Unveiling the Truth: Debunking Negotiation Myths with Allan Tsang

Hello, my friend, and welcome to another.

Episode of Negotiate Anything.

Thanks for spending time with us today. It's listeners like you in 181 different countries that have made Negotiate Anything the most popular negotiation and conflict resolution podcast in the world. I'm your host, Kwame Christian. I'm a business lawyer, mediator, professor, and the director of the American Negotiation Institute. Before we get started, I have two quick questions for you. Is negotiation a critical part of what you do? Do you need to resolve conflict and persuade at? If you answered yes to both of those questions, visit our website to learn more about our negotiation workshops. We've traveled the country working with professionals just like you, and we'd love to have the opportunity to work with you, too. Check out the link in the description to learn more.

Alan, thanks for joining us today.

Thank you, Kwame. I'm glad to be here.

It is our pleasure to have you. I'm very excited for this one.

So how about you get us started.

By telling us a little bit about yourself and what you do?

Well, I'm a negotiation coach. What that means is I help people that want to pursue negotiation excellence or they want to negotiate better in that journey. So I take a lot of the principles of negotiation, different skill sets, and then I help them in improving themselves. I show them a process and I teach them a system where they will know exactly what to do, when to do it, and know exactly what that next step should be.

Fantastic. Great.

Yes. And listeners, I'll put Alan's info in the description so you can get in touch with him and connect with him on LinkedIn. He's one of my favorite LinkedIn influencers when it comes to negotiations. Yeah. So we appreciate that info.

So, yeah, I'm excited for this episode.

Today we're going to cover negotiation myths. And so we're going to start off with win win. We're talking about trust then. And then we're going to end up with getting to yes versus starting with no. So how about we start off with win win versus what you like, mission and purpose. Can you tell us a little bit more about that?

Well, the word win win is a very seductive idea. It sounds really good. And it is what is usually proposed nowadays that by anyone who has been to studied in academia or read a book on negotiation, this idea of win win, where you win and I win is it's a great feeling. The problem is English is my second language and I kind of consider myself a student of language and words and their meaning. And I think the word win has a specific Meaning it means that someone is winning in a competition.

Right?

So when you win, someone has to lose. How many of you want to see a race where everyone wins?

Not many people.

How many boxing matches do you want.

To watch where both win? Well, no one likes to lose.

So the idea of win win is very seductive. The problem is the word win has a meaning.

It's about competition.

But most of the negotiation that I'm in is we are really not competing. They want one thing and we want something else. For instance, if I'm going to buy a car, the car salesman doesn't want.

To collect as much.

He wants to sell the car and get cash. Me, on the other hand, I want a reliable, dependable car that I can drive to work and earn money. So I want to part away with some of my cash to get a car. We are not fighting over the same thing. This is oversimplifying it. But in a business negotiation, for instance, one of my clients may be selling parts or selling components or selling something that they make. Their customer needs that component in order to make a bigger machine, in order for it to go into a car.

A truck, a building, a crane whatsoever. But they're not really competing over the same product. It's not a win win.

It's really an alignment of mission. During this time, is what I'm doing making sense for you in helping you move your mission and purpose forward? It may be at a certain time in the future, I no longer add value to your company because we are either too expensive, we can no longer meet your delivery demands, or we can no longer meet the volume that you need from us.

And then we have to part ways. There's no lose. We just have to move on to another customer.

So to me, it's more of an alignment of mission. Is, can I help you move your mission and purpose forward versus looking at one thing and how are we going to split this?

Yeah, Alan, that makes a lot of sense. So in your experience, if somebody has a win win type of mentality and they go into a negotiation where the other person has a win lose type of mentality where they're trying to play to win, what type of mistakes do you see from the person who is thinking win win, what are the tactical errors that they're actually making at the negotiation table?

A person that goes in with a win win mindset feels that both sides have to be happy or they have to get something out of it. We, on the other hand, prefers that no deal is much better than being stuck in a horrible deal. Right. But if a win win person is negotiating with a win loss, the win win person will almost always lose because they are taking on the responsibility in trying to make sure the other person gets to win. So they will invariably start to compromise in order to make a deal happen. In fact, I've seen people say when they go in, they go in with a badner and they'll just say, if this doesn't work, this is my fallback. We have to make something happen. I have spent so much time on this deal, I have to walk away with something. So what happens is they end up compromising.

Now, that's interesting, and you're spot on here with what you're saying. And so let me play devil's advocate, somebody who has the win win mentality. What they would say is, well, in order to make something happen, I do need to sweeten the deal for them. I need to make something good happen for the opponent or the person on the other side or they're just not going to say yes. So isn't it a good thing to compromise?

Well, compromises is not a bad thing. It's when you have to make compromises that jeopardize your mission and purpose. My job is to help my clients not make compromises that they do not have to make. Basically avoid unnecessary compromises.

So by nature, it's not bad to.

Compromise, but what are you compromising? Most times they're compromising profits. When a salesperson goes in, they want to sell a product at $100, they cut off the walkaway, it's at $80. A lot of them, if they do not know how to negotiate, when they come across a win loss person, and the win loss person says, nope, this is not good enough. Go sharpen your pencil. If they say it once or twice, sometimes in the first time, they will drop it by 10%. Just in one word. No. If they push back a few more times, the inexperienced salesperson will go drop right down to the walkaway price of $80. So what's at stake? They're compromising their company's ability to move forward with the profit that they need to make because he's afraid to negotiate.

Yep, you're absolutely right. And I like the way that you categorized compromise because not all compromises are created equally. So you, you want to avoid unnecessary compromise. And I think that's the distinction that makes it. That's so difficult for people when it comes to negotiation because there's a little bit of art behind it. So I know I need to compromise. How much is too much. When is the right time? Those are the types of things that kind of make it difficult for people. And I think it's almost a fear response that leads them to retreat quickly. So for somebody who's in that position, how do you help them to distinguish between an appropriate compromise and an inappropriate compromise?

So this is a mindset exercise. It's kind of like a boxer going to the ring. They never think about how many punches am I going to be willing to take before I take a dive, right? So you go in ready to fight. So you're going to keep on pivoting. And it's kind of like a sport. It's kind of like a sport of boxing. So what are you trying to achieve? What is the real problem here? What does success look like to you guys? Right? Asking these questions, creating discovery, discovering what you need so that you can talk about the real issue instead of kind of fixated on one term. And price is just one of the terms. What if. What if I'm selling you a product, Kiwami, and instead of selling it to you at $100, I'll sell it to you at $80? The problem is I don't deliver it to you on time. Now what? So it's like my clients, right? Sometimes they're selling parts that are critical to the operations of their customer. Sometimes it's not Kwame. Sometimes it may be like a screw, but it's a very specially made screw. It's a very small part. It may cost $0.50. However, not getting this screw on time may actually hold up the production of an aircraft carrier. So what is the risk and the impact of not getting that part on time, but getting the price that you want?

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That makes sense. That makes a lot of sense. So it's about figuring out what it is that you really need and figuring out what you can and can't give on for each specific issue without getting fixated on one specific issue. And most of the time the fixation.

Is on the price, right?

Exactly. I mean, the problem there is the fixation on the term. And that's why in negotiation, most of the time what we want to find out is the impact on that person. Let me give you an example. One of my client, his account manager was trying to negotiate with their customer and they needed to have an annual 3 or 4% increase on their price. Their customer said no. And they said no for about two or three months. Every time he asked, look, we need to increase the price on these parts. The answer came back, you cannot do this. We are not going to be able to do this. So instead of arguing back and forth on the price, I just asked him, why don't you ask him, what do you want us to do? What do you want us to do? And his idea was, I can't ask that question. That seems stupid because they'll obviously say, I don't want you to raise prices. Right? But because there's a series of things that we did. But ultimately the one question in that interaction we wanted to find out is, what do you want us to do? And the answer came back, and you'll be surprised. My client's customer said, if you do not raise prices on these parts, I will give you a whole new group of products to make for us. Why? Because these parts, I am being observed by upper management and I have a metric that I have to meet and I have to keep my prices down at a certain price point. And if it goes up beyond that, it's going to affect my bonus at the end of the year. So my customer obviously said, yeah, no problem, we will not raise price on these parts. So let us, let's take on this new group of products for you.

That's a great example. Yeah, I love that example because it shows also the difference between curiosity and running with your assumptions. Because the assumption is that they definitely don't want a price increase, period. And if I ask this question, I know what they're going to say. But we really don't know what people are going to say when we ask these seemingly obvious questions or simple questions. But that's why it's so important to ask. And through that kind of, using your terminology here, it revealed that there was some alignment when it came to mission and purpose. When you took the time to go through the investigation, you saw that alignment, and based on that, you could find flexibility and opportunities in other locations.

Exactly.

Well, let's move on to number two, the second thing, which is trust. And I know this is something that's going to surprise a lot of people, the myth of trust. And that's one of those business buzzwords that's really, really popular right now. And so when you talk about trust, the necessity of trust being a myth, what do you mean by that?

It means that a lot of people hold that to be true, that it's an idea or principle that people follow and it sounds like it should work. We only do business with people that we like and trust. The problem is that's not true. The problem is we would like to trust someone, but we don't need trust to do business with it. So I'm trying to be a little nuanced here. We want to do business with people that we trust, but we don't need trust to be able to do business. Just think about this for a minute. How much business does the US do with China right now?

A lot. A lot of business.

We talk about billions and billions. Like we just put tariffs on, like a few hundred billions. Right. This past year. Right. Do we trust the Chinese? Do the Chinese trust the U.S. are we still doing business?

That's true.

In fact, I have, when I'm called in is because trust has already been broken. Even this morning, I've got an email from someone who says they have a problem with their partner. This is a partner they've worked with. They trusted them. That's why they went into partnership. But now all of a sudden, there's a problem, there's a distrust. So now I have to come in and help them. I have clients whose customers wrote emails where I have a copy of. Because I'm being brought in, into the negotiation. And you see words like this. I am beyond disgusted with you guys. I'm about to take all my work away from you. There's no trust there. There's not even zero trust as when you meet a stranger. There's a distrust, there's a negative, there's a deficit here. And we still go in and we negotiate. And in one meeting we can leave and we can get five or six new blank appeals from this customer.

So in that situation, because I know this is something that is going to sound strange for a lot of the listeners, you're giving examples of times where you are doing business with somebody that you do not trust. And so in that situation, if there is a lack of trust, how do you even begin the negotiation process? If There is, let's say, negative trust. There's a distrust between the parties. How do we negotiate without it?

How do we negotiate without it? It's a good question, Kwame. We follow a system. So the system is, what's the mission and purpose? What am I trying to accomplish for this counterpart, this adversary, this negotiation opposition here? What do they want? How can I help them get it? If I can show them that I can help them get something they cannot get, otherwise, it doesn't matter whether they like or trust me. I am not saying that trust is not a good thing. Trust makes the deal go faster. Absolutely. Ideally, you want trust because trust is a feeling at the end of the day, when you do business with a salesperson for the first time, I've seen people say, oh, yeah, I trust him. Based on what? You just met the guy. How do you know he's not a great actor? That's why there's so many conmen out there trying to make people like and trust them. They have mastered the handshake and the smile. Right. So how do you know. How do you know that they're not trying to con you? So you focus on what is the. What is the problem? Can you solve it? Can you help them see that you can help them solve it? And this is where you come in. People like attorneys, people like you that are good at contract law, you want to make sure there's a strong agreement to make sure that everybody does what they do. I've had clients that have had customers not pay on time, and they were threatening not to do business with them anymore. I've went in, I've talked to them, and what they did is they just need to have a good agreement on how to get paid, and they continue doing business. You see that often they just change payment terms from 60 days to 30 days to pay, on delivery, to prepay. They're just changing the terms in order to continue doing business, even though there's no trust. Right.

So in those examples, really what's happening is you're focusing on the problem that they need to be solved and the problem that you need to be solved and finding creative ways through negotiation to solve those problems, and then having the additional layer of being mindful that there is a lack of trust and creating mechanisms to kind of bridge that trust gap.

Exactly. That trust gap is real. It's a feeling, and the feelings are real. So we have to acknowledge that we want to bring. We. We don't want to rely on those feelings, but we also realize that those feelings can Be changed with a new vision. If I can help them see that I am the best option for them in getting this product or this part or this service or to help them solve this particular problem, then we have a deal. It doesn't mean we have to be friends. Do you know that a lot of, like, people that have gone through divorce, they don't trust each other, but yet they have to make deals on how to work with their kids? Because the kids is the mission and purpose.

Hmm. That makes sense. That makes a lot of sense.

Yeah. Sometimes we have to work with people we don't like, and that's part. That's part of why we have to learn how to negotiate. To work with difficult people.

Exactly. Fantastic. Well, perfect. Let's move on to the third one, which is getting to yes versus starting with no. And I know this is one of the fundamental tenets of your style of negotiation starting with no, which I know is a little bit counterintuitive. So we already touched on getting to yes, which is the win win methodology. Can you tell us more about what we mean when it comes to starting with no?

Sure. Before I get to start with no, I just want to kind of wrap up the first part where we talked about win win. If you follow what I'm talking about. Helping someone fulfill their mission and purpose at the end of that negotiation, what we have is true win win. I even hate saying those words because it's kind of like the best alternative. I know that I sometimes use mutually beneficial agreements in place of win win. But win win is a very catchy word. But at the end of the day, they further their mission and purpose, and I do as well. But it is not both of us arguing over what One apple and then both of us splitting it, and you get some and I get some, and we all walk away a little less happy, or we're both compromised a little bit. So it's not that. But that is what people have made win win to be. Especially, I have negotiated with guys that are buyers for Walmart, Kmart, and Target, Right? And they will say things like, kwame, I need you to give me the best price. Because if you give me the lowest possible price, you get to make a lot of these for us. That's win win. But really, it's win win for them, meaning they win twice. They get a lot of product, and they get to pay a little bit for it. And you have to work really hard for very little profit. So really, that's not win win. But back to the third question of Start with no. You know, I'm a camp guy. I was trained by gym camp many years ago. A lot of what I do is the foundation is start with no. And the reason I embrace that methodology or that idea or approach and the principles is that it is much more to me genuine, authentic, by asking someone to tell me what they don't want. But then for me to try to get them to say these micro yeses. Right. Because that seems manipulative to me, trying to get someone, is this a good day? Is this what you want? This is what you want, right, Kwame, do you want to be successful? Right. The reason we say start with no is we want to uncover what it is that you do not want. It is much more respectful because I'm not going to try to manipulate you. If at any time this deal doesn't make sense, I want you to just tell me no, and then we'll just go a different direction or we'll just end it here. Is that fair? Most of the time they'll say, yeah, fair. I've never seen anyone say no. That's not fair. So when we say start with no, fundamentally, that is something that all of us want to say, but we are afraid of saying it. We're afraid of hurting people. We're afraid of ruining relationships. We do not know how to say no gracefully, respectfully, in a way that preserve that relationship while I preserve myself, my resources. No hits people in a very visceral way. The first thing, I have six kids, and the first things that my kids learn to say is no. Because no is the way of controlling the environment. They get to say, no, I don't want to go to bed. No, I don't want to eat that banana pudding. No, I don't want to be kissed. So no is a way for them to control their surroundings. And so in terms of negotiation, giving the other person the opportunity to say no, it's very important to us.

See, that's really interesting. And I think for a lot of people, it's a scary approach because they almost feel like they are prompting people to say no, which makes it more likely for them to say no during the negotiation. But what you're saying is that in your experience, it's actually the exact opposite. By giving them the opportunity to say no early and often, it makes them feel safer, which makes them more likely to agree if agreement is the right decision for them.

Correct. Let me give you an example. So this is the principle of giving the person the opportunity to say no or inviting a no is Coupled with something that I call tactical vulnerability, the willingness for us to be hurt by the other person. To just kind of put myself out there. So there was this deal where my client's customer was not happy with them. They were delivering parts that were not meeting quality standards. They were failing in the field, and it was going to cost tens of thousands of dollars for these parts to be returned. And that was just the beginning of it. With all the parts that were in the field, it could cost millions of hundreds of millions to kind of retool and bring it back and ship it back and remake and deliver again. Right. So when I got the email, it was, we saw your mission and purpose about delivering quality parts. This is laughable. I'm like, oh, this is not good. Usually when I get the emails I'm copied on, it's never good. I'm like, okay, all right, so let me do some research. Come to find out this part by my client's customer. They attempted to have that made offshore. They couldn't make it. They came to my client years ago to have this made, but along the way, different people have started managing it, and they had no idea that my client was doing them a favor by making these parts. So that one little nugget, I had a whole conference table maybe about 15, 20 foot long laid out with all the communication. I'm just reading through them and just kind of found out. One little nugget. So we use that one little nugget and we talk to them, and I call them and I just say, look, it looks like we've completely failed you, and we're completely incompetent in making these parts. Good for you. And out of 100 parts, we're getting about 40% that are unusable and they're failing the field. I know that our promise is about less than like, half of a percent to 1% defect rate, but 40% is unacceptable. No wonder you're yelling at us. And I'm surprised that you're not cussing on me right now. And he's like, oh, no, I'll never cuss at you, Alan. I'm like, if I were in your spot, I would. Right. This goes into de escalation. So finally I said, well, we have tried to make these parts, and it's very difficult. I don't know that there's anyone else in the country or in this world that can make this really. Well, maybe we don't know. Why don't you just tell me where you want us to ship these patterns? And this Tooling, and we'll go ahead and do that as soon as possible for you. The customer immediately said, no, no, no, no, no, no, no, no, no, no, no. That is the last thing we want to hear from you. See, at first they were just kind of threatening that they were not happy with us. Our mission purpose was laughable. They don't want to give any more business to us to when we were able to help them see that, yeah, we shouldn't have taken this project. It's very difficult. I don't know how anyone could have done it. Well, 40% is unacceptable to us. So you just tell us where to ship this to and we'll do it. And we were basically calling the bluff and becoming very vulnerable. So at that point, the whole game turned around and they said, can you please continue to make this for us? We're going to put in a system that will test. We'll test these parts before we mount them and that will be on us and we'll take care of that, blah, blah, blah. But at the end of the day, my client didn't have to compromise. But prior to that, the cost of tearing down and shipping things back and remaking it, the first batch was just going to be like 30,000. And the first reaction from the account manager of my client was like, how about we compromise and just come to an agreement and meet in the middle and see how much they're willing to take? Instead of 30,000, let's say 15,000. Or they owe us money for shipping these other parts. How about we just say, forget about that invoice? But the problem, Kwami, is when we do that, we are going to accept every single failure that happens in the field that will cost millions in the future. So there was no way we could do that. So it took a little bit of time to look through all the notes. So one of the steps in a good negotiation strategy is just doing research. So I had to go and print out all the communications for the last couple of years laying on the table, go through all the emails back and forth just to find out that when we agreed to take on this project, they could not get it made anywhere else. So essentially I was inviting him to tell me, no.

This is a really interesting approach. And again, like I said, it's scary, but the, the term you used, strategic vulnerability, It's. It's very clear how that comes into play here. And so first step you did was research. And then after that, it seems where the deviation is between where you decided to take the negotiation and where Your client initially wanted it to go was that their first move was going to be compromise. Immediately before doing anything else, they were going to compromise. And it's a great example of an unnecessary compromise because you didn't need to do that. And what you did first, instead of trying to find that yes was you started with no, just like you said, you gave them the opportunity to say no. And it's, it's almost like one of those judo type of situations. They're attacking you and they assume that they're going to, you're going to meet their force with force or just concede. And what you do instead is the exact opposite of what they anticipate. You invite them to say no. And so from their side, thinking about the impact that maneuver has on them, what do you think is going through their mind when you, when you start off the negotiation in that way?

One of the purpose of the, one of the steps of tactical vulnerability is to help the other person feel safe, that they're in control, that yes, you want to fire us, you can. But, but have you considered this? It's what I want. I want them to see that, yes, they have the power to do everything they want to do to us. And then I help them see the risk is exactly what you say in judo. Someone wants to throw you, you just pivot and change. And now you're possibly in the same position throwing them, using their force against them.

Exactly. I love that. I think that's a really great example. Before I wrap it up, I wanted to ask you this is when it comes to this, starting with no, it's one of the reasons why it's so counterintuitive is because you are through making them feel safe, you're also making them feel powerful. And some people might feel concerned about. Well, I'm making myself seem vulnerable. I'm also making them feel powerful by reminding them that they have the ability to say no. But what it sounds like is that by making them feel powerful and safe, they don't feel the need to use that power on you. Whereas if you try to disempower them and say no, you can't say no to me. It almost makes them want to test that to impress upon you that they can say no. It's almost inviting that. Am I reading that right?

You are exactly right. That power, the knowledge of having control, of feeling in control, actually helps them keep that in check so they don't use it. I mean, one quick example. Well, a customer was, one of my client was having problem delivering parts to A customer to the point where earlier I said they were totally disgusted. So finally I pulled up the technical vulnerability and I said, look, most of the stuff we do, you can do it. In fact, it sounds like you can do it better than we do it. And then I just softened my voice and I just say, in a curious way, just said, why don't you just fire us? My client's account manager looked at me. His eyes are wide open in fear. At this point, both of them were going into a shouting match, right? It was heated and my client's account manager's customer was standing up and raising his voice. And when I said, why don't you just fire us? He said, don't you think I've never thought of that? And then he just says, and he starts to sit down and he goes, well, he starts thinking, the reason I won't fire you guys is you guys make this one difficult, complex parts better than anyone else. I said, really? He said, yeah. I said, what else? He goes, well, because you guys are able to give us updates on a weekly basis that no other suppliers have agreed to do. And that helped us in our planning and stuff. Like, great. By the time we left our meeting, I would start driving back to the office. It was like a four or five hour drive. Halfway through, I'm getting emails and we have like five or six new blanket pos. This is from the customer that wrote an email that said, I am beyond disgusted with you guys.

That's quite the turnaround.

It's just, why don't you fire us? Guess what? Does he have the right to fire us? Absolutely. Anytime he wanted. It's a power he has. I'm just giving him the power he already has and I'm voicing it.

Right, that's perfect. Fantastic. Well, we are coming up on time here, so before you go, I want to give you an opportunity to let the listeners know a little bit more about what you're doing and how they can get in touch with you.

Well, I love coaching. I like helping individuals, professionals, sales teams, account management teams, customer service, executive teams negotiate the deals. Whether it's critical deals with the supplier or customers, or turning around a dissatisfied customer, or building strong agreements. I love to help them with a process and a system that they can depend on and rely on that their sales manager can use to manage a whole team of 10, 20, 100 and the same system that you can use to just get updates on as an executive. It's simple, but it's certainly not easy. So what I like doing is working with companies and helping them negotiate some of these difficult challenges.

Well, great, Alan, thank you again for coming on the show. We really appreciate it.

Oh, it's a pleasure.

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