Lessons learned negotiating with Hollywood sharks

For this month’s column, I want to give you some insights about Hoffman’s candid experiences (the full episode is available here). Why should you be interested? Because drawing parallels from different sectors/perspectives nearly always generates new insights.

Let’s start with a quote from the interview. It was early in Hoffman’s career and he was raising money for one of his very first ventures.

“Did you have a BATNA [best alternative to a negotiated agreement] Steve? Did you have two to three alternatives waiting in the wings?”

“Mike, that was my critical mistake – we had nobody else, no backup; we trusted them. This was our first VC deal.”

The first lesson learned here is always have a BATNA, irrespective of which side of the deal you’re on. Your BATNA has to be real, palatable and exercisable.

What you’ll learn in this month’s Ask the Negotiator column is:

• Insights from negotiating with a seasoned counterparty

• What should you do to prepare for your next negotiation?

Insights from negotiating with a seasoned counterparty?

These are some of the insights that came out of the interview with Hoffman:

• Trust needs to be earnt, not simply given

• For bigger deals, get a strong commercial lawyer on your side from the outset

• You’ve got to drive the deal and set the deadlines, and mean it when the time expires

• Confidence is absolutely fundamental in negotiations. Without it, your counterparty will use it to their advantage, and they will come out better off

• You’ve got to have a BATNA that is realistic, palatable and executable

• Understand the power of fear, uncertainty, doubt and greed. You have to find out what’s motivating the other side, not just their overt demands

• The ‘stoney-faced’ counterparty isn’t always bad news

What should you do to prepare for your next negotiation?

• Back in 1996, when I joined KPMG, they recommended a brilliant book to me. The essence of this book was ‘how do you build trust with clients?’ The really condensed version is to think through the four key elements of the trust equation: credibility, reliability, professional intimacy and self-orientation. Before any negotiation, prepare well (you’ll be more credible) and think about your counterparty more than yourself

• If you’re about to negotiate a strategically-important, complex deal, find a great commercial lawyer and a negotiation coach. Make sure you start by crafting the principles of the deal (and objective criteria) before getting into contract negotiations

• Think through the realistic deal timeline and milestones. Write them on one side of A4. Send it to your counterparty and ask them to add/edit. Now you have a mutually-agreed cadence to keep your deal on track

• Confidence is key. Preparation helps significantly. Know your emotional triggers and how not to react to them. Observe others to see how they do it

• By using active listening and thoughtful questioning, find out the motivations (interests) behind your counterparty’s demands

• Body language is important, but don’t rely on it to drive your own behaviors/actions (and be really careful with mirroring techniques)

I’d like to thank Hoffman for being so open and candid with his experiences. I hope his experiences have given you at least one thing you can apply in your next negotiation.

If you’ve got a roller coaster negotiation story to tell (anonymized is fine) or comments on this article, I’d love to hear from you.

Mike Lander is chief executive and founder of Piscari, which empowers agency leaders with better negotiation skills and insights into how procurement professionals work.