Only eight per cent of decisions have to do with facts; emotions play a heavy role even in corporate decisions, Stuart Diamond tells Devina Joshi
What does it really take to be a good negotiator?
How can negotiation help in creating value for businesses and their clients?
Negotiation helps people meet their goals. I have found that if we have different needs, we can trade them through negotiation. I'll give you an example. Four months ago, one of Google's negotiators wanted their fibre-optic installation done in Southern US. The price was $6 million. The Google negotiator went to the vendor for a discount and asked him, 'What can Google do for you?' The vendor in turn said that if he received a letter of reference from Google, he could grow his business on the basis of it and in turn, reduce the price.
Google agreed, and in exchange for a letter of reference, the vendor decided to give Google a price of $6,000. The vendor gave the company a 99.9 per cent discount - that's how valuable that letter was to the vendor. This is what negotiation can do - when you're trading items of unequal value to both parties, it can boost your business. You need to figure out what people value.
The problem is that people don't get enough information about the other party. They must be more curious. I have been a journalist earlier with The New York Times, so I believe I know how to get information from people.
What are the biggest mistakes people make when they enter a negotiation? How can you avoid being exploited in negotiations?
Fighting yesterday is the biggest mistake. How do you prevent being exploited? You don't take risk, except incremental. You say, 'I'm not comfortable with this situation, how can I be more comfortable?'
Is it really important to get everyone on the same page? Isn't effective negotiation likely to lead to homogeneity, which in turn can adversely affect the output of an organisation? Aren't different points of view conducive to better output?
No, it isn't crucial to get everyone on the same page. Studies show that the more people disagree, the diverse their views, the more value they add and the more the creativity produced. In fact, with its diverse population, India should be in much better economic shape than what it currently is if only most people valued those who are different. Silicon Valley is the most diverse place in the US. If you don't value diversity, you have Rwanda Genocide. If you value diversity, you have companies like Google.
Less than 10 per cent of the reason why people reach agreements has anything to do with facts, it has more to do with emotions, as you once said in your Google talk sessions. Would you say that decisions at a corporate level are influenced more by emotions than facts? How does negotiation help in such situations?
Yes, only eight per cent of decisions have to do with facts and all sorts of decisions, including corporate, are influenced by emotions. Decades ago, in the US, former football player OJ Simpson was on trial for murdering his former wife. He walked free despite a yard of DNA evidence against him. Why? Simply because the jury didn't like the prosecutor. So, it really doesn't matter if you're right; you won't get people to agree unless they like you.
I gave a speech to 400 people from Microsoft a few years ago. I began the talk by telling them I googled Microsoft this morning, typing in three words, 'Europe hates Microsoft.' I got five million hits in a tenth of a second. Why did that happen? I asked them to think about the attitude they project to the public. This is more important than the product that is offered to consumers.
A negotiation is not a contest. It is not a stressful event. It is just a conversation where emotional payments need to be given, whether that is an apology, a concession etc. Effective negotiation is not about logic. Studies show that the more important the negotiation is to the people involved, the more emotional they are. When people get emotional, they stop listening. And if they stop listening, they won't be persuaded.
Speaking of emotions, in your book Getting More, you have stated that emotion reduces people's information-processing abilities as it destabilises a situation. What do you think should be the ideal emotional temperature of an organisation?
Calm and empathetic. The right emotional temperature would equal the statement 'I love you but I'm not crazy'.
So, what is better: a conflict model of negotiation or a collaborative one, and under what kind of situations?
Most definitely, collaborative. This model has four times as much value to give than a conflict and twice as many chances of successful deals too. A typical conflict model involves walking out of situations, power play, using leverage or threats.
Eighty per cent of Indians mistrust each other, so conflict is the model of the day. This is the polar opposite to Sweden's collaborative model with 70 per cent trust. In fact, Sweden, Finland, Norway, Denmark and Switzerland all have a 60-70 per cent trust-based collaborative model.
As per my research, if India's model were like that of Sweden, the country would make $95 billion a year in GDP. Indians would have 8 per cent more jobs - which would equal 38 million jobs, double the population of Mumbai. Collaboration is about giving people a chance: being less reactive and more constructive. After the 2008 terror attacks in Mumbai, India and Pakistan didn't talk for a whole year. That doesn't solve a problem. It is no country's fault; it is just a failure to understand how to make it better.
You are Google's principle negotiation instructor. Now here is a company known for keeping its employees happy, with a work environment that almost spoils them with free perks etc. Can working for a market leader like Google automatically instill a hint of superiority in its employees? Does this influence their negotiation abilities?
It could but it doesn't at Google because it has very strong values. You can be well-off and successful and still be humble. Yes, there are people in the company who are not the way they should be but by and large, Google is an ethical, straightforward company that cares about its employees.
How do you negotiate with irrational people?
You have to give them emotional payments. Value what they say. Say to them 'tell me more'. If they place the onus of the solution on you, I will say, why not solve the problem together. I won't say, this is too expensive, I can't fix this. I will say, tell me why it is like this so we can fix it.
Be clear about your goals, what you want out of a negotiation. For instance, I can negotiate with my son who cries out for Lego toys - 'I give Lego toys to children who clean their room, are you such a boy?' Ditto with banks - 'I give business to banks that give good interest rates, are you such a bank? It is about consultation, not confrontation.
THE LAST WORD
- Diamond has taught negotiation and cultural diversity to corporate and government leaders in Eastern Europe, former Soviet Republics, China, Latin America, the West Asia, Canada, South Africa and the United States
- He has analysed competitive and persuasive strategies for organisations as different as Merck, Citibank, General Electric, BASF, Prudential, the Government of Colombia, a $16 billion petrochemical company in China and scientists in Ukraine, in addition to teaching negotiation at the business schools of Columbia, NYU, USC and at Oxford and Penn Law School