Negotiation Blog

Film Award for Best Negotiating Practices

By Thomas Wood

The lead up to the Academy Awards always gets me excited about seeing great films. This year Martin Scorsese's "Hugo" and Michel Hazanavicius’s “The Artist” were fabulous, and received 10 and 11 nominations respectively. But will they win at the 2012 Academy Awards? I hope it's not deja vu of the 2011 Academy Awards, when brothers’ Ethan and Joel Coen’s “True Grit” received 10 nominations but didn’t win. Well, True Grit definitely won Best Picture for Negotiating Practices among our team of professional negotiators here at Watershed Associates.
True Grit tested the “grit” of every character’s negotiation moxy in the various negotiations that transpired in this movie, and there were many.
 
The story is tried and true:  Teenage girl seeks revenge on her father’s killer, and pairs up with two strong willed lawmen-for-hire to chase down the killer in Indian territory of the 1880s. There’s an opening scene with Dakin Matthews playing a tough and crotchety old businessman and trader, Colonel Stonehill, and Hailee Steinfeld playing the vengeful teen, Mattie Ross. As Mattie prepares to set out on her adventure, she needs resources, and she comes to the trader to negotiate for them.
 
Before he died, Mattie’s father had purchased and paid for two ponies from the trader. Her father had paid for the ponies, but the ponies had not yet been delivered to him and are still in the custody of the trader. Mattie’s father also had his saddle horse boarded at the trader’s stable. Along came a thief who, upon murdering Mattie’s father, stole her father's saddle horse, and left behind the saddle, the two ponies, and the less valuable horse Mattie's father had lent the theif.
 
When Mattie approaches the trader, her astute preparation becomes apparent. The trader is quick witted from years of experience (and a great script), but has to determine whether Mattie has a strong BATNA (plan B), or is bluffing. Mattie uses just enough friendliness and legitimacy to her advantage, while also showing she is prepared and goal oriented (a picture perfect example of Watershed’s mantra: be firm, fair and professional). The trader is caught off guard by this shrewd teenager, and to his disadvantage underestimates her negotiation skill and determination.
 
There are lots of negoiation missteps, mostly on the part of the experienced trader. There are things the trader could have learned about Mattie’s need for resources if he wasn’t caught off guard and had asked better questions. Simply by using sincere curiosity and probing more effectively, the trader could have landed a much better deal. He focuses only on dollars instead, missing low cost/high value trades he probably could have made with the girl. He also makes other common erros in his haste, such as
  • responding to her offer in a way that makes it difficult to explore Mattie's interests,
  • negotiating against himself without waiting for a counteroffer when faced with Mattie’s various BATNAs/bluffs, and
  • declaring multiple times that this is his final offer.
And yet, the trader held all the cards from the start. At the opening of the negotiation, Mattie has nothing and the trader has everything – the ponies, the payment, the saddle, the less valuable horse, and the expertise. Mattie doesn’t beg or play the victim who needs charity. She uses many Best Negotiating Practices, among them
  • an assertive but defensible opening offer,
  • legitimacy,
  • persuasive analogies,
  • a strong BATNA, and
  • a tapered concession pattern.

Mattie has almost no power in this negotiation, but she leverages something much more potent – her skill as a negotiator – her true grit.

And that’s only one of many negotiating scenes in the Oscar nominated movie from 2010.
 
See True Grit again or for the first time, and test your “grit” as a negotiator by spotting all the missteps and Best Negotiating Practices interlaced in this great film.

 

Negotiating Tip

Don't anchor yourself: When preparing for a negotiation, remember to develop your 'ask' or opening offer first - before your goal and least acceptable agreement or walk-away.


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Negotiating Salary: Tactics, Blunders or Best Negotiating Practices - Part III

By Thomas Wood

Let’s magnify the various moves Bill and Jen made in their salary negotiation that my colleague explored in previous blogs Part I and Part II. They reached a deal, but was it to thier mutual satisfaction? We’ll categorize the moves as Tactics, Blunders and Best Negotiating Practices (BNPs). Do you agree?

  1. Negotiating Tactics – moves made for short term advantage that risk losing credibility or trust;
  2. Negotiating Blunders – moves or approaches that fail to achieve their objective or any other positive outcome; and
  3. Best Negotiating Practices (BNP) – skills, strategies and behaviors that are designed to create and capture value in negotiations.
Tactic, Blunder or BNP?
 
 
Move
 
 
Response & Impact
Blunder
Bill relied on this part-time position and didn’t have a Plan B – other interviews or networking
Bill’s failure to continue to build his BATNAs (his Plan Bs) puts him at a disadvantage
BNP
Bill prepares an opening offer and support
He is ready when Jen asks
Tactic
Jen ignores Bill at first to make him feel unimportant
It works mildly, but Bill’s preparation keeps him confident
Blunder
Jill opens the conversation without any rapport building or excitement about Bill joining the organization
Jen misses the opportunity to build an alliance with Bill, which will make it more difficult for her to learn what matters to him. She also risks him deciding against the job.
BNP
Jen asks Bill what he wants
Hearing from Bill informs Jen up front if this conversation is worth her time. But it did come with the risk that Bill would anchor Jen by opening first.
BNP
Bill opens with his prepared opening offer of $127K.
Great opening offer – high, but justifiable, and therefore credible
Blunder
Jen says “Absolutely not” to Bill’s opening, which is the same as saying “No.”
Saying the word “No” or a similar negative response shuts down conversation
BNP
Jen opens with her opening offer of $78
Jen’s opening seems appropriate – she starts low but within a justifiable range
BNP
Bill asks “Why?”
Always a great probe, when said with sincere curiosity and not as an attack. Jen is so far from Bill’s preferred salary that he can only benefit from more information.
Blunder
Bill doesn’t wait for Jen’s answer. He starts defending his stature.
Jen is unfazed because Bill isn’t engaging her – he’s presenting to her. Bill is waiting too long to start asking questions – the best way to engage his counterpart.
BNP
Finally Bill realizes that he is not convincing Jen, and starts asking lots of engaging questions.
You can’t probe too much!
BNP
Bill next asks for Jen’s advice as to what he needs to succeed in this job.
Great open-ended question. Engaging the other side is critical. Jen’s inclination now is to help Bill, rather than to win against him.
BNP
Bill asks Jen to reconsider the salary given the information they have discussed about his background and fit for the position.
Bill needs Jen to move a lot, so his open request is a good strategy. He’s giving her a way to save face if she is convinced that his salary can go higher.
BNP
Jen makes a huge move from $73 to $103K.
Jen’s first move is big, but she saves face by having reconsidered the expertise required for the job and Bill’s fit for the position.
Blunder
Bill seems inclined to accept the offer.
Bill could have asked more questions about the new salary range, and further built the relationship. Jen probably had more to give. But Bill lacked confidence due to his non-existent BATNA (plan B).
Tactic
Bill asks about getting an alternative work schedule given the lower salary than what he had anticipated.
At least Bill asked for something to justify why he would move off his opening of $127K – the alternative work schedule. It was a “nibble,” but because he knew Jen could give it, there was little risk to the relationship in employing this tactic.

 

Negotiating Tip

While always reasonable and patient, be assertive and enterprising. And be firm, fair, and professional. Challenge assumptions and think of mutual gain as you build relationships. 


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Three Possible Next Plays in Deflategate

By Marianne Eby

Deflategate continues to enlighten us -- not just about American football, or alleged scandals, or even the science of air pressure in balls in cold weather -- but about what happens when parties can’t reach a negotiated solution to their dispute. Last week opened with an appeals court reinstating New England Patriots' quarterback, Tom Brady's 4-game suspension, and ended with a court filing by the Brady team. The many plays that have occurred and the ones yet to come demonstrate the perils of litigation, the power of having a Plan B or BATNA, and that there is still benefit to and time for a negotiated solution.

When my colleague at Watershed Associates, Leslie Mulligan, wrote about Deflategate in July and again in September 2015, she quite rightly predicted that we have not seen the last of the NFL v. Brady case. She exposed the various stakeholders and their potential interests – why they might want what they are demanding. She also talked about the parties’ Plan Bs, or BATNAs (best alternatives to a negotiated agreement) – what moves they might make if no agreement is possible.

What Leslie couldn't know then was how the 2015 NFL season or the appeal of a lower court decision would ultimately play out, and what would be the next moves by parties who so far had not found common ground on which to negotiate a resolution of their differences.

The parties in court are technically the National Football League (NFL) Management Council, and the National Football League Players’ Association (NFLPA). The parties who everyone talks about are NFL Commissioner Roger Goodell and the star quarterback Tom Brady.  Brady’s football team, the New England Patriots, are involved as they certainly care about winning games (and the revenue) that could be impacted by a suspension of Brady for his alleged role in the scandal. Roger Goodell is under great pressure to keep the League’s owners satisfied with his leadership decisions and equal treatment among teams, so the other teams’ owners are major stakeholders. And of course the NFLPA needs to demonstrate that it will protect the rights of the players, like Brady.

These parties chose to execute their litigation BATNA to resolve this dispute rather than negotiate a solution. As a former litigator myself, I know well the perils of litigation. Negotiation can be win-win or win-lose, but litigation is almost always lose-lose, and it has played out exactly that way in Deflategate.

The parties’ BATNAs in and outside the courthouse have continued to unfold. Last week a panel of the U.S. Court of Appeals for the 2nd Circuit reinstated the 4-game suspension issued by NFL Commissioner Roger Goodell against the New England Patriots' star quarterback, Tom Brady. This is probably not the final play in what has been a drama filled game of questionable tactics.

Unlike litigation, negotiating a settlement of their dispute had the potential to put the solution within the parties’ control. They could have mutually determined how they would be perceived, their investment of resources (15+ months, lawyers fees, personal time and stress) and the ultimate outcome. Litigation, on the other hand, held the potential to declare a final winner and a loser, raising the stakes significantly. Sometimes implementing the BATNA of litigation is the only way to satisfy our interests, but it usually comes at great cost to both parties.

There are always winners and losers, but it’s the Interests that underlie the wins and losses that really matter.

With commentary from me on what really mattered throughout Deflategate, let’s review Brady's win-loss record on and off the field, and in and outside the courthouse, and what was really at issue in each stage of this game since January 2015.

Brady wins
Jan 18, 2015 - Tom Brady leads the Patriots to win 45-7 in the AFC Championship game.
​►What matters?  Brady is a star football player and key to the Patriots' win record. A defeat of this magnitude certainly doesn't come about from pure ball tampering, but it does leave others wanting pay-back.

Brady loses
Jan 23, 2015 – NFL announces investigation into allegedly deflated balls (or as it turned out, possibly one ball); Deflategate is born!
►What matters?  NFL’s interest here is ostensibly the integrity of the game.

Brady wins
February 1, 2015 - Midway through the 4th quarter of the 2015 Super Bowl, the Patriots are down by 10 points, but Brady isn't resigned to lose. Brady leads the Patriots to victory as Super Bowl XLIX champions.
►What matters? Brady and the Patriots don’t need deflated balls to win.

Brady loses 3 consecutive moves
May 2015 – NFL issues harsh penalties. Brady gets a 4-game suspension to take place in the 2015 season for his alleged role in Deflategate. The NFL also imposes a $1,000,000 fine on the Patriots and takes away the team’s first and fourth round draft picks.
►What matters?  The offical interests seem to be that the NFL won’t cover up even alleged complicity by one of its superstars and that it doesn’t “play favorites” with the teams. But there is a behind the scenes interest as well – that Goodell is beholden to all teams’ Owners and they haven’t forgotten past cheating by the Patriots.

June & July 2015 - Arbitration of an internal NFL appeal: NFL Commissioner Goodell, acting as the arbitrator, denies Brady’s appeal and upholds the suspension.
►What matters?  The NFL’s power to conduct the investigation as it saw fit and issue penalties as it deems appropriate are paramount to its leverage with the players’ association.

Minutes later? Beating Brady and the NFLPA to the courthouse door, the NFL files a lawsuit in US District Court in New York to affirm the arbitrator’s decision.
►What matters? NFL files in NY to avoid ending up in a Minnesota federal court that has been more friendly to players.

Brady wins 3 consecutive moves
book of law with judge's gavel Brady is unstoppable throughout the 2015 NFL season.

Sept 3, 2015 – Federal District Court's Judge Berman vacates Goodell's decision and rules in favor of Brady. The Judge urged the parties to settle. Berman finds legal deficiencies that were fatal to the NFL’s suspension (inadequate notice to Brady of the possible punishment, lack of access to investigative files, and not letting Brady examine the lead investigator). 
►What matters?  Goodell’s conduct (rulings and decision) at the hearing are deemed unfair and in breach of the collective bargaining agreement.

The NFL didn't try to stop Brady from playing in the 2015 season, and the Patriots ultimately secured the AFC East Division title.

Around the same time, the academics finally weigh in. MIT professor John Leonard releases his study of the data – the math and the football – and he concludes that “no deflation occurred and the Patriots are innocent. It never happened.” It’s all over YouTube: MIT Professor Debunks Deflategate. And Harvard Business School has around a thousand students grapple with a case study about Deflategate, developed by professors Marco Iansiti and David Sarnoff. Iansiti comments:

“The data are the data. A lot of the proceedings are now frankly more about the power relationships between different stakeholders in the whole environment, and less about what actually happened with the bloody footballs.”

►What matters? Brady and the Patriots have multiple moral victories that no court can erase. It’s clear that Deflategate is all about the power of the organizations involved, and litigation, as is often true, is only a vehicle to increase or avoid losing that power.

Brady loses
December 22, 2015, the NFL files an appeal to the US Court of Appeals for the 2nd Circuit. And in January Brady and the Patriots lose the AFC Championship to the eventual 2016 Super Bowl champions, the Denver Broncos.
►What matters?  The NFL’s power to enforce its decisions is paramount to its leverage with the NFLPA, regardless that the facts favoring Brady are mounting. On appeal, the law matters (not the facts), and winning on the field is as unpredictable as court.

Brady wins
March 2016 – Brady renegotiates his salary to include a $28M signing bonus for his $60M multi-year contract.
►What matters? Brady reduces his year-1 salary to $1M and thereby ensures that he protects a large portion of his earnings with a signing bonus the NFL can’t touch in the event that the 4-game suspension is reinstated on appeal, after the questioning at the hearing on March 3 didn’t bode well.

Goodell hedges on whether the NFL will enforce Brady’s suspension if the NFL is successful on appeal.

“That is not an individual player issue,” Goodell said then. “This is about the rights we negotiated in our collective bargaining agreement. We think they are very clear. We think they are important to the league going forward and we disagree with the district judge’s decision.”

►What matters? The NFL’s real interest is in protecting its rights under collective bargaining agreements; the facts aside and well beyond the implications for Tom Brady.

Brady loses
Apr 25, 2016 – US Court of Appeals for the 2nd Circuit in New York issues decision overriding Judge Berman and reinstating the Brady’s suspension, with one dissenting opinion. 
►What matters? Judge Berman’s improper application of the law in overturning Goodell acting as arbitrator of his own decision. The NFL’s power in collective bargaining is re-established. 

Brady wins
Brady holds the #1 spot for sales of NFL players merchandise for the 2015-16 season.
►What matters? Since his initial suspension, Brady surpassed both Quarterback Peyton Manning’s merchandise sales even though Manning led the Denver Broncos to be Super Bowl champs in 2016, and the merchandise sales for Russell Wilson, quarterback for the Seattle Seahawks, who held the #1 spot for the previous 2 years. The players get 2/3 of the money from the merchandise sales. One could conclude from this that Deflategate improved Brady’s reputation rather than hurt it.

What are the parties' next moves?
Who wins or loses next?  More importantly, what really matters?

The NFL wants happy fans, the assurance of power in its collective bargaining agreements with the players’ union, and increased revenue. The NFL has lost a great deal of respect to protect those interests. Tom Brady is by all measures a star football player, but he wants to go down in history as an honest football legend, not to lose income, and as a winner on and off the field.

Will the parties rely again on the strength of their BATNAs, or will they finally see that their interests can be addressed in a negotiated agreement – that they can move from lose-lose to win-win?

Here are the 3 possible next plays in Deflategate:

  1. Goodell and the NFL retreat
    Goodell and the NFL could reduce the suspension or choose not to enforce it against Brady, having adequately secured confirmation of Goodell’s power and the NFL’s rights under collective bargaining agreements.
     
  2. Brady and the NFLPA advance
    Brady and the NFLPA could ask for a stay of his suspension and seek to get a majority of the 13 active judges in the 2nd Circuit to agree for all 13 judges to review the 3-judge panel’s ruling.  Or Brady and the NFLPA could seek an appeal to the US Supreme Court. Neither option has a great chance of success.
     
  3. What if the parties negotiate a solution and regain control over the outcome of this dispute.
    The mere threat of filing an appeal could act as leverage to get the NFL to negotiate a settlement that releases the suspension. Brady and the NFLPA have just strengthened their leverage by showing a willingness and ability to execute their BATNA of filing an appeal; they officially added Theodore Olson to their legal team, a former U.S. Solicitor General who has argued before the Supreme Court 62 times.

The NFL has won the legal issues at this juncture, and may want to avoid any risk of a further appeal, given the strong dissent by Judge Katzmann, who found the Commissioner breached his authority.

Brady doesn’t have much more to gain even if he wins the next court decision, given that his popularity actually increased during Deflategate, the Patriots re-signed him and helped him avoid most of the financial hit a suspension will impose, and there are many experts who question not just the NFL’s actions during Deflategate, but the evidence itself, leaving Brady’s integrity largely intact.

Of course Brady and the Patriots want to win football games, and the team’s chances of reaching the playoffs in the upcoming season are increased if Brady plays those first 4 games. But that outcome is attainable in a settlement, and does not need a court decision. We don’t know what are the parties’ next moves, but we can be pretty sure everyone wants to see more of Tom Brady playing football, especially when he may not have many seasons left.

Negotiating Tip

We feel smarter when talking. But studies show that people who listen more are usually considered to be smarter than people who talk a lot.


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Tom Brady's BATNA Prevails in Deflategate

By Leslie Mulligan

Famed quarterback Tom Brady will take the field this Thursday in the NFL's season opener when the New England Patriots play the Pittsburgh Steelers. Brady will no doubt demonstrate his prowess in the game, but unlike other seasons, he'll step on the field with one victory already in hand. It turns out that in the pre-season battle of the BATNAs, Brady had the winning strategy.

In July Commissioner Goodell denied Brady's appeal of the NFL"s (US National Football League's) May 2015 4-game suspension for alleged cheating -- involvement in or covering up deflated game balls -- and upheld his own decision. Brady and the NFL Players Association (NFLPA) went to court to fight this battle, as intense competitors will do. Ultimately, Judge Richard Berman ruled in Brady’s and the NFLPA’s favor, vacating the 4-game suspension that the NFL had levied.​

When I wrote about the situation in July, I was keeping an eye on the stakeholders, the parties' interests, and the available BATNAs. Now we know that victory in the battle of the BATNAs led us to the finish.

BATNAs are your Best Alternatives to a Negotiated Agreement, or plan B. The other side doesn't have to agree with your BATNA, because it's the plan you will execute if negotiations don't produce a desirable result.

Knowing the strength of your BATNA relative to your counterpart, and being willing to execute it, is essential as you enter any negotiation, as the NFL regrettably realized this past week. We can all learn from the NFL's missteps.

Every successful negotiator knows that you are more powerful at the negotiation table if you have a strong BATNA, preferably more than one. But remember - your BATNA is your back-up plan, your Plan B. In fact, your Plan A should be to reach a mutually beneficial agreement through dialogue, without having to execute BATNAs. This is paramount, especially if you will need to work together in the future.

Clearly the NFL and the NFLPA have an ongoing relationship and must work together going forward. Executing BATNAs can be risky because you don't know the fall out, unlike the greater certainty that comes with a negotiated agreement. Executing BATNAs can also damage relationships, as we have seen play out in this situation. To that end, Judge Berman urged both sides to negotiate a solution rather than do battle in court. 

But each side evidently thought that its BATNA was the stronger BATNA.

As you enter a negotiation, one critical step is to assess the relative strengths of each side’s BATNA. This assessment is done in the Exchange stage of negotiations, while you are measuring your opponent’s position, understanding their interests, and assessing their trustworthiness and credibility. Depending on the strength of your BATNA and your assessment of the other side, opening offers are made. In Deflategate, both sides had strong opening positions: Brady refused to accept any ruling that included missing a football game because of cheating, and the NFL seemed to require Brady to bear some level of responsibility by accepting the NFL’s Deflategate investigation led by Ted Wells.

These seemed like aggressive opening offers at the time, but both sides must have felt that they had strong BATNAs. If you are confident in your Plan B, you can afford to be very assertive with your opening position. As no negotiated settlement was reached, each side apparently believed that they had the superior BATNA. Clearly, Brady and the NFLPA made the right assessment.

Although the NFL under-estimated the strength of Brady’s BATNA, the NFL did do one thing well. The NFL immediately sought to improve its BATNA by filing a pre-emptive lawsuit against Brady in a New York federal court, rather than the players-friendly venue of Minnesota, where recent trials had been held that went the player’s way.

A good negotiator constantly works to improve short and long-term BATNA’s, before and during negotiations, and certainly when agreement can't be reached. Roger Goodell and the NFL clearly had that on their minds, as they filed the NY lawsuit to reaffirm the NFL's ruling on the same day the ruling was issued – July 28th.

For more on ways to leverage your BATNAs, check out an earlier Watershed blog, the Negotiator’s Keys to a Powerful BATNA.

We have likely not seen the last of the NFL vs Brady case, as the NFL recently stated that it will appeal Judge Berman's decision. But this move should not stop Tom Brady from joining the New England Patriots on the field as the NFL opens its season. Let’s hope that both sides reassess their negotiation strategies to find a way to address their interests and appease their stakeholders. While the battle of the BATNAs has a victor, nothing's certain about who will win the season opener. Let the games begin!

Negotiating Tip

The number one goal in collaborative negotiations and in avoiding/resolving a conflict is to make sure all parties maintain self-esteem.


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3 Key Negotiation Issues to Watch in Deflategate

By Leslie Mulligan

Will Tom Brady or Roger Goodell come out the winner in the NFL's DeflateGate? Who has the skills and strategies to win the next round? Get your tickets because this negotiation is a game everybody is watching.

NFL camps are opening this week all over the US, and football-hungry fans are getting excited about watching their teams – and favorite players – on the gridiron again. One huge problem hanging over the start of the season: what will happen to much-beloved Tom Brady, locked in battle with NFL commissioner, Roger Goodell and the "ownership powers that be," over DeflateGate? Did Tom Brady break the rules with football deflation in the AFC championship game, and if so (or even if he just “covered up” potential evidence), what punishment fits this crime?

The NFL handed down a 4-game suspension back in May 2015 and the players' union, NFLPA, appealed in June. Just this week, Commissioner Goodell upheld his decision: the 4-game suspension stands. But the questions may linger - what is fair in this situation, and what will be accepted by those football-hungry fans, especially when Tom Brady was just announced as the #1 seller of NFL merchandising for Q1 this year, from the NFLPA’s Top 50 Player Sales list.

How can Roger Goodell and NFL ownership keep fans happy, while retaining control over league activities? The balance of power is intriguing.  – can a win-win be reached between the NFL and Tom Brady’s camp, especially now that Goodell has solidified his position with his latest ruling? Here are the issues to watch.

Stakeholders are Issue #1 to Watch

An essential concept in negotiations is to manage your stakeholders, in part by recognizing and hopefully meeting their interests: Goodell has a number of stakeholders, and their interests are not necessarily aligned. The NFL (and NFL Owners) makes close to $10B in revenue a year, with an aim of reaching $25B by 2027 – the top professional sports league in the world.

And they pay Goodell handsomely; in 2012, Goodell’s salary was $44M (this is the last published salary, as after 2012, the NFL relinquished its tax-exempt status and closed ranks on disclosing salaries). Goodell clearly wants to keep the owners happy! In fact, at least two of these very powerful owners lobbied hard to uphold the 4 game suspension – Jim Irsay (Indianapolis Colts- the team that lost to Brady in the infamous game) and Steve Bisciotti (Baltimore Ravens). So it is no surprise that Goodell doubled-down on his decision this week.

Tom Brady’s last contract was $57 million over 5 years – orders of magnitude lower than NFL revenue and less than Goodell’s own salary, but in the court of public opinion, Brady’s power is significant.  The NFL assuredly wants to keep all of those jersey-buying fans happy too, as their zeal fills the owners’ cash registers. It seemed as if the majority of fans wanted Brady’s suspension lightened if not lifted – that will play out on the airwaves in the coming days, as we see how fans react to Goodell’s decision.

Interests are Issue #2 to Watch

Both sides of this conflict have myriad interests in play. It is essential to understand and prioritize your interests, and determine what is driving the other side, in order to attain a win-win outcome in any negotiation. Goodell clearly wants to keep the NFL owners and the fans happy, but he has a self-serving interest too: he wants to preserve his reputation and legacy as an outstanding Commissioner. His reputation has taken repeated hits lately with various league scandals. As he ponders next steps, surely he wants to avoid second-guessing in the media, questioning his leadership. How his decision to uphold the suspension preserves, or sullies, his reputation remains to be seen.

Tom Brady is also very interested in self-preservation – he values his earnings potential both as an NFL player but as a champion endorser too! If he is viewed as a cheater, his short-term income from promotions, commercials and other sponsorships may dry up. In 2013, Brady's endorsement income was $7M, not too far below his NFL annual salary.

But probably more important to Tom Brady than his marketing potential is his legacy as one of the best, if not the best, quarterback to have played the game. He went on record in January to proclaim he was not a cheater. The new information that he had his cell phone destroyed after the investigation began raises the stakes for him. He wants to be in the pantheon of immortal NFL players, and with 4 championships under his belt already, he was on his way. It is no surprise that Brady wanted the entire 4-game suspension wiped away – with the recognition that he did not cheat. So his interest is clear, but how to best achieve it?

BATNAs are Issue #3 to Watch

Tom Brady and the NFLPA have one major lever – their BATNA! In this case, their Best Alternative To A Negotiated Agreement, or Plan B, is to take the NFL to court. And they have been clear that they are willing to do just that: they are willing to execute their BATNA and go to court. BATNAs are most powerful when the other side believes you have a strong Plan B (or more than one alternative, even) and are willing to execute it. Back in June during the initial appeal, Brady’s defense attorney publicly stated that they have a strong case, and many in legal circles agree.  

The NFL has a lot on the line; some recent NFL investigations did not go so smoothly (remember the Ray Rice case), but Roger Goodell has shown that he is also willing to execute his BATNA. The last thing that Roger Goodell and the NFL probably want is a protracted legal proceeding, including all that might come out in the Discovery phase of litigation, but that seems to be the path we are on. Just a few days ago, Forbes published an article that suggests Brady and team will prevail in court. If that's an accurate assessment, Goodell's priority must be keeping his stakeholders happy at this stage.

End game?

One hope is that cooler heads will soon prevail, as an underlying, common Interest in play for both parties should be a speedy resolution. Brady assuredly wants to get on the field – he only loses $2M if he misses all 4 games, but he would snap his 13-year record of season opening starts. And Goodell would like to open the NFL season with happy fans (and happy owners). But for the moment, we are at the stage of litigation threats. It will be fascinating to see how this unfolds.

We will know soon enough if they are able to pull back from their BATNAs and negotiate some form of a win-win solution. Interests and stakeholders are now well understood; opening and counter-offers have been made and BATNAs revealed. Let’s hope they focus on Best Negotiating Practices rather than legal tactics in the near term, and close the books on this rapidly, so that the start of the American football season can kick off happily for all parties - especially the fans!

Negotiating Tip

 “Champions aren’t made in gyms. Champions are made from something they have deep inside them: a desire, a dream, a vision.”  Muhammad Ali


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Donald Trump's "Art of the Deal" - What's his final grade?

By Leslie Mulligan

Donald Trump is certainly dominating headlines these days as he campaigns for President – he is all over TV news, social media and can’t help but pop up in our daily conversations with friends and family, regardless of your political leanings. But he has never been shy, as a long-time fixture on the NY real estate scene; he promotes himself as a skilled “deal-maker.” As a negotiating expert and trainer myself, I was compelled to read his first book, Trump: The Art of the Deal, to explore what negotiation concepts he relies on, and maybe to see what he misses. Regardless of his own “pomp and circumstance”, based on the ideas in his book, what grade would Trump get in Negotiation Fundamentals – Pass or Fail?

Let’s walk through the book a bit before we grade Mr. Trump. Overall, the book is a good read, shedding light on this provocative political candidate with deep dives into many of his real estate deals. He does frame a few negotiating fundamentals, but the narrative really serves as a showcase for Trump’s inimitable style. He liberally uses old-school negotiating tactics, which may work one time, for one deal, but do not necessarily play well in long-term business relationships. Does Donald Trump “play well with others?" His book highlights mostly his successes, as you would expect. But in this blog, I will dissect his view of Negotiating a bit, with lessons learned for all of us. In any case, the stage has now shifted, as he plunges into the political arena. In fact, Trump himself proclaimed in his presidential announcement last June: “We need a leader that wrote The Art of the Deal.”

Although originally published in 1987, I read Trump's book this year for the first time. In fact, with Trump’s recent political ascendancy, many people have been prompted to buy the book; The Art of the Deal’s sales have jumped, to the point where the book is hovering around the Top 100 books on Amazon – quite a coup for an almost 30–year old book (that sold millions when originally released). It is also the #3 Best Seller in Amazon’s Business Professionals Biographies.

Politics aside, here is my critique of Trump's first book and his thoughts on deal–making. How would Donald Trump do in a class on Best Negotiating Practices?

The original New York Times book review had an intriguing closing comment, perhaps prophetic for current Trump loyalists:  “Mr. Trump makes one believe for a moment in the American dream again.’’ After an introductory chapter that chronicles a week-in-the-life of Mr. Trump, Chapter 2 tackles the substance (and style) of his deal-making prowess  – The Elements of the Deal  – opening with an autobiographical perspective:

"My style of deal–making is quite simple and straightforward," he writes. "I aim very high, and then I just keep pushing and pushing to get what I'm after. Sometimes I settle for less than I sought, but in most cases I still end up with what I want." 

He then illustrates 11 key elements of “the deal”, which are articulately summarized in a recent Business Insider article. When I ponder a highly successful negotiation that yields win–win results, 6 of Trump’s eleven Key Elements resonate quite loudly with me (we will revisit the remaining five later in Part II of this blog).

1– THINK BIG

The first and perhaps most important Key Element is Trump’s call to action:  Think Big! He urges “If you’re going to be thinking anyway, you might as well think big”. This is Negotiating 101 – and so is definitely worth exploring further. Any negotiation eventually produces some give and take; you rarely close at your very first offer. In fact, be forewarned – if you do close at your very first offer, you may have used persuasion, not negotiation, and later, the other side may have “remorse” about the deal.

But in a normal give and take, to maximize your results you start by opening big, as you will inevitably come down off of that first offer through the course of bargaining. What Trump misses is that if you start so aggressively that your opening is indefensible, you lose credibility and trust. So think big, but be sure that you can make a substantive, realistic case for your first offer – you want to be taken seriously on every offer that follows.

Trump tries to separate himself from lesser negotiators:

Most people think small, because most people are afraid of success, afraid of making decisions, afraid of winning.

I disagree. The negotiators I work with may be less skilled, fear conflict or lack confidence, but they do want success. So I challenge you to quell your anxiety, and most importantly, do not negotiate against yourself before you ever sit across the table from a negotiating partner – go ahead, stretch and think big.

2– PROTECT THE DOWNSIDE, AND THE UPSIDE WILL TAKE CARE OF ITSELF

Donald Trump is a realist, well, maybe more of a pragmatist, too. His 2nd Key Element is "Protect the Downside and the Upside Will Take Care of Itself."  To me, this means that although he thinks big, he definitely considers his “bottom line”, so that he knows when to stop in any negotiation – self-protection, if you will. In negotiating parlance, we define a Negotiating Envelope (also known as the Zone of Possible Agreement) – two end points that establish your Most Desired Outcome (MDO) by thinking big, but also your Least Acceptable Alternative (LAA) that protects your downside, by contemplating the lowest you are willing to go. Savvy negotiators push themselves, stretching when they set their objectives initially, and then confidently open at the negotiation table, but only after privately setting a walk-away point. This focus on your plan will frame your success.

Business man silhouette looking at puzzle pieces to prepare for Negotiation

3– KNOW YOUR MARKET

I wholeheartedly support Mr. Trump for emphasizing Planning – preparation is critical in any negotiation – actually, the more prepared you are before you sit down at the table, the more confident you will be. And we know that Donald Trump does not lack for confidence. This idea is echoed in another of Trump’s Key Elements – "Know Your Market."  He may mean this primarily in the real-estate/business sense, but any good negotiator knows that the more prepared you are, the more you increase your chances of success. Think through not only your Negotiating Envelope, but also the other side’s, consider what the other side is most likely to offer – and really want. The best negotiators spend much more time planning and preparing than they ever do in the actual negotiation. Never sit down with the other side until you have thoroughly vetted (or at least thought about) not only your own negotiating strategy, but your negotiating partner’s, too. Our refrain is, “A failure to plan is a plan for failure.”

4– MAXIMIZE YOUR OPTIONS

During the planning phase of negotiations, do not get fixated on only one approach – having back up options gives you leverage. Trump knows this, as he commands us to "Maximize Your Options:"  

I never get too attached to one deal or one approach.... I always come up with at least a half dozen approaches to making it (a deal) work, because anything can happen, even to the best–laid plans.” 

Plan B and Plan C, alternatives to any deal you are negotiating, are what we call BATNAs in negotiating parlance. BATNA – the Best Alternative to a Negotiated Agreement – means you have leverage, and power, at the table. A BATNA is a well–conceived plan that you are willing and able to execute if no agreement can be reached. You want the other side to worry that you may walk away from the table and execute your own plan B – and you know Trump plays that card. Now Trump may bluff at times – sometimes it feels like he is bluffing when we watch him campaigning – but it is clear that he knows the value of BATNAs.

5– USE YOUR LEVERAGE

BATNAs clearly provide leverage, but they are not the only way to gain leverage at the negotiating table. What is leverage? Trump defines it well: 

“Leverage is having something the other guy wants. Or better yet, needs. Or best of all, simply can’t do without”.

These are what we call Interests – you want to delve into the other side’s underlying interests, why they want what they want. 

In his book, Trump describes a time when he was interested in buying a corporate jet – he really wanted a 727 but it cost $30 million at that time, so he had his brokers looking for a G-4, going for only $18 million. Serendipitously, Trump discovered that Diamond Shamrock, a Texas oil and gas company, was in serious financial difficulty, even while its executives had been enjoying the perks of a decked–out 727. Not surprisingly, new management now wanted to ditch the jet, as well as shake up the executive team.

DEAL word under a magnifying glass

Trump made a call, starting with some pleasantries, and expressed interest in Diamond Shamrock's jet. It was clear to him that the new CEO wanted to deal. Trump then low-balled an offer at $4 million, admitting to himself even that this was absurd. But knowing the other company was in desperate financial shape gave him leverage. Indeed, Diamond Shamrock countered at only $10M, as unloading its corporate jet was a primary Interest. Both sides agreed at $8M, a tremendous price for a refurbished jet with all sorts of fancy amenities – just Trump’s style.

In this case, Trump leveraged his knowledge of Diamond Shamrock’s financial troubles, and its need to both lose a costly asset and send a message to Wall Street around a new management team at the helm. In negotiation, we often think about what we need – but to really hit a home run, you need to spend more time thinking about what the other side needs, and why they need it. If you know what they need, and you can deliver it without a huge cost to you, then you have leverage – the upper hand!   

6–HAVE FUN

The final Key Element in Trump’s book that I really value is "Have Fun!"  His view is almost child-like:  “The real excitement is playing the game,” and he maintains that he has a very good time making deals, especially all of the deals described in his book. This may sound like boasting, but still, I applaud this advice to have fun. People who have fun while engaging in otherwise stressful activities – think parenting, mountain climbing, negotiating – excel more than others.

Collaborating to reach a solution can be energizing, socially gratifying, and filled with surprises. If you approach the agreement with the spirit of cooperation and collaboration (rather than conflict), not only will you enjoy it more, but you will get a better result – for both sides! Many people shy away from negotiating because they view it as conflict; someone has to lose, right?  Well, not necessarily; both sides can win. Interest–based, collaborative negotiations yield better results. Trump may lose sight of this from time to time, but that doesn't mean his advice to have fun won't help you become a better negotiator.

What didn’t I agree with in The Art of the Deal?

I believe that we can all become better negotiators – by learning, by practicing, by experience. Trump, on the other hand, believes only some lucky few have an inherent capability to dazzle at deal–making. He asserts, “More than anything else, I think deal–making is an ability you’re born with. It’s in the genes.”   I respectfully beg to differ; we can all improve, by enhancing our current negotiation skill set, adding some better strategies, and reinforcing our confidence. 

Donald Trump plays hardball a bit more than necessary, probably because he comes from an old–school perspective. Uber–competitive tactics do not foster long-term collaborative partnerships in business – but it is his style, that is obvious. There were also strategies and behaviors that Trump missed in his 11 Key Elements  – skills that can be invaluable to a negotiator.

Negotiator holding apple with A+ grade carved in it

Finally, I give Trump a PASS in Negotiating Fundamentals, but I would say he is a low B student.

Come back for Part II, when I lay out essential concepts that Trump may miss (or misuse), which will transform you from a good negotiator to a great negotiator, regardless of your DNA. Become an A+ negotiator!

Negotiating Tip

Three easy ways to build trust: Listen as an ally, show sincere appreciation for your counterpart’s efforts, and make (but link) concessions.


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