Lori Walsh: Are negotiations a battle to be won or an opportunity to be discovered? We thought now would be a good time to think deeply about negotiations and whether they really need to be combative. Mike Wagner is a leadership expert who has traveled the world teaching people about leadership. Today we bring you part one of a three-part conversation inspired by his blog, uncommonwisdom.org. We start with some of the things you thought you knew about negotiating. Let's talk about the uncommon wisdom of negotiation.
Because you can go to the bookstore and library and find books and tomes, and take classes and read about how women don't negotiate well, but men do. And there's all kinds, there's just baggage with this idea of negotiation from peace negotiations to salary to how to buy a car. Where do you begin when you start talking about some of the fundamentals?
Mike Wagner: Sure. As with so many things in leadership, I think you have to actually look at: What is the common wisdom? How do most people view negotiations? And then ask the question, does that work? If not, why not and what would be a better approach or what works better? Research actually shows that most leaders, most of us as just people are actually not very good at negotiations. We're actually relatively bad at it. And again, the research is full of examples where mergers that are negotiated fall apart. Or scientific research has been done where almost always negotiators come to a substandard outcome than either of them wanted or than was possible. Right? And so they actually-
Lori Walsh: They actually made the situation worse. Yeah.
Mike Wagner: They actually made it either worse or not as good. There's a great study that Harvard did about negotiations that showed that a significant part of the time when employees or would-be employees were negotiating a new job, they actually didn't get what was important to them because they were negotiating the wrong things at the wrong time. And companies likewise would negotiate the wrong things at the wrong time. So the starting point is we're not that good at it. And I would argue that a couple of reasons, but the biggest reason that we're not good at it is because we view negotiations incorrectly. We view negotiations as a battle to be won.
And when you look at these books, read these books, most of them are about winning the negotiation. Right? And the language we use is confrontational. "Our opponent at the negotiating table, how do we beat them? How do we better them," what have you. And so most of us view negotiations as a battle to be won, which means your negotiation counterpart on the other side of the table is the enemy. They are the person that you are trying to beat. And that's what actually gets us into trouble.
We should be looking at negotiations from an opportunity for both parties to add value together. "What is it that I and the person that I'm working with, what is it that we can do together that we can't do separately? How can we work together in a way that both of us get more out of our relationship than we would normally be getting?" And so we need to look at negotiations not as a battle to be won, but as an opportunity to be discovered.
Lori Walsh: How big of a leap is that for people?
Mike Wagner: It's a huge one.
Lori Walsh: In fact, the guy who says that might not be the person you send to the table.
Mike Wagner: Well, that's probably true. That's probably true. It's interesting. Again, it's a huge leap because we see negotiations, we've been taught negotiations from this confrontational viewpoint from day one. There's two instances of life that I think jumped to mind when I say negotiations. Right? One is the purchase negotiation. So, "I'm going to buy a new car. I'm going to buy a house." And the other type of negotiation is world peace negotiations, trying to get the Palestinian/Israeli affairs in order. Right? And the problem is because those are our anchor points, those are our perspectives. If you look at the purchase negotiation, we tend to think that those are one-time events, not an ongoing relationship. And so, "I'm never going to see this car dealer again. I'm never going to buy a house again. I've got to get my best price," and what have you. And so we tend to think that that negotiation is a transaction, a one-time event.
Or in the situation of peace negotiations, yeah, we think that the other person is our lifelong enemy and we have to beat them. And so in order to be more productive in our negotiations, you have to get over that. You have to get over that natural tendency to view the negotiation table as a coliseum where gladiators do battle.
Lori Walsh: Or you're going to come home from buying that car and somebody in your family is going to say, "Oh, they saw you coming," because you're going to pick up or you're going to come back to the workers as the union representative and they're going to say ...
Mike Wagner: That's right. I was beaten. That's right. They beat me.
Lori Walsh: Yeah.
Mike Wagner: Exactly.
Lori Walsh: Management took you to the cleaners. Yeah.
Mike Wagner: That's right. I lost the negotiations.
Lori Walsh: Lost, yeah.
Mike Wagner: And so again, transitioning to productive negotiations is not an easy thing to do. One of the problems with becoming a more productive, and when I say productive you get more done, one of the challenges with being a productive negotiator as a leader is: Will the other person make the same shift with you? Again, if I were negotiating with you today, I've got bad learning. I think it's a battle. You think it's a battle. Who's going to shift the definition as not being a battle first? And so there's an uncomfortable egg and chicken debate on, "I've got to put up my defenses. Even if I don't want to go into the gladiator ring, the other negotiator is going to be fighting me. They're going to be trying to beat me, so I'm going to try to beat them first." It's a very vicious, vicious cycle.
Lori Walsh: Let's talk about how to make the shift.
Mike Wagner: The first shift, when you sit down to negotiate, is to understand what you want to accomplish rather than who you try to beat. And so the shift is, "How do I create benefit, value? How do I create good outcome here?" Not, "Am I going to be taken advantage of?" Or, "How do I take advantage of my negotiation counterpart?"
There's a great research study that I've done over the years, and I do this in workshops, where I'll have individuals simulating a negotiation. And I set the negotiation up so that both of them are store managers. They both need four employees and there are only five employees available between the two stores. So there's a shortage of resources. Right? And I set up all sorts of other rules. You can't share employees. You can't make future promises. If you don't decide where the employees go, they'll go to a third store that you don't know anything about. And so I box in the negotiators that you have to decide where these five people are assigned. And there's no side deals, no special bargains. 90% of the time, the negotiators reach no agreement.
Now, the logical agreement, as you and I talk, would be somebody is going to get two and somebody is going to get three. Right? But the problem is that 90% of the time when the negotiators sit down at the table, they can't stand the thought of getting two when somebody else gets three. They would rather both get zero. And so 90% of the-
Lori Walsh: Like Solomon.
Mike Wagner: That's exactly right. Yeah, the dividing of the baby, absolutely.
So 90% of the time the negotiators would rather call it equal rather than actually one person does a little bit better than the other one. And so when we sit down at the negotiations table, what we actually need to do is not look at, "How am I doing against my partner, my counterpart?" What you actually have to do is, "Am I better off than I was 10 minutes ago?" And so in those store managers, what they needed to negotiate is against themselves. "Today I have zero. Wouldn't I like two or three?" That's the right mindset is that you negotiate against where you are at today as compared to where you could be. Not, "How am I doing compared to my partner?" So the winning negotiation is to not to engage in the battle.
And so yes, I'm negotiating with you, but I'm not negotiating against you. I'm not trying to beat you. I'm trying to do good things for myself, for my company, my people, my employees, my family, whatever it is I am negotiating about. And so that's the fundamental shift, is, "I don't care. I don't care if you get a better deal than I do. What I care about is that between us, we create enough value that I am much better off than when I started."
Lori Walsh: So the people that you're working with in these workshops are intelligent people, by and large.
Mike Wagner: I hope so.
Lori Walsh: They're smart enough to figure out the calculus and yet 90% of the time they end up in the same spot, even though maybe they sat down and realized what was going to happen. Do you see a predictable pathway that they start out? Because my question is: Do they not get it at the beginning and they try and never really figured out the game because they had blind spots on? Or did they get it and then they just said, "But I'd rather have the three employees and so I'm going to see-
Mike Wagner: They almost never get it, and the longer time I give the negotiators ... I put a time limit on it for research purposes. The longer the time frame, what they try to do is figure out ... They go back to the case study that I give to them and they try to figure out how they can bend the rules around that fifth employee. And so they spend all their effort saying, "Okay. Fine, I get two, you get two. Now who's going to get the third?" And they go through all sorts of gyrations. "You get him on Tuesday," and they'll break the rules. They will consciously go against the rules that have been set up.
And so I'll tell them, I said, "Look, I already told you you couldn't do that."
"Yeah, but it's not fair," is what they'll say. They are so focused on their opponent. And again, I don't like to use the word opponent because that reinforces the bad language. So they view their counterpart as an opponent and so everything is about beating them or at least coming out equal. And so a lot of times you'll see a union in a company, "Well, we both got something," and in their public announcement at the end of a strike or what have you, they both are stumbling over themselves that, "We got equal treatment here," because they can't bear the concept of being beaten in the battlefield. And that's how we phrase our negotiations.
Lori Walsh: Yeah. Hold your nose, close your eyes, make the deal, and then you realize later there's, that ...
Mike Wagner: Well, and then again, if all of a sudden, and this is why deal sometimes fall apart, then it's like, "Whoa, I didn't know that that piece of land was that valuable. You didn't tell me that. You did better than I did." And you might have a perfectly great deal, but then all of a sudden, "Well, that piece of land was more valuable than I thought it was. You tricked me. I was outsmarted. I'm going to go to war again to take back my prize." And so again, the entire ethos around negotiations is this battlefield.
And again, even in peace negotiations where we're trying to stop the fight, we're usually debating over past mistakes, past infractions. We're trying to just get back to non-violence as opposed to actually sitting down. Wouldn't it be lovely if the Israelis and the Palestinians could actually say, "We have this corner of the world. How could we make both countries unbelievably successful?" And that's not their approach. Their approach is, "You've wronged me. I've wronged you. My wrong was worse than yours.
Lori Walsh: It's not our approach either, necessarily, as the people who broker those, or-
Mike Wagner: Oh, no. We take sides.
Lori Walsh: Yes, we take sides.
Mike Wagner: Yeah, we take sides.
Lori Walsh: Yeah, depending on who is in power in Washington, there's going to be a side that we're going to take.
Mike Wagner: That's exactly right.
Lori Walsh: Yeah. We all know whose side we are on right now from the administration standpoint. Yeah.
Mike Wagner: No, that's exactly right. That's exactly right or wrong.
Lori Walsh: Not saying that's right or wrong, I'm just saying that we-
Mike Wagner: Well, no. And then when going to peace negotiations and so when Trump and his, and this, I'm not making an anti-Trump statement, but when he introduces the peace proposal with Netanyahu at his side, he was basically saying clearly, "This is favored by one and not the other." And so it was broadcasting this is not going to go anywhere.
Lori Walsh: Well, and Jared Kushner came out and insulted both parties in some way, saying that they should figure ... There wasn't a sense of, "How can we be part of this benefit as well?"
Mike Wagner: No, that's right. And then again, Kushner said, "This is the best deal they're ever going to get," which is basically broadcasting, "We don't want to talk. We want you to accept what we've already negotiated."
Lori Walsh: "If you were smart," yeah. I don't have the quote in front of me now, but basically he was saying, "If you weren't so thick-headed, you would realize this is the best you're going to get and you would go with it."
Mike Wagner: That's right.
Lori Walsh: And then the presidential leader, whoever it is from way back to when, feels like it's their victory. I won because I got something.
Mike Wagner: Yeah, that's exactly right.: Yeah, and so again, you need to quit. It's funny, I was at Harvard when Arafat and the Camp David meetings, and they almost came to a peace agreement. They came so close and Arafat walked away. And from everything I've read, in fact, he spoke at Harvard. I heard him speak and what have you, but he walked away from the peace agreement at the last minute. And everything I've read is that he was afraid that it would look like he was beaten, even though everybody said the agreement was actually the best agreement that had ever been discussed. It had been jointly worked out. It was reasonable. It was balanced. And yet he thought that it would be spun that he'd been beaten and he walked away. And that's now 30 more years of conflict because of it.