Book Summary: Negotiation Genius Written by Deepak Malhotra and Max Bazerman

May 31, 2022 0 Comments

Negotiation is at the heart of human communication. Think about it. Most conversations are a sale in the making. You are either selling yes or accepting no in everything you do. At work this is reflected in what you do, how you do it and what you get paid. All of these facets are negotiable. Deepak and Max go well beyond the win/win, win/lose, and lose/win mentality and show how to create value. The whole point of the book can be summed up in a quote from Emerson: “Man waits; genius creates.”

Why is this important to me?
I start all book summaries with this question because if we can’t answer it, then there’s no point in wasting time watching the video. People do anything to avoid pain and get pleasure. When in the middle they reach their COMFORT ZONE! The comfort zone may be the one place where good negotiation is not needed. Otherwise, you need to know how to trade – PERIOD. This book will show you how.

Win/win is considered the ultimate goal of good negotiations. Is it the best result? The genius of the negotiation will show that it is not always the best result. Amateur negotiators pull on each side of the rubber band hoping it won’t snap before they can come to an agreement or settlement. This is claiming value in a nutshell. Johnny wants to pay only $50,000 and Jane wants $100,000. They are usually somewhere in the middle at $75,000. Claiming value is not as powerful as creating value, which we will examine in more depth.

Deepak and Max divide the book into 3 sections. I will cover parts of each section for time reasons. Claiming value is the first part. Value Claim: This is when each party tries to get the most out of the negotiations for itself.

1. BANTA – The best alternative to the negotiated agreement! Identify all your best options. Do your homework and get ready
2. RV – Reserve Value – This is your starting point. Understanding BANTA allows you to really know what your reserve value is.
3. ZOPA – is the ZONE of Possible Agreement – This is the difference between the sales reserve value or starting point and the buyer’s reserve value.

Common negotiation mistakes are as follows: 1.) You made the first offer when you weren’t in a strong position. 2) You made a first offer that wasn’t aggressive enough. 3.) Spoke but did not listen 4.) Tried to influence the other party but did not try to learn. 5.) You didn’t question his assumptions about the other party. 6.) He Miscalculated the ZOPA and did not re-evaluate it during the negotiation. 7.) Made bigger concessions than the other party.

Contingency Contracts are designed to bring out lies and deception as the most extreme in any contact. They leave certain elements of the deal unresolved until the uncertainty in the future is resolved.
Silence: get comfortable with silence. Just remember that if you speak when it’s their turn, you’ll pay per word.

Investigative negotiation is just what it says. Probe and ask questions to gather information. How can we obtain information to create value, resolve conflicts and reach efficient agreements?

1.) Trust is essential in all relationships. You can have a weak agreement with good people and get a great result. You can also have a rock-solid deal with bad people and have a terrible outcome. Trust is the glue that holds the deal together after it’s done. Sharing information can help you collect information.

2.) Negotiate issues simultaneously – When you do this, more information is shared and the dialogue is more open. Once people feel comfortable with you, they will download more information.

3.) Ask good questions and LISTEN – If you take nothing else from this video review, this tip will serve you well. Ask open-ended questions in your TERMS like “Why”, “Tell me more”, “Can you be more specific?” It will allow you to get a full spectrum of what they are concerned about, what is important to them, and what areas are NOT. important to them.

The power of questions can be mind-boggling. Think if Microsoft wanted to buy your software company. You value it at three times the revenue, which is $15 million dollars. If you accept this offer knowing everything you can possibly know, then this may be good enough. What if due to their distribution, they will be able to generate $100 million per year in revenue with their software? Don’t you think they would pay you more? They could pay you triple your price. The key here is knowledge. Understand why they want to buy and the consequences if they don’t and this will give exponential results.

Several principles are essential for you to learn. Remember that in any negotiation if you get a No, don’t accept it. Your goal is to understand “Why NOT”. Once it does, you’ll be able to reopen it and get a yes.

I hope you have found this brief summary useful. The key to any new idea is to work it into your daily routine until it becomes a habit. Habits are formed in as little as 21 days.

One thing you can get out of this book is that you don’t accept NO. Instead, ask why!

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