, I want to reduce risk, I want to improve communication.
Could be a number of different things you do. But then I would
say, okay, break those down. What are you going to actually negotiate
into the deal to ensure the successful achievement of those things. You're listening to
Carrie Let's's Financial Survival Network, where you get valuable information you just can't find
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You are listening to watching the Financial Survival Network of your host Kerry Lotz.
Well person, you're about to hear from really happy to brain you. It
builds himself as the negotiations Ninja. And your name is Mark or fan Mark
trait to have you on the show. Hey, negotiation. Everything in life
eventually becomes a negotiation, right, it always does, always will. Everything
about living day to day is about negotiations. So being that that's the case
of being a good negotiator. Is it about winning or is it about getting
both sides or all sides what they want or getting closer to what they want?
Yeah? Good, good. First question, I'm going to say something
controversial. Ridles the hop when win is the biggest lie that's ever been told
in the negotiation world. But so is wood loose because it's built on the
same premise. When when presupposes that both parties can win, that's not possible.
If you've been in the business world in general, you know that to
be true. But even let's just say, for example, that both parties
could win, then you would need to know what the complete value of that
deal is over the lifetime of that deal, which is almost impossible to know
as well. And you've got to know that with complete certainty. And even
if you could know that with complete certainty what the deal is and the value
of the deal is over the lifetime of that deal, then you would need
to be able to be quote unquote fair with each other a distribution of that
value. But what is fair, really fair, is based on what your
perception of what fair is, and it's also based on what my perception of
what fair is. And so we have to come to an agreement on what
fair is. But we can't because it's not objective. It's subjective. And
even if we were going to come to an agreement on what fair is,
we would also need to be one hundred percent transparent with each other about the
value and about our own interests and everything that's going on in our business between
each So I would argue that the whole idea is built on faulty ground.
Now, the number one objection I get to this, of course, is
mark that's not what winmen is about. Win win is about how you feel
after the negotiation. It's about if both parties feel like they want Well,
that actually makes less sense to me than the first thing, because if it's
just making you feel good, then I could do that all day. Right,
All I have to do is to emotionally manipulate you during the conversation.
So I think the premise that that is built on is a bit faulty.
I would caution people when they think about win when that it's now incumbent upon
them to create a win for the counterparty. That puts you in a very
dangerous position and opens you up to bad actors who would use your good ideas
or your collaborative nature against you in that negotiation. So first, I want
you to think about what it is the value that you're trying to create for
your organization. They obviously want to create value for them, That's why they're
talking to you, right, Otherwise they wouldn't be having a conversation with you.
So what is it that you're trying to get value out of? So
is it a zero sum game? So it's not a zero sum game.
So then the question is, sometimes you can make too good a deal for
yourself where it's so bad for the other party that the deal is going to
blow up, it's going to fall r So it isn't just about achieving all
your objectives at the expense erect of the counterparty. And right, yeah,
I'm not saying that mutually beneficial deals aren't possible, But I'm saying it's not
your job to ensure they get a great win. So let I think the
philosophy behind this is very very important philosophically speaking. Don't go into it making
it your job to ensure that they get a win. That's their job,
their job to ensure that they get a win or value from the negotiation.
But if you make too good a deal and their value isn't there, that
deals can fail. Right, So you don't want to Yes, you want
to pursue your objectives, but within reasonable latenits right? Sure? Can I
counter that with a counter argument? Sure? What do we determined as reasonable?
Is reasonable based on what your perception of what reasonable is? If it
is, what is that based on? Is that based on data or is
that based on fear of rejection? Where most people would now for you,
for example, you may be in a position where you're like, Okay,
I've got forty five years of experience doing this, I know what quote unquote
reasonable is. For the vast majority of people that I speak to, reasonable
is based on fear of rejection. I would say that reasonable is where both
parties gain from the transaction. You might gain more, and that's okay,
but there's a benefit to both sides, Whereas if it's undre reasonable, then
the costs to one party are two great, and it's going to make it
the outcome of this deal negative and the deal may never happen as a result.
Yeah, I love where your head's at. What I would caution for
people, though, when they think about this, is be very cautious of
how you determine what reasonable is versus what reasonable is it. Because if it's
if it's what you determine as reasonable, is that I get a gate,
or even if either side gets more, that's fine. If all I have
to do at that point to say, well we're gaining on this is unreasonable,
like why am I not getting? Ay? So okay. So,
just like a lawsuit case in court, I assume negotiations are wanted loss on
preparation and often revation alone. Right Yeah, Oh, I mean the vast
majority of the time, most people are winging it, and I think we've
probably got the media to blame for that. I mean, if you watch
any major commercial type V like a Wolf of Wall Street or a Boiler Room
or something like that, you see these amazing salespeople create deals out of seemingly
thin air. The reality is that's not true. It comes with a lot
of preparation, right, and preparation. So I think Sun Sou said,
you know, you have to know your enemy, but you need to know
yourself even better than you know your enemy. Yes, amen to Sun Sue.
Correct. And he also said tactics without strategy is the noise before defeat.
But most people think that negotiation is all tactics, like how you say
the thing, the case of your words, how you inflect on certain things.
Though most of it comes down to the strategy and preparation that you have.
All right, So what other tools do you break to the negotiating table?
Well, aside from planning in preparation. Within that, I think you
first need to think about what is it that we're trying to create? Right,
we had that at the beginning, But then how am I going to
get there? You may say to me Mark, I want a quote unquote
good deal, to which I'm going to say to you, cool story.
So does the other person what does a good deal mean for you? What
constitutes a good deal? So you might say, well, I want to
make more money, I want to reduce risk, I want to improve communication,
could be a number of different things you do. But then I would
say, okay, break those down. What are you going to actually negotiate
into the deal to ensure the successful achievement of those things. So I'll give
you an example. Ha Here they wanted to redo the pool house facility.
So you know, I basically figured out what they wanted, talked to the
guy, and then you know, he puts forth a proposal. Then they
come back with a bunch of changes which were meaningless, didn't really save anything,
And I'm trying to explain. Look, contractors, they know how to
get you here. You've either got to cut corners or when you change something,
they're going to get hit you with a change order and they're going to
make that money back. So you're better off just acknowledging the fact that they
need to make a profit regardless of what the number is. If if you
push for too good a deal, you're going to get hit with change orders.
And you can't explain thus to these people. They just don't know they
have to negotiated right. And important in that is you also knew what you
wanted as a part of the leadership of the HOA right, you wanted to
ensure a smooth process. You probably had a timeline that you wanted to hit.
You probably wanted to reduce some liability as a result of all that,
But there were some key things that you probably want to hit too. Very
true, Very true. Well, I find it to the fascinating that most
people, like you say, they go into a negotiation that wing it.
You don't really know what you want, so therefore you don't know if you
got it, and you don't know if you wanted or lost. To react
to you. But sometimes you make these deals, like you said, it
seems everything se as a reasonable The company, you know, a consultant,
basically he develops a marketing plan for big companies, household names, right,
And he doesn't really want to do it, he doesn't need to do it,
but he says, look, I know, I think it's going to
work. You're going to give me six percent of revenues in perpetuity, right,
And they need him so badly at that point, and seems like a
great deal. Twenty years down the road, they're still paying in royalties millions
of dollars a year and they just want they'll do anything to fy the door.
But they know that they can't get out of it fire. That's all
that. Yeah, this is what I mean by in terms of the total
value of the deal over the lifetime of that deal. Right like this,
that's the perfect example of what I was talking about. So understanding that at
the beginning of the conversation and determining that could be very, very beneficial to
your organization long term. I mean, think about if you grew business from
you know, let's just say, yea, I'm the six seventh figures,
right, You've got a one point five two million dollar business, but you
grow that into a two hundred million dollar business. Six percent at two million
dollars doesn't seem outrageous. Six percent at two hundred million dollars seems crazy,
right, So when you think about the scope and scale of the business,
that's why that's so important. Exactly what we're talking about here. And yeah,
when you were a tenet of size or one hundredth of size, hey,
it was get out. It was pie in the sky right exactly.
Plan worked and you wouldn't be there without him, right, right, you'd
be there without him. But as he had said, I want when you
hit twelve two hundred million, I want twelve million a year. You would
have told them to take a hike, but when you were negotiating, he
never even thought that was possible. So you still want the negotiation. It's
just that maybe he made a better deal than you thought he did. Yeah.
Absolutely, it's good. Give us some real life examples of the deals
that you've helped negotiate for clients and others. Some that have turned out amazing,
and some of that have bombed. Well, I'll tell you the one
that bombed. It was one of the larger negotiations I've ever done. It
was about two hundred and fifty MILI and everything was going hikey, Dori,
And we were about nine months into the negotiation, which is fairly reasonable based
on a deal of that size, and I was getting stuck in the weeds.
I was too deep in the weeds to see it. You know.
That's saying you're so deep in the forest that you can't see the forest through
the trees. That's where I was right. And we were arguing over venutia
nonsense. Little thing was that within the grand scale of the deal didn't make
a lot of sense. And were buttonheads over and over and over again,
and should have done this way sooner. But I went to the person that
I represented and I said, listen, we're stuck. We're stuck in this
deal. I don't know what to do. And I got pulled out of
the deal and the counterparty side got pulled out of the deal, and they
put two new people in place, and they closed that deal in the next
three weeks. So the shot them going to the right. Yeah, and
we were like seventy five percent done right at nine months, and they closed
the last twenty five percent in the next three weeks. And that taught me
a big lesson. The lesson is don't let your ego get in the way
of your success. That's probably the biggest lesson that I've ever learned in a
negotiation, because ultimately, you want to be right in a negotiation. Oftentimes
when your ego gets in the way, and so you could let being right
get in the way of securing a really important deal for your business, and
fundamentally that changes the way that you think about the deal. You end up
putting being right ahead of making money. And when you're putting being right head
of making money, you're now emotional in the negotiation, and that's bad.
Yeah, you got to be objective and emotionally uninvolved. Correctly, you love
cut the deal and it popped the champagne. So this is an example where
you got so tied up in the details that you forgot what the goal was.
That's right. Luckily your client didn't, So becoming a hand drance,
that's right. Right, So all right, and that is that? What
a great lesson. I mean, it's not great for how you feel after
after that happens to you. You're like, oh my god, I'm a
loser. What have I done? But it's an important lesson to learn.
Yeah, well you came back down to earth, you know exactly, Hey,
because of the success. Look, I'd always say you learned way more
from your failures than you do from your successes. You know, you should
treat your failures like gold or the lessons you learned from them. So what
about one where worked out the opposite where you were the hero everybody deciety?
Yeah, I mean the opposite is also true. I've worked on many deals
where I haven't. The goal is to not be a hero. Strangely enough,
the goal is to ensure that I represent the need of the business that
I'm representing in the best way. Possible, and when you always keep that
top of mind, you're always more successful. One such deal in particular,
similar kind of industry, similar kind of situation. We're able to get the
feedback from the client about what it is they were trying to achieve down to
the nth degree. We were crystal clear about what is it that we wanted
to achieve during the negotiation, and we had a range of acceptable outcomes for
each of those things. Going into the deal. Made that transaction a lot
easier because we were very clear about what we could do, what we could
not do, where we wanted to be, where we didn't want to be.
And I didn't have to go back and forth with the client. I
didn't mess rever represent the client's need, I didn't get stuck in the minutia.
It was much much easier to be able to get things done. And
I think that's the major message that I want to leave with everyone today is
be very very very very clear about what it is you want to achieve and
how you think you might want to achieve it, because once you're clear about
that, the negotiation goes much sooner. I know there's a lot of people
who try to be cagey with that sort of things in negotiation, or they
say, well, if I just ask for what I want, that's too
on the nose. I find the opposite is actually true. I find the
more direct you are, the better it's going to be. Right any So,
what about the concept of envisioning or visualizing the completed deal as you want
it? Love that working from the end result to the you know, it's
kind of law of attraction, the new ag type stuff. But I find
it really works. It works. It does work because you get a clear
vision of what success looks like for you. And I think where most people
think that that sounds maybe to fluffy is you're probably thinking high level at not
breaking that vision down. So if you want success, like what does the
successful deal look like to you? How does it end up? But then
working backwards from that to create the concrete steps to be able to achieve that
is where you be to be. If like the end state of visualization is
too fluffy, work backwards from that. So are where we find you on
the web? How do we connect with you? The easiest play to find
me is right on the website negotiations dot Ninja or connect with me on LinkedIn
and you can just search my name Mark Grafin on LinkedIn and I'm happy to
connect. Just make sure that you said you listened to Carrie's podcast, because
that's why I'll know how to connect with you. Excellent. Really appreciate that.
Hey, you got a question from Mark and myself. If you've been
stuck in the negotiation, it hasn't worked out, or it has worked out.
Who want to hear from you? Shoot me an email kl at Kerrie
lets dot com. Go to the site of Financial Survival Network dot com show
notes to this interview. You'll have Mark's link right there. Just click it.
Go ahead. While you're there, sign up for your free newsletter.
Mark. Been a pleasure. Thanks someone for stopping by. Thanks so much
for having me Kerry appreciate it. Thanks for listening to Carrie Letz's Financial Survival
Network, your solution to today's trying times. For the latest, go to
Financial Survivalnetwork dot com. Financial Survival Network now more than ever