Ch 8 Ctd. Never Split The Difference by Chris Voss

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THE PINOCCHIO EFFECT With Carlo Collodi’s famous character Pinocchio, it was easy to tell when he was lying: you just had to watch the nose. It turns out that Collodi wasn’t far off reality. Most people offer obvious telltale signs when they’re lying. Not a growing nose, but close enough. In a study of the components of lying,2 Harvard Business School professor Deepak Malhotra and his coauthors found that, on average, liars use more words than truth tellers and use far more third-person pronouns. They start talking about him, her, it, one, they, and their rather than I, in order to put some distance between themselves and the lie. Word/Grammar Highlight: "Telltale" - Adjective describing something that reveals information, often something hidden. - Example: Her nervous fidgeting was a telltale sign that she was hiding something.

And they discovered that liars tend to speak in more complex sentences in an attempt to win over their suspicious counterparts. It’s what W. C. Fields meant when he talked about baffling someone with bullshit. The researchers dubbed this the Pinocchio Effect because, just like Pinocchio’s nose, the number of words grew along with the lie. People who are lying are, understandably, more worried about being believed, so they work harder—too hard, as it were—at being believable. Word/Grammar Highlight: "As it were" - An expression used to qualify something you have just said, suggesting it might not be the perfect way of putting it. - Example: He was, as it were, trying to escape.

PAY ATTENTION TO THEIR USAGE OF PRONOUNS The use of pronouns by a counterpart can also help give you a feel for their actual importance in the decision and implementation chains on the other side of the table. The more in love they are with “I,” “me,” and “my” the less important they are. Conversely, the harder it is to get a first person pronoun out of a negotiator’s mouth, the more important they are. Word/Grammar Highlight: "Conversely" - Adverb meaning "in the opposite way" or "on the other hand." - Example: Some plants thrive in sunlight; conversely, others prefer shade.

Just like in the Malhotra study where the liar is distancing himself from the lie, in a negotiation, smart decision makers don’t want to be cornered at the table into making a decision. They will defer to the people away from the table to keep from getting pinned down. Word/Grammar Highlight: "Defer" - To put off (an action or event) to a later time; postpone. - Example: They deferred the decision until the next meeting.

Our cabdriver kidnapper in the Philippines of Alastair Onglingswan used “we,” “they,” and “them” so rigorously early on in the kidnapping I was convinced we were engaged with their leader. I just never knew how literally true it was until the rescue. In the Chase Manhattan Bank robbery from Chapter 2, the bank robber Chris Watts consistently talked out how dangerous the “others” were and how little influence he had on them, all a lie. Word/Grammar Highlight: "Rigorously" - Adverb meaning "in a thorough and strict manner." - Example: The experiment was conducted rigorously, with careful attention to detail.

THE CHRIS DISCOUNT People always talk about remembering and using (but not overusing) your counterpart’s name in a negotiation. And that’s important. The reality though is people are often tired of being hammered with their own name. The slick salesman trying to drive them to “Yes” will hit them with it over and over. Instead, take a different tack and use your own name. Word/Grammar Highlight: "Tack" - A method or approach used to deal with a situation or problem. - Example: He decided to take a different tack in negotiating the contract.

That’s how I get the Chris discount. Just as using Alastair’s name with the kidnapper and getting him to use it back humanized the hostage and made it less likely he would be harmed, using your own name creates the dynamic of “forced empathy.” It makes the other side see you as a person. Word/Grammar Highlight: "Humanized" - To make (something) more humane or civilized. - Example: Seeing his smile humanized the experience.

A few years ago I was in a bar in Kansas with a bunch of fellow FBI negotiators. The bar was packed, but I saw one empty chair. I moved toward it but just as I got ready to sit the guy next to it said, “Don’t even think about it.” “Why?” I asked, and he said, “Because I’ll kick your ass.” He was big, burly, and already drunk, but look, I’m a lifelong hostage negotiator—I gravitate toward tense situations that need mediation like a moth to the flame. Word/Grammar Highlight: "Gravitate" - To move toward or be attracted to someone or something. - Example: She always gravitated toward people who made her laugh.

I held out my hand to shake his and said, “My name is Chris.” The dude froze, and in the pause my fellow FBI guys moved in, patted him on the shoulders, and offered to buy him a drink. Turned out he was a Vietnam veteran at a particularly low point. He was in a packed bar where the entire world seemed to be celebrating. The only thing he could think of was to fight. But as soon as I became “Chris,” everything changed. Word/Grammar Highlight: "Pause" - A short period of silence or hesitation. - Example: There was a brief pause in the conversation.

Now take that mindset to a financial negotiation. I was in an outlet mall a few months after the Kansas experience and I picked out some shirts in one of the stores. At the front counter the young lady asked me if I wanted to join their frequent buyer program. I asked her if I got a discount for joining and she said, “No.” So I decided to try another angle. I said in a friendly manner, “My name is Chris. What’s the Chris discount?” Word/Grammar Highlight: "Another angle" - A different approach or perspective on a situation. - Example: We need to look at this problem from another angle if we want to find a solution.

She looked from the register, met my eyes, and gave a little laugh. “I’ll have to ask my manager, Kathy,” she said and turned to the woman who’d been standing next to her. Kathy, who’d heard the whole exchange, said, “The best I can do is ten percent.” Humanize yourself. Use your name to introduce yourself. Say it in a fun, friendly way. Let them enjoy the interaction, too. And get your own special price. Word/Grammar Highlight: "Exchange" - A reciprocal act or operation. - Example: There was a friendly exchange of words.

HOW TO GET YOUR COUNTERPARTS TO BID AGAINST THEMSELVES Like you saw Aaron and Julie do with their kidnappers, the best way to get your counterparts to lower their demands is to say “No” using “How” questions. These indirect ways of saying “No” won’t shut down your counterpart the way a blunt, pride-piercing “No” would. In fact, these responses will sound so much like counterbids that your counterparts will often keep bidding against themselves. Word/Grammar Highlight: "Counterparts" - A person or thing holding a position or performing a function that corresponds to that of another person or thing in a different place or organization. - Example: The Prime Minister met with his European counterparts.

We’ve found that you can usually express “No” four times before actually saying the word. The first step in the “No” series is the old standby: “How am I supposed to do that?” You have to deliver it in a deferential way, so it becomes a request for help. Properly delivered, it invites the other side to participate in your dilemma and solve it with a better offer. Word/Grammar Highlight: "Deferential" - Respectful and polite, especially in a submissive way. - Example: He spoke to his boss in a deferential tone.

After that, some version of “Your offer is very generous, I’m sorry, that just doesn’t work for me” is an elegant second way to say “No.” This well-tested response avoids making a counteroffer, and the use of “generous” nurtures your counterpart to live up to the word. The “I’m sorry” also softens the “No” and builds empathy. (You can ignore the so-called negotiating experts who say apologies are always signs of weakness.) Then you can use something like “I’m sorry but I’m afraid I just can’t do that.” It’s a little more direct, and the “can’t do that” does great double duty. By expressing an inability to perform, it can trigger the other side’s empathy toward you. Word/Grammar Highlight: "Nurtures" - To care for and protect (someone or something) while they are growing. - Example: The teacher nurtures her students.

“I’m sorry, no” is a slightly more succinct version for the fourth “No.” If delivered gently, it barely sounds negative at all. If you have to go further, of course, “No” is the last and most direct way. Verbally, it should be delivered with a downward inflection and a tone of regard; it’s not meant to be “NO!” Word/Grammar Highlight: "Succinct" - Briefly and clearly expressed. - Example: A succinct summary of the book.

One of my students, a guy named Jesus Bueno, wrote me not long ago to tell me an amazing story about how he’d used the multi-step “No” to help his brother Joaquin out of a sticky business situation. His brother and two friends had bought a cannabis grow shop franchise in northern Spain, where the cultivation of marijuana for personal use is legal. Joaquin and his partner, Bruno, each invested 20,000 euros in the business for a 46 percent stake (a minority partner invested another €3,500 for 8 percent). Word/Grammar Highlight: "Franchise" - A type of license that a party (franchisee) acquires to allow them to have access to a business's (franchisor) proprietary knowledge, processes, and trademarks in order to allow the party to sell a product or provide a service under the business's name. - Example: McDonalds is one of the biggest franchises in the world.

From the beginning, Joaquin and Bruno had a rocky relationship. Joaquin is an excellent salesman, while Bruno was more of a bookkeeper. The minority partner was also an excellent salesman, and he and Joaquin believed that growing sales was the correct strategy. That meant offering discounts for large orders and repeat customers, which Bruno disagreed with. Their planned spending on launching a website and expanding inventory also rubbed Bruno the wrong way. Word/Grammar Highlight: "Rocky" - Likely to fail or collapse. - Example: The relationship had rocky moments.

Then Bruno’s wife became a problem as she started nagging Joaquin about how he should not spend so much on expansion and instead take more profits. One day, Joaquin was reviewing inventory purchases and noticed that some items they had ordered had not been placed on the store’s shelves. He began searching for them online and to his surprise he found an eBay store set up with the wife’s first name that was selling exactly those missing products. Word/Grammar Highlight: "Nagging" - Constantly harassing (someone) to do something. - Example: My mom was nagging me to clean my room.

This started a huge argument between Bruno and Joaquin, and soured their relationship. In the heat of the moment, Bruno told Joaquin that he was open to selling his shares because he felt the business risks they were taking were too large. So Joaquin consulted with his brother: my student Jesus. Word/Grammar Highlight: "Soured" - To make or become unpleasant or disagreeable. - Example: The encounter soured the relationship.

Because they believed that pressure from Bruno’s wife was why he wanted to sell, Jesus helped Joaquin craft an empathy message around that: “It seems like you are under a lot of pressure from your wife.” Joaquin was also in the middle of a divorce, so they decided to use that to relate to the wife issues, and they prepared an accusation audit—“I know you think I don’t care about costs and taking profits from the company”—in order to diffuse the negative energy and get Bruno talking. Word/Grammar Highlight: "Diffuse" - Spread or cause to spread over a wide area or among a large number of people. - Example: The police used tear gas to diffuse the crowd.

It worked like a charm. Bruno immediately agreed with the accusation audit and began explaining why he thought Joaquin was careless with spending. Bruno also noted that he didn’t have someone to bail him out like Joaquin did (Joaquin got a start-up loan from his mother). Joaquin used mirrors to keep Bruno talking, and he did. Word/Grammar Highlight: "Mirrors" - To reflect (an image) in or as if in a mirror. - Example: His actions mirrored his dad's.

Finally, Joaquin said, “I know how the pressure from your wife can feel, I’m going through a divorce myself and it really takes a lot out of you.” Bruno then went on a ten-minute rant about his wife and let slip a huge piece of information: the wife was very upset because the bank that lent them the €20,000 had reviewed their loan and had given them two options: repay the loan in full, or pay a much higher interest rate. Word/Grammar Highlight: "Rant" - Speak or shout at length in a wild, impassioned way. - Example: He went on a rant about the government.

Bingo! Joaquin and Jesus huddled after learning that, and decided that Joaquin could reasonably pay just above the loan price because Bruno had already taken €14,000 in salary from the business. The letter from the bank put Bruno in a bad spot, and Joaquin figured he could bid low because there wasn’t really a market for Bruno to sell his shares. Word/Grammar Highlight: "Huddled" - Crowd together; nestle closely. - Example: The group huddled together to keep warm.

They decided that €23,000 would be the magic number, with €11,000 up front with the remaining €12,000 over a year period. Then things went sideways. Instead of waiting for Bruno to name a price, Joaquin jumped the gun and made his full offer, telling Bruno that he thought it was “very fair.” If there’s one way to put off your counterpart, it’s by implying that disagreeing with you is unfair. Word/Grammar Highlight: "Jumped the gun" - Acted too soon. - Example: The runner jumped the gun.

What happened next proved that. Bruno angrily hung up the phone and two days later Joaquin received an email from a guy saying he’d been hired to represent Bruno. They wanted €30,812: €20,000 for the loan, €4,000 for salary, €6,230 for equity, and €582 for interest. Nonround figures that seemed unchangeable in their specificity. This guy was a pro. Word/Grammar Highlight: "Specificity" - The condition of being specific; explicit detail. - Example: The contract lacked specificity.

Jesus told Joaquin that he’d truly screwed up. But they both knew that Bruno was pretty desperate to sell. So they decided to use the multi-step “No” strategy to get Bruno to bid against himself. The worst-case scenario, they decided, was that Bruno would just change his mind about selling his shares and the status quo would continue. It was a risk they’d have to take. Word/Grammar Highlight: "Status Quo" - The existing state of affairs, especially regarding social or political issues. - Example: The rebels wanted to change the status quo.

They crafted their first “No” message: The price you offered is very fair, and I certainly wish that I could afford it. Bruno has worked very hard for this business, and he deserves to be compensated appropriately. I am very sorry, but wish you the best of luck. Notice how they made no counteroffer and said “No” without using the word? Word/Grammar Highlight: "Compensated" - Give (someone) something, typically money, in recognition of loss, suffering, or injury incurred; recompense. - Example: The employee was compensated for his injuries.

Joaquin was shocked when the following day he received an email from the advisor lowering the price to €28,346. Joaquin and Jesus then crafted their second gentle “No”: Thank you for your offer. You were generous to reduce the price, which I greatly appreciate. I really wish that I could pay you this amount, but I am sincere in that I cannot afford this amount at this time. As you know, I am in the middle of a divorce and I just cannot come up with that type of money. Again, I wish you the best of luck. Word/Grammar Highlight: "Sincere" - Free of deceit, hypocrisy, or falseness; earnest. - Example: He made a sincere apology.

The next day Joaquin received a one-line email from the advisor dropping the price to €25,000. Joaquin wanted to take it but Jesus told him that he had some “No” steps to go. Joaquin fought him, but in the end he relented. Word/Grammar Highlight: "Relented" - Abandon or mitigate a harsh intention or cruel punishment. - Example: She relented and let him go.

There’s a critical lesson there: The art of closing a deal is staying focused to the very end. There are crucial points at the finale when you must draw on your mental discipline. Don’t think about what time the last flight leaves, or what it would be like to get home early and play golf. Do not let your mind wander. Remain focused. Word/Grammar Highlight: "Finale" - The concluding part of something, especially a performance, show, or movie. - Example: The finale was amazing.

They wrote: Thank you again for the generous offer. You have really come down on the price and I have tried very hard to come up with that amount. Unfortunately, no one is willing to lend me the money, not even my mother. I have tried various avenues but cannot come up with the funding. In the end, I can offer you €23,567, although I can only pay €15,321.37 up front. I could pay you the remainder over a one-year period, but that is really the most I can do. I wish you the best in your decision. Word/Grammar Highlight: "Avenues" - A way of approaching a problem or making progress toward something. - Example: I wanted to try another avenue.

Brilliant use of specific numbers, and what an empathy-building way to say “No” without using the word! And it worked. Within one hour, the advisor responded to accept. Word/Grammar Highlight: Exclamation Point Usage - Here, the author uses exclamation points to convey excitement and approval of a negotiating tactic. It can be a great tool to convey feelings. - Example: This meal is absolutely delicious!

Look at this closely: see how the mixture of mirroring and open-ended questions dragged out the information about Bruno’s financial problems, and then the “No” method exploited his desperation? It might not have been a great idea to use this method if there’d been another buyer, but with no one else it was a brilliant way to get Bruno to bid against himself. Word/Grammar Highlight: "Exploited" - Make full use of (a resource or situation), especially in a way considered unfair or underhanded. - Example: He exploited the weakness of the opponent.

KEY LESSONS Superstar negotiators—real rainmakers—know that a negotiation is a playing field beneath the words, where really getting to a good deal involves detecting and manipulating subtle, nonobvious signals beneath the surface. It is only by visualizing and modifying these subsurface issues that you can craft a great deal and make sure that it is implemented. Word/Grammar Highlight: "Rainmakers" - A person who brings income to a business or other organization through successful deals or ventures. - Example: My company is constantly trying to find "rainmakers".

As you put the following tools to use, remember this chapter’s most important concept. That is, “Yes” is nothing without “How.” Asking “How,” knowing “How,” and defining “How” are all part of the effective negotiator’s arsenal. He would be unarmed without them. Word/Grammar Highlight: "Arsenal" - A collection of weapons and military equipment stored by a country, person, or group. - Example: The soldier has an arsenal.

■ Ask calibrated “How” questions, and ask them again and again. Asking “How” keeps your counterparts engaged but off balance. Answering the questions will give them the illusion of control. It will also lead them to contemplate your problems when making their demands. Word/Grammar Highlight: "Calibrated" - Carefully assessed, adjusted, or measured. - Example: The scales have to be calibrated.

■ Use “How” questions to shape the negotiating environment. You do this by using “How can I do that?” as a gentle version of “No.” This will subtly push your counterpart to search for other solutions—your solutions. And very often it will get them to bid against themselves. Word/Grammar Highlight: "Subtly" - In a manner that is so delicate or precise as to be difficult to analyze or describe. - Example: It was subtly implied.

■ Don’t just pay attention to the people you’re negotiating with directly; always identify the motivations of the players “behind the table.” You can do so by asking how a deal will affect everybody else and how on board they are. Word/Grammar Highlight: "Motivations" - The reason or reasons one has for acting or behaving in a particular way. - Example: What are his motivations?

■ Follow the 7-38-55 Percent Rule by paying close attention to tone of voice and body language. Incongruence between the words and nonverbal signs will show when your counterpart is lying or uncomfortable with a deal. Word/Grammar Highlight: "Incongruence" - The state of being incongruous or incompatible. - Example: This shows incongruence. ■ Is the “Yes” real or counterfeit? Test it with the Rule of Three: use calibrated questions, summaries, and labels to get your counterpart to reaffirm their agreement at least three times. It’s really hard to repeatedly lie or fake conviction. Word/Grammar Highlight: "Counterfeit" - Made in exact imitation of something valuable or important with the intention to deceive or defraud. - Example: The money was counterfeit. ■ A person’s use of pronouns offers deep insights into his or her relative authority. If you’re hearing a lot of “I,” “me,” and “my,” the real power to decide probably lies elsewhere. Picking up a lot of “we,” “they,” and “them,” it’s more likely you’re dealing directly with a savvy decision maker keeping his options open. Word/Grammar Highlight: "Savvy" - Having or showing perception, comprehension, or shrewdness. - Example: She is very savvy. ■ Use your own name to make yourself a real person to the other side and even get your own personal discount. Humor and humanity are the best ways to break the ice and remove roadblocks. Word/Grammar Highlight: "Roadblocks" - An obstacle preventing progress. - Example: The snow created roadblocks.