Audience: Most of the time, hopefully, the person on the other side is or are, is an intelligent team you’re dealing with. But you do get the what I call amateur, like if I pound on the table – if I can get just intellectually and emotionally tiresome to deal with.
Joel Peterson: You can get abused, in negotiations. And there’s a whole lot of, there are a lot of issues around power and information. If there’s a disparity in power, leverage, information, and you’re dealing with a party who’s going to use that and take advantage of that. You can go out of the room feeling abused. I actually met with Donald Trump in his office in New York, about 20 years ago, before he was a huge cheese, but he was with — well no, he still had the same hair. And actually he tried to sell me an interest in the Washington Generals. Any of you know the Washington Generals? This was a USFL football team that had drafted Herschel Walker. And so he was very proud of that, and he was trying to sell me an interest in that, and I didn’t fall for it. So, that’s my qualification for teaching a class on negotiation.
Actually my qualifications is, I have negotiated billions of dollars of transactions over the years, literally, hundreds if not a thousand different kinds of transactions. I was in the real estate business for 20 years and I was actually the chief financial officer of a big real estate company for about ten years, so I was negotiating debt deals and equity deals, and then partner departures and solving litigation. And, so my life was a diet of — just solid diet of negotiations. And then when I got done with that, I started buying companies and it became a different diet of negotiations. So, I’ve seen a lot of different kinds of negotiations. I’ve experienced the feeling of looking forward to a day when I’m negotiating and with great anticipation, and really loving it, because I like the people on the other side. I like trying to problem solve. I like being creative. I like all those elements. And I also have looked at certain days of negotiating where I dread it. I cannot wait to get the day behind me. So there’s nothing intrinsic about negotiations that say you should like it or not like it. I remember teaching a real estate class here at Stanford about 10 or 12 years ago, and asking the class roughly the same question, but I did it in the form of, who of you likes to buy a new car? And that was the most highly correlated question with who likes to negotiate, and who doesn’t. There are some people who absolutely hate the process of buying a new car, because it feels like you come out a little dirty. You know? You don’t have the — it’s uneven information, uneven power. And whatever, so it can, it can be a bad experience.
Well, who here are expert negotiators? Raise of hands. Every hand should go up. Every hand in the room should go up. You all are here in life, because you have been superb negotiators. You would not be — what is the negotiation? Negotiating is getting what you want at a price that’s acceptable to you. So you have paid prices to be at this place in your life, that you’re happy with. So you are expert negotiators, and I want to ventilate that a little bit, and let you really kind of peer into what it is that you’ve been so good at. But first of all, here’s maybe a little bit of a map for you to start thinking about the terrain of negotiation.
All of the conversations you have in life — if you think broadly about it, everything that you’ve done has been a negotiation. For those of you who are married, you’re negotiating all the time with your spouse, with your children. In your job, you’re negotiating all the time. In school you’re negotiating — I mean, conversations are in effect a give and take, and there’s a give-get transaction, and usually the more informal they are, the more successful people feel. When you do it with friends and family, usually they feel more successful, then you get into these sort of — where we think about negotiations as entrepreneur is in this area of stylized negotiations where there are agreements, there are certain things that we negotiate, we sit down at a table, somebody takes notes, we write it up. And there are certain things that we trade off, and then finally, very formal negotiations. These are typically ones that are done in arbitration, or litigation where there are rules of evidence, where there’s a very structured, narrow thing, and that one is not a very fun one, although I’ve now spent four years in litigation. I’m good enough. In fact, I had one attorney say that I was the best witness he had ever run into. And I started liking negotiation — litigation after that. This was an opposing attorney, too. So you feel pretty good about that.
So what makes for successful negotiations? In across all of those. And I recognize so many people from my past in here, it’s going to be hard not to cold call, on Angie here, or FA, Nicola. So what makes for successful — if you think about successful negotiations what do you think about? I’ve just had a successful negotiation. What’s your self talk? Yeah.
Audience: Set the right expectations.
Joel Peterson: Okay, expectations, your expectations, you’ve set them the right way going in. They’ve been met, therefore you’ve achieved your objectives. That’s a successful negotiation. Yeah.