High Stakes Negotiation Strategies with Alex Adamo

Welcome to the Hidden Currents Podcast, and I'm your host, Pádraig McDonaghá. On this podcast, we interview successful business leaders, owners, and executives to explore their insights into building trust and relationships that deliver organizational results. As always, this show is sponsored by the Intergroup Consulting Method, the most powerful and effective way to solve costly conflicts between groups at work, where in just 2 days we help replace resistance, rancor, and resentment with mutual trust and shared purpose. You can find out more at our website, intergroupconsulting.com. My guest today is Alex Adamo. I'm delighted to have you aboard, Alex, to share your insights into building trust and relationships. And as chief negotiator with The Commercializer, you are in a very interesting space that I'm most fascinated to hear about. And as usual, we kick off with the question about trust in general. Where does trust feature in your role as a chief negotiator for the commercial and major deals that you help companies to pull off?

Thank you for having me, first of all, Parik. Um, so on our side, uh, that's a, that's a very fascinating question because in the deals— so we manage $6.5 billion of deals per year when we either do the deals ourselves or we support companies do their deals on an average size between $100 and $300 million, uh, in terms of the deals that we do. And, um, a lot of these negotiations, there's very little trust. So we get invited on negotiations where there is no trust, and otherwise we probably wouldn't. They could do it themselves. So there is a lot of conflict. It's what we call a win-lose scenario where there is adversarial negotiation. So you can think about, for example, when an FMCG supplier wants to push their— imagine a beverage supplier or manufacturer that wants to push a double-digit price increase to retailers, for example, in the UK, like Sainsbury's, Morrison's, M&S, or Waitrose. And then the buyers need to negotiate with the people that they work with on a yearly basis that are on the other side of the table. But they need to have this 4 weeks to 18 to 25 weeks long negotiation. Where a person, you know, one side compromises a little bit, and then the other side gets what they want, and so on and so forth. So there is very little trust there, usually.

And if that's your starting point, is it your goal to build trust in first one team and then the other? Or how do you make this dynamic work for you?

I'd love to hear, you know, outside of the podcast, your perspective as well. Because the standard approach that you would see people asking to textbook negotiation when you listen to the Harvard people that talk about win-win negotiation would be, yes, you need to build trust. Or you listen to the FBI negotiators that say you need to mirror the counterparty's language so that then the counterparty feels that you're on their side and you can calm down their amygdala, which is the primitive part of their brain that gets them— my background is evolutionary anthropology, so I will use some of those elements from a neuroscience perspective. But a lot of people advise you, calm down their amygdalas so that then you get people relaxed, and then they trust you, and then they say yes to you. And for me, in this kind of negotiations, that is all bollocks, unfortunately. It doesn't work, Parag. It doesn't work.

So what does work?

So what we do is we do not try and convince ourselves that the right path in these negotiations is to build trust, because there is no trust. There is two companies that distrust, not distrust themselves, they do trust each other because they work together, but they do not trust the intentions or the honesty of the decision of why one should push a 10% price increase and the counterparty wants a 5% deflationary situation. So 15 points distance on a billion-dollar deal, that's a lot of money. That's $250 million. That are at stake, just because a party has received certain indications that that must happen, and the counterparty has got opposite, and opposite indications, diametrically opposed indications. So, so there isn't any trust. And the first point that negotiators that we support should understand is not to try to build a win-win scenario where there isn't any. Accept that there's going to be conflict, and then do what you need to do to achieve the deal. So instead of working with trust, What we work on in this kind of deals is pressure. So it's how do you build commercial pressure to the point that when necessary, you bend the counterparty to accept your deal? And that is an intricate matter of creating several strategies that you need to put on the table and understand when to threaten the counterparty from a commercial perspective, understand when to give deadlines and then give in or give up those deadlines and make concessions. It's a lot of that, you know, what you see like in Donald Trump style. Not that we necessarily endorse his geopolitical— this is not a geopolitical commentary, but he does use manual, in a less structured manner, if you will, but sometimes he does use manual win-lose textbook negotiation techniques. You know, you set a deadline, you create pressure, you force the two parties to sit at the table and make a decision. So that is really helpful in an environment where a lot of time, especially on the supplier side, the negotiation is misconceived for a trust-building exercise, whereas it isn't. It is a power play.

So is it might is right? Whoever is the stronger gains more? That's effectively the bullying tactics that I would associate with Trump.

It wouldn't be who is the stronger. It's who can read better the balance of power and then uses it to their favor. You can be the stronger in a negotiation, but still be exploited because you do not know how to use that power at the negotiation table. And you have a team that cannot execute a negotiation appropriately. You might be the bigger player. And many times we do support the bigger player at the table. And, but you still might have people that when they go to the negotiation table, their hands are shaking and their words are stuttering. And you could go, you could be the bigger player, but you will still leave money on the table, significant percentages on the table that equate to millions or tens of millions of pounds.

Hmm.

It's about how you use power.

Sure. But it's about power, which is almost a diametric opposite of trust, which is a more willing buy-in. It's a sort of acceptance in what's being said the other side of the table rather than protecting yourself from exploitation and manipulation.

Yes. Yes, that's right. It's very important to protect yourself from exploitation and manipulation. It's very important that you do not exploit a counterparty. The first point is to exploit— to protect yourself so that then they do not use it against you. And then I'll tell you one more thing is once you reeducate, at least on the side of the table that we typically are in, once you reeducate the table, the counterparty, after these companies have been in the relationship or people have been in a relationship for the last few many years or even decades together, After you reeducate them that they cannot treat you like a doormat, and then there is what we call the dominance gauge, then you, you rebalance the dominance gauge and they start respecting you at the same level. Then this is where you build trust. First, you build respect and then you can build trust because you need to tell them you can't threaten me. You can't do what you think you want to do because in this big commercial relationships, If they can take, they do not need the trust way. They'll just take. So you need to be able to push back, not be bullied, put the dominance cage at the same level, and then the following year, then you can put on the table and say, look, why don't we avoid what has happened last year? Why don't we avoid the fight and we trust each other and build a win-win outcome together? But first, you need to build the mutual respect, because if there isn't then it's not trust, it's still a transactional relationship between the parties.

Fascinating. Fascinating. Um, are you dealing with individuals mainly when you're engaged in this kind of work, or is it teams and it's an inter-team gig?

Teams. Yeah, it's usually teams, rarely individuals. So it's always CEO, commercial director, national account manager, CFO, Uh, depending on whether we are buy side or sell side, if you're buy side, then you would have CEO, chief procurement officer, CFO, category managers. Instead, if you're on the sell side, commercial directors, national account managers, key account managers, and, uh, uh, and CEOs there. Yes. So it's always teams. It's a team dynamic where that also must be managed appropriately.

Indeed. And do you prefer working with the strong side or with the weaker side coming in?

I don't mind, you know, both have challenges, both have challenges. And typically when they engage us, there isn't a massive difference because— and this difference rarely is really perceived until they start working with us and then they can quantify the difference in terms of balance of power. And we can write it on a piece of paper after 2 to 3 hours workshop where we really figure out what the real balance of power is and then what the perceived balance of power is. So because the kind of companies that tend to engage us, there is always a very similar balance of power. One of them is a little bit, like, one of them is a little stronger in that negotiation, the other one is a little weaker, but it's never completely different. Otherwise, they don't need the negotiator by their side. They can just impose their conditions, or the other counterparty can just capitulate.

Very good. What does— how do you define success in those circumstances? So you said, Fermo, earlier, a 15-point difference.

Yeah.

Is it going to be 7 or 8 or always converging towards the middle?

Yeah. So we define success based on— so when we first begin engaging a client, we do the assessment with the CFO and the general manager. And the commercial director, where we decide this is the bare minimum that we're prepared to bring. So let's say for the sake of the argument or the example, 15 points, 15%, for example, price increase. I mean, I'm talking about numbers post-COVID, post-COVID inflation bottleneck. Now you don't have these numbers anymore. Now it's like a couple of points, 2 to 3 percentage points. I'm making just, just as an example. So they wouldn't— they would tend to be smaller percentage points right now. But let's say that they say worst case scenario is 15%. And then we say, OK, but what do we think the counterparty can actually take? And we're like, well, 16.5%. That is the maximum that we believe the counterparty can take. So then we set our breakpoint. Then we set what we believe to be the breakpoint of the counterparty, the maximum, their walkaway point. And then success is anywhere between 15% and whatever they managed to achieve. You know, maybe we open at 18%, 19%, 20%. And then we understand with trade-offs in terms of activities, concessions, marketing, examples, whatever are these sub-variables of the deal, how do we achieve the deal? And then you calculate not only what you push in terms of inflation, but you calculate the total profitability of the deal. So we decided a number, and then we said anything above that or below that, depending which side you're on, is success.

Very good. Do you ever— figure in synergy of some new kind by changing the paradigm and the understanding of what's at stake and actually what's possible. So with new thinking that it might be possible to not see it as a win-lose, but maybe short-term this and long-term that, for example, or operationally it's this, but strategically it could be even that. Do you understand what I mean?

Yes, yes, yes, we do. So we create both plans usually. So it really depends on the counterparty. So there are certain negotiations, some sort of play. So if you go to a discounter, for example, they'll tend to approach a much more win-lose, narrow, narrow focus view on price. So will tend to be a win-lose short-term negotiation. But then there are some more sophisticated counterparties that do want to see the long-term win-win outcomes. And this is where trust plays a big, a big role, of course. So we try and play on both levels and many times. But by the way, Parik, I've shared with you earlier the extreme example, but our approach is to first try and go win-win. So first try and say, hey, why don't we build this together? There are opportunities for this is what you want. We can give you more if you help us achieve this, which is very important to us. Let's work on that. But you need to be careful as well when you do so, you need to do, because once you share this kind of language in a negotiation, if the counterparty decides to have an exploitative approach towards us, they could see that you have the budgets and decide not to give you anything in exchange. And they just accept, you just use a competitive approach towards you. And then you need to be even harder to say, no, no, I have them, but I won't give them to you. So we try and play on both levels in terms of, we try and play on both negotiations in parallel. And our option, you know, preferred option is always win-win. But the reality I live in is that companies, you know, in these kinds of negotiations, they want to go win-lose. And many times, 70% of the times, which is a massive value waste.

So 70% of the time, they're coming at it with a more limited perspective of what's possible than a win-win.

Yes. And now I'll tell you one more thing, Parag, actually, which I think you'll be interested for your trust-building interest there. Which is it really depends as well who you engage within the organization. Because if you speak to the junior buyer or the buyer, even the head buyer, they might be given a very specific target to achieve within the category or to achieve within this particular supplier that we might be representing. So then they won't be given the mandate to break these requests and make them become something that could be a win-win because Win-win and trust requires creativity, but also requires decision-making power. So if you give the mandate to a person, even though they're negotiating a $200 million deal, but they're only told, no, you need to go deflation, you know, unless they resign from their job, you can give them any creative variables that you like, but they won't be able to consider them because that's categorically against their mandate and the reason for existing as a buyer. Instead, what happens is many times once we can't achieve a deal on a win-lose basis, Or before we even try and make that happen, before we end up in a win-lose, which we would like to avoid, is we try and do what we call top-to-top meetings, which is you get the top, top executives who actually have the decision-making powers to actually either meet in an unofficial way before the actual negotiations begin, or to do an official meeting at the beginning where the red lines are established and the negotiation approach is also established. But now once you have the two CEOs of the companies speaking and say, look, we should achieve both this and this is the range that our teams are going to achieve. However, if we don't, or why don't we look at a more strategic 3-year approach so that then we see how we can both improve. So this is where you can then go really hard on win-win.

Yeah, that's exactly the kind of perspective that was in my mind.

Yeah, absolutely.

Fascinating stuff.

But then one thing, Marek, sorry to interrupt. One thing is when you're running a a 50 million company, 100 million company, that the CEO still has got mindshare for this kind of things. And one thing is when you got a 30 billion company where the CEO doesn't even put their nose into the negotiation. So then they delegate, they give a number, and everyone has to respect the number that was given to them. So they have less leeway for creativity and trust building.

Yeah, for sure. Uh, as you're obviously highly successful at what you do, um, Would you say that you're seeing more trust and possibilities for working in a win-win way or less as time goes by? And is your own perspective and attitude shifting in any way in that regard?

So I'm going to respond at the cellular level of humanity, as in how do I see people, right? And that is, I would love to see more opportunities in terms of people being able to be more transparent with each other and build opportunities for collaboration. And this is where I want the world to go to, actually, you know, oppositely to the, to the kind of day-to-day work that I, that I do, if you will. However, when I see the state that humans are in at the moment, which is amygdala hyperactivation, which is the part where people are stressed and they tend to be overexcited, not in a, in a positive way. I mean, I'm talking about overstimulated way from the 500 notifications. We also do workshops on this that we call the Negotiators Mindset Workshop, where we help people recalibrate the nervous system. But when you look at— and we help people, you know, the science of sleep, exercise, cold therapy, meditation, because once you can, as a human, you can deactivate what we call the amygdala, which is the primitive part of your brain that makes you either angry or afraid. Of anything that you're seeing in front of you, which is, as you will know, the fight or flight reaction that happens very often. Once you can deactivate that part of the wheel, then your prefrontal cortex will connect, which is the part that makes us uniquely human. And that is the part that makes you see opportunity. That is the part that makes you calm in front of your counterpart. And when both parties are actually calm, then they can see opportunities instead of fight. So that's what I would like to see. That's where I would like it to go. But from established industries, people are still under stress, so they can't really see it. I see many more win-win and trust-building opportunities outside of the industries that we exist in, which is tech, for example, or, or a high-growth industry like AI and robotics. So these are opportunities where the deals you make, they're not win-lose. They're based on trust and believing in the other counterparty, in their commercial vision, believing in my commercial vision. I mean, you see it on the news every day. Companies spending billions on things that are completely unproven. These are negotiations that are based on trust and two companies or people that want to build something greater than themselves. So there are some industries that I don't see that very much happening, but there are other industries where this is happening on a day-to-day basis.

Fascinating, fascinating. A couple of tips for people who find themselves in the counterparty situation. What would you say are the top 2 or 3 things for people who don't have your experience and are finding themselves sitting across the table?

Across, like you mean in a negotiation, right? Yeah. So the first thing is be aware of your emotional state. In the negotiation and try and do techniques that allow you to be as relaxed as you can. Some of them are breathing techniques, or you can do meditation throughout your life experience. You're not going to do that during a meeting, of course, during a negotiation, but make sure you do not fall victim of your own stress and fear to reach the deal. Otherwise, 99% of the times you will be exploited. You will leave money on the table, whether you're negotiating your car, your house, your company, your job, or you're representing your business. So that will happen. And it's mathematical that it will happen. Because if you care about the negotiation, you will feel some stress. So it's very important how you're able to embrace that pain and stay calm in the eye of the storm. If you're not feeling painful or, you know, stressed, you're not negotiating something extremely important to you. So that doesn't matter. We're talking about the important negotiations. The second part that I would highly recommend is, um, always prepare not only your breakpoints or your worst case scenario, which is what about 70% of people do, not even everybody, but at least prepare your, your breakpoint. But also, and this is something that very few people do, the counterparty's breakpoints on all the variables. So what is the maximum they can actually give you? Because that will activate a maximization mindset. There is two kinds of people in negotiations, or two kinds of personalities in general: satisfier and maximizer. The satisfier wants to achieve, just close a deal so I have less of a problem to deal with. Instead, the maximizer wants to maximize the deal, whether it's a win-lose or win-win. If I'm in a win-win negotiation, I want to get everything I can and give everything I can to the counterparty, because it must be good for them, must be good for me. And third, think before you speak. Very important. That's so important because people, you know, they're afraid in negotiations of silence. You know, they're afraid of what could happen. They're afraid of themselves. Like, think first, then decide what you're going to say. You have the right not to keep talking all the time because that will allow you to be more confident and more credible as well in your conversation.

3 great tips there, Alex. Where can people find you if they'd like to connect with you, avail of your services forever?

So they can, they can go on to thecommercializer.com with an S, and there we offer all of our workshops. We've also created myself as an artificial intelligence, Adamo. I'll share it with you. Let me know what you think. You want to share with your subscribers as well so that it's, it's a support negotiation advisor. And so everything is available there. If you want to connect with me directly, with my team, for any creative ideas, because I'm also an entrepreneur and I like to invest in companies as well. So anything outside of them— so this is the commercializer, but anything outside of the negotiation realm, then people can connect with me directly on alexadamo.com. And I think that we got our email addresses and everything else, I think team@alexadamo.com or so. And then you can connect with me because I'm really interested in spreading this message as well and what we call negotiation democracy. So spread the message of negotiation to share not only with top executives like you and I and the companies that we support, but also with people that can use the confidence and awareness of negotiation to perhaps negotiate £50 off their rent or save £1,000, you know, when they buy or sell their car. I think this is so impactful. So I'm really interested in sharing it with with people that are not commercial professionals as well, because that can impact their lives positively so much.

That's brilliant. I've really enjoyed our last couple of minutes together, Alex. Been fascinating. Could easily spend another hour listening to you and going over and back, but we have to keep it in bite-sized chunks. And I'm sure our listeners will be delighted to connect with you if they want to know more. I'd like to thank Alex Adamo for making himself available today to share your insights, Alex Adamo, in today's podcast. And as always, remind people that the show is sponsored by the InterGroup Consulting Method, the quickest, most powerful, and effective way to turn around relationships that have broken down among groups at work or among groups that are working and delivering major projects. In just 2 days, we help groups replace resistance and resentment with mutual trust and genuine collaboration. If you know business leaders or owners who might be also appreciative of this kind of specialized mindset, please feel free to recommend the Hidden Currents podcast. And until next time, remember, relationships build results.