3 Ideas in 2 Minutes on Winning Negotiations
3 Ideas in 2 Minutes on Winning Negotiations
Faustian Bargain, Ackermann Model & Winning Negotiations
I. Faustian Bargain
And here, poor fool! with all my lore
I stand, no wiser than before.
Heinrich Faust is exasperated. All his studies, degrees and his doctorate were for nothing. He craves ultimate knowledge and wisdom. And the devil wants to grant it to him. The only thing Mephistopheles wants in return is the doctor’s soul. Faust cares too much about wisdom. Faust accepts. The Faustian Bargain is born.
The term goes back to Johann Wolfgang von Goethe’s tragic play Faust. Outside of literature, it describes a metaphorical deal with the devil; a false victory. We enter into such a bargain whenever we abandon our moral principles for money or other benefits; perhaps even collaborating with questionable people in the process.
The 1997 thriller The Devil's Advocate is a classic cinematic example. Keanu Reeves starts a new job at Al Pacino’s high-powered law firm. Showered with perks and benefits, he soon suspects that all is not well at his new workplace. As it turns out, he’s made quite the literal Faustian Bargain with the devil himself.
II. Ackermann Model
Speaking of questionable people. The Ackerman Model is a bargaining method designed to negotiate kidnap ransom. But it can be used in any price negotiations, really. The method was developed by former three-letter-agency employee Mike Ackerman. Here’s a simplified version of the system of offers and counteroffers:
Set your target price (your goal).
Set your first offer at 65 percent of your target price.
Calculate three raises of descreasing increments (to 85, 95, and 100 percent).
Use lots of empathy and different ways of saying “No” to get the other side to counter before you increase your offer.
When calculating the final amount, use precise, nonround numbers like, say, $37,893 rather than $38,000. It gives the number credibility and weight.
On your final number, throw in a nonmonetary item (that they probably don’t want) to show you’re at your limit.
—Chris Voss, Never Split the Difference
III. Winning Negotiations
First and foremost, negotiations are a psychological game. As usual, philosopher Naval Ravikant has a rather minimalist insight into how to win it:
Negotiations are won by whoever cares less.
🐘
Have a great week,
Chris
themindcollection.com
P.S.: My latest article is about pilot decision-making: DODAR: How to Think Like a Pilot (Facing an Emergency). Check it out if you haven’t already.