Intentional Growth Negotiating the Sale of Your Business as if Your Life Depends on it
Do you want to be armed with the best negotiation practices and strategies before bringing your company to market? Today we’re going to be talking to Chris Voss, FBI veteran, CEO of the Black Swan Group, and author of Never Split the Difference, which was named one of the seven best books on negotiation. You’re going to learn how to get the best deal for yourself from one of the best negotiators on the planet. We’re going to talk about practical tactics you can use to level-up the playing field and put yourself in control throughout the exit process.
You will learn about:
- 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.
Today we’re talking about emotional intelligence as it pertains to word choice at the negotiation table. Seems simple, right? Well, if you think you have it mastered, you’re dead wrong. Without even meaning to, we can incite emotions by our poor word choice (after all, what was your first reaction when I told you that you were flat-out wrong? I’m guessing you didn’t smile and agree with me). Knowing that, what can we do about it?
Enter Chris Voss, ex-FBI kidnapping and hostage negotiator who now uses his skills in the business field. He gives the rundown on some crucial preparations you can make before entering the ring with your potential buyer (or seller!) so you can avoid these costly mistakes.
Calibrate Your Words
We calibrate everything. We set our thermostats, GPS and music levels ‘just so’. So why are we less careful with our words? To top it off, we are told our whole lives that what we say matters — perhaps you’ve been told that your words hurt after a particularly strong-worded argument. Despite this excellent advice, we still try to dominate negotiations as if having the biggest vocabulary or the best numbers are enough to secure the deal.
Chris Voss says no. In fact, you run the risk of doing the opposite if you’re not careful. Let’s say you’ve got a buyer sitting across from you who says that they can’t do something because of X, Y or Z reason and you say the innocuous words, “I understand” in an attempt to bring the conversation around and work through this barrier. You’ve just shot yourself in the foot, effectively, because now your adversary is on alert because you’ve just reinforced their negative feelings rather than simply acknowledged them and let them pass.
This leads us to the next point…
Negative Emotions Impact Us Greater than Positive Ones
Not fair, right? But we all know the feeling. That last bad quarter sits with us far longer than that one amazing one last year. You remember that one… barely. But you can remember when, ten years ago, you had a financial crisis. To be specific: negative emotions impact us three times more than positive emotions. Our negative thoughts drive us better than our positive ones do.
Let that sink in for a second.
The same goes for negotiations. Both sides will have fears, nerves, anxiety, you name it. Instead of simply saying “I understand” and trying to brush by it to a different point of attack, it is important that you recognize these feelings in order to diffuse them.
Chris draws on his extensive hostage negotiating background as well as clinical research on the impact of addressing negative emotions in order to create a more positive outcome. While you could focus your efforts on the positive side (good numbers, good this, good that), you are wasting your time and effort. You could get the job done three times faster and more effectively if you simply learn how to negotiate through the negative thoughts.
Two Millimeter Shift
We all know and love Tony Robbins. If you don’t, you may want to familiarize yourself with him sometime. He has this concept of the two millimetre shift to deal with negatives. He urges you to identify the negative and not deny or ignore its existence. In so doing, you can diffuse that feeling before it becomes a deal-killing explosion.
To perform a two millimeter shift, you simply need to address the issue head on. We aren’t conditioned to do this, really. Now is not the time to utter “I understand, but” phrases. Now is the time to say “you may feel that I am doing x” or “you may feel that x is happening” so you can address the elephant in the room before it hinders your action plan.
There is significant science behind this showing that by going from a denial to an observation (“I don’t want you to feel like I’m pushing you around” to “I’m sure it seems like I’m pushing you around”), you dial back the negative emotions significantly in the amygdala.
Every. Time.
Ask Why
How often do you ask why someone does something? I mean, we ask our kids all the time: “Why would you think that’s a good idea?” But what about the buyer for your business? Chris suggests asking your buyer point-blank why he or she is interested in your company. We’re not here to do it in an accusatory way as we may with our very guilty children. Rather, we’re aiming to be deferential and innocent in our approach.
Chris puts it best. Simply say something like, “Why would you ever want to buy my business? I mean, I just don’t see the fit for you guys.” And everyone is going to jump to the moment to answer your question and impart some wisdom.
You can always count on people to want to give you their opinions and advice. In this case, they’ll want to defend their buying choice — your buyer wants to make sure you know he or she isn’t stupid and has very valid reasons for wanting your company. You’ll get the most honest answer out of them at this point because you’re making them feel like they’re the ones in control and who are in the position to educate you.
That’s a win. The power has shifted in your direction. This cuts down on the number of surprises you’ll experience at time of sale or even after the sale. Your buyer is more likely to out their hidden agenda in this moment than if you tried to ply it out during the negotiation process in another way.
Don’t Forget What and How
Chris calls asking why in the above example getting proof of life. After that, the why question is off the table — you’ll simply make your buyer defensive if you keep it up. So how can you get that information out of him or her? Simply ask what and how, again keeping your tone and questions deferential and innocent-seeming.
In this case, Chris is referring to getting any potentially deal-killing terms off the table. The person you’re sitting with, unless it’s the company’s lawyer, is likely not the deal-killer. Most deals have items or terms inserted into them after the initial negotiation is complete by those that weren’t sitting at the table. This comes back to our ego or need to feel in control: you left the lawyers out of it and they want to prove their worth and, more so, that this was a bad call.
So they will find any number of reasons to point out the weaknesses of the deal or convince the buyer (or seller) that this is a bad deal. The best way to nip this in the bud is to include them during the process in your deferential and innocent way. Ask your buyer who else this deal will impact and if those people will be comfortable with the deal. Ask the same question in every meeting so that the buyer is forced to go back and consult with their lawyer about it — this gives the lawyer something to show off on and plays right into your hand.
The lawyer has now had his or her say on the process and you’ve addressed their emotional needs. You’re less likely to see them try to blow up the deal since they’ve already had their hands in the making of it. This is now something they’ve helped shape and their ego is satisfied.
Our FBI agent-turned-deal maker’s best advice is to have tactical emotional intelligence. Use it well and it will help you win greater success at the negotiating table!
Takeaways:
- The “black swan” theory: When you’re selling a company, there are a lot of unknowns, or black swans. It’s important to understand why the buyer wants to buy your company.
- Ask, “how am I supposed to do that?” This is a great way to avoid saying no or arguing.
- Label negative emotions. Calling feelings out into the open and addressing them will let you process the issue and work toward a solution.
Links and Resources:
Solidity Financial
Black Swan Group
The Edge
Never Split The Difference
Getting to Yes
The Upward Spiral
Text FBIEmpathy to 22828 to subscribe to The Edge Newsletter
About Chris Voss:
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.