hey everyone welcome back to contractor growth Network I'm Logan shinholster and today we have an awesome guest I have read his book three times it is the famous Chris Voss if you don't know who he is Chris is a master of high sex negotiation forly an FBI hostage negotiator Chris's experience includes intense scenarios like the Chase Manhattan bank robbery standoff where his skillful negotiation secured a peaceful resolution he's the author of The highly acclaimed book never split the difference negotiating as if your life depended on it which distills his negotiation expertise into essential strategies for business and life Chris now shares his insights globally teaching companies the art of negotiation through understanding human psychology and strategic communication Chris will be our keynote speaker on day one of the new era of Contracting virtual Summit join us as we delve into the mind of The Negotiator who's reshaped how the business approaches high stakes discussions let's get into it the first question I asked Chris was what should your mindset be when you're going into a negotiation yeah really curiosity probably and playfulness it gives you a couple of psychological advantages you're quicker on your feet you see patterns faster you're actually 31% smarter in a positive frame of mind and curiosity genuine curiosity uh is kind of a superpower um I've seen it show up in a number of other formats as a way to get you get you through almost anything like it comes up in man search for meaning as to a survival method psychological protection method and what was one of the most horrific experiences any human being could ever endure which is being in a concentration camp curiosity comes up in talib's book uh Nim Nicholas Talib antifragile and he called curiosity superpower an antifragile characteristic where you gain from disorder and so curiosity is one of those things it just uh it re removes judgment from your brain it just helps you see things better it keeps you in a positive frame of mind and then as crazy as it sounds like when I'm in a playful mood if I got a really tough negotiation I got a lot at stake if I'm playful I'm smarter and it ends up being contagious it puts the other side in a playful mindset as well it increases your collaboration with the other side it allows for self-effacing humor which is great for collaboration finding good Solutions so I would say curiosity and playfulness uh will put you in a position to do a great negotiation and when you talk about playfulness like what do you mean exactly well uh let me give you a couple of examples um I uh I had a medical bill a couple of months ago that I just forgot gotten about and you know it's about three grand or so and you know sometimes a bill like that I'm planning on paying him full anyway so you know if I'm late I'm G to pay the thing off and so I realized I'd let it go two months and I'm going to call him on a phone and I I sat down on my desk that day fully intended to pay the bill in its entirety but then I thought you know I'm in a pretty good mode you know what the heck let me let me take a run at these guys I'm not going to be a jerk on a phone I'm not going to I'm not going to leave them worse than I found them by interacting with me I'm at least going to get him to laugh and if I pay the bill in full then I put some positive karma in the universe and made the world a better place for all of us in that moment so I I'm in this good mood and I'm going through the phone tree and I finally get to you know if you owe us money press this button which means I ain't talking to customer service I'm talking to Deb Collections and as I'm sitting there waiting to thinking uh as soon as the lady picks up the phone and she says hello not even hi may I help you any of that customer service nonsense in a really playful voice and go I owe you money as if I was laughing about it with her and she goes you know she kind of laughs and she goes you know who is this what you know what's your what's your Belling number and she finds my number and she comes back on she goes oh yes you do now she's in a playful tone of voice and I say to her you know what uh if I pay this thing off in full right now like how much of a discount can I get because as a general rule 10% discount is a throw weight discount uh you know you can almost always get that I mean it's rare that you can't at least get a 10% discount and I figur based on how much I uh how long I was going to be in a phone how much I owed I thought you know $300 off this this baby I'd take that and I hear in the background go uh say to somebody $700 and she's talking to somebody else and I'm I'm like oh wow okay you know that's more than double what I expected she comes back on a phone she goes $700 and I goes uh $700 off she goes no $700 to pay the whole thing off now I'm I'm I'm stunned I mean I'm stunned and all I know is that I was playful with her and I was joking with her and I you whoever whether it was M or man or woman on the other end of the line I just want to have a little bit of fun and suddenly I get this great deal out of it and so that's kind of what I mean you know be playful with the other person make fun of yourself with them and if they can do something for you they'll probably do about as much as they can for you there's a lot of misconception around what negotiation really is because of what we see on TV and in movies so I asked Chris what are some of the myths around negotiation well you know and the first one is you know be the biggest jerk in the room be the most demanding guy you know be and Donald Trump's just an example of an assertive negotiator and I'm a natural born assertive I read his book The Art of the deal way back when it first got published and enjoyed reading it and would still recommend it to this day you know Trump was uh in in the early days you know he's dealing with contractors in New York City and he's kicking chairs across the room I mean he has got these massive displays of anger and outburst and he's getting his way short term I mean he's uh he's the loudest most aggressive person in the room and and it's a great way to get things short term and then put everybody in a position where they will no longer collaborate with you at all they won't return your calls they won't talk to you A lot of people don't know the uh the uh um the Chelsea Pierce uh real estate development in the west side of Manhattan phenomenal I mean absolutely one of the best developments in Manhattan in the last 50 years Trump originally owned that land it was the Westside railroad yards and he had these great visions and dreams of putting up the world's tallest building there and redeveloping it in a great way but by the time he got to that development he had kicked chairs across a room in so many rooms that nobody would deal with them and he couldn't get the land developed uh it remained undeveloped for the longest period of time because he knew how valuable it was and couldn't get get anybody to develop it all the community groups were aligned against him like everybody in New York was aligned against him and the only reason that land finally got developed was he finally sold his interest in it and other developers came in just made this phenomenal like it's it's inspiring in so many ways how good the Chelsea peers are and what looks like so the seduction there is when you're angry and loud and aggressive you can get a lot of examples of how you got your way and people don't really track how toxic that is long term and how ultimately everybody in your environment gets sick of being yelled at and have chairs kicked across the room and they won't deal with you anymore one of the issues a lot of Contracting Company owners face is that when they're told no by a prospect they immediately put their walls up and get defensive Chris talks about the space between yes and no so I asked him to expand upon what that space really means yeah and I was just I was just having a discussion last night about that very concept um uh with my girlfriend Wendy Starin who's a Independent Business person of her own very successful entrepreneur model and songwriter and she was talking to me about you know somebody's gonna she expected a really bad proposal from uh there people she done business with in the past and it was going to repeat and they were probably going to you know uh try to get her to take a big pay cut and I said you don't got to say yes or no uh you're not avoiding a question I mean the first phrase in a book U never split the difference which is how am I supposed to do that is neither yes nor no you're neither accepting nor are you rejecting what the other side has offered and and we think when somebody makes an offer we have to say yes or no you don't have to say either but how do you not say either if you say to somebody how am I supposed to do that you've just opened up the gap between yes and no and there's a lot of space there it's my contention that space be in that Gap is as big as a Grand Canyon because they say how am I supposed to do that now you put the other side into a completely different thought pattern you put them into a problemsolving thought pattern collaboratively with you whether they like it or not it's very differential you know you could say how am I supposed to do that in an attacking angry way and again tone of voice is critical your inner voice betrays your outer voice which is another reason to remain curious like how how am I am I supposed to do that you know that's a curious way to ask that question you haven't accepted and you haven't rejected it like you've indicated that look if if the implementation issues could be solved here uh collaboratively you know i' I'd be happy to do it I just you know there's some real problems here and it's a shift away from out of the yes no um prisoners dilemma if you will into let's see if we can collaborate to make this a better deal and if if you can go with how am I supposed to do that and then get into a listening collaborative mode actually listening and showing that you're listening paraphrasing what they've said summarizing it you know looking for the insights into what they've said then you find the space between yes and no is huge and probably yields a much better deal for both sides because I I know a lot in like the the Contracting space there's a lot of options here it's not a a one-size fitall where this is the kitchen that you're going to get and either take it or leave it so how would that space between yes or no uh be related to when you're looking at maybe like the full scope of a project as far as the client saying eh I don't think that what you presented is exactly what I want well yeah and then ideally um if there if what they've said uh let's presume the client uh intentionally means that collaboratively I mean there's one or two things when somebody doesn't like your price uh they're expressing a real problem or they're just trying to beat you down on price they're testing you I mean you know even if when people are being collaborative everybody's been trained if they think about it all you know at least they got to test the price at least they got to try I got to try to get a better price so you know find out if they're if they're testing you if there really is a problem because when you say to somebody how much supposed to do that or another great way to respond to that if if they've uh rejected your portfol proposal is the label seems like you got something else in mind seems like there's something else here that you're thinking about you know that's that's a tentative probe we call that a label that's an invitation to collaborate somebody does have something else on their mind find out what it is I mean there's so many other things that that go into it you know in pricing terms when is the money going to get paid how's it going to get paid I once um did a a a roof project on a church that I was involved with in in New Jersey a long time ago and a contractor said well you know I need X dollar up front and we were like okay you know what do you need The Upfront money for well you know we got to we got to buy we got to go out and buy all the materials and I said well give me the list of materials and we'll go buy them and get them delivered on your behalf that way you don't have to put any money out up front and they're like ohow you know that's that's solves a cash flow problem for us right now because you know you're asking me to put money up on a deal and at the front end and not get paid till the back end you know we there's there's a way we can collaboratively work on this so the the exploration of what's been offered and accepted look for the adjustments there's a pretty good chance that what the other side has in mind in terms of an adjustment might actually be more profitable or solve a cash flow problem for you and what you're talking about there is very much finding like what you would consider that middle ground to a certain extent and I know the whole book has never split the difference right what is the difference between compromise and a high value trade ah it's a great question I mean um compromise usually is I'll take some of your idea and we'll take some of my idea and we'll put them together and it's just going to water down the ideas um it compromises in so many ways the analogy that I've used all the time is you know I'm asking my girlfriend should I wear black shoes or brown shoes and we compromise and I wear one black shoe and one brown shoe I mean compromise is usually a blending of different ideas that try to in the moment it gives people psychological uh they feel like it might have been a psychological Victory but the loss feels bigger and then it it just always compromise always ends up being worse one company that I was talking to um a traditional company and and a and a sort of a new um entry into the industry it entered and they merged and it's sort of like old school old thinking new thinking and they wanted to they wanted to build a new corporate headquarters that was state-of-the-art and it would be much more efficient and it would save a lot of money in the long run and they had this nonsensical co-ceo idea you know the old CEO the new CEO and the guy from the old was like I see how this makes sense on paper but if we give up our old headquarters it's going to make us look bad so they compromised and did both things they wasted a massive amount of money keeping both headquarters up up and running and ultimately both CEOs left the company in disgust because they both felt the loss and they lost money and as it played out it it turned out it operationally it was a very bad idea to put the two ID together so the high value trade or is there just a better way to do it is it possibly that you've got a better idea than I do and what I'm looking for is just emotional face saving like ah your idea is actually better than mine but it was your idea so I don't like it because it was your idea I mean what really gets in the way there um ideally a high high value trade is is just a a quote Clash you know quote to use the f- word fair trade to begin with you're trading a pair of shoes for $45 you got what you were after and the guy that made the shoes got what they were after they got they got fairly compensated and you got a decent pair of shoes for what you needed so H how were the needs met were the two sides uh is what you were looking for in the first place did you meet the need that you were trying to fill and did you give fair you know I I like to pay people what they ask the funny I think the thing about the Black Swan group that would surprise a lot of people is we don't we don't really bargain over price we talk a lot about terms like I'm I'm GNA I'm GNA if if what you're asking me for uh is what you're going to charge everybody else is the value there and am I really going to get what I paid for you know are you going to keep all the promises you make I've got a possible Financial advisement deal that I'm involved in now that I'm probably going to reject and among the reasons I'm going to reject it is I was told up front it was probably going to cost me xll let's say for example $50,000 and I think the other side smelled uh the opportunity to hold me up because I wanted to have it done before the end of the calendar year we're recording this very end of November like how if if I can get this in in in place before the end of the year be worth a lot to me and the other side went oh well price now $70,000 and I'm like all right wait a minute hold hold it hold it hold it hold it there you know there's there's a grabbing with both hands issue here and so there's no high value trade there I'm not I'm not going to bargain with them over the price I'm just not going to do the deal at all so we don't bargain a price you know I've kind of gotten away from your question of this you know what's the difference between compromise and a high value trade trade in point of fact if it's a good deal that's the definition of a high value trade you got what you were looking for and you paid a fair price for it so it sounds to me like at the end of the day the compromise is no party is happy or everybody gave up something that it's not a 10 out of 10 and the high value trade is really client is Happy salesperson is Happy both sides are good to go that is your high value trade yeah you know no no nobody got greedy nobody nobody suddenly smelled the potential advantage and try to jack up the price and that's not to say that you know there's still my method you know the Tactical empathy method of negotiation that's not to say that the Cutthroats and the chair kickers don't make money you know it's regardless what you think of Donald Trump it's inarguable he's been successful another example Kevin o from Shark Tank who I've met in person and um and and every everything I hear about personally is that he's a great guy and my experience with him personally is that he's a a a great guy and a generous guy we both spoke at a conference after the conference was over he took a bunch of people to dinner we had a wonderful dinner he paid for everything he didn't have to do that he was generous guy but he has said on Shark Tank that you know a bit good good negotiation when both sides are a little unhappy well to me that's that's like saying a good marriage is when both sides are a little unhappy and and ain't going to work out longer you know that the long-term relationship of trust and collaboration is not based on both sides being a little unhappy that isn't to say that there aren't the Kevin O's of the world out there who are very successful made a lot of money by anybody's definition Kevin has been successful and that's his take on negotiation that's not my take and and the highest value for the long term my best comparison is Oprah I no matter how much money Kevin has he ain't got opr money no matter how much money Donald Trump has Donald Trump doesn't have as much money as opr do and he started well ahead of her because Donald Trump's father was a very successful New York City real estate developer to begin with that's where Donald got a start and Oprah did not start from there and Oprah's highly collaborative and Oprah's not a pushover you know there a there ain't anybody bragging about how they got the oer hand on Oprah anywhere so I think that you know the collaborative negotiation uh is is ultimately your best chance of success next we talked about how the idea of having a lot of proposals out right now with prospects is not always the best scenario and how to actually figure out if you're going to be the client's vendor of choice for their project yeah yeah um if you don't know who the fool in the game is is probably you you put a lot of proposals out and until you ask start asking people very specific questions to look at the profile of the circumstances and then it tends to start to jump out of them in a really big way having a lot of proposals out is psychologically gives you a feeling of safety and you figure the more the more mud you throw at the wall you know the more it'll stick but after a while if you begin to take a look at the circumstances of The Proposal was it somebody you did business with in the past how did you get involved in making a proposal within a in a few in in the first place if you to just if anybody would to take a a small look at some of the de demographics is this are you are you the competing bid and or did you did you have do you have is there a reason for them to pick you before you put the proposal out as soon as you start asking people to take a hard look at just a few slight profile demographics of the circumstances it becomes glaringly obvious that you were the competing bid now do you have to be the competing bid why how much time that you put into that we've got a fair amount of data that suggests that regardless of the industry and the Contracting industry is no exception at least 20% of those opportunities you were the fool in the game you were never going to get it it was you were the competing bid and there was no reason you were going to get it so what would happen if you just stop wasting time on that 20% you don't have to get better at anything you just put more time into the proposals that were you're not the fool in the game and suddenly your your hourly rate has just increased by no less than 20% you're making yourself 20% more money by not spinning your wheels so all I would ever ask anybody to do is run your own data look at ask yourself the questions have I ever The Proposal I have have I ever done business with these people um has who's the referral how did I get referred into this how did I find out about it you know let me let me let me give me an imaginary number of one to five on the strength of the referral if there is one am I am I being brought in by a trusted advisor am I trusted by the trusted advisor you start looking at uh just a few simple demographics and you know don't do any less proposals to start off with but then ask yourself in your gut you know my gut instinct am I the favorite of the fool here just your gut instinct go Ahad do everything the way you're doing it now I promise you in a year from now on the one ones that your gut was that you were the fool you will have gotten none if extremely low percentage of those on the ones that your gut was telling you you were the favorite you're going to find your batting average was extremely high now the next year you could do this quarterly if you wanted to as soon as you start having faith in your own gut ask yourself what you could do with that time if you got it back what would happen if if you stopped knocking yourself out on the proposals where you were the fool in the game how much would you improve your business how much could you go to your suppliers and make your own better deals how much could you work on getting more referrals from the people that you were the favorite with and increase your referral Pipeline and the strength of your referral pipeline just by not being a fool in the game and wasting your time on it anymore and it it's very common in the Contracting space where there's this Mantra of you got to get three bids and I don't really know where that ever came from but it's I mean at this point it's 2023 like it has been around for Generations so with that in mind if you're in this proposal you know process currently how do you figure out if you are the preferred vendor here well ask yourself questions you know is there a previous relationship with who you're submitting the propos proposal for what's the reason that you could find out whether or not you got invited to submit you can ask that it's that's a legitimate genuine question going into it there's a there's a number of ways you know you know how is it that you're interested in us what's the reason that you you want us to be involved they're going to give you an answer that's going to give you a feeling in your gut as to whether or not it's good or bad and you got to inter it from your gut you're going to interpret one of three Place places whenever you're you're interpreting anything there's your gut your heart and your head your head is where your fear centers are where your amydala is where you see things working out wrong um that's where you lack experience that's and it's designed to be negative uh that's your survival mode that's your head your heart what do you hope for and you got to watch out for what your heart is hoping for on proposals too because well I hope I'm the fa like ah you know they should pick me I don't know your gut what's Your Gut tell you and a lot of times I ask myself that specific question I will say to myself what's my gut telling me here because your gut is a ridiculously powerful supercomputer that assesses your experiences appropriately and the more you ask yourself what your gut is telling you versus what am I afraid of what am I concerned about or what do I hope for your gut gets more and more uh accurate so just just start asking yourself your for your gut feeling on it and and and you'll get a you'll get a good feeling we spent a lot of time talking to Chris about how to negotiate with prospects and with vendors but the reality is that's not the only people that we're negotiating with a lot of Contracting companies are family run businesses and just like in family life not everyone sees eye to eye so we asked Chris how do you negotiate in business when you're working with family tions Run highest on whether or not people feel involved collaborated with and heard they don't really trigger in when the decisions are made unless they haven't been hurt like like a father and a son uh one of the other is not listening to the other just making the decisions um and I in many ways I've probably been guilty of that in the past myself because my son was very involved in my business and he has just decided to go out on his own uh and and strike you know his sort of make his own Mark in the world and I'm sure that there are a lot of times that that he would bring proposals to me and I just go like no you know we're not doing that so I was probably guilty of not hearing him out a number of ways and that's frustrating for any human being let let alone an in independent entrepreneur and if you're talking about Contracting businesses which are by pretty much by definition independent entrepreneurs if you got a father and a son you know each of them each of them's curse is they're very much alike one another you know they're independent they don't like being told no or they don't like having anybody having any veto power over them no matter how often a veto comes up like I did I rarely vetoed my son's recommendations and I still did and each one of those you know probably just off the top of my head my my gun and thing is like no we're not doing at and i' turn it down without hearing them out I'm sure I was guilty of that plenty of times especially with family these are people that you've got a much longer history with and who each of you have wounded one another inadvertently and you're completely oblivious in family when you've wounded them because you're exposed to them so much more so that that's the the real challenge with family however long you've been associated with with one another your time together is compressed and condensed and consequently The Accidental uh wounds are there that you were oblivious to and the other side still singing stinging from something and if you knew what it was you number one you'd apologize and you make amends you'd probably be shocked by it but you just don't know and that's one of the hard things about having family and business is the amount of times uh We've inadvertently wounded each other and then also the number of times we're just not hearing each other out neither of those things have to do with what the final decision was it has much more to do with how we got to the final decision so when you're in a situation with a uh spouse or a son or or father or daughter whoever it is in the business and there's a a a larger decision that needs to be made what is the best approach to come to that decision in your mind um you know just make sure that each of you summarize the other this as fully as completely and any any emotion emotion Laden decision whether it be family or um you know God any anything if you know in advance you're probably not going to agree with the other person a great way to start out with is you know before I disagree I want to make sure that I completely understand where you're coming from so as far as I can tell here's what you want and here's why you want it and here's how you're thinking got to that phase when somebody feels completely hurt out the the answer from them is always that's right it's not yes it's not no and it's not your right summarize the other person how they feel about it what's driving them what they think is important there's no agreement whatsoever on your on your side what it is is making the other side know that they've been heard it's remarkable how collaborative people are once they feel heard there's actually a lot of neurochemistry behind it and the neurochem one of the neurochemicals that people who feel completely heard receive on their own is serotonin which is the neurochemical of satisfaction like you want somebody to be satisfied with the process increases chances that they're satisfied with the decision so the act of making someone feel heard actually goes a long long way to solving problems that are really just about and I I I don't know that you know my reasoning how do I know how can you make this decision unless unless I know you know my reasoning well how you know it is I repeat it back to you as one of our keynote speakers at the new era of Contracting virtual Summit I asked Chris what does the new era of negotiation look like to you I'm I think it really is about using empathy bringing tactical empathy into the negotiation process taking uh emotional intelligence neuroscience and the two are more and more um intertwined the more we learn about neuroscience and we just didn't have it 15 20 years ago the majority of the negotiation books that were written were written before Neuroscience existed and is backing up what emotional intelligence gut instinct what that was telling us but we just we just didn't know we had a lot of books out there getting to yes which is very academic academically rigorous but human beings are not academically rigorous you know we're emotion-based and we're very much in a world where the recognition of emotions as being interplayed in our decision making is now out there there's very little denying it even when I left the FBI back in 20072 2008 and I'm working on a master's program at Harvard I remember telling a number of my colleagues that you can't make a decision without emotions like actual decisions are completely interwoven with uh emotions and I remember like no it's not like I'm getting attacked like crazy you know like no you know which then is sort of an indicator that I'm on the right track but I have a very distinct memory of two people that I thought were very rational very successful which meant I thought that they would see emotional intelligence as being critical to every aspect of their lives and they angrily denied it and I think the new era is where like this has become undeniable and more people are recognizing success with it and I think that's very much the new era of negotiations or business life in general negotiations are are a help and a hindrance and not just a hindrance if you want to hear more from Chris and other speakers and learn really the artart of negotiation be sure to join us at the new era of Contracting virtual Summit on January 24th and 25th click the link in the description check out what's going on with the event get your tickets and we'll see you there