The Naked Negotiator

In her book, Beyond Deal Making (2010) international negotiation expert and mediator Melanie Billings-Yun outlines her five step GRASP method for negotiating long-term sustainable relationships.

The acronym GRASP is not just a mnemonic device.  By following the GRASP method you can increase the odds of creating a sustainable agreement.

The GRASP Method

Goals: What do I/they want to achieve or avoid?

Routes: How can I best achieve my goals by supporting theirs?

Arguments: What reasons support my/their routes?

Substitutes: How else could I/they accomplish this?

Persuasion: What’s in it for them?

The GRASP method is practical and easy to follow. Beyond Deal Making offers a fresh innovative approach to negotiation.

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I am often asked how long it takes someone to make their initial judgment on a person when they first meet them.

I used to answer, “4 minutes.” This reply was based on research on the time it took job interviewers to make up their mind on the suitability of a job applicant. However, I now answer “10 seconds.”

In their remarkable studies, social psychologists Nalini Ambady and Robert Rosenthal, have shown that we often form positive or negative impressions of people in a mere “blink” or “think slice” of time.

After subjects watched three two-second video clips of professors teaching, their teaching ratings predicted the actual end-of-the-term rating by the professor’s own students.

To get a feel on someone’s energy and warmth, the researchers concluded just six seconds is usually enough.

First impressions matter because, we lock down on our first impression. Once we have made a judgment we tent to look for confirming evidence to reinforce our initial impression — good or bad.

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David Myers,  Professor of Psychology is an expert on the psychology of fear. Psychological science, Myers tells us, has identified four factors that drive up our perceptions of risk.

1. We fear what our ancestral history has prepared us to fear. Thats why we fear snakes and spiders.

2. We fear what we cannot control. We feel more in control when we are driving a car than we do flying an airplane.

3. We fear what is immediate. We are more concerned about the risks of taking off in a plane than the risk of dying from cancer.

4. We fear threats readily available in memory. We easily recall the 9/11 images and they make us hesitant to fly. Our brains are not designed to easily recall the fact that, mile for mile, we are 37 times more likely to die in a passenger car than on a commercial flight.

No wonder our fears drive so many behaviors. Since fear is largely an emotional factor, negotiators need to actively manage emotions. While you cannot directly control what someone feels, you can influence the drivers that fuel negative emotions such as fear.

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Skilled blackjack players think like investors.

In his book Beat the Deal, author Ed Thorp says the main job is to assess the probability of drawing a favourable hand.

Thorp shows you how to count cards so you can work out when the probability of holding a winning hand moves in your favour.

When the odds favour the player, the best strategy is to increase the bet so you can increase your payout.

Thorp calculates that a favourable opportunity comes up just 9.8% of the time. The odds favour the house the other 90.2% of the time.

The lesson for deal makers is that long term success depends on discipline and expertise. Professional gamblers have played lots of games, they stick to a specific game such as blackjack that increases their zone of competence - then they play the odds.

Professional gamblers only bet big when the odds favour them. In the Casino you have to bet every time you play. In deal making you don’t have to play, until the odds favour you.

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“If I had a little humility, I would be perfect.” - Ted Turner

The 5 P’s, “Prior Preparation Prevents Poor Performance” reminds dealmakers that poor deal preparation can prove disastrous.

In July, 1985 Kirk Kerkorian, the head of MGM and United Artists called Ted Turner, the owner of Turner Broadcasting Services with an offer to sell him MGM/UA. Kerkorian told Turner he was going to put MGM/UA up for auction in two weeks, but Turner could have the company if he paid $1.5 billion - and closed the deal by August 8.

Turner desperately wanted MGM/UA films to give him control of his programming, so he sent 40 lawyers and accountants to go over the books. Then, two days before the deadline, and without any negotiation on the price, Turner signed a purchase agreement.

Analysts say he overpaid by $200 to $300 million.

Plus, he ignored that MGM was in a bad state producing a raft of poor money losing films. To boot, his lawyers failed to ask what legal commitments MGM had made. Turner did not uncover that on August 4, MGM/UA had signed a contract locking up all cable rights and that HBO had already contracted to buy several MGM movies at low prices.

Turner may have been a visionary entrepreneur but he proved an amateur dealmaker.

Poor preparation causes us to make unwise assumptions, since assumptions are the mother of all stuff-ups.

When you’re desperate to do a deal and under time pressure remember the 5P’s: Poor Preparation Prevents Poor Performance.

Popularity: 67% [?]