The Creative Negotiating

Creative negotiating is a quest for mutual-gain synergies—to match your assets to the other party’s needs, and vice versa. It takes more than a collaborative mindset; it’s an act of imagination. Creative negotiators unlock hidden opportunities to capture more total value in the deal. 

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Strategic Negotiating, Part III:

My Story:

The Making of a Negotiator

I started out as a fourth-generation paving contractor in North Plainfield, New Jersey. For years I worked closely with my father, who did something remarkable: He kept a small business afloat in a boom-and-bust, Darwinian marketplace. Though he never took a seminar on the subject, he attributed the company’s survival to his ability to make a better deal. It went back to my great-grandfather, who had a famous motto: “When times are tough, bid the job at cost, and profit is everything you negotiate.”

Great-Grandfather Mobus lived through the Panic of 1893, the Silver Campaign Depression of 1896, and eight recessions before he died in 1929—he knew from what he spoke. When times were good, there would be lots of jobs for a handful of contractors. You could set your price high and get it. But as a new wave of owner-operators elbowed into our bailiwick, and then the inevitable downturn came and jobs dried up, they’d undercut one another into bankruptcy.

To keep our company from capsizing with them, my dad pressed his subcontractors and suppliers to shave a few percentage points. Then he’d shore up his bottom line by cashing in on any change orders. Since the public works people liked him, they’d pony up enough to keep us in business. At that point, we could pretty much dictate our terms, within reason; it’s expensive and disruptive to jettison a prime contractor in the middle of a job. (You’ll find the same dynamic from aerospace deals to the home improvement industry; the further along in the work, the more leverage shifts to the seller.)

In short, our profit was everything my father negotiated.  

Finding Flexibility

My dad always believed there was more flexibility in a deal than might appear at first glance. That gave him the freedom to negotiate more assertively and also to look for creative solutions. When he found a way to cut a corner without compromising the work, the client’s project manager typically split the savings with him. One time a church wanted us to pave their parking lot and driveway. Their budget was tight, our margin miniscule. My dad looked at the plans, which called for 16 inches of aggregate crushed rock beneath eight inches of asphalt. The church member who’d drawn them up used to work for the county, and he’d tailored the specs to a high-use public street. My father pointed out that the aggregate just wasn’t necessary for their purposes—a big economy for the church, and more profit for us. He made the deal by asking himself: What do they really need? That was a lesson I’d never forget.

To Negotiate Is Human

Back in school, I was working on a doctorate at UCLA when a business group asked me to give a few seminars on negotiating. I just ran with it—I loved it. I think I got hooked on the subject because negotiation is more than an economic activity. It’s a fundamental human activity. It goes to the essence of human interaction, as I was recently reminded while negotiating bedtime with my very determined eight-year-old daughter.  More specifically, negotiating helps us deal with conflict in a more effective and satisfying way. Done properly, it makes our lives easier. It empowers us; it gets us more of what we want.

As my interest in teaching streamed into my fascination with business, I found my life’s work. In the mid-1980s, I was hired by Chet Karrass, the pioneer of modern negotiation training. One year in, I was conducting Chet’s seminars. One year after that, I effectively ran their day-to-day operation as senior vice president. Before long I’d assumed a lead role in developing and refining Karrass Effective Negotiating, the program that set the 20^th-century standard.

In our next installment, I’ll tell you how Karrass became the leader in the field—and why today’s environment demands something more. 

Our Mission

At Mobus Creative Negotiating, our mission is to show you how to find more profitable outcomes in deals large and small. We can help you improve your negotiation skills by gauging the other party’s pressures and needs—by turning a transaction into a strategic relationship. To learn more about our Creative Negotiating seminars, visit us at http://www.mobusinc.com.