You Can Negotiate Better Than Trump

This isn’t a political post. Sorry to disappoint you if you came here to read a liberal tirade against Trump. I want to talk with you briefly about negotiation and the faults I see in all politicians as negotiators.

Trump ran for office as a deal maker. His book, The Art of the Deal, was often cited as his treatise on deal making and his wealth as proof that it works. To date, I don’t see any talent for deal-making. To be fair and balanced, I don’t see any demonstration of negotiation talent from the Democrats either. For the sake of making this easier for you to read, I will not continue to make the “neither do the Democrats” argument. Let’s focus on the guy who claims to be a great deal maker.

The style we see demonstrated so far is one of demands. Trumps simply states what he demands and then issues threats that will supposedly push the other side toward his demands. For example, Trump claims that the U.S. will build a wall on the southern border and that Mexico will pay for it. If Mexico will not pay for the wall, there will be trade repercussions.

How has that worked out? There was Trump’s visit to Mexico. That didn’t go well. Then there was the phone call with Mexico’s President Nieto. That didn’t go well. Nieto is very unpopular in Mexico yet after his standing up to Trump, Nieto’s popularity rose and Trump’s declined. Not only are the two countries further apart on the issue of border control, Trump actually lost ground in both Mexico and the U.S. There’s not much art there. Granted, die-hard Trump supporters will admire his strong stance. Unfortunately, I believe the admirers are in a diminishing group.

What’s the outcome so far? The wall is off the table in Mexico and dead in the U.S. Congress. There will be some immigration reform. Surely it’s needed. But the most basic reform will be hard won for the great negotiator.

As of this writing, there is a high-stakes deal on the table to reform health care. The strategy again has been based on threat. There is the threat that our entire system of health care will collapse if we don’t take his deal. Trump went as far as to threaten Republicans. He said he would field and support candidates to unseat incumbent Republicans who do not vote for his, no, Ryan’s repeal and replace bill. I predict that this bill will not pass.

Trump’s overall strategy on health care went like this. Promise the moon. Develop the bill with no input from the Democrats. Threaten the public, the Democrats, and the Republicans that failure to adopt his plan will result in disaster.

That’s very poor negotiating. Regardless of whether or not you support Trump, still, you have to agree that the strategy is weak.

In the business world, Trump’s strategy can, and has often worked for him. For him. When someone makes wild promises people are often dazzled. “It’s going to be so great, you won’t even believe how great it is.” Hey, the guy is a billionaire. He must be right. And if things don’t work out? He can escape with bankruptcy as he has many times leaving smaller business people unpaid. It’s legal. The system works that way.

I know people who have made horrible deals because they let greed blind them. Promises from a billionaire are pretty enticing even when not grounded in reality. I have protected clients from hedge funds that I knew were out to take over their business. Promises promises.

This is why I teach my clients how to use Game Theory to negotiate their best deals. We start by looking at something that Trump doesn’t even consider: the aspirations of the other side. Those aspirations are called “payoffs” in Game Theory. We look at all the possible payoffs we can find, not for ourselves, for the other side. After all, we go into negotiation knowing what we want. It’s critical to understand the benefits to the other side. When we open a negotiation with how we can benefit the opposing party, it is disarming and powerful. The “art” I teach is to help you understand how to identify the pay-offs. It’s not that easy and requires deep consideration.

The next step is to consider whether we have complete or incomplete information. If the other party has planks in their position that we are unaware of, our position will be weak. It’s fair to say that Trump often acts with incomplete information.

There are strategic moves in negotiating your best deal. Those moves include promises and, possibly, threats. Promises and threats aren’t the best bargaining chips so we don’t start with them. We do want to have properly constructed promises and threats at the ready in case we need them. An effective promise is more difficult to construct than you think. Simply saying “everything will be great” is not enough to move an intelligent negotiator.

This might seem like a pretty heavy topic for “presentation training”. It is. Pretty slides and good body language help, but they aren’t enough to win your point.

Do you have to be involved in deals with Congress or foreign powers to use this technique? No. When you are negotiating a better arrangement in your partnership or working with a new customer or vendor, you can, must use this technique.

If you have a business problem with your partner, vendor or customer, call me. We can fix it.

Chris Reich, Business Adviser

Footnote:

MEXICO CITY — President Donald J. Trump’s decision to build a wall along the southern border escalated into a diplomatic standoff on Thursday, with Mexico’s president publicly canceling a scheduled meeting at the White House and Mr. Trump firing back, accusing Mexico of burdening the United States with illegal immigrants, criminals and a trade deficit.

(New York Times, January 27th, 2017)