The Naked Negotiator

Churchill’s Greatest Speech?
In 1946 Churchill was a beaten man. The previous year, he had lost the prime ministership after his Conservative government has suffered an overwhelming election defeat.

Churchill wanted to warn the Western world about the spreading menace of Soviet communism, but he worried that Americans wouldn’t listen to someone who was now just the leader of an opposition party, rather than the head of an elected government.

Churchill’s opportunity to convince American’s came when he was invited to speak in Fulton, Missouri. He knew that he had to paint a vivid, graphic picture of what was happening in countries like Poland and Czechoslovakia.

He toyed with words like “Soviet imperialism,” “militarism,” and “tyranny,” but he rejected these as shapeless abstractions. None of these would paint a vivid enough picture in his listeners’ minds.

On the train trip down to Missouri, Churchill scanned his map of Europe. To highlight the spread of communism, he drew a black pen line from the Baltic Sea through Poland down to the Adriatic Sea. He retraced the line, searching his mind for the right image to describe the Soviet threat.

The inspiration came at 2 a.m. during an overnight stop in Salem, Illinois, when the right word picture appeared — which Churchill quickly added to his speech.

The next day, Churchill delivered the words that would mobilize the United States and move it to action:

“From Stettin in the Baltic to Trieste in the Adriatic an iron curtain has descended across the continent.”

The iron-curtain metaphor became one of the galvanizing images of the Cold War. When China fell to Mao Tse-tung’s communists in 1949, the metaphor changed to bamboo curtain.

The iron curtain speech was, according to James C. Humes (author of Churchill: Speaker of the Century), Churchill’s greatest speech.

Why was it the greatest? Because a single speech triggered a change in American feelings about the Soviet Union (America’s wartime ally), and started the Americans to rearm.

Whenever you present a persuasive case, look for an organizing metaphor. The right metaphor will clinch a deal or sale.

Popularity: 80% [?]

The year: 1912. Teddy Roosevelt was nearing the climax of a hard fought presidential campaign. The final push was a whistlestop tour through middle America. At each stop Roosevelt planned to deliver an inspiring address and hand out thousands of pamphlets. On the cover of each pamphlet was an imposing Presidential portrait; inside was a rousing speech. Hopefully, these would win over vital undecided voters.

The final tour was about to begin when a campaign worker noticed a small printed notice on each photo: Moffett Studios - Chicago. The photograph was copyright and no one had obtained a clearance from Moffett.

Unauthorized use of the photo could cost a dollar for each pamphlet distributed. The prospect of a three million dollar bill sent a chill through campaign workers. They simply couldn’t afford it. The pamphlets were a crucial part of the re-election strategy. If they went ahead without Moffett’s permission and were caught out, they’d be branded lawbreakers and be liable for a small fortune.

The campaign workers concluded they had no choice; they had to negotiate with Moffett, and there was no time to lose.

You can imagine how they felt, Moffett seemingly had them over a barrel.

Dejected, they sought campaign manager George Perkins’s help. Perkins immediately instructed his typist to cable Moffett.

“We are planning to distribute many pamphlets with Roosevelt’s picture on the cover. It will be great publicity for the studio whose photograph we use. How much will you pay us to use yours?”

The reply came back soon:

“We’ve never done this before, but under the circumstances, we’d be pleased to offer you $250.”

Legend has it Perkins accepted without asking for more. Perkins understood the power of information; the critical role it plays in shaping a negotiation. By selectively controlling the flow of information to Moffett, Perkins created the illusion that he held the upper hand.

Information power lies at the heart of the bargaining process. In even the simplest of negotiations, both parties take a position, then present facts, arguments, data and other information to support that position. Both sides then use information to get the other side to modify their position until there is enough common ground to reach a mutually satisfactory settlement.

To guard against information being manipulated or concealed, you must do your homework. The more information you have, the more power you have. It’s that simple.

Popularity: 65% [?]

Colorado Surgeon Michael Woods found himself being sued for malpractice when a medical student accidentally punctured an artery during an appendectomy. In the end, the appendix was successfully removed, but there were complications and the patient became upset.

Woods took advice from his lawyer who recommended - no response and no interaction between him and the patient.

In court, when the patient was asked why she had chosen to sue she said, “I sued because he acted like what happened to me was no big deal. He just didn’t care.”

Woods realized it wasn’t the injury or the outcome that had led to the lawsuit — it was her perception that he didn’t care. It was his failure to offer a sincere apology that caused the suit.

In his insightful book Healing Words: The Power of Apology in Medicine Woods says,

“The business world has internalized a truth that medicine has yet to discover and embrace. Apology isn’t about money, or being right or wrong - for either the buyer (patient) or the vendor (doctor). It’s about the provider showing respect, empathy, and a commitment to patient satisfaction; and then about those receiving the apology having the grace to see the provider as human and fallible — and worthy of forgiveness.”

Since 2002, hospitals in the University of Michigan Health System have been pushing their doctors to apologize. Their attorney legal fees have dropped by two-thirds and the number of malpractice suits have halved.

Sincere apologies lower emotional temperatures and establish the foundations for a positive, constructive re-engagement.

Popularity: 57% [?]

You may not be able to “fight city hall,” but you can negotiate with government - if you know how.

The first ‘Don’t’ when negotiating with government officials is, don’t use the word “negotiation” writes Jeswald Salacuse in Seven Secrets for Negotiating with Government (Amazom, 2008).

Government officials would much prefer you call your negotiations, “discussions,” “conversations,” “requests” or “interactions.”

Government officials don’t like talking about compromises and tradeoffs. Government officials view their role as enforcing the law, implementing regulations and pursuing policy. “Negotiated decisions” make officials uncomfortable.

Before you negotiate with government, you need to appreciate government’s power base. Salacuse identifies four sources of power that governments leverage at the bargaining table.

1. Monopoly. Governments are, for the most part, monopolies. As a negotiator in the private sector you usually have the fallback of talking to a competitor. If you’re negotiating approval with a government agency e.g. to sell a drug, you can’t get the approval from anyone else.
2. Privilege and Immunity. Governments pass laws, set regulations that private citizens and private companies cannot. In many countries, governments can’t be sued. These privileges can force you to make additional concessions.
3. Protocol. Government is much more likely to use protocols that dictate how you will interact with government departments and officials.
4. The Public Interest. At any time, governments can play the public interest card. You may be legally in the right, but it’s hard to beat a government player who claims public opinion is preventing them from going along with the terms you originally negotiated. Governments find it much easier than private players to renegotiate deals.

Popularity: 52% [?]

The best deals are the ones you have the courage to walk away from. Bad deals entrap you, destroy rather than add value, and suck up vast amounts of management fix-up time. The best deal makers go into a deal with a clear list of non-negotiable must haves.

Frank Borelli, the former chief financial officer of financial services from Marsh and McLennan won’t buy a firm unless it meets his non-negotiable list of must-haves. Borelli’s three must haves are:

1. The acquired company must earn at least the company’s cost of capital
2. The expenses of acquiring the company must not be so high they decrease his firm’s earnings
3. The target company’s growth rate has to be greater than Marsh and McLennan’s own.

Between 1992 and 1996 Borelli turned down the chance to buy 3 companies before he found Johnson & Higgins, a firm that met all three of his must haves. The acquisition proved of great value.

Patience, discipline and clear priorities are signs of great dealmaking.

Popularity: 40% [?]