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 IV:


The Karrass Gospel

(and why it stopped working)

Back in 1968, an aerospace negotiator named Chet Karrass left the Howard Hughes organization and launched Effective Negotiating, the 20th-century gold standard. Chet came along at a time when business was highly structured. A buyer took x bids for y commodity and pit one bidder against the next to get the lowest possible price. Sellers scrambled to find leverage to counter. In Chet’s view, negotiation was all about power and competition. He had one cardinal rule—to bargain as aggressively as you could. As his senior vice president and top seminar leader, I spread the gospel: 

*“Firm” prices aren’t really firm. Take nothing at face value. Assume everything is negotiable. 

*Compliance is not a virtue. Good negotiators need to be tough to protect their side’s interest. 

*Know when to shut up. Hold back information that could work to your disadvantage. Only a naïve negotiator would say, “I’m really glad you bid—you’ve got the only product that meets our specs.” Don’t be that person.

*Never make the first concession. Sure, you’re under pressure to get the deal done —but the other party is, too, maybe more so. 

*To do better, ask for more. The side that wins the negotiation is the one with the highest expectation level.


Liberation Theology

Chet didn’t invent this common-sense philosophy. He took a lot of it from Herb Cohen’s You Can Negotiate Anything, which borrowed freely from Walton and McKersie’s A Behavioral Theory of Labor Negotiations. (Which in turn probably stole from Plato’s parlays with the Emperor Nikephoros in the 9th century AD.) Down in the trenches, savvy dealmakers were using a similar approach, consciously or not. The Karrass breakthrough was to explain these concepts to the inexperienced, to coin some fresh terminology, and to spell out tried-and-true methods for gaining an edge.

People flocked to our seminars because they found them liberating. We showed how they could question the way things were “always” done (because “everybody” did them that way). They could defy conventional wisdom—if they had the right tools. Our program was chock-full of practical tips. It demonstrated what transpired when a real-life industrial buyer and seller sat at the table, down to their actual dialogue. It clarified negotiation at the molecular level.

Plus it didn’t hurt that we had no real competition at the time. 

I wasn’t yet 30 when Chet gave me (mostly) free rein to further develop Effective Negotiating, a big creative challenge. Plus he afforded me the opportunity to train high achievers from two-thirds of the Fortune 500, including GE, GM, IBM, Microsoft, Exxon, and DuPont. I learned as much as I taught at those seminars. I gained insights into best practices in negotiating—and how they varied from industry to industry, country to country.

The Death of the Hammer

As years passed and the world turned, Effective Negotiating pretty much ran in place. Taken to its logical extreme, the Karrass Way was a blunt instrument to hammer the other side: This is my price, and here’s why it’s a great price, and here are five reasons you’ll be in big trouble if you don’t pay my price. The program was geared to a zero-sum environment. I win, you lose. 

But over the last decade, globalization has innovated—and disrupted—every business in unprecedented ways. While the marketplace is more competitive than ever, it’s also more intensely cooperative. In particular, as Daniel Pink points out in To Sell Is Human,search engines and social media have created information parity, a level playing field for buyers and sellers. As a result, it’s much harder these days to bluff or game your way to an advantage. In complex negotiations within long-term business relationships, trust matters. The old, cutthroat tactics can backfire—badly. 

Price is no longer king. We are living in an age where buyers have limitless needs and sellers an elastic array of assets (or vice versa); the challenge is to “customize” the deal and find the optimal match. Twenty-first-century negotiators may need to consider Scope of Work or guaranteed gross margin or quality control, or a dozen other factors. They may need to explore the potential for joint advertising or joint technology or even joint project management. Price-driven haggling won’t get them where they need to go.  

In short, a new approach is needed. In our next newsletter, I’ll look at Harvard’s “win-win” alternative to Karrass. I’ll also tell you about the all-important ingredient that both of them were missing—that makes Mobus Creative Negotiating the evolutionary next step.



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