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How To Negotiate And Win, The MIT Way

Lawrence Susskind, how to negotiate

With Lawrence Susskind, Professor at MIT: Entrepreneurial Negotiations: The MIT Way, Author of 20 books on negotiation skills and techniques including his latest, Good for You, Great for Me: Finding the Trading Zone and Winning at Win-Win Negotiations

Acknowledging that we all negotiate in many aspects of our daily lives— with our spouses, our friends, our children—Professor Susskind defines how to negotiate, as it applies to his  online course, as the proper interaction between investors and entrepreneurs, so that each party presents and protects their respective interests in a manner that leads to positive results all the way around.

As opposed to the “old school” way of selling, where the presenter or sales person goes into the room with a product or an idea and simply puts it on the table, Susskind teaches the value of advance preparation, the importance of building relationships, studying all the angles, and anticipating resistance, all important components of how to negotiate successfully.  He stresses the value of trust within these relationships. The venture capitalist, for instance, needs to keep connected to the inventor down the road, after the sale, in order to sustain and grow that business. Without trust between partners, there can be little chance of that happening.

Professor Susskind’s online entrepreneurial negotiation course, Entrepreneurial Negotiations: The MIT Way, teaches these skills by matching each student with a partner and putting them into an interactive situation where they go through all the steps of an actual negotiation. After that, they watch a video of Susskind in a kind of debriefing, where he confronts the same situation, utilizing all the points of his program and his philosophy. For example, if there is an adversarial point in the negotiations, he illustrates how to handle resistance and bring the negotiating back to neutral ground.

He concludes by saying that you don’t have to be the smartest person in the room to be a successful negotiator.  Instead,you need to be the best prepared, the best listener, and the most creative problem solver.

Disclosure: The opinions expressed are those of the interviewee and not necessarily United Capital.  Interviewee is not a representative of United Capital. Investing involves risk and investors should carefully consider their own investment objectives and never rely on any single chart, graph or marketing piece to make decisions.  Content provided is intended for informational purposes only, is not a recommendation to buy or sell any securities, and should not be considered tax, legal, investment advice. Please contact your tax, legal, financial professional with questions about your specific needs and circumstances.  The information contained herein was obtained from sources believed to be reliable, however their accuracy and completeness cannot be guaranteed. All data are driven from publicly available information and has not been independently verified by United Capital.

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Steve Pomeranz: Professor Lawrence Susskind teaches at MIT. He’s written twenty books on the subject of negotiation. He’s also founded a company that provides mediation services to companies and governments around the world, and he’s launching MIT’s first ever professional education course on how to negotiate this spring. I’ve asked him to join me to discuss what he has in mind and to get some insight on the skills necessary to help you get what you want out of life. Hi Larry, welcome to the show, I’m so happy to have you with us today.

Lawrence Susskind: Thanks so much, glad to be with you.

Steve Pomeranz: We want to spend our time today talking about these new online courses, but before we get into those details, in a sense, we’re not all entrepreneurs in the strict definition, but we’re always negotiating in our lives. Whether it’s with our spouses or our friends, our children, we’re negotiating constantly, our bosses. What can this course provide us in terms of what we do in our regular lives?

Lawrence Susskind: I view negotiation as an effort to get somebody else to do what you want, when you want, the way you want. As you said, that occurs across all kinds of contexts, and it turns out that, for entrepreneurs, the someone you’re talking to, you have a certain kind of relationship with. If you’re the inventor and they’re the investor, you have a certain kind of relationship with them. Getting them to bet on you, getting them to invest in you, getting them to partner with you the way you want, when you want. You can either view this as a contest, as a battle, as a win-lose proposition, or you could say, “Let me try to connect to what their interests are, what they want, and see if there’s a way for me to come out of this engagement with an outcome that’s pretty good for them and very good for me.”

If you start out saying, “Every negotiation is an opportunity for problem solving, where the problem is how to help them do what they need to do and help me do what I want to do,” you will just proceed in a different way, down a different path. You need different kinds of skills, and you’ll get a better outcome.

Steve Pomeranz: What is the difference between selling or a sales presentation and negotiating. It sounds like one may be a subset of another, but if I have an invention and I’m trying to convince somebody to help me fund it, am I selling? Or am I negotiating?

Lawrence Susskind: I’m not so sure that there’s a huge difference between those two terms. I realize in the world at large people act as if they’re very different. They think of selling as just a buy-sell, one-shot deal, although really good sales people are concerned about the relationship that they’re left with in terms of how they sell them something. My sense is that if you care about the aftermath of the sale, and you’re trying to worry the relationship while you’re trying to work out buy-sell, then you’re negotiating. Similarly, often, when you’re negotiating, you’re doing a lot of listening; you’re doing a lot of trying to understand the needs, concerns, and interests of the other side. Then you’re doing a lot of problem solving.

I think really good sales people are trying to figure out what latitude they have to try to time when they’re going to sell to someone this thing, what arrangement they’re going to have between this sale and future sales. They’re worried about reputation in terms of what they say about selling. When a good sales person is doing all of that, I think they’re negotiating. I don’t see a big difference.

Steve Pomeranz: So many types of … well, negotiation I think, most likely has changed over the years, if you go back 25 or 50 years. To what degree, if any, has the art of negotiation changed?

Lawrence Susskind: A lot of people go back to, say, an early book that was called You Can Negotiate Anything, or you can get someone to do what you want. Then I see the emergence in the early 1980s with the publication of Getting To Yes by my friend and colleague Roger Fisher as a demarcation where people decided that I care more about the relationship I’m left with, the long term interaction, my reputation, solving the problem, than just making a deal and getting out of there before they realize what hit them.

I think we move from a very pure win-lose to a much more mutual gain approach. That, to me, is the big shift that’s occurred.

Steve Pomeranz: If you’ve just joined me, my guest is Professor Lawrence Susskind. He’s a professor at MIT, and he’s launching MIT’s first ever professional education course on negotiations this spring. How important … this sounds like the question itself answers it, but I want to get more into detail…how important is trust between the two parties? In a sense, it’s kind of an adversarial situation. I want something you have, you want something that I have, perhaps. How important is trust, and how do you communicate this trust into the relationship?

Lawrence Susskind: In the entrepreneurial negotiation course that we’re going to launch in April, trust is absolutely an essential ingredient. The reason is, if you look at how long it takes for people who make venture deals to go out into the market or go public, in terms of the product they really have and they’re ready to go national or international, they got to work together for a while. If I meet you and I say, “I like that idea, here’s the deal,” and I don’t care enough about building trust, which is the basis of an ongoing relationship, and then we have to work together for six or seven years to take that idea to the point where we can now send it out into the world, in a very elaborate way, we can never make it.

Trust is the essential ingredient in relationship building, and the relationship turns out to be important when you’re not just making a buy-sell contract and signing it and hand-shaking, and you’re off separately. You’re really going to depend on people. The venture capital investor needs to keep working with the inventor, or the person whose idea it was, in stamping it up and trying it out, and building an organization, all during that time the relationship matters. If the way you started was to put one over on someone, or muscle them into something they don’t want, and they don’t trust you, that whole relationship will fall apart or never mature, and the success of the joint venture, if you will, is doomed.

Steve Pomeranz: How much is the personal aspect of the process of negotiation—whether it’s body language, whether it’s how you look at someone, how you shake a person’s hand, how you communicate what you want to say. What role does that play in what you’re teaching in this course?

Lawrence Susskind: Your list in the question is a good list. All of those, I would call them ego and emotion issues. Some of the things you mentioned were just how you display things, but behind that is “what are you feeling?” Not just “what are you thinking?” How you’re managing how you’re feeling, and how you understand how the other person’s feeling. What’s their emotional temperature? How do you take their temperature? And when someone get’s angry, what do you do? Do you get angry back, because you don’t want to look like a push over; or do you know how to respond to anger on the other side by making sure they understand what you meant to say in the first place, and changing or re-framing what’s going on so that you can move from a confrontation to a problem solving opportunity?

This is a big part of the focus of the class. It’s a little bit different from a lot of other online courses because, each week, over the six weeks, we ask people to do a negotiation with someone they are signing up to take the course with, a friend, a colleague. If they can’t, we can match them up with someone. If they can’t find someone to do the negotiation with, we can show them a pair of people, actually my graduate students, doing all negotiations and can watch the tape if they can’t do it themselves.

Then they watch me interacting with those folks in a kind of debriefing, almost like watching the highlights of a sports contest, just the highlights, but then talking with those people, watching the highlights, saying, “Wait a minute, when that person took that really nasty route there, look what you did. Look how you responded. You just made it worse.” Then we can talk about ways of handling that, so that they have meaning to people, because they have just tried to do a negotiation. Then the next week there’s another negotiation that builds on all of that. It’s a very interactive class, but not interacting with the video screen, but having to do negotiations, and then watching me debrief people who just did the same negotiation using the video highlights of that. A lot of it is about those interpersonal reactions. You can’t just get by on being able to cope with the inner personal side, but if you can’t handle ego and emotion, if they get the better of you, you will never be able to move your ideas forward and into the market.

Steve Pomeranz: We only have a couple minutes left, but if knowledge is power, how much preparation beforehand does one need to do in terms of research, before actually going to that first meeting?

Lawrence Susskind: A lot. Preparation is the most important step. A lot of people have lost the negotiation before they ever arrived, because they didn’t do the right preparation, so knowledge really is power. But not quite in the way people think. It’s not knowledge expertise; it’s knowledge information. If I’ve not talked to anyone else who might invest in my company, and I’m meeting with you and you make me a … I guess, it’s a pretty good offer, I have no way of knowing. I didn’t do, as part of my preparation, the home work to generate some other comparable offers then tell those folks to wait while I talk to you.

Part of preparation is the self help you can do to gather good information. If I’ve got a great offer in my pocket from someone else, when I’m talking to you, I’ve got complete power in that negotiation. I’ll walk away, if you don’t give me what I want.

Steve Pomeranz: Do you need to be the smartest guy at the table in negotiation?

Lawrence Susskind: No, you need to be the best prepared, the best listener, and the most creative problem solver.

Steve Pomeranz: My guest Larry, or Lawrence Susskind, Professor at MIT, and we’re talking about his course, which is MIT’s first ever professional education course on negotiations. Larry, how do people find this course online?

Lawrence Susskind: I think if they just go to MIT professional education, or even just Google entrepreneurial negotiation, I think we’re going to come up first. It’s called Entrepreneurial Negotiation, The MIT Way.

Steve Pomeranz: Very good. Thank you so much for joining us and I appreciate your time.

Lawrence Susskind: Good to talk with you, bye bye.