How to Negotiate a Business Deal

Adapting Hostage Negotiation Tactics for Your Business

I recently had an interesting conversation with Chris Voss, founder and CEO of The Black Swan Group, Ltd. Chris is a best-selling selling author and recently published the national best-seller “Never Split the Difference.” He also was the FBI’s lead international kidnapping negotiator, and he comes from an entrepreneurial family. During our talk, Chris gave me some insight into how the psychology behind negotiating with a kidnapper is not all that different than that used in business negotiations.

We need to rethink some, if not all, of our business strategies in these unprecedented times. We all should take a moment to consider how we can adapt the most commonsense hostage negotiation tactics to business and apply them to how we conduct our business negotiations with customers. Why? Because it all comes down to human nature!

Here are some tactics that Chris recommends for gaining the upper hand in a business negotiation.

Use Tactical Empathy

Negotiation is not about taking a hard stand and being unwilling to bend or give in to your opponents’ wants. To be a successful negotiator, you need to have a high level of emotional intelligence and sensitivity. Basically, you need to be able to put yourself in the other person’s shoes and understand their motives and emotions. You need to be able to show the other person you understand what they are feeling. Tactical empathy is the term used to describe this process of trying to understand what your opponent is thinking and feeling and using that knowledge to your advantage. Chris developed his type of negotiation for the FBI that is based on tactical empathy.

Perform an “Accusations Audit”

In a hostage situation, a good negotiator will compile an exhaustive list of all possible negatives that the opposition may have about your side, which is a critical first step in negotiations. It gives you insight into what your counterpart might think, feel, or say about your side. This audit is a helpful tool that you can use to anticipate possible attacks and have counteroffers ready if needed.

Be on the Lookout for Black Swans

It’s funny how a single, unexpected event or the smallest piece of innocuous information coming to light can completely change the course of a negotiation. This is where black swans come in. Have you ever seen a black swan? It is very likely you haven’t, and if you were to, it would be a pretty out of the ordinary occurrence. They do exist though, and in negotiations a black swan is a “surprise event” that could be as simple as the small print in a contract or knowledge of a bump in a competitor’s supply chain that can work to your advantage in a negotiation. The trick is knowing how to recognize these black swans, holding them until the right moment, and deploying them if needed during different stages of negotiations. When done right, they can be essential to pushing your adversary to see things your way.

Get to the Heart of the Matter with Calibrated Questions

Calibrated questions are a critical part of any effective negotiation. Chris teaches his clients how to use these questions to give you a competitive edge over your counterpart in a high-stakes negotiation. “How” and “what” questions like “How can we fix this problem” or “What can I do to make this better?” are calibrated for emotional impact rather than obtaining information. They give the other side the impression that they have the upper hand and increase empathy for your position. These are simply questions that begin by acknowledging your counterpart and their position. They work to your advantage because you are appealing to their emotions, which can cause them to let down their guard. Meanwhile, these questions are changing the power dynamic of your negotiation and forcing your opponent to consider your position as they allow you to introduce ideas and requests that push your side forward in the negotiation.

Everyone Has a Need to Be Heard

From the time we are young children until the day we die, most of us have the common need of wanting to be heard. You can make your counterpart feel listened to through a simple technique called mirroring, where you consciously repeat their words back to them during your negotiation process. It helps demonstrate emotional intelligence and empathy, even when you are going through a volatile negotiation process. Mirroring accomplishes several positives during negotiations:

  • Your counterpart knows that you are listening to them and hearing their words and concerns
  • It helps build rapport and mutual trust between you and your counterpart
  • It is a tool for helping you retain the information provided

Chris says sometimes you just need to come out and address the elephant in the room by asking why your counterpart feels the way that they do. You can win points by showing empathy for their position.

Verbally Acknowledge Your Counterpart’s Arguments

The process of verbally acknowledging your counterpart’s position and feelings is called labeling. This process is a powerful tool that can reinforce positive feelings and deactivate negative ones. Labeling generally begins with the same words:

  • “It seems like”
  • “It sounds like”
  • “It looks like”

The trick is not making statements like “I think…” because that sends the message you don’t really care what they are thinking. Instead, you care about what you are thinking.

An alternative strategy is the process of mislabeling — intentionally misidentifying your counterpart’s position. This can be an effective strategy because it allows your opponent to correct you and potentially reveal additional information that can work to your advantage. You can use both techniques and make it appear that you are appealing to your adversaries on a personal level before you push them to unwittingly divulge information that they have been holding out on.

In Chris’s book, he discussed a situation he and his colleagues dealt with when he was an FBI negotiator trying to get three fugitives who were holed up in a New York City apartment to give themselves up. During negotiations, they addressed the negative emotion the fugitives were having by saying, “It looks like you don’t want to go back to jail.” They were labeling their emotion, which in that example is fear. By labeling that emotion, it moves the opponent’s thinking into a more rational realm. Once you have expressed your labeling, your next move is to be quiet and listen to your opponent reveal their thoughts.

Don’t Be too Aggressive, but Don’t Be a Pushover

Every salesperson has probably had the experience that no matter what they do, the other side does not want to engage. It is a common occurrence in hostage situations, where the kidnapper wants nothing to do with law enforcement. But that doesn’t mean that the law enforcement officers shrug their shoulders, pack up, and call it a day. Nor does it mean they should take the dangerous tact of making aggressive moves that can lead to disaster. Instead, they try building trust and rapport through active listening with the end goal of gaining influence over the opposing side. This strategy can easily apply to business negotiations. Think about it, what do you have to lose, other than time spent listening to your counterpart and attempting to build rapport. If you are successful, then you have succeeded in getting a leg up in your negotiations.

Time Can Be Your Friend

Remember, time can be your friend in a volatile situation. This is true in hostage situations and business negotiations. Chris told me a story about an experience he had with a kidnapping in Guatemala he was working on as an FBI negotiator. The other negotiator told him that the locals told him the kidnappers would be more desperate to negotiate for a lower ransom later in the week. Why? Because with each day that passed, they were getting closer to the weekend and more desperate to end the situation so that they could go do their normal weekend partying. So, sometimes, it may pay for you to not rush to come to an agreement in a negotiation. Deadlines are an essential tool in negotiations. However, when reaching what seems to be an impasse or a breakdown in talks, it does not hurt to hit the pause button to allow both sides to regroup. When emotions are running high, stalling for time can allow tensions to subside and could bring you more favorable terms on your side. This could put you both on a more constructive path instead of throwing away your hard work.

I highly recommend reading Chris’s book to learn more about the parallels between hostage negotiation and business negotiations. You can check out our interview on my podcast here.