Wall Street Negotiation Tricks
On Wall Street everything is a negotiation.
And the negotiation doesn’t stop when you get home either, because life is a just a big negotiation. With your girl friend, husband, kids, friends.
But I bet you are doing it all wrong.
I know I was….even in my mid thirties.
Couple of signs you are doing it wrong:
- You know exactly what you want and you say it right at the beginning
- You think the other party is trying to screw you throughout the negotiation
- You have no idea what the other person wants, and don’t think that matters anyway
- You want to win the argument more than achieving your goal.
The price of negotiating badly is high. It means, you’re probably getting paid less than you want, not getting the promotion you are looking for, not getting the client order you are looking for.
Here’s how to become a world class negotiator:
The most important part of negotiation is building trust. You can’t let the person you are negotiating with feel threatened. It can’t be you versus them.
That’s never going to work.
Most people who view negotiation as a battle of arguments, become overwhelmed by the voices in their head. They get emotional, they get angry and they get irrational.
Negotiation is not an act of battle it’s a process of discovery.
The goal is to discover as much information as possible. To quiet the voices in your head, make your sole and all-encompassing focus the other person and what they have to say.
With that in mind, remember that when deliberating on a negotiating strategy or approach, people tend to focus all their energies on what they say or do, but it’s how we act and look that is the easiest and most effective thing to focus on.
How we act is so critical, because our brains don’t just process and understand the actions and words of others, but their feelings and intentions too.
The first thing to do when you walk into a negotiation is SMILE.
Smiling puts the other person at ease and puts them in a positive frame of mind, rather than feeling that they are being threatened or attacked.
A positive frame of mind has been scientifically shown to lead people to think more quickly and more likely to collaborate and problem solve with you. Positivity creates mental agility in both you and your counterpart.
Another simple trick for building trust is mirroring – great sales people do it all the time.
Mirroring, is essentially imitation.
It’s a neuro-behaviour displayed when we copy each other to comfort each other. It can be done with speech patterns, body language, vocabulary tempo, and tone of voice.
It’s generally an unconcscious behavior and follows a profound biological principle: We fear what’s different and are drawn to what’s similar. Mirroring is the art of insinuating similarity.
The psychologist Richard Wiseman did an experiment with waiters, to identify what was the most effective method to build a connection with strangers: mirroring or positive reinforcement.
One group of waiters, using positive reinforcements, lavished praise and encouragement in patrons using words such as “great,” “no problem,” and “sure” in response to each order.
The other group of waiters mirrored their customers simply by repeating their orders back to them.
The results were stunning: the average tip of the waiters who mirrored was 70 percent more than of those who used positive reinforcement.
Think about that for a second.
Next time when your boss says: “Jamie can you update the model with the new numbers over the weekend”, you can either say “sure” or “no problem” knowing that this is going to take you all of Saturday and could be a huge waste of time, or you can SMILE and repeat back their last three or four words back to them, for example: “you’d like me to update the model with the new numbers?” in an inquisitive tone. The intention behind most mirrors should be “Please, help me understand.”
This will lead them to clarify what they are really trying to achieve. They might at this point say, “yes, I just want to be prepared in case we need to send the client the pitch book next week”. Ok, now you know why they want the model updated, and your boss feels like you understand them better. So you could reply by saying, “yes we should be prepared to send the book next week, but maybe we should wait for the new numbers the company is going to send us on Monday?”
Most of us enter verbal combat unlikely to persuade anyone of anything because we only care about our own goals and perspective. But the best negotiators, sales people and leaders are tuned into their audience. They know that if they empathize, they can mold their audience by how they approach and talk to them.
Empathy works wonders in a negotiation, whether with your boss, your girl friend or with someone selling you something. Once they see that you understand them, they will be much more open to listening to you.
Think of labeling as a short cut to intimacy, a time saving emotional hack.
Labeling is a way of validating someone’s emotion by acknowledging it. By giving someone’s emotions a name shows that you identify with how that person feels.
At the beginning of a negotiation with your boss about your bonus, you build trust by smiling and mirroring them, and then you label their emotions by saying something like “I’m sure this is probably a pretty stressful time for you and you have a lot to do. You are probably thinking that I am pretty ungrateful for what you already gave me”.
Now be silent and watch what happens.
Highlighting their negative emotions upfront is key because it shows that you understand where they are coming from and diffuses any anger they might be feeling.
In fact you can take this idea further using a system called an accusation audit. List the worst things that the other party could say about you and say them before the other person can. Because the accusations often sound exaggerated when said aloud, speaking them will encourage the other person to claim that quite the opposite is true.
For example, you could say: “I’m sure you’re still probably angry about how I screwed up the books in June”, or “I’m still disappointed by how I did in that presentation in August”. Putting the negatives upfront on your own disarms the situation. Now the other person can’t use them against you and you clearly show that you understand their perspective.
Get them to say No
Jim Camp wrote a great book on negotiation called: “Start with NO”.
Most of the time we try to get people to say yes. Yes to more money, yes to a promotion, yes to a deal. But yes makes people unsafe. We’d rather say no. Scientific studies have proven this.
One of the first things to do in a negotiation is to get the other person to feel safe by having them say No.
For example: “Feels like you thought I did a bad job this year” or “You probably think I didn’t do well this year”. Most people are going to say “No” to this. And then they will go on to outline why you actually did well this year.
Or more simply, when you call someone, a lot of people say: “Do you have a few minutes?”, whereas its better to say: “Is now a bad time.”
Look for the question that allows them to say No.
When negotiating anything, and you hear No, it often means:
- I’m not ready to agree yet
- I don’t understand
- I need more information
- I don’t think we can afford it
- I want to talk it over with someone
The trick is to train your self to hear “No” as something other than rejection.
A few great questions to ask when someone says “No”: “What about this doesn’t work for you?” or “What would you need to make it work?”
Negotiation is a high stakes game, so you have to make sure you put the other person at ease. If they get to say “No” upfront, it makes the other party feel safety, security and in control.
When you’re discussing your bonus, rather than being angry, ask a No question. For example: “Are you trying to tell me to leave the firm?” or “Seems like you guys are trying to push me out of here?” Or when you’re on your 2nd or 3rd interview for a job and want the other party to commit, try asking: “Seems like you guys aren’t sure I’m the right candidate?” or “What about my candidacy for the job aren’t you sure about?”.
So there you have it, I can guarantee your negotiation, sales and meetings will be all a lot more successful with these three techniques:
Build Trust – Smile and Mirror there words
Label Them – show empathy by stating how they feel, and put the negatives out there
Get them to say No – Get them to feel safe by being able to say no early on
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