Podcast: Emotional Intelligence as a Negotiation Tactic, Interview with Chris Voss
Chris Voss uses his years as an FBI hostage negotiator to impact the negotiation process. Pick up his tips here.
About the Host
Ryan is an entrepreneur, podcast host of the show Life After Business and the co-owner of Solidity Financial. Having personally experienced the hazards of selling a business, he joined up with his friend Brandon Wood to educate others on the process. Through their business (Solidity Financial), they provide a platform for entrepreneurs called Growth and Exit Planning that helps in exit planning, value building and financial management.
About the Guest
Chris Voss is CEO of the Black Swan Group and author of the national best-seller "Never Split The Difference: Negotiating As If Your Life Depended On It," which was named one of the seven best books on negotiation. A 24-year veteran of the FBI, Chris retired as the lead international kidnapping negotiator. Drawing on his experience in high-stakes negotiations, his company specializes in solving business communication problems using hostage negotiation solutions. Their negotiation methodology focuses on discovering the “Black Swans,” small pieces of information that have a huge effect on an outcome. Chris and his team have helped companies secure and close better deals, save money, and solve internal communication problems.
Chris has been featured in TIME, Business Insider, Entrepreneur, Inc., Fast Company, Fortune, The Washington Post, SUCCESS Magazine, Squawk Box, CNN, ABC News and more.
If you listen, you will learn:
- Some of the details of Chris’s background and how he got into negotiating.
- Information on tactical empathy as described as Chris’s book, and why it helps with negotiation.
- The brain science behind how people react in times of stress and when negotiating or communicating with others.
- Some of the primary things people can do before they go into a negotiation situation.
- The “black swan theory” and how it can help you in your negotiating.
- How a business owner can figure out why a buyer is interested in the first place, which will help with negotiations.
- Specific tips on calibrating questions and the only way you should ever pose a “why” question.
- When, why and how to say, “How am I supposed to do that?” as well as an example of how it worked for someone Chris knows.
- Chris’s perspective on the words “no” and “yes.”
- Tips for how you can get someone else to represent your interests well.
- How to separate negative emotion from the process of negotiating.
Announcer: 00:09 Welcome to Life After Business, the podcast where your host, Ryan Tansom, brings you all the information you need to exit your company and explore what life can be like on the other side.
Ryan Tansom: 00:20 Welcome back to the Life After Business Podcast, Episode 76. Do you want to be armed with the best negotiation tactics and philosophies before bringing your company to market and hiring your team of advisers? Well in this episode today you're going to learn how to uncover the real reasons why a buyer would want to buy your company and get the best possible outcome for you from one of the best negotiators on the planet. Today's guest is Chris Voss. He is a rock star. I was unbelievably honored to have him on this show. Chris was in the FBI for decades and then he became the FBI's lead international kidnapping terrorist negotiator and he took all of the experience that he learned with the decades of interactions of high stakes negotiation and put it into a book called Never Split the Difference. So in today's episode, Chris explains some of the really practical tactics that he uses in the field and then during high stakes negotiation what are the different things that you can do to level up the playing field and put yourself in control to get what you want.
Ryan Tansom: 01:19 Because as a business owner selling your company is one of the most emotional and financial transactions you might ever have in your entire life. So doing the prep work and understanding what are the things that really matter for both sides and how to uncover those truths is absolutely a must do if you want to be in the driver's seat throughout the exit process. So without further ado I hope you enjoy this episode with Chris.
Announcer: 01:43 This episode of Life After Business is brought to you by Solidity Financial's growth and exit planning. Their proven process gives you clarity on all of your exit options and how those options impact your financial success, timing and future happiness. Sell your company on your time frame to the right buyer at the price you want.
Ryan Tansom: 01:43 Chris, how are you doing today?
Chris Voss: 02:07 I'm doing great. Thanks for having me on.
Ryan Tansom: 02:10 Oh my gosh I am so excited. I read your book and it's an honor to have you on the show because you get so much experience and you've done a lot for our country too and that you've accumulated crazy amounts of the real life school of Hard Knocks experience along with the framework that you've put together. For some of the listeners that may not know you know a little bit about your background, maybe you know go back and kind of just give us a little bit of a debrief so we know how you got into it and you know kind of where you are today.
Chris Voss: 02:41 Sure. Thanks Ryan. Well you know I was I'm your I was an FBI hostage negotiator was the FBI lead international kidnapping negotiator. I was in charge of the negotiation strategies for every American kidnapped overseas for about seven years. And so that kept me fairly busy. It was it was pretty amazing. I was an FBI agent for 24 years in total for counterterrorism in counter kidnapping the entire time with the FBI. Originally a small town boy from Iowa.
Chris Voss: 03:13 I left the bureau, thought this FBI Jedi mind tricks that we used had applications to the business and private sectors so went to Harvard Law School negotiation course - as an FBI agent, I'm the only guy who ever did that.
Chris Voss: 03:30 I ended up teaching there two years after that. Taught business negotiation at Harvard. Taught business negotiation at Georgetown University. Taught business negotiation at USC University of Southern California in the MBA programs to MBA students. So finally decided to write a book. Never Split The Difference: Negotiating As If Your Life Depended On It. It has been doing really well since it came out. It leads the business negotiating category and has lead it for almost the entire two years since it's been out and it's cool it's a fun book and it's applicable.
Chris Voss: 04:10 A lot of counterintuitive stuff. But although the stuff is not stuff that you would have thought of on your own probably it's really easy to understand none of this is like the theory of relativity which I still don't understand. You know you don't got to be Einstein; all you gotta be is Fred Flintstone to be able to apply this stuff.
Ryan Tansom: 04:29 Well and that's maybe why I understood it because I actually- I absolutely love the book which is why I had reached out because it's so applicable and it pulls from so many different backgrounds and you know real world scenarios and what was interesting Chris because I mean you mentioned in the book but you know up until like fairly- until your book, Getting to Yes was like you know the be all end all for negotiation books. You know you debunk a lot of stuff that was in there and you know maybe you know for the people that haven't read the book you know could you give us a like a general brush stroke of the different kind of framework and theories that you gathered together to form the book.
Chris Voss: 05:06 Well really what it is is emotional intelligence. It's tactical empathy; it's weaponized empathy. You know Getting to Yes is an intellectually sound book. There's nothing intellectually wrong with Getting to Yes and reading it which I have read is you know like reading the dictionary like trying to learn a language reading the dictionary. There's nothing wrong with the dictionary. But it's hard to apply. And I think the principle idea is Getting to Yes I think it's based on the idea that we as human beings are reasonable and rational. The hostage negotiation on the other hand never subscribed to that fiction because we figured there's somebody waving a gun around a bank threatened to shoot people was was irrational you know who knew that they were no different than the rest of us. It's kind of it's like the the way the FBI profilers. I don't know if you've ever seeing Mind Hunter on Netflix [Ryan interjects: Yeah. Yeah.]. How many of the shows are there about the profilers. But the profilers. Their original premise was criminal behavior was just human behavior. They just happen to be committing crime and homicide was just really intense criminal behavior. So the patterns would just be easier to see. But it was still just human behavior.
Chris Voss: 06:28 And as it turns out the crazy thing about this is as it turns out hostage negotiation is the same thing. What people do under intense stress is exactly what they do normally they resort to all their normal coping mechanisms all the same rules apply the brain which we know so much more now about neuroscience which we didn't know 20 years ago. We watch the brain work and the brain falls into a pattern in the brain called the limbic system in your brain. So what does that mean? Well the limbic system much the same way your respiratory system does. Your respiratory system works by certain rules, your limbic system works by certain rules. We have the science now that backs it up. Hostage negotiators crazily enough tapped into that science back in the 1970s as we can see in a brain. And now all the neuroscience backs up the soundness of the emotional intelligence of hostage negotiators. You know we're emotional creatures.
Ryan Tansom: 07:25 So describe you know your tactical empathy and you did an awesome job in the book and I think there's this you know the real empathy and then empathy in the way that normal people think about and then the tactical empathy that you describe in the book are you going to give us a little bit of a snippet of what that means?
Chris Voss: 07:43 Yeah a couple of things. Right so we're more driven by negative thoughts than we are positive thoughts. There's a rough ratio of 3:1 so tactically if I want to make a deal with you I'll get in the deal faster if I diffuse your negative thoughts than if I try to enhance your positive thoughts. A typical business deal is "here the benefits for you." This will make you happy you know that's pitching the positive. It's not to say you can't make deals that way. It's not to say you can't make agreements that way. That's just not the fastest most powerful way. They're lazy like me. I want to do a third of the amount of work as you. I want you to work- to spend three times longer on a deal. I want to spend a third of the amount of time you're going to spend.
Chris Voss: 08:34 I diffuse the negatives, I'll spend a third the amount of time as you spend, if you get the deal at all, pitching the positive. Now what do you do with that? What you do with that is actually a two millimetre shift in order- to use a Tony Robbins phrase. I love Tony Robbins' ideas. He talks about what are the two millimetre shifts? 2 millimeter shift in dealing with the negatives: don't deny negatives, just identify them. Like if you and I were in a deal and I get the sense that you feel that pushing you around so I should listen to that instinct my emotional intelligence alarm bells are going off and probably pretty accurate. But instead of denying it and me saying I don't want you to feel like I'm pushing you around. That's the worst thing I could say. The two millimeter shift is hey I'm sure it seems like I'm pushing you around going from a denial to an observation.
Chris Voss: 09:31 The observation- And there's a book that I love called the Upward Spiral where they did experiments that bears this out is the identification of a negative not the not the denial of a negative but the identification of the negative dials it down every time without fail. [Ryan interjects: Why is that?] Why does- I don't know why. Why do we need oxygen? Because that's the way our respiratory system is set up. We do know and I'd actually I'd like to know how they negotiated this experiment. Here's the brain science experiment that bared it out.
Chris Voss: 10:07 They ran wires into literally ran wires into the part of the brain where the negative emotions are sort of enhanced, generated and enhanced. It's called it's the amygdala and it's the organ in the brain and we've all heard of the amygdala hijack you know you know where you get mad. What we didn't realize is the amygdala is working all the time not just when it's hijacking ya. it's like the heart. The heart's working all the time, whether you're paying attention to it or not. So the negativity in the amgydala is in a certain location. So they monitor the electrical activity in that location and then they showed people pictures that induce negative emotions whether it was fear, sadness, anxiety... they had a list of negative emotions. They showed somebody the picture and they just have them self label, self identify. They'd say what emotion is this picture making you feel? And a person look at a picture that was making him feel sad and they'd say it makes me feel sad. And the minute that they self-label the electrical activity in the negative region dropped every time. Thousand percent of the time.
Chris Voss: 11:23 So the self-labeling process what a hostage negotiator does is word an observation in a way that bypasses the logical part of your brain, the prefrontal cortex, the CEO the brain, and hits the amygdala dead on which causes the self-labeling contemplation and it drops it down. What difference does that make? Three times the barriers are around the negativity.
Ryan Tansom: 11:49 One is it is tied into our inherent need to be understood,, too because you can actually- is that kind of were the tactic of empathy you know phrase comes from where you just you're trying to understand someone's scenario and situation
Chris Voss: 12:12 We have we have an inherent need to be understood as old Stephen Covey advice "seek first to understand, then be understood." Everybody wants to have you understand them first. The problem is Covey didn't tell us how to do that. He didn't realize that it's not saying I understand what is actually like.
Chris Voss: 12:27 That's the worst thing you can say to somebody in a negotiation. We literally, in hostage negotiation, that's such a bad habit that I would actually put a big sheet of paper on a wall in our command center where the hostage negotiators will be working. I would write the phrase I understand on a piece of paper put it right front of the negotiator and put a red circle around it and a red line through it you know the do not do this symbol like this is not allowed. And if they and I and I'd leave it in front of them the whole time and I'd say if you ever say I understand we're taking you off the phone. It's that bad.
Ryan Tansom: 13:04 So what is a way to- Is it through the labeling process that you're showing them you understand versus actually saying it?
Chris Voss: 13:11 Yeah it's a combination of the labeling process is one component. Another component is going to be paraphrasing and some- another component is going to be summarized. Another component is like and just to get them to talk more is we got a tool called a mirror. And if you were a mirror what I just said, you'd say a tool called a mirror and I'd say yeah a tool called a mirror. What a mirror is repeating the last one to three words of what somebody just said. If you'd have mirrored me, what I would have done was expand on that point automatically. It's literally an automatic response. So you get somebody talking and that's how you generate this whole feeling of being understood.
Ryan Tansom: 13:51 Well and now and I love this because there's all these things that you're talking about are in the real world no matter where you are in any given situation and I think you know for our listeners who are getting pushed or are looking towards like one of the biggest stressful emotional financial situations of their life of selling their hard work of their business... All of these things come to a head. And again you had said that the amygdala gets hyjacked in a lot of these situations. [Chris interjects: Right.] So you know if you're if you're an owner if you're someone in a situation like this and you're preparing to go down this route. What are some of the things that you should start doing to get prepared to go to a negotiation battle or however you want to phrase it like what are some of the primary things that you advise people to do before they go into a situation like this?
Chris Voss: 14:44 Well you know it's the standard negotiation advice even though you get so much at stake where you know you're being taken hostage a little bit by it so first the one thing that we love to talk about is you know well let out no a little at a time like and the book starts out in the first five pages is the ultimate way to say no to the other side without making them feel hurt without driving them from the table and how to actually get more out of them simultaneously. And it's you know just- practice is saying How am I supposed to do that? And saying it just like that. I mean that that is the single best way to find out how much is on the table. Now find out how much is on the table before you start reacting to what's on the table and know especially this is there's this Nobel prize winning theory called prospect theory.
Chris Voss: 15:34 The other side is going to offer you less than what you think your business is worth. And then not because they're trying to lowball you but because since they don't own it deep down in their heart they're going to think what they think of as a fair price is still going to be less than what you'd think of as fair and they're not going to do that to screw you, because most of the time when somebody offers you a low price you know the amygdala hijack is that's not fair.
Chris Voss: 16:06 You're just low balling me, you're try to cheat me. You're trying to steal my life's work. Now make no mistake, there are going to be a few people out there that are going to try to steal your life's work. But 75 percent of the people are actually going to try to give you a good deal. So 75 percent of the people you encounter that would be an inappropriate reaction for. They just don't know any better. And the mere fact that the other guy on the other side of the table might not be screwing with you and free you to help you explore the deal and then take it or not.
Ryan Tansom: 16:43 OK so I love it. And you know as there's a couple of things also that you had mentioned in the book that I think is hugely valuable to note too because you know there's that whole thing the getting the Yes which is your lowest benchmark I can't remember what the acronym is. So there's a couple of things that you guys had suggested to do differently which is going in there with the best and the worst case scenario. But then there's the whole theory which is your consulting company, the Black Swan. And I think it's immensely important in a negotiation with the buying or the selling of your company because there's black swans on both sides of the table. So ready if you could answer that in two parts. One is like how did you know mentally. How do they go into that with the best and worst case and then explain what the black swan theory is.
Chris Voss: 17:28 Sure. All right yeah. I mean, focus on what the best case scenario is really I mean you've got to have a goal. The problem is worst case- thinking through worst case scenario, a lot of human beings will end up with that being their goal and if they beat the worst case scenario they're like I did good, I got a victory! They've left so much on a table. That's the biggest problem with thinking worst case scenario. As a hostage negotiator I just know and that concept that you're talking about is called BATNA - Best Alternative to Negotiated Agreement. And some people will die if they don't have a BATNA. Well, no negotiation I ever had a BATNA. So I just got used to walking a tightrope without a net. What's the big deal?
Ryan Tansom: 18:09 You can't really- I mean the worst case scenario is extremely bad in your situation.
Chris Voss: 18:12 Yeah but you know I mean like whether or not there's a net on you when you're on a tightrope it doesn't actually change how tight the tightrope is it doesn't change the wind it doesn't change how far you have to go. It doesn't change one iota of what you've got to do to cross that tightrope; it's all in your head. So I found it immensely liberating to negotiate for from the very beginning just not caring what BATNA was. I don't think it's any big deal not to have an alternative. And some people it scares the hell out of them. They can't they can't move forward without it. So you know that's the first part. The other thing that you asked me about was you know the whole Black Swan thing. No matter how smart you are, there's a better deal than you can imagine on the table.
Chris Voss: 18:56 No matter how smart you are, because the other side is holding cards they're always holding cards you don't know anything about, you're holding cards they don't know anything about, and see the bizarre intersection there is what's the overlap in those head and cards and so there's always a better deal now if you can engage in a conversation with and ensure the other person that you are trustworthy in your worth revealing those cards to. The idea is to get them to show you your cards.
Ryan Tansom: 19:28 Can you explain a little bit about the black swan theory because I think it's extremely relevant because it's something that you know it's not necessary the card that you know of, right?
Chris Voss: 19:38 Half of them are cards you would have no idea are there. Like utterly clueless to because it's got to be stuff going on in their world that you would never,no matter how much research you did even if you bug their offices and dug through their trash and look through their documents, there's going to be stuff there that you can only find out if they tell you that sort blacks-
Chris Voss: 20:07 And they're typically things they're that typically stuff the other side has no idea's important because they don't know what cards you're hiding. So they don't. There's no way they can know what's important to you. And they're usually little things.
Ryan Tansom: 20:18 I'm trying to think of a couple you know random examples of like actually let's say someone wants to sell their company to someone. But you know it's not just about the price that they're willing to pay right. I mean this is something like how they might do operations that could increase your leverage right because it's something that they're explaining but they don't know it's important to you because you would have a higher degree of leverage because of what they told you, yet they didn't know that that would have harmed them right in the negotiation or something similar to that.
Chris Voss: 20:45 Yeah they may be a path for them that works really well that they have that they had no idea is important to you. Price is only one term. When I was working kidnappings- international kidnappings are about ransom, there's no way around it. So we ran them as sting operations. You know you got to get some of the money into the bad guys hands because it's evidence. And one example of that. And actually you know a long time ago when we first really discovered how powerful this was, a kidnapping gang working in Ecuador they raided oil platform for three straight years on the third year we decided to do a controlled ransom payment and we rounded up 50 bad guys and get 75 percent of the money back. It wouldn't have mattered if we got 10 percent of the money back because we took out the whole kidnapping gang. Now if we had done an assault on the oil platform, we'd only have gotten the kidnappers.
Chris Voss: 21:44 We got their money launderers, we get their leaders, we get their planners. We get the people they did business with. We took out the entire operation which we never would have been able to do if there had been an assault on the oil platform. So you want to take out the whole site. All right so that's why we pay. Why do we pay? What Chris Voss: 22:04 difference does it make? I could have agreed- If somebody wanted ten million dollars I could have agreed for ten million dollars cuz you just try and get that money at them. Like I'm the master at bogging you down in details. You think the other side's lawyers will screw you up in the terms and conditions phase after you sign a deal. You know the worst lawyer, the worst foot dragging lawyer on the other side of a table got nothing on a hostage negotiator. When we go into implementation mode I will make you bleed from the ears and make you feel like you're in control the whole way and that's. And what's the point of that? The point of that is price is irrelevant to terms.
Ryan Tansom: 22:44 So that's it's interesting that you bring that up because that was going to be one of my questions. I actually have a different podcast episode that was titled "You tell me the price, I'll tell you the terms" because there's always... It's trying to get someone to start to move towards action. But then there's the whole due diligence phase and I don't know if you heard the stat that 80 percent of sales don't go through... So, 80 percent of these companies that go to market they actually fall apart in due diligence or wherever it might be because of this entire situation. So you know what is it about the details of how... when you're doing that what is it that you're doing that the other person is not necessarily aware of?
Chris Voss: 23:24 What we'll do is we'll know that their deal killer is away from the table it won't come to the table because their primary objective is to kill the deal and primarily because they weren't consulted sufficiently going into the deal. You know they're you know lawyers are famous for this in-house counsel on the other side. They're mad that they are not negotiating all the deals for the companies and that there are other people out there making deals. So with that what are they going to do? Because they're mad that they weren't involved when the terms and conditions phase comes up. You know they're going to try to they're going to look to rip it apart. They're trying to show everybody they should have been in charge. Everybody knows that's the case. What do you do about it as a result? Calibrate questions in the interaction that will cause them to have to go back to their lawyers and ask questions.
Chris Voss: 24:09 Now they won't know you're doing that to them. You're going to be innocent like you know... who else does this effect, and what are they going to think of this and how do we know for sure that the people behind you are good with this? Now to your face your point of contact will say Oh, they're fine they're good they're fine. Don't worry about that. You don't care what the answer is you care that you ask that same question in four straight meetings, your contact starts to get nervous. He's going to go back and ask the deal killers away from the table which is what you designed to do. Now the deal killers away from the table feel involved. And they're less likely to kill the deal once it's been brought to them because their ego satisfaction has been taken place. So we're going to use the process to bring people to the table without them knowing we brought them to the table.
Ryan Tansom: 25:00 But is that a way to you know to go back to the Black Swan theory... You know I think what you said there's about average of like 1 to 3 or something like that. You know these things that people don't know are extremely important behind the scenes something there's a couple of them. Usually in every scenario.
Chris Voss: 25:15 We like to say at the end of a negotiation if you haven't found at least three things that totally surprise you in the course of the conversation, then you've failed.
Ryan Tansom: 25:29 Well what's really crazy interesting about that is so many people that I've interviewed on the show of people that have sold are the people that we work with that they've sold their companies the so many times it's not until after the deal closed that they realize why that buyer bought their company which is just it's like this huge surprise most of the time. And you know that's why I think there's information out there that you know three out of four owners aren't happy because they bought you they said it's for the culture but then all of a sudden it was for the client list and you didn't. They had no idea. And everything turned out to be differently after the deal. So you know when you're going through this process how can you know how can a business owner or their advisers or whoever flush out these black swans to literally figure out why is it this buyer's interested in me.
Chris Voss: 26:22 Well it's kind of a two pronged phase that needs to go upfront. Got to be deferential. There is great power deference. There's a there's a tremendous deal making attorney I live in Los Angeles. There's this guy named Tom Gerardi. Tom Gerardi has been named the top trial attorney in California multiple times. Tom Gerardi, when you meet him, you look at this guy and you go, this is the guy everybody's scared of? This guy. He should be Santa at Macy's. [Ryan interjects: Got the picture. Love it.] So he walks into my negotiation class and I just I just know of him by reputation I haven't heard the guy speak before he walks in the door. A mutual friend helped set it up. And I'm like wow you know what does this attack dog going to say?
Chris Voss: 27:10 And this guy comes walking in and he says the secret negotiations is being nice and gentle. Now when you're nice and gentle, the other sides stop and drop their guard and they start to run off at the mouth and they feel superior and they feel in control. And that's when people start to reveal what they're really after. So you start out by being deferential and you say things to them deferrentially and innocently. And one of the great ones that we love 'why' is is one of the most emotionally charged words in the English language if not any language. If I say to you why did you do that. You're going to feel you did something wrong and that I'm accusing you. And instead of and you're going to immediately want to defend and justify this. That's a 100 percent of the time. Every single time. You got to be very careful with the word why.
Chris Voss: 28:07 Most people 99 percent of the time they ask it wrong. As a matter of fact, a lot of people that I've thought we used to teach them never ask why. But here's where you go- here's how you use why. It's what we call proof of life. What's the proof of life. What what what's really in here. You deferentially, innocently ask people up front like why would you ever want to buy my business? I mean you know I mean I just don't see the fit for you guys. Why would you ever want to do it? And that's their opportunity to defend why they want it. They're more likely to reveal a truth because they're educating you and people love to educate other people. You're appealing to the side of their ego that makes him feel large and in charge.
Chris Voss: 28:53 And because of that, if they're educating you they're more likely to tell you what's really going on because their guard's not up.
Ryan Tansom: 29:02 So yeah because I mean that there's... naturally, you just want to explain why. You're drawn to explain and to educate the other... you know the other follow up and some of those questions and maybe you can elaborate on the why versus the how and what. Because I think you know when you get down the line with the terms and conditions and as the deal continues to kind of like erode in the perfect vision of all cash up front that you had you know explain how you know your rebuttals and how you're negotiating and the tactics of how you use the how and what response and the calibrated questions.
Chris Voss: 29:42 All right. So yeah. And I love that you picked up the record calibrated because every question is calibrated for effect. Like if you don't know what your emotional impact what your emotional effect of your question is before you ask it or the words that you use, you're firing a gun without having any idea of what targets were hit. So you know how and what again is still along the lines of being very deferential and making the other side feel in charge triggering in-depth answers that they don't get defensive about and so your why should only be upfront for proof of life.
Chris Voss: 30:19 Now when they come up with a term and you're not certain about the term you don't want to say Why do you want that term. You want to say you know what is it about this that works for you? What's the purpose behind it? How does this impact things? You know you going back and forth on the why- er, on the whats and hows, you're actually asking kind of the same question three different ways to make the answer three dimensional.
Chris Voss: 30:44 And you start to tease out what's really going on and you tease it out in terms of down the line. I mean how does this affect the long term survivability of the business? How does this affect your portfolio? How does this affect what's at stake? What makes this a good term? You can get into a position of asking these questions and then actually when you get into what these sorts of questions, what some people refer to as guided discovery, with deference, you can control the entire direction of the conversation. There's so much control not control but what you do is you box people in and they don't know you boxed them in with the question.
Ryan Tansom: 31:24 Can you explain it maybe elaborate too on how you're doing that with those questions instead of saying no because I think maybe I'll give you an example to tee up and you can elaborate on it is you know a lot of times it's like OK you know I'm going to give you five million bucks for your business. But you know a million up front. You know maybe 3 million in a long-term earnout now that you have to work for us and it's tied to compensation and then another... and holdbacks so essentially you're not getting the money you're like stuck into a job, so a lot of people immediately viscerally react to that say no. You know of all the normal non professional ways to negotiate. How do you get- back yourself out of a situation that you've been backed into like that by you know not saying no like someone would want to say?
Chris Voss: 32:13 The first thing to do is you know you've got to get good at saying how am I supposed to do that? And saying at least three times at least two different ways. So the first thing is going to be like, "How am I supposed to do that?" And then let it sink in. You know this is this is what we call letting out a little at a time. Now this is this is a context-driven question that actually you know my son Brandon who is my director of operations and our best negotiation coach. He called this 'forced empathy.' You force the other side - force them - to look at the offer they've given you in context. And they don't know that you've just forced them. It's what I talked before about boxing them in and they don't even know it. So it's just great context empathy forcing context forcing question and why you want to say it deferential like how supposed to do that.
Chris Voss: 33:10 And if if there's movement in the terms, you now... they're going to give the movement without you asking for movement. You want to get movement without asking for because you don't want to trigger reciprocity. You don't want to "Oh." You want them to feel like that that was their idea which then increases implementation. This is a lot of psychological emotional intelligence at work through every single word. Make the other side give you can control.
Ryan Tansom: 33:37 So can you give us, Chris, maybe an example. Really good ones that I've heard before but like you know one where you saw whether there's a student or in your experience of how someone who used that phrase "How am I supposed to do that" to get a better outcome or get to the progress that they wanted.
Chris Voss: 33:54 Yeah. One of my favorites off the top my head because everybody's afraid that when you say how are we supposed to do that the other side's going to say because you have to because you have no choice.
Chris Voss: 34:05 That's actually the response that you want and you should not stop saying How am I supposed to do that. There was a deal that was going on here in Los Angeles. One of my students a high net worth wealth adviser is trying to rent a home- lease a home in the Hollywood Hills for a trust fund baby. So the home that they're looking to lease is in the vicinity of the 20 grand or more per month. I don't spend that much in a year. You know and this is a monthly outlay. So
Chris Voss: 34:39 they're in a negotiation with the real estate agent and then net worth wealth advisor says "How is my client supposed pay for that?" And they said "Well you're right." Now understand when someone says 'you're right that' is not responsive to the question. You know it's about triggering what you say and what they heard. Being conscious of what they actually hear because nobody actually listens. So you try to create a dialogue, you're affecting the dialogue that's going on in their brain.
Chris Voss: 35:08 So the person says, "you're right, it is a lot." And they start to talk and they drop the price and they talk about a bunch of other terms and the conversation always goes around through a lot of other things where you have to say it again. So they get back to the retail- the least term again and of course it worked before. So the net-worth adviser says, "you know how's my client supposed to pay that?" And the person on the other side said because if a client wants a house they'll pay him.
Chris Voss: 35:31 Perfect that's where you want to be because now you just finally hit you found out everything is on the table in regards to that term which is your job as a negotiator. It doesn't obligate you to take the deal. What it does is push the other side to that limit without making them mad enough to walk away which is in fact your job as a negotiator on every given term. It also doesn't obligate you in no way shape or form to take. You've never put yourself in a position to say well you come into this range I'll take the deal. And if you said OK here's how you got it you say to yourself Holy shit I should ask for more! Sorry for the profanity. But you never want to put yourself in a position where what you said to get a term obligates you to take that term. All you want to do is fully explore.
Chris Voss: 36:18 Now let's say they threw a term at you that just doesn't work and it's a deal killer. Well you've already telegraphed to them that you have a problem with this term you don't want to say no abruptly you want to give the other side every chance to make the deal and that you know then we'll the step saying no down and we'll say a little bit more directly and now if it if it still doesn't work we'll say look you know you're being very generous. Which is a counterintuitive to say when you know side's being stingy but it's actually ridiculously emotionally intelligently smart.
Chris Voss: 36:52 You're being very generous that just doesn't work for me. I'm sorry. Sorry this doesn't work. Then you've given them one more real good warning that they need to fix the deal before we walk away. And you haven't insulted them or threatened them or backed them into a corner by doing that. But you are now telling them that we're getting close to the end of the deal if you don't sweeten the pot without creating any obligations on any side. And since- if the other side's not backed into a corner you need to find out every possible advantage you could get. And if he if they're backed into a corner what they're going to do is are going to hold back intentionally cause they're mad.
Chris Voss: 37:27 And you don't want to trigger because then even like you said even have decided you know you've got a phase to go through and you don't want the surprises to be in the terms and conditions phase after you signed the deal.
Ryan Tansom: 37:36 So in that part of the negotiation you know because you get the how am I supposed to do that and some of these calibrated questions that you're asking... can you explain because I think it's so amazing. The the the No... It was actually totally shocking to me your your whole your whole perspective on the word no versus yes. Because I think everybody's reaction is to say no immediately and first of all- or to be scared shitless of the word no because of high rates. And the difference between no versus yes. Can you explain? Cuz I think it's applicable if there's one thing for anyone to takeaway like how to view that in a different light.
Chris Voss: 38:21 Right. So it's not the word itself, it's the context of the words. What you calibrated for it to do. And you know a calibrated No. And that's why we continue to use your phrase calibrated question because a calibrated no is worth at least five yeses at least if not more so in the midst of a negotiation you can say to the other decide when you would want to say you want this to work. You simply say do you want this to fail and take any question that you might want to get a yes to. And he just flipped the way that you asked it so that essentially you get the same result with a no but when people say no they feel safe and protected and they're going to tend to answer the next four questions for you and say No I don't want it to fail. But in order for us to make this work we're going to do this this this and this. Bang bang bang. You just get the rest of the information.
Ryan Tansom: 39:16 Why is it so natural for people to do that then?
Chris Voss: 39:19 You know that's a crazy idea. I think- And that's the one that I mean that's such a new idea that I have not yet the brain science is my emotional intelligence experience tells me that people feel safe and protected when they say no. Because you're feeling safe and protected, you are now going to open your ears up and you're probably going to want to push things forward because you don't feel you're committing to anything, you're just outlining implementation.
Ryan Tansom: 39:46 I think it's so interesting because you know all the B.S. behind the yeses we give people we just totally don't mean it. You're like Oh sure yeah yeah I'll get back to you or yeah we want to make this deal... and people are just lying through their teeth.
Ryan Tansom: 40:00 So you know is there something they've seen Chris where like you know if I if you were to ask me no question that like triggers me to justify something or another, because you know I've seen it work since I've read the book. So is there something you've seen or like how that how you can guide that no process into getting the information because people just start babbling and I'm so curious and how that happens.
Chris Voss: 40:26 Yeah you know it's all I know is it happened to us time after time. I mean first example of one the first most powerful ones. I asked Jack I asked Jack Welch to come speak at a negotiation course on teaching USC. It's at a book signing and 200 people in line doing everything they can and doing everything they can to minimize your time with Jack Welch to three seconds because there's 200 people in line and everybody wants something from him. Everybody's trying to get him to say yes to something like "Jack, you know would you come over to the house? My wife makes a great meatloaf." You know whatever it is. Asking him crazy stuff... you know Jack. Give me a hug. You know whatever. Everybody's trying to get him to say yes. So I walk up to them when I say is it a ridiculous idea for you to come speak to the negotiation course I teach at USC? That quick. I didn't' even tell him my name. And he freezes. And he looks up to the left and he gets this ridiculously intense scowl on his face and he freezes I swear it felt like six hours.
Chris Voss: 41:25 It was probably 15 sec like I thought my heart stopped. He looked furious and then I thought he was so furious he just had a stroke and died. I thought he was going to fall over right front of me. But when he finally unfreezes he looks at me and he says "This my personal assistant's name. This is a special Twitter account that we have set up there to communicate with her. I will call her and let her know you're going to be reaching out for- my people are going to be in Los Angeles in the fall. We are coming this week you class." Understand he just answered my next five questions which is who do I need to get a hold of? How do I coordinate with her? What's your travel schedule? How do we work this out? I mean that's literally five questions, but having triggered the No, he then thought through five more implementation questions. Boom boom boom boom. Laid it all out for me. Happens every time we do this every time. Nobody ever just says no. They go No. And this, this, this, and this.
Ryan Tansom: 42:25 It's so crazy. So Chris I literally got done I paused the book when I was listening to it. And I and I got done and I wrote that e-mail that you suggested in the book for my gentleman that hasn't gone back to me in six weeks and I shit you not it was three minutes and I got a response. So explain to the listeners that that e-mail or kind of I don't know how to get someone to come up from here that they haven't seen for a while.
Chris Voss: 42:54 And it's... Have you given up on x y z whatever it is. One line e-mail one line text literally you'll get we'll get an answer in three to five minutes from people not getting with you. It's ridiculous. Like you send that message, sit there and stare at the screen because it's coming back.
Ryan Tansom: 43:13 I literally got an explanation, too. I mean, it was just it was like it was eerie actually.
Chris Voss: 43:19 Yeah it's freaky right. It's and and we're not seeing it fail.
Ryan Tansom: 43:26 All these different things are so crazy interesting because you know when you're going through. You know selling your business you know that the steps are OK. I'm I'm agreeing mentally that I want to do this. Who are my buyers? And then it's literally an engagement or interaction after interaction where you're essentially fighting for your life. And there is no you know essentially up until your book there is no rules of engagement on how to go- you know you don't know when you're giving stuff up even though the whole time because most often or not the buyers have done this a gazillion times and you're the first person... It's the first time you've ever doing this.
Chris Voss: 44:00 Yeah. Talk about not being a fair fight. Right.
Ryan Tansom: 44:04 How do you know how have you seen that people can use these kind of tactics. If they've got other people involved right. So there's a lot of people that will hire an investment banker a business broker to kind of fend on their behalf. And you know you were always explaining the value of face time and then you know the ability to read behaviors, all that stuff. What do you do if you got someone that's out there on the front lines for you?
Chris Voss: 44:29 Yeah well the person on the front lines for you, they're a human being. So you've got to they're going to try to push together a deal because that's how they get paid. And I don't mean anything by it. They're going to try to push both sides together trying to do whatever you can whatever they can to get the deal without realizing how much you have on the line. So you know managing them is as important as managing a process. And there is no better way to manage people than with the calibrated questions of what particularly in that in that instance. Because what it's called. You want. You want to tire them out more than the other side tires them out. What does that mean? They're going to pound on the other side and they're going to pound on you.
Ryan Tansom: 45:18 So I mean is that detrimental if they're on your side though or not?
Chris Voss: 45:24 Well you want to push your people as much as you can without threatening. So they're on your side and many of your business brokers like any other broker in any other business you know they are on your side. They want to see you get paid. They want to get you the best pay out possible as quickly as they can because they want you to be able to move on with your life. And they don't want this to linger.
Chris Voss: 45:56 They don't know that there's a really good chance that just by lengthening the process by 20 percent there's a really good chance they'll increase the payout by more than 20 percent. You know it's really counterintuitive to do that. They're gonna think about all the deals that they put together quickly. Then they get to be proud as hell that they cut the deal for you as opposed to fighting for every last dime. Now it's hard on them. And that's why understanding that it's hard on them. How do you manage them. Without making them feel picked on beaten up backed into a corner you manage them with all their calibrated questions of what and how.
Ryan Tansom: 45:56 So why- what's the backdrop of the 20 percent deal?
Chris Voss: 46:41 That's just off the top of my head I mean I did I do a lot I do a lot of coaching with real estate agents and you know they're there they're brokering people's hopes and dreams. You know a business is someone's it's their hopes and dreams for the future. Their memories of the past. You built up a business a business is your child. You got memories of the past, you got hopes and dreams for the future for the sale of that business the same sort of emotional dynamics as there are in selling a home. Whether there's a hot market for cold market. You know the agents know what it's going to take to let the market speak to them. And let the market tell us what it's worth. Now, and I've heard I've had a lot of agents go out. The market has spoken. This is what the market wants. And they'll bring it back to the client and the client will be just just devastated. And the agent will say, but the market has spoken. This is what the market wants. And we've had a number of agents that I've it talked into saying like you know what? Go back out and let the market speak again run the process at least one more time. You know maybe you think that the market spoke but one you know one announcement from the market ain't enough and time after time after time we and we've had listing brokers say I know the market have been doing this for 20 years the market has spoken. If they go back and run it again they're shocked with a higher result enough times that they feel horrible for not having run it a second time.
Ryan Tansom: 48:22 Interesting yeah I can see that.
Chris Voss: 48:25 And and but getting them to do that is a hard thing to do because you know your broker has worked has worked very hard for you. Your broker's got more intelligence more experience in the market than you do because they've been in the market for six months. They got more intelligence more experience in a market you know. But this is very deceptive for brokers and agents. But they don't know it is and you've got to get them out of that without them knowing that you've got them out.
Ryan Tansom: 48:51 It means applying all the same tactics to them to just make sure that you know they don't feel like their- because I've been in that same situation with my own real estate agent like you don't want them to be pissed off and upset when they're going out to market. You want... You want them to be on board for why they're doing that right?
Chris Voss: 49:06 Right. Yeah. You want to feel good about it you want. You want them have some appreciation. You know that they're really- You know every person says they want to under promise and over deliver and then they don't want. They want to under deliver and over promise. But people feel good about doing a phenomenal job. So it's helping it's helping them do a phenomenal job and it's helping them actually walk the talk that they gave you earlier earlier on.
Ryan Tansom: 49:34 You know know we're getting short here on time Chris and one last little question that I got because I think it's a big challenge. You know we struggled with in our our sale and then a lot of people have that we've interviewed or talked to but you know how do you separate emotion from the process? Because you know it's your baby it's your house it's your business it's all these things that usually people- or or someone's loved one. Right. I mean how do you how do you separate the emotion from the process if you're the one on that side of the table?
Chris Voss: 50:04 You don't want to separate emotion you want. You want to separate negative emotion. And there is a difference. You know we don't want to be dispassionate and actually we think better in a positive frame of mind. We think better with positive emotional work force will make better decisions. We see situations clearer more quickly we see patterns more quickly. So the issue is not emotion it's negative emotion. So how do how do we separate it? Well it's how do we diminish its impact? Not that we separate it. And that's a stupid thing. At the very beginning. The mere recognition of negative emotions diminishes those negative emotions. That sounds too stupidly simple to be true but the Brain Science backs that up every time.
Ryan Tansom: 50:54 Well yeah I'm just like I mean I'm I'm just thinking of examples of I mean just even saying to someone with the deal closing this is my baby. How am I supposed to let go of it and know that it's going to be fine? And just like calling it what it is right.
Chris Voss: 51:07 There you go. That's beautiful. How am I supposed to let go of it and know it's going to be fine? That's a brilliant question to ask.
Ryan Tansom: 51:14 Yeah I'm definitely Flintstone material, too. I'm not some PhD. [laughing] Chris, I can't thank you enough for coming on the show. I mean I absolutely love your book. If there's one thing you wanted to highlight that we've talked about as we've talked about a motive various different things or you know leave our listeners with one last thing what would it be?
Chris Voss: 51:34 Yeah you know I'm gonna tell them how to get a hold of me, but in a negotiation, let the other side go first. Don't take yourself hostage. You don't. You don't get a take. You don't get to react. You don't get to take what they throw out on the table. You know let them go first. Chances are they're gonna spontaneously give you something you didn't expect is going to be better because they're dying to talk to you anyway. They're not going to listen to word you say until they've had their say so you know you're saving time by let them go first.
Ryan Tansom: 52:00 I love it. And then of course I was you know at. Let me give a little shout out about your book and your company's Web site and everything in the newsletter. So what's the best way for the listeners to reach out to you and get a good dose of all the stuff we talked about?
Chris Voss: 52:11 Right. So the gateway to everything we have is is the once a week newsletter that we put out, which is complimentary. It's FREE. I used to have a friend that said if it's free I'll take three. And you know so Edge comes out once a week short a single short digestible article and everyone could read it. You don't want some newsletters wear you out deciding what to read. Right.
Chris Voss: 52:39 And also any sort of training we have coming up. It's a gateway to our Web site a gateway to all the products that we charge for many of which are free. It's also a gateway of where is the best place to buy the book which is always Amazon. Never Split the Difference. But the Edge is a newsletter and the quickest and easiest way to set up a subscription is to text the word all one word. FBIempathy don't let your auto correct put a space in between FBI and empathy. Not case sensitive FBIempathy, all one word, text to the number to two two two eight. That's 22 28. We get a text response. Signing up for the newsletter gateway to everything we have.
Ryan Tansom: 53:23 I love it and read the book of the haven't. It's amazing. Chris I can't thank you enough for coming on the show. Appreciate it.
Chris Voss: 53:23 My pleasure, Ryan. Thanks for having me on.
Ryan Tansom: 53:35 That's awesome, Chris. Hopefully you had fun and enjoyed it too.
Chris Voss: 53:38 I did, man, that would fast. That was great. Yeah. Thank you man, I really enjoyed it.
Ryan Tansom: 53:43 I I loved it. So what I'll do is I'll be circling and Brooke back in with all that. Well like I said we make it stupidly simple we give you a social media postings and blurbs and iframe for the links and all that stuff so you don't have to do much work.
Chris Voss: 53:43 Thank you. Much appreciated.
Ryan Tansom: 53:58 Rock on with the book. I really mean it. I've literally been in sales my whole life, too. No one has ever given anything as applicable as this. It takes the thinking fast and slow and all the other Ph.D. gobbledygook out there and puts an into the real stuff so I can I can totally see why you've been you've been crushing it out there.
Chris Voss: 54:18 If you put that word if you haven't already done it what you just said if you put that word for word in a five star you on Amazon I'd be eternally grateful.
Ryan Tansom: 54:18 You got it. Guarantee it.
Chris Voss: 54:18 Thanks, man.
Ryan Tansom: 54:18 Alright, Chris. Have a good one, man.
Chris Voss: 54:18 Alright, bye bye.
Ryan Tansom: 54:33 Thanks for sticking in there I hope you enjoyed the episode with Chris as much as I had fun doing it and what I wanted to do for this takeaway is to really dive into three of his different tactics and how I think it's applicable to negotiating the transition or sale of your company. So the first one that I want to peel apart is the black swan theory. So in his book he talks about there are three black swans which are unknown unknowns about both parties. And when you're selling a company there's a lot of unknowns. And I think really the biggest unknown or the biggest Black Swan is trying to uncover why is it that the buyer wants to buy your company and you really need to peel apart the dialogue and the communication to figure this out. Because most of the time everybody will say the service is about the money or the client list or whatever it is but understanding the true nature of why they want to buy your company and what the intentions are for the company and the culture and the operations after a close is really important for you to be able to understand whether that is a fit for you or not or whether you're going to like it.
Ryan Tansom: 55:45 So the two following takeaways and tactics that I think are very useful to trying to figure that out is his phrase of how am I supposed to do that. I think it is so genius because instead of saying no. So if someone says I want you to have a two million dollar earn out I want to say no that's not possible in arguing and stomping your feet it's okay that makes sense but how am I supposed to do that if I want to walk away or how am I supposed to really just trying to help them articulate why they're doing it.
Ryan Tansom: 56:20 So you're uncovering the truth of why they're presenting certain things that they are presenting without you saying no and having this contentious fight back and forth and the third tactical tool that I think everybody should pick up and start using is the ability to label negative emotions because it calls the B.S. or calls people's real feelings out into the open and addresses them because we can't solve any problems unless we address it. So labeling something and then actually processing the issue allows us to process it and work towards a solution together and then layering that on top of the home I suppose to do that. So if someone's asking something of you that you're not really willing to do or not wanting to do because it's firing your employees or doing more of an earn out or less money upfront really saying well okay it sounds like you don't trust me enough and then they say well we want the earnout, then how am I supposed to do that if I need the money now.
Ryan Tansom: 57:20 So really just having a mature emotionally intelligent dialogue and conversation back and forth is the best and most productive thing that you can do whether it's with the seller or your adviser the investment banker or whoever it is and really putting yourself back into the control and the driver seat I hope you enjoyed the episode next week is a fantastic episode. We have a gentleman named Jeff Green who wrote a book called The Smart Business Exit and we spent a ton of time talking about what a great exit looks like. What are the different variables to have a valuable company and then how do you have control and happiness after the sale of a company. So until next week.