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[00:00:00]

The biggest fight or should I say negotiation? My wife and I have ever had was over toothpaste. You see, my wife is a roller and I'm a squeezer and nothing upsets a roller more than a squeezer to this day. After 20 years of marriage and we still have two tubes of toothpaste. Welcome to Think Fast. OK, Smart.

[00:00:24]

The podcast negotiation plays an important role in our daily lives. You might be striving to get an increase in your salary support for a project less screen time for your kids or more quality time with your romantic partner. Becoming a better negotiator can help you and the people you interact with today. I am so excited to be joined by Maggie Neil, the Adams Distinguished Professor of management emerita at the GSB. Additionally, along with Thomas Lisse, Maggie is the co-author of the book Getting More of What You Want.

[00:00:54]

Her research focuses on negotiation and team performance. Welcome, Maggie. Thanks so much for being here. Thanks, Matt. It's a pleasure. If you are well known for your keen insights, your engaging teaching style and humorous storytelling and along with your love of horses. So excited to have you here. I'd like to get started. I know you have a particular way of looking at negotiation. How do you define negotiation and what do you see as the definition of a successful negotiation?

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Well, to many of us, approach to negotiation as a battle. And that battle is characterized by I'm going to try to get stuff from you and I'm going to try to keep you from getting my stuff. And if that's how you think about negotiation, you're already an uphill climb, because what that perspective does is it frames how you interact and evaluate your counterpart and yourself. You're going to evaluate your counterpart through that screen of battle. And so what I suggest is, rather than thinking about your counterpart as your enemy, think about negotiation as collaborative, problem solving, collaborative problem solving has three dimensions.

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The first is that I, as the protagonist negotiator, am better off, better off than my alternatives. Better off than my status quo. Better off than had I not negotiated.

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Now, that may sound like a low bar, because what reasonable person is going to negotiate to be worse off?

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That's true, except we all have each of us have been in negotiations multiple times, probably where we knew at the moment. The second before we said, yes, we should walk away, but we said yes anyway because we privileged agreement over the quality of deal. So that's number one is I as the protagonist, need to be made better off. But number two, there's no command and control in negotiation. I cannot force you to say, yes, all that I can do is present proposals to you where you think it's in your interests to say yes.

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And we agree on a common course of action. So that means I need to understand who you are, what your interests are, your preferences, your motivations, what your challenges are. And I need to be able to answer the question, why would you say yes to my proposal? Because if I don't have the answer to that question, I'm not ready to negotiate.

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So the second part is really about reconnaissance and reflection into who you're negotiating with. Absolutely.

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And the third point is that when I present a proposal to you, I'm going to present that proposal as a solution to a problem that you have.

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And that's the crux of the collaborative problem solving perspective. What it does is it takes this out of me against you, not like that a lot.

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That that reinforces several things that we've heard across many of these podcasts episodes is you really have to know your audience, who you're talking to, and you have to frame your communication in a way that helps and supports them. It's not just about you. So I love that you're echoing that.

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Yes. And not just about you as the whole point.

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What suggestions you have to help us better plan for our negotiations. Are there things we can do to prepare ourselves and those we negotiate with?

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Absolutely. So I need to understand my situation. The first thing I need to understand is what are my alternatives? What happens to me in the case of an impasse? There have been a ton of research in this area, and it's really very clear. Those folks with better alternatives on average, walk away with more in the negotiation and the reason they do that is because they're more willing to walk away. So let's say I have a really good alternative.

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It makes it easier for me to walk away. So if you want an outcome, a negotiated outcome with me, you've got to actually pay me to stay and engage with you. But my alternatives are outside the negotiation, but they have a huge impact on how I behave because they affect the second parameter, which is my reservation price, my reservation price. It's the tipping point in a negotiation.

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And it is arguably the most strategic piece of information because it tells me where that point is, where I am willing to walk away. In fact, if I am negotiating it and I am at my reservation price, I should be so indifferent as to the outcome that I can flip a coin. And if it lands heads, I walk away and fail and tails I say yes. And I would argue most of us don't ever think about. You know, most people don't, and even people who do oftentimes don't have the discipline.

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To be able to honor that reservation price because they value getting a yes. Over the quality of the deal, hmm, and this is what's so critical, because if you don't have a reservation price, you don't have a point. Your bottom line is not clear what your bottom line is. And you don't have the discipline to maintain that bottom line. Then whatever surplus exists in the negotiation can easily flow to your counterpart. Because it really is a point where you say, no, I won't do this, but you need to know where that is.

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And now, if all you focused on were those two aspects, your bottom line or what happens if you've got an impasse? Then what's going to happen is you're going to systematically underperform in your negotiation and you do so because of a very powerful psychological process.

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Expectations drive our behavior. So if my expectations about what I can get in this negotiation are centered on my bottom line or what happens to me if I get an impasse.

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If that's where my mind is, that's where I will end up, so I must leverage up my expectations. I must think about an aspiration, an aspiration is. An assessment and that that doesn't mean I look at it and say, oh, if things went really well, the perfect world, I would get all of this. You know, what I say is, here's my situation. Here's my skills and ability. Here's my counterpart. Here's their situation.

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If everything went in my direction in this situation optimistically, what could I hope to achieve? That doesn't say my counterpart completely sort of rolls over their back and says, I give no, they're going to be trying to get more of what they want. But if things go my way, what could I hope to achieve? And what I found that is that. Rarely, rarely identify an aspiration. Sometimes they will identify a reservation price, absolutely. Sometimes there are alternatives, yes.

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But they rarely use what I think is really one of the secret ingredients in successful negotiation, which is setting an aspiration and having a focus. From your perspective on that aspiration, previously on this podcast, we've talked a fair bit about how to structure our messages. Are there specific best practices for how you structure negotiation messages? For example, I know you've done some research on chunking and I find it really compelling. Can you tell us a bit about that?

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Well, there's there's two ways to think about chunking. So number one is that too often in negotiation, we we tell ourselves that the correct way to negotiate is one issue at a time, and that strategy is a recipe for value destruction and negotiation.

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And so part of what we want to do is we want to be able to negotiate multiple issues simultaneously. And the reason we want to do that is because not every issue is equally important to both of us. And so what I want to do is I want to get a sense of value or importance of the issues over which we could negotiate. How important is it to you compared to how important they are to me? I'm quite willing to concede on an issue that's important to you, especially if it's not that important to me in order to get a confession on an issue that's important to me.

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That's the beginning of the chunkin process. So where are the asymmetries in our preferences?

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And then what I want to do is I want to negotiate at the package level. So think about as you make a proposal, all the issues and kind of try to work with them all simultaneously. I want to craft a proposal that reflects our unique contributions as opposed to I want to win that issue up on the last issue.

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I see. So in essence, chunking gives you multiple levers to pull that that you don't have if you're going issue by issue. So often when we negotiate, we bring a motion to the party, were frustrated, were nervous, were excited. What role does emotion play in negotiation and do you have any guidance on how to handle our emotions in the heat of a negotiation?

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There's been a fair amount of research on the emotional aspect of negotiation. So the first thing I would like to say, which is sort of counterintuitive, is that emotions affect how we think and the different types of emotions affect how systematic our thinking is. And so there's a fair amount of research that looks at the looks at what emotions encourage deep thinking versus encourage top of the mind thing.

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And it turns out that it's not about happy or angry. It turns out that actually happy and angry both create an emphasis on top of the mind, thinking you want to sort of think about the emotions that actually get your counterpart to think deeply. And those are things like surprise or sadness. Those are emotions that actually are associated with much more deep information processing.

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Thank you for that information. We have a tradition on this podcast. Before we end, I like to ask everybody the same three question. OK, question number one, if you were to capture the best communication advice you have ever received as a five to seven word presentation slide title, what would that be?

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I'd say insight often arrives from unlikely sources. I like that.

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Sounds like you've got some history with that advice and anything you're willing to share.

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Well, part of the issue and let me give a little pitch here. I have a TED talk from Stanford about negotiating with my horse. One of my most failed negotiations was with my horse. And she also taught me a whole lot about negotiation.

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Subsequent to that, insight comes from really interesting places. Yes, I'm impressed that we went so long without talking about horses, so I'm glad it came up. Question number two, who is a communicator? I guess I will say a human communicator that you admire and why? So I'm going to give you two, because one of them is historic and one of them is current, that Tony Foushee has is an amazing communicator and has to manage such a tight rope to multiple and competing audiences simultaneously.

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I am just in awe of his ability. That's number one.

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And I actually had the opportunity to work with him years and years ago when he was presenting some of his HIV research at a conference. And he is as authentic and genuine as you see him today. He was back then. He is who he is. And I think that's part of what makes him successful. Who is your historical reference? John Kennedy. Mm hmm.

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And the reason is because John Kennedy moved an entire generation to do stuff they never thought they were going to do. And anything goes back to his inaugural speech.

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Ask not what your country can do for you, but what you can do for your country.

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Many folks answered that call and did and began doing things like the Peace Corps and did went on to basically change the world because that was what he asked us to do.

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So, number three, what are the first three ingredients that go into a successful communication recipe? First one is concerned for the other. Mm hmm. If I'm trying to communicate to somebody, I need to understand where they are and I need to frame my communication in a way that meets them where they are.

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And then I need to sort of help figure out how that communication can move them to a place that I would prefer them to be. And so that's why I think, for example, negotiation is such an important skill. Maybe together we can come up with a better solution than either one of us could have imagined separately.

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What a great recipe that would make. Maggie, thank you so much for your insights into negotiation will help all of us do a better job of getting what we want and fostering more collaborative relationships. I really appreciate your time. Thanks so much, Matt. It was great talking to you. Thanks for joining us for another episode of Think Fast, Talk Smart, the podcast produced by Stanford University's Graduate School of Business.

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For more information and episodes, visit GSB, Stanford, Edu, or subscribe to our show wherever you get your podcasts.