Win-Win = Lose-Lose
Mark: Welcome to the Negotiations Ninja Podcast, where we develop and deliver the most engaging negotiation content and training in the world. We host negotiation experts, business people, and entrepreneurs, and discuss what works, what doesn't work, and how we can improve our negotiation skills. Negotiations Ninja listeners, welcome to the Negotiations Ninja Podcast. You've got Mark here. Today, I've got Allan Tsang on the show, and both he and I will be busting some negotiation myths. If you're very orthodox in your negotiation/ communication thinking and the way that you approach things, you are probably not going to be our friend after this. Both Allan and I consider ourselves to be fairly heterodox thinkers when it comes to negotiation and communication in general. We're going to be busting some myths that people hold to be the orthodox truth when it comes to negotiation, and we may not be friends after. Enjoy this amazing episode, and we'd love your feedback. Allan Tsang, we're here. We're ready to bust some myths. Are you ready?
Allan Tsang: I'm always ready.
Mark: It might shock you to know that not a lot of people know that we have this disdain, maybe that's too harsh of a way to put it, but there's a lot of myths that exist in the negotiation world that hopefully you and I can bust today. Let's be very clear, we might lose a few friends today, Allan.
Allan Tsang: I think we're going to lose more than a few. Oh boy.
Mark: Before we dive into the conversation, maybe just tell the listeners a bit about who you are and what you do, and then we'll dive into it.
Allan Tsang: All right. Well, for those who don't know me, my name is Allan Tsang. Born in Hong Kong, grew up in West Africa, came to the US 32 years ago. For the last 15 years, I've been coaching negotiation and doing consulting. I work with startups as a startup mentor, and I coach negotiation teams for up to$4 billion companies, so the whole gamut. I teach and train and coach negotiation. I was taught and I was coached and I was apprenticed with Jim Camp. He wrote a book called Start with No. I worked with him until he passed away in 2014, and I have continued to develop what I've learned from him, as well as working with Gary Noesner. We do workshops together. I learned a lot from him, and he's been my mentor for a while now. I'm glad to have someone I can go to. So that's in a nutshell a little bit about me. Maybe a little bit more personal, I live in southwest Virginia up in the mountains in a national forest with my wife and six kids. Three of them are off my payroll, graduated from college and moved out of State. The other three still live with us.
Mark: Fantastic. I didn't know you lived in the mountains.
Allan Tsang: Yeah, I live in the mountains. I don't see people and-
Mark: That's why you are the way you are.
Allan Tsang: ...I'm an introvert.
Mark: Now I know. This explains a lot, actually. You're basically a mountain man.
Allan Tsang: I don't have a lot of friends to piss off, so it's okay.
Mark: Well, we're going to piss a few off today, Allan.
Allan Tsang: Let's do it.
Mark: Let's add to the list of people that hate you. Okay, myth one, which I think you and I agree on, but maybe we need to dive into for the sake of the listeners. Myth is that win- win is the best solution. Your answer to that, good sir? What do you say to that? False or true?
Allan Tsang: Yeah, so I want to ease into it.
Mark: This is not like you.
Allan Tsang: I want to ease into it. It's a completely flawed paradigm. It's that?
Mark: Yes. Okay.
Allan Tsang: Crosstalk works from here.
Mark: I loved that you started there, so let's start there. Why is it a completely flawed paradigm?
Allan Tsang: First of all, words matter. I'm a student of communication. I'm just, hey, born Chinese, raised in Africa, taught by teachers from every continent, so I have a weird bastard accent. I know it. I get it. It's weird. I listen to myself. I'm like, " Is that Chinese or African or southwest Virginia? Is that Appalachian? Can't tell." Doesn't really matter. That's another myth, that you have to be a good talker, you have to be very smooth. I am not. I am not one of those.
Mark: You're pretty smooth. I've heard you talk.
Allan Tsang: My wife married me, so smooth enough to do that job. Paradigm, right? Why does word matter? Win- win implies that everybody win. Honestly, when you say win, someone has to lose. It sounds good, and it's a very seductive idea. It's like everybody gets a trophy-
Mark: It's a nice idea.
Allan Tsang: ...yeah. There's been that school of thought for the last, at least, 30 years, been teaching the win- win idea of negotiating. The problem with that is when you are up against a win- lose guy, and his approach is to win at all cost, and if you go in as a win- win, the only thing you will end up it's a necessary compromise period. I've seen it thousands of times. My client may go, " Look, we approach negotiation win- win integrative negotiation, and it's all about winning together." And they go in and as soon as the other side has any pressure uses aggression or deception, you can see them just folding. It has happened and we have to go back on and we have to regroup, and then we have to reset expectations of mindset. So I have to fix a lot of these win- win mindset. The win- win is not a bad outcome. At the end, you want both parties to get what they want. And this is the paradigm that Dan and I teach is mission and purpose focused. This is the influence from Jim Camp. Mark, we've talked about doing some collaboration together, right? It may not go anywhere, but are we competing? We are not. I am not trying to win, and I don't want you to lose. You have a mission and purpose, and I have a mission and purpose. The question is, do they align? If they align, we get to do business. It may reach a point maybe in six months, a year, or two years, and our mission and purpose no longer aligns and we'll have to part ways. Does that make sense?
Mark: Mm- hmm(affirmative).
Allan Tsang: It's about moving our efforts forward towards a mission and purpose. I am not competing with you. I'm not trying to get to a certain destination faster than you. We're not in competition.
Mark: Can't we just all win together and kumbaya and hold hands here? Shouldn't that be what we focus on, and some sort of collaborative winning outcome?
Allan Tsang: You could, there are times that that would work. Absolutely. And you can use the win- win mindset would work sometimes. And I wouldn't even say work a lot of times. The problem comes in when you're up against an adversary that is set out to win at all costs and to take advantage of you, that is the problem, and they don't have enough tools to overcome that. Developing a valid mission and purpose allows you to deal with nefarious players as well as good players, players that play according to the rules of win- win, right? The problem is when you against someone who is a win- lose, you will most likely always lose.
Mark: The thing that I don't like about it is that I think it pre supposes that if you come in with a win- win mindset, it presupposes that you now have to advocate for the needs and wants of the counterparty.
Allan Tsang: Yeah, it makes you want to help them win.
Mark: Right, like why would I want to do that? That doesn't make any sense, right? To me as someone who's in negotiation has done negotiation for a long time, yes, I want them to come away with an outcome that makes sense for them, but I don't want to go and just start giving away value to them because I feel like we both need to win. You need to get 50% and I need to get 50% of this deal, that doesn't make any sense.
Allan Tsang: I think that comes from, and this is me taking people off, comes from weak negotiators.
Mark: Shot fired.
Allan Tsang: This is literally what they would say sometimes because I work with negotiator, like some negotiated trainers I've met them before, and this is what they teach. And I told inaudible. You hear them say like this, " There's a rule of reciprocity. So this is what you do, you give them something you don't care about, and what they're going to do is they're going to feel obligated to give something back to you. That's the beginning of win- win." I'm like, " Oh, okay. So like a nefarious purpose. Got you." No, I don't really play that. I'll tell you straight up, " You know, Dan knows, and I work with him closely." People know what I think, that's it. You don't have to guess, I'm very direct. And my students I tell them, " Don't play games, just have a clear, valid mission and purpose. Discover what theirs is and see how you can help them achieve what they want, they're setting out to achieve and make sure that the terms that you guys agreed, agreeing on is acceptable to you." That's it. That all these nefarious games and trying to do something and give them something that you don't care about and take something that they care about like a tit for tat, it works sometimes.
Mark: To be fair, I mean, we're beating the hell out of this concept-
Allan Tsang: We're making jerky.
Mark: ...there are parts of it that work, right? There are parts of it that I think can and should be in your negotiation practice. And it is a good methodology to know about because you're going to be negotiating with, or against these people at some point in time. And so you need to understand it and we're being pretty hard on it, but there are parts of it that make a lot of sense to me. I agree with you on the mindset piece, because I think it's very narrow. And so I think if you... It's far too focused on one outcome versus the potential value that could be driven from multiple outcomes. Because if you come in with a win- win mindset, then you believe that win- lose is also a possibility. And then that narrows your focus. And I don't know that that mindset is beneficial mindset going into a negotiation.
Allan Tsang: No, it's not. If you go into a deal with a win- win mindset, you have this pressure and neediness to make a deal. I'm going to help them make a deal, and therefore, well if I give up a little bit, just to have a deal, something is better than nothing. And look, we have a win- win, we have a deal it's better than no deal. I hear it all the time, " I don't want to walk away with nothing." And I'm going, " Wait a minute." I'm going to give you an example, Mark. This is-
Mark: This is another myth that I wanted to bring up. So inaudible, we'll dive into this right now. I feel like you and I could talk about win- win for a long time, but let's talk about this-
Allan Tsang: ...it all stems from-
Mark: ... I wanta deal regardless.
Allan Tsang: ...Yeah, so you want a deal regardless and you want to sell a widget at$ 100. Your cost of goods is$ 50. And so what happened is you're like, " Well, I know I can give them a 25% discount." Well, great. Except now you have to sell twice as much. That's the problem, you work harder for less money. Where's the win there?
Mark: For the listeners, just so that you know, the myth that we're bouncing around here, the myths that you commonly hear in many circles in sales and negotiation procurement is that any deal is better than no deal. And that's just false because a bad deal is much worse than no deal, much worse, right? Like if you're losing money on a bad deal, that just means you're losing money faster than you were before. And now you're just going bankrupt faster. That just doesn't make any sense. Why would you make a bad deal like that? That's atrocious, faulty thinking.
Allan Tsang: And that is actually usually paired with quotas. When you have quotas, people feel pressured to compromise and they compromise because the deal is better than nothing, and I can hit some numbers. My number says, I need to at least come home with like a million this month. So I am at 900,000, let me make a few deals at the bottom line, my inaudible, right? The lowest possible I'm going to walk away with that. Great, you get it. The problem is you have salespeople that are making all kinds of false promises and then customers get ticked off and they say, " You told us this, I've seen this. And you told us you were going to do this and you didn't do it." Well, the salesperson has made his commission has moved on to another company and say, " I've met all my target, a million dollars every month." Except six months later, the customer is ticked off and say, " This feature that you mentioned, we don't have it, now what?" And they're suing this company, now my client. They're suing this company, and this company is now having to hire more people to put in the new features, flying to sales manager all over the country to try to patch things up and give discounts, horrible.
Mark: Allan we get to lose so many followers after this. Okay, so those are two myths. Let's go into the myth number-
Allan Tsang: You going to lose listeners.
Mark: ...it's going to be bad, man. No one's going to want to listen to this show after this. Mystery, you talked about this a little bit earlier, you need to be a great talker and or a smooth talker to be a great negotiator. False, you don't need to be a great talker or a smooth talker to be a great negotiator.
Allan Tsang: Just look at me, I'm like a walking myth buster. I'm very direct, right? I'm direct and I'm not smooth. And I have a weird accent. I mean, one of the best talkers I know is my partner, Dan.
Mark: Oh man, yeah. I could listen to that guy talk for forever.
Allan Tsang: Yeah. Like it's his Midwestern Western accent and everything.
Mark: Oh, crosstalk smooth Midwestern Western accent.
Allan Tsang: It's like a inaudible or whatever it was as someone, a master of rhetorics. I mean, how do you beat that? So up against him, I'm like, " Oh, we got problems." But look, the truth of the matter is it doesn't hurt. It doesn't hurt to be a smooth talker and a good talker, good with words, good with rhetorics, absolutely helps. It helps to be liked. Likeability, big thing, right? But you don't have to be liked. And trust, right? Trust is another thing. It's nice to have trust in the negotiation, but you don't need trust to negotiate. A lot of these things are like nice to have and it definitely gives you an upper hand, absolutely. So to be a good talker, smooth talker, it's great, but I just want to reassure that many of the people out there that they think they're not good talkers like I am, I think you can still do really well.
Mark: Yeah. It's nice to have, but not a requirement.
Allan Tsang: I mean, you have an awesome accent and a smooth talker, you know that. inaudible down.
Mark: You know what though, the benefits of this smooth talking accent is that I get to say a lot of stupid inaudible and people believe me, because it sounds more intelligent when you have an accent.
Allan Tsang: You can get away with it.
Mark: All right. Myth, number four, the person who gets the best deal has the best tactical skills.
Allan Tsang: I disagree with that because primarily as a strategist, so I have to help people prepare the negotiation. And what I say is it doesn't matter how well... It's almost like I don't care how well you drive or how fast you drive. But if you're driving with the wrong map, you're going to end up in the wrong place. So sooner or later, a lot of my negotiation, I coach people on negotiation, and then as an interim or a chief negotiation officer, I get involved with the strategy and big negotiations because we want to make sure that these negotiation ends up furthering their mission and purpose. The last thing you want to do is win a deal and it takes your company to a completely different direction. It could be worse. I mean, it could be better, but it could be worse. You have to really watch out for that. So strategy definitely affects in negotiation. You need both to do well in negotiation. So you have to prepare-
Mark: I think, you know what? We probably got the media to blame for a lot of this, right? And I mean, I feel there is a few trainers that really talk about the benefits of good tactics and look, good tactics are important. Don't get me wrong. I think this is another one of those nice to have, but not as important as the strategy piece. If you watched a movie on sales or you've watched Boiler Room or Wolf of Wall Street, these slick talking tactical guys on the phone or girls on the phone and they're saying all the right things. And then all of a sudden the deal comes together, that's not how it works. That's not a real representation of the way that negotiations actually work ever. It doesn't matter how good your tactics are, if you're shooting in the wrong area, you're never going to hit it.
Allan Tsang: ...correct.
Mark: I think for a lot of people listening to this right now, they're like, " Okay, but what does that mean?" Well, that means that your strategy has to be really, really dialed in. In order for your tactics to work your strategy has to be there first. Otherwise everything begins to fail, right? You've got to understand very deeply the needs and wants of the counterparty, your needs and wants. That mission, vision, purpose thing that Allan was talking about is super, super critical because without that, then everything else just falls flat.
Allan Tsang: You don't have a guide, right? You have a map to work on. And one of my favorite saying, I think I've shared it with you in a while back, like maybe a year or two ago, that strategy without tactics is the slowest path to victory.
Mark: Mm- hmm( affirmative), yes it's right.
Allan Tsang: Tactics without strategy is the noise before defeat.
Mark: Mm- hmm(affirmative). It sounds very some Sun Tzu of you.
Allan Tsang: Yes. It sounds very all this ancient Chinese secret inaudible.
Mark: Very Art of War ask.
Allan Tsang: But you know, because it's true and I've seen it time and time again played out, tactics without strategy is the noise before defeat. It's like they win a deal and then they go, " Wish I'd never taken it, wish I'd never taken this deal. This was a horrible partnership to get into." Well, it should have been well better thought out.
Mark: That's right. And that really reinforces the point of a bad deal is often much worse than no deal.
Allan Tsang: Oh yeah. Being stuck in a bad deal, it's like a crosstalk-
Allan Tsang: ...every single day.
Mark: It's the worst, I've been there. Sucks.
Allan Tsang: It sounds like there's a story behind that.
Mark: Oh man, we need to have-
Allan Tsang: crosstalk up now. crosstalk.
Mark: We need to have some scotches before we get into that story. That's not for public ears. All right, next myth. You have to concede on the price to get the deal.
Allan Tsang: Well, that's a big one, right? That's because they've narrowed everything down to one term, to have a successful deal. And people convince themselves that. I mean, even the buyers, it's like, " I got to get a good deal on the price or there's no deal." But if they step back and they have to look at it, this is the thing, one of my students bought a service and the service was poor. So he called the service provider and just say, " You did not deliver what you delivered." You know what the first thing was? " What if I gave you 20% discount, can we continue?" Wait a minute. Just think about that for a minute. I want your listeners to just let this sink in, you didn't deliver what you promised. So now you're going to make it less expensive and would my client buy more of it?
Mark: So I'm still not getting what I want.
Allan Tsang: Yeah. The thing is they would rather pay more to make it work on the contrary... Another story, I had a client and he had a project worth millions. They did it, but it failed. It did not deliver what my client hoped to deliver. Was my client partly to blame? Yes. Partly to blame. But a lot of the blame went to the customer as well. So the customer was upset, making all kinds of demands. And so at this point we had to break up. So we developed that breakup letter and we help them see the value, what my client did and what the role that their customer had in this failure. Then he came back and said, "No, we don't want to break up. We want you to continue, but I want you to do this." So they put a lot of terms into it, it's like, " We're going to look at you. We're going to basically look over your shoulders every single minute. And we're not going to pay you..." Now they double the project, so there's millions on the table again, " But we're not going to pay you the whole amount. We've got to reserve a certain percentage. And then upon a year later, when it's accomplished, we'll pay you that." My client can't do that. So we're not going to compromise, that's a bad deal. It was a bad deal anyway. So we just said no, and we negotiated, and guess what? So now they've doubled the project. Money was never an issue. They have the money and they are going to do exactly what my client asked them to do, under terms that are acceptable to my client in order to make it successful. Now that they know how their customers work, they have to change the work conditions. It had to be negotiated. So just because you have a dispute, doesn't mean is the end and you don't have to be stuck with a bad deal, and you can negotiate the conditions of your work arrangement.
Mark: And just because there's a deal, doesn't mean that the negotiation's over.
Allan Tsang: Oh yeah, it keeps on going. I mean, you've seen this, sometimes you say no and both people part ways, and then a year later they come back and they do business again.
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Allan Tsang: It's a good thing. People overplay that, right? The walk away tactic.
Mark: I don't know, man. I don't know if people have the courage. Not a lot of people have the courage to walk away. I haven't found very many people that have the courage to play that card.
Allan Tsang: I have seen buyers threaten that.
Mark: Yeah, the threat is there, but I have never seen the follow through of like, " You know what? This isn't going to work and we're going to walk away." And then they actually get up and walk away. I've seen that a handful of times. I haven't seen a lot of it played out.
Allan Tsang: My clients do it. I have clients who when I first met them, this is literally what they said, Mark, " We never say no." inaudible. Okay. So crosstalk-
Mark: What, they never say no?
Allan Tsang: "We never say no." I mean, he's a nice guy. He wants to make a deal. And he's made a lot of deals and his account managers, they don't want to say no either.
Mark: He's lost a lot of money, basically that's all I got to say to him.
Allan Tsang: We easily increased a lot of margin. We lost some accounts because they threatened to leave and we invited them to leave and they left and they went elsewhere and they spent 10 times the money, trying to make it work and still couldn't get it work. They were trying to get my client. It was a$ 4 million account. They wanted my client to cut it by 4%. You know manufacturing, they want a 4% decrease year over year, right?
Mark: Yes, very common.
Allan Tsang: My clients said, " No, we're not going to do that." So they threatened to leave and they left. This$ 4 million account they tried to go to China and they spent 10 years trying to make it to work. They couldn't get it to work. So then they start moving into Italy to get it manufactured. So it was over$ 10 million and three years later, they still couldn't get it to work well.
Mark: So people need to learn their lesson the hard way, right?
Allan Tsang: And I think since then, my client was more apt to be able to say no. I think he became very comfortable. I worked with them for many years. And then later he was very comfortable saying no to the point where some of his account managers were, I guess getting a little, I guess they were not used to it coming from other industries, seeing the boss comfortable saying no, I think it's a culture that comes from the top.
Mark: I think it's really, really important. You got to know where your boundaries are. You got to be able to draw that line in the sand. I think it's so, so important, which is a good segue into the next myth, bluffing is really important in negotiation.
Allan Tsang: Oh boy, if you bluff with my students, they'll let you bluff and then inaudible. Like the walkaway we talked about, right? If you're going to bluff to walk away, my clients would actually ask you to leave. Are you walking away from this deal? They are not going to be threatened. So if Herb Cohen was walking where they're like, "Are you walking away from this deal-"
Mark: He was actually walking away.
Allan Tsang: ...and if he really meant to walk away, that's great. But if he wasn't and it was a bluff, let's say he was a bluff. He has to answer that question, " Yes, I'm walking away."
Mark: That's right. " Yes, I'm walking away."
Allan Tsang: Good. Then if they come back later, you don't even have to compromise. But at that point, when they do walk away internally, you can make a decision and see what we need to do in order to make that deal happen. This is what we call not making unnecessary compromise. A lot of people think Allan never compromises. Nope, we don't want to make unnecessary compromise. And that's what-
Mark: I want to get into a discussion about compromise next. But I want to focus on this bluffing thing. I think a lot of people really need to understand that if you bluff a move, like you bluff that you're going to walk away or you bluff that you're going to go somewhere else, or you bluff that you have another alternative or whatever it is, and someone calls you on that, they call you on that bluff, it's over. Now you got nowhere to go. You got to come back with your tail between your legs and basically beg to make that deal work. Bluffing has no place in negotiation in my mind. I really don't think it does. I feel like if you're going to make the threat to walk away, if you say, look, " We're going to walk." You got to-
Allan Tsang: ...crosstalk be ready.
Mark: ...be willing to walk. That's okay. Sometimes you have to do that, right? That's sometimes very important. Sometimes you got to walk, but don't bluff.
Allan Tsang: There's a subtleness over here. There's a nuance I want to add into it. What I coach my students is we never walk away. We fade away. We'll just say, " Well, it doesn't seem like this is going to work for both of us right now. So when something changes, you let us know." So we fade away. You see, we did not... It's not, " Well, that's it. I'm out." I'm not going to do that. Because I may go back and then we may come up with a better deal I go, " Something has changed. I have better idea, how about we meet again?" But when you bluff and you... Let's say you're not bluffing and you walk away and you do it in a way that is threatening or demeanor-
Mark: Yeah, or damages the relationship.
Allan Tsang: ...correct.
Mark: Yes, so I agree with you.
Allan Tsang: Then it makes it very hard to go back. Somehow crosstalk say, " Look, it sounds like this is the wrong time for you, and for this reason we'll just stop talking about this. And when something change, you let us know." So we're inviting the other party to walk away. We give them the right to walk away and they can walk away and they'll feel good about it. Or we'll just fade away. It's a nuance, but this nuance can make all the difference about preserving and relationship and not destroying it.
Mark: Hmm, I like that. That's a nice little nuance.
Allan Tsang: What next? What do you have for me?
Mark: Compromise. It's good to compromise. That's the myth. Compromise is a good thing.
Allan Tsang: It's a good lead, and like the whole point about bluffing is to cause the other party to compromise, right? Threats, aggression, deception, manipulation.
Mark: So I want to get a little bit sticky about the wording here and maybe I'm being arguing over semantics. Do you mean compromise or do you mean concede? Because a compromise in my mind is where both parties have to make a concession to come to a deal.
Allan Tsang: What's the different between a concession and a compromise?
Mark: Concession is you make a concession to me.
Allan Tsang: Okay.
Mark: Compromise is we both make concessions to come to a deal.
Allan Tsang: And you can compromise without me compromising?
Mark: No, I can concede without you compromising. But there has to be two parties making the concession to come to a deal to make it a compromise.
Allan Tsang: The word you're using is, in terms of the compromise is on both parties.
Allan Tsang: Concession is united.
Mark: Like you're sitting with your wife and you deciding tonight we're going to watch a movie. She says, I want to watch a romance. And you want to watch an action flick, but you compromise and you watch a comedy, which is something neither of you wanted in the first place. So you've both had to make a concession to come to an agreement.
Allan Tsang: You've both made a concession.
Mark: Whereas if you said, " Okay, we'll watch whatever you want." Now you've made a concession. She hasn't made a concession.
Allan Tsang: Okay. So this is a word... I've learned something new today. That's awesome. I've always seen it, compromise can be unilateral. So I'm using concession and compromise interchangeably.
Mark: I see. I thought so. That's why I wanted to dive into what you meant by that.
Allan Tsang: Okay. To go with your terminology, do both parties have to compromise to make a deal? Sometimes.
Mark: Sometimes. And I think this is a really important point to be able to touch on, compromising on the whole deal, right? Where both parties have to make significant concessions to come to the deal. It doesn't make a ton of sense because then that doesn't work.
Allan Tsang: This goes back to why I would have a client write down and develop a valid mission and purpose because that's what's going to guide. We have to go back and go, " Well, how do we compromise on our mission? Can we, by taking less money..." A lot inaudible, it could be money, it could be quality, it could be delivery, it could be inventorying or not inventorying whatever, right? So those terms conceding on some of these terms, you word, if I can see it on these terms, would I jeopardize this mission and purpose? Does it mean that we will not be able to deliver against this mission and purpose? If I can-
Mark: That's exactly what I'm saying. That's exactly my argument.
Allan Tsang: ...we will not do it. We'll just say-
Mark: That's right. It doesn't make sense.
Allan Tsang: ...we cannot deliver what you're asking based on what you're demanding. So for that reason, we're out.
Mark: Oh man, I'm going to have to turn on an episode of Shark Tank.
Allan Tsang: Shark Tank, man. I love it. And for that reason, I'm out.
Mark: And for that reason I'm out. Yeah. Look, I think it's really important for people to recognize that there may be small parts of the negotiation that where both parties have to concede to get a much bigger deal done, right? On a specific term or a specific limitation of liability. Maybe there's a curve out there where both parties have to concede on something. Neither party is super happy about it, but in terms of getting the entire deal done, maybe they have to make that compromise to make the whole deal work, but they shouldn't have to compromise on the whole deal to make it work. And I think that that's a very important distinction and I think it's critical that everyone understands that compromise can be useful in some scenarios, but it's a myth in my mind that compromise, the definition that I use is a good thing. I think so many people, because it's so common, right? Like let's compromise. It sounds good, right? It sounds fair, but when you dive into it, it doesn't make much sense at all. And I think that's the same for a lot of these things. There are these standard, the labored truisms that they've come up over time and they get used over and over and over again. And really, really smart people use words like win- win. And so everyone's like, " Yeah, that's a great idea. I really liked that." But when you really look under the hood and digging a little bit deeper, the practical application of some of this stuff that we deem to be just these things that exist in negotiation that are fundamentally true are actually not true.
Allan Tsang: I love what you just said. That's spot on. And people just need to... It seems we're just splitting hairs at this point. It affects how we-
Mark: It's so important. Like you and I are nerding out over this because this is what we do, right?
Mark: for the listeners that are listening in on this, you may be listening in on this going like, " Guys, is this a hill that you want to die on?" Yeah. This is a hill that I'm going to die on. Absolutely, 100% because words matter. And they're very important. And without proper definition around what that thing actually means and digging into sort of where it all stems from the history behind it and all the rest of it is you start telling a story that's not actually true. And then the foundation for everything that you teach is then faulty. And so naturally then what ends up happening is that you've got contradictory stuff that pops up.
Allan Tsang: Yeah. If words doesn't matter, Mark, right? For those who don't think, look, if both sides give up a little bit and they both get away with a deal, then it's great. It's a win- win. No, no, no. The real word for that is called loose- loose. Let's just call it what it is. I mean words doesn't matter, let's just call it loose- loose. So you shouldn't go into a deal and go, " Hey Mark, how about let's work on a lose- lose agreement." At the end we both know that you're going to give up a little bit and I'm going to give up a little bit and we'll be happy and we'll walk away a little bit less happy, but we'll still be happy because we have a deal. How about that? Like a loose- loose. You want to come up with lose- lose deal?
Mark: That sounds amazing. Can I sign up for that deal?
Allan Tsang: It's on right.
Mark: One of the interesting things, I had a conversation with Chris Voss about this for the listeners, just so that you know, I'm sure you all know about this guy, former FBI guy. Great book. One of the things that he said, we talked about win- win negotiations was you need to be very careful with experienced negotiators. Like people that have been around for a long time, that talk about win- win. Be very careful of those people. I said, " Why Chris? Why do you have to be careful of those people?" He said, " Because those people are going to slit your throat, and that will be the end. They will take everything that you own and you will be done after that because you're coming in thinking this is going to be great, collaborative, they're going to help me out. When this person's been around the block a few times they've taken some hits. They know how to handle themselves. They're not in it for you. They're in it for them." So just be very cautious about those people that talk about win- win that have been around for a long time, because they're using that as a tactic. It's a persuasion tactic to lull you into a false sense of security.
Allan Tsang: Exactly. Couldn't agree more.
Mark: Right, I'm going to recap because I want to make sure that the listeners understand what we've covered here today. So myth one, we talked about win- win being the best solution. Truth of the matter is win- win is in our opinion, based on faulty logic, it doesn't pan out. It's inaudible essentially. Myth two, you need to be a great talker or a smooth talker to be a great negotiator. It's nice to have, but not required. Often the quietest person in the room is the best negotiator because they're taking in all of the information. Three, you need to control the discussion by talking the most. No, that's not true either, right? You need to be endlessly curious. Myth four, the person who gets the best deal has the best tactical skills. That's not true either. Oftentimes it's the person who has the best strategy that gets the best deal. You can't have... Your tactics just one of the land if you don't have a good strategy. It's you can't have one without the other. And if you're going to have to choose one, choose strategy. Myth five, you have to concede on price to get the deal. This is just very myopic thinking where people are just focused on one term within the grand scope of the deal. The truth of the matter is your concession strategy that you've developed should determine what you end up conceding on, what you can and cannot give away. Six, you should bluff. That's massive myth. Bluffing has no place in negotiation. Should be left at the poker table. And if you bluffed that you're going to walk away and someone calls you on it, you're in big trouble, especially if you can't walk away. So if you've got to walk away, be prepared to walk away. Seven, any deal is better than no deal. That's categorically false. The truth is no deal is much better than a bad deal. And then myth eight that we talked about was around compromise. We just got into a little bit of the semantic detail on that. Compromise can work in parts of the deal to make a much larger deal work, but you should never compromise on the entire deal because that's a lose- lose deal, which is what Allan was pitching earlier on in the conversation. Allan, what have we missed? Any other myths that we've missed?
Allan Tsang: Yes. Trust and relationship.
Mark: Oh, yeah. You have myth. You have to have trust in a negotiation. My very good friend, Kelly Jensen, who basically wrote the book on trust in negotiation would have a few things to say about this, but I think he would agree that trust makes deals easier. I think he would agree with that. And he's done a lot of research to identify like friction in deals and negotiations around trust. But trust is not required. He does acknowledge that. It's not required to make a deal work.
Allan Tsang: So yes, with trust, my clients can charge a little bit more.
Allan Tsang: You can charge 10, 20, 30% more. But you cannot charge 100% more. 100% comes from when. Sometimes they don't trust you. I have clients who have customers who no longer want to work with them. They don't trust them. They haven't worked with them for nine years and all the approach were rebuffed. They had no interest in working with my client. And two weeks later we negotiate. We get the deal. We walk in, there was no trust. If you negotiate well, you can get 100% of the deal without trust. If you're working with an existing customer and over time you can charge a little bit more. That's incremental. What I do is I help my clients win deals without the crutch of trust.
Mark: Let me throw a curve ball into this. What about rapport?
Allan Tsang: Rapport gets sticky. And this is where Dan and I in our styles, we have a different view on rapport. I don't do the salespeople approach and neither does Dan. You know the sales people, they walk in a room and they go, " Oh, you have a picture of Mother Teresa." My mother is called Theresa too, right? " Oh, you play baseball." " I play baseball." " You like the Steelers?" " I love the Steelers." crosstalk-
Mark: You don't believe that associations work?
Allan Tsang: ...that goes into manipulation.
Allan Tsang: And so I become very allergic to that kind of stuff. If it is all crosstalk-
Mark: What if it's true?
Allan Tsang: ... and it canbe, you just have to see how much the other person is doing it.
Mark: Yes. Okay. That's fair. That's a fair comment. It can't be overdone. It needs to be genuine. Agreed crosstalk.
Allan Tsang: Right, if I came to your office right now and I see a picture of Bruce Lee, I'm going to go, "Oh, that guy's cool." We might talk about it because you weren't genuinely interested and I'm genuinely interested. But if it's not, it's very contrived. It goes into playing mind game. So that's not... And I believe rapport comes from when you feel I have heard you, and I understand the pain that you're feeling. I see the vision of pain that is driving your decisions. I believe that is when rapport occurs.
Mark: Hmm. So maybe dive into that a bit. What do you mean by that?
Allan Tsang: So what happened is we can have like a, let me give you an example, even by like Dan's example, like he talked someone off of a parking garage or something like that, and she was ready to jump. You read in his book that. If you haven't, you should get it Life Or Death Listening.
Mark: Fantastic book.
Allan Tsang: If you see someone who's ready to commit suicide, there's no rapport when you go in. So you have to establish rapport and rapport is the other person feeling that you have heard her or him and pain that they're experiencing, the emotions that they're having at the moment, and then you get it, you get it. Sometimes you will see someone even having a cathartic exhale, " Finally, Mark gets me. No one in the world gets me. Mark gets me." We're not talking about my picture, the pictures on my desk, on my wall, but I'm telling Mark, " You know what, no one gets me. All my kids have left me and moved to Alabama and Colorado. They don't want to talk to me. My wife took off and took my dogs with her and she's moved over to, I don't know, Australia. And I'm by myself. I lost my job and no one wants to work with me." And Mark comes over and he listens-
Mark: And he says, " Jump." No.
Allan Tsang: ...okay, great. Then I'll just go, " I will have... This is the report inaudible, this guy gets it."
Mark: Yeah. I think that there's a big opportunity to tie in some of the tactical stuff around association and building that commonality, that sort of tribe mentality that exists when creating that association to speed up rapport building in a normal business setting a normal sort of like one- on- one relationship building session. When it comes to the work that like guys like Dan and Gary do, I get it. Some of that stuff's just not going to happen, right? You've got to really cut through inaudible to get to the emotion immediately. There is an amazing book by a guy named Chris Hadnagy, I'm sure I'm botching his last name. It's called Social Engineering. It's the science of human hacking that he's coming at it from a different lens. So he's in the Info Sec business, the information security business and his job is to train people to make sure they protect their data because it's not just about hacking the system anymore. It's about hacking a person to extract information so they can get into the business to extract information, right? So he talks a lot about how a lot of these relationships are developed in passing so to speak, " passing" just by chance, right? Just by chance you bump into someone that happens to have the same interests as you, and is able to extract a bunch of information out of you. And I think there is a really, really interesting sort of cross section between what you're talking about, where you cut into the emotion and then his methodology, which is all around sort of the tactics around getting information. One of the things that he talked, I can't remember what it's called, but he... You're wearing a red sweater right now. The listeners can't see this, but you're wearing a red sweater right now I said, " Oh, you're wearing a red sweater, you must be a January baby."
Allan Tsang: "No, I'm not January. I am November."
Mark: Right. And so I'm-
Allan Tsang: Not my month. Then you go, " My crosstalk wears a red sweater and she's born on the 15th. Are you born on the 15th?" I'm like, "No, not 15th, 22nd."
Allan Tsang: Then you're like, "Oh, November,
Allan Tsang: 22nd."
Mark: Right, I'm creating a situation where you have to correct me because people have a need to be right all the time. And those kinds of interactions can be very useful when building rapport and all that kind of stuff in a negotiation, I think it is very useful. But do you agree with the concept of cutting through a lot of that to get to the core of the matter in the emotion?
Allan Tsang: So this is where I say, yes. Some of these things will work against an untrained person, but my students will be trained. And when they recognize that, we are no longer doing business. You see, these tricks may work and it's called, you can extract information. And people used to say... Let me back up a little bit. Salespeople used to show up and inaudible and then they learn, ask questions, it's more powerful. So now you hear sales people saying, " He who ask the most questions wins." And I say, " That's inaudible, you have to ask good, powerful questions, the fewer, the better." Then the thing is people go, " Yeah, question is great." And I go, " Not necessarily because statements can get more information." And this is an example of what you just did Mark, by making a statement, a false statement, my aunt wears red sweater, she was born in January, I bet you were born in January. No, no, no. My desire to correct you will give you accurate information. And that comes from making a false statement, not a question, a false statement.
Mark: That's right.
Allan Tsang: And it drives the other person to correct you. It's a powerful-
Mark: That's very powerful for the listeners, just so that you know, that book is called Social Engineering. I think he's coming out with a new book as well. I'm going to have him on the show later on this month, but fascinating stuff. What else have we missed? So we hit trust now, what else have we missed in myths.
Allan Tsang: ...Relationship.
Mark: You got to have a relationship to be able to do a deal?
Allan Tsang: Yeah.
Mark: Okay. I think that's fair. I think most... Well, I don't know, do most people believe that? Do most people believe that you have to have a relationship?
Allan Tsang: There's whole schools of thought called relationship selling, it all comes down... Have you not heard it all comes down to relationship? You've got to have a relationship.
Mark: I mean, I feel like relationships are important. They're good. They're fantastic. But they're not required. I think this is one of crosstalk-
Allan Tsang: That's because you're a good negotiator, right? Talk to those who say, " Well, you've got to have a relationship first."
Mark: ...yeah. That's just not true.
Allan Tsang: The thing is if I need friends, I have friends outside of business. I don't need to have a friend with you as a salesperson.
Mark: Allan, we've got to cut this mountain, man inaudible. All right, friends are important. Friends are nice. You can make friends. It's okay. Let's talk about it. Open up to me. It's just you and me listening right now. It's just you and me. There's no one else listening.
Allan Tsang: We just have incredible rapport right here. You understand me so much. inaudible for your listeners, I have a free gift for you guys.
Mark: Rock on, what is it?
Allan Tsang: Dan and I just finished writing a white paper on guess what? It's called the win- win trap.
Mark: Oh, very interesting.
Allan Tsang: It's a white paper and then just send me an email and we'll send it to you to PDF for free.
Mark: Nice. Do you want to give out your email or do you want people to just go and submit their information? I would caution you against getting at your email on a podcast.
Allan Tsang: I'll give you the link. I still need to put it. Is still hot off the press. I still need to put it on the website and then I'll give you the link and then they can download it.
Mark: Okay. Perfect. For the listeners, just so that you know, we will link out to that in the show notes. Allan Tsang, always a pleasure my friend. We've probably lost a few friends today, but that's okay. I think we'll be okay.
Allan Tsang: I think we'll be okay. I gained you as a deep, deep friendship with rapport. You understand the mountain man in me.
Mark: No I understand the way you are because you live in the mountains. That's why. Yeah. No social interactions. I get it now. I get it. Amazing. Thanks for being on man.
Allan Tsang: Thanks for having me. It's been a lot of fun.
Mark: Hey friends, thanks so much for listening to this episode. If you enjoyed it, please share it with friends and colleagues so that they can benefit from it as well. If you find Negotiations Ninja Podcast worthy, please go on to iTunes and give us a cool rating with a nice review. We certainly appreciate every single one that we get because it helps us to understand who is listening, how they're listening and what it is they like. If there's something that you would like me to discuss around negotiation, influence or persuasion, give me a shout. You know how to reach me on social media or you can get me on my website which is www. negotiations. ninja.
Is win-win the best solution? Is any deal better than no deal? Is the ability to bluff a game-changer in a negotiation? Are these perpetuated truths fact—or fiction? In this episode of Negotiations Ninja, the myth-buster has returned. Allan Tsang joins me to shed some light on these long-believed negotiation myths (including the fallacy of win-win). Don’t miss this eye-opening conversation!
Resources & People Mentioned
- The Trust Factor: Negotiating in SMARTnership by Keld Jensen
- Life or Death Listening by Dan Oblinger
- Social Engineering by Chris Hadnagy
- Start with NO by Jim Camp
Connect with Allan Tsang
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