Every so often, I need to reclaim my title of “Negotiator”. I am not saying the best negotiator; I am intentionally claiming “Negotiator”. You may think… well if you are just a negotiator, not even the best, the OG, [or insert any presumptuous adjective], you are not different than my friend or me.
This is the first mistake most people make: lacking self-awareness. They think they are better than others. That overconfidence only leads to being sloppy and vulnerable in the negotiation. While most of you believe you are negotiators, you are barely hagglers. Ouch… that is harsh, Claude… this is not your usual style. Sometimes you need to apply pressure in negotiations. It is rare but something you should consider only partially. I would do it once every 100 times. Like my mentor said, it is helpful to show your fangs occasionally.
This post is a mix-match of what could have been a few posts. I am combining
- A personal negotiation I may enter (investing in a small company),
- A situation where the collective thinking was misleading, and
- Finally, if you ask yourself the wrong questions, it does not matter if you get the correct answer.
- “Small” personal investment in a project: Through a personal connection, I met a Black guy working on a project that can elevate Africa and make Black millionaires. These are two topics that catch my attention fast. After meeting with him, I loved his energy. He is a real hustler, someone I believe has the potential to sell the project. His vision is sharp, he knows the impact he can have, and he thinks big. His team has a proven track record and a competitive advantage where they operate. That sounds like a home run, right… Not exactly. He serves an industry that I know nothing about. This is extremely rare. I negotiated contracts in many industries. Some people have never heard of it. But his industry is highly specialised. Deal structures are complex and include many variables. I am lost. I have no shame about it. That self-awareness drove me to reach out to everyone in my network to build knowledge. On top, I explored if AI could help me on my journey. This is negotiation. It does not matter how much I want to close this deal. I need to detach from the situation. I need to forget about the glamour of the project, the accolades I could get. The critical question is, “How can this business deal make sense”. It is not about my gut feeling; it is not about what one expert says. It is about:
- a. How much do I put in
- b. What are the chances of success
- c. How much could I get back
All the research has a single goal. Help me create a better picture of one of the 3 points. At this point, I am not considering how to negotiate with the project’s founder. I am focused on my financial metrics. And from the founder’s point of view: Who do you want in your corner if they are both ready to invest the same amount? The one who is educated in the business and can add extra value, or the non-educated one who will slow you down with dumb questions?
- The second situation is about how the collective is easily distracted by “bag of pennies” – something voluminous that makes a lot of noise and draws people’s attention. This is where hagglers go wrong. I argue that they do not understand the principle of value. They overvalue the bag of pennies or undervalue their contribution. Let’s look at who does it well in my opinion:
- Artists performing during the halftime show at the super bowl: They are not paid by the NFL. It may seem shocking to many. Are they dumb? Rather the opposite. They understand the upside that comes with performing at the super bowl. They know they will get increased exposure, which will build them a platform to get paid for the next 10 years rather than receiving a one-off lump sum.
How can more people in the community shift their mindset, focus on long-term gains, and build a platform that will keep paying them for years?
- Last and not least, the questions you ask yourself matter. It sounds obvious, I know. But how many people ask the wrong question? Connected to my previous example. The question should not be “Will I get paid or not”. The question should be, “How much value will I create?” From there, you can start thinking about how you want to capture that value you just created. What I like about this approach is that you are in control. What’s the difference between the 2 approaches? With #1, you make a decision most likely based on your guts or the opinion of others. Typically you will then show up and haggle your way through the situation. You may be OK with this approach. But really, long term, you will need to do better. With the 2nd option, you are forced to do your homework; you must dig deep to understand what is at stake. Then it would help if you defined how much value you create you should get. Suddenly you are not haggling; you are presenting facts with confidence, have a compelling story that resonates with them, and know at what point you should walk away.