"Negotiation Genius" by Malhotra & Bazerman

Summary:

Negotiation Genius” (2007) was written by Deepak Malhotra and Max Bazerman–two leaders in executive education at Harvard Business School that have a proven track record in the field of negotiation.

Whether you’re a beginner or experienced salesperson, this book will dramatically improve your negotiating skills. The book draws on decades of behavioral research plus the experience of thousands of business clients. The authors take the mystery out of preparing for and executing negotiations—whether they involve multimillion-dollar deals or improving your next salary offer.

“Negotiation Genius” provides readers with detailed strategies that work in the real world even when the other side is hostile, unethical, or more powerful. When you finish it, you will already have an action plan for your next negotiation. You will know what to do and why. You will also begin building your own reputation as a negotiation genius.

 Authors Max Bazerman (left) & Deepak Malhotra (right).

Authors Max Bazerman (left) & Deepak Malhotra (right).

Lessons:

1)  Always Know Your BATNA

You need to assess your BATNA, or best alternative to negotiated agreement–the course of action you will pursue if and when the current negotiation ends in an impasse. Without a clear understanding of your BATNA, it is impossible to know when to accept a final offer and when to walk away in order to pursue other options.
— Page 20

Determine your BATNA is the first step in any negotiation because you have to ask yourself, what will do you if the current negotiation ends in no deal? Your BATNA is the reality you will face if you reach no deal in the current negotiation. 

For example, let’s imagine you are selling a large piece of land. If the new owner keeps it residential, the property will be worth around $36-44 million, but if the land is turned into a commercial business, it will be worth between $40-48 million. 

You receive one offer from a buyer for $42 million that says he will make residential buildings on the property. The other buyer says he doesn’t yet know whether he will make it residential or commercial and would like to negotiate a price.

In this scenario, your BATNA is $42 million. If the second buyer offers anything lower than 42m, you simply walk away. If the buyer matches the offer, you still have the option of walking away. 

Since the property has the potential to be worth between $40-48 million, this becomes your ZOPA–zone of possible agreement. If you’re able to negotiate a price in the ZOPA that is higher than your BATNA, such as $44 million, you should take it, if not you’re free to walk away. 
 

 

2) Don’t just ask what–ask why

Negotiators tend to spend most of their own speaking time telling others what they themselves want or need. Unfortunately, this approach–find out what each side wants–often derails negotiations. The reason: too much focus on what people want distracts your attention from discovering why they want it.
— Page 85

The authors point out a common mistake made by negotiators–asking what but not asking why. It may sound reasonable to listen to the other side to find out what they want, but that is only part of the battle. 

Sometimes in a negotiation, there is no room for compromise on what they want, but a clear solution can emerge when the focus is shifted to why they want it. 

Deepak tells a story of his wife trying to hail a cab on a cold winter Boston night. It was rush hour and dozens of cabs were all occupied. When she spotted an empty cab, she ran after it but there was a problem. The cab didn’t have his “for hire” light on. Deepak’s wife asked for a ride anyway, as expected, the cab driver said no. 

However, Deepak’s wife asked the cab driver why he would not take her. The driver explained that his shift was over and he was heading home. Deepak’s wife asked which direction the cab driver was heading home, and it turned out his destinations was only a few blocks away from hers. She jumped in the cab and the driver drove off. The driver made a few extra bucks while Deepak’s wife got her ride home, a win for both sides. 

Remember to ask why people want something, and not just what

 

3) Make Multiple Offers Simultaneously  

Making multiple offers simultaneously is a great tactic for other reasons as well. Not only does it allow you to discover the interests of reticent negotiators, but it also allows you to anchor more strongly and to simultaneously come across as flexible.
— Page 102

This is a tactic not many negotiators may know about, but it an extremely useful strategy. Giving multiple offers gives you the chance to make two offers that you like, and it gives more options to the other side. 

It will also show you what aspect of the deal the other side is more focused on–this goes back to what they want and why. The book uses the example of giving a real estate broker two contracts to sell a home. The broker can either choose: 2.5% commission and have 3 months to sell the house or 3.5% commission and have two months to sell the house. 

This also works great with siblings when splitting up chores. For example, I’ll ask my sister if she wants to vacuum the house or Swiffer the floors, and I’ll do the other task. This method is a lot better than just saying vacuum the house and I’ll Swiffer because it comes across as more flexible to the other person and makes it seem as they have more freedom in the decision. 

 

Conclusion:

“Negotiation Genius” is an absolutely spectacular book. As a graduate business student, I have read several books about sales and closing deals, but nothing comes close to this book. It is shorter and easier to understand than any textbook on the subject, and cheaper too. 

Even if you aren’t a business student, there is a ton that can be learned from this book since negotiation plays an aspect in multiple areas of one's life. A person can negotiate the price of fruit at the market, the salary at a new job, or the apartment chores with their roommate. 

The book also covers key lessons such as negotiation from a position of weakness, ethical dilemmas in negotiating, and negotiating with an irrational person. 

The book is about 350 pages long, but the authors use a lot of interesting real-world examples that keep readers engaged chapter after chapter.


Rating: 5/5 stars

If you’re interested in reading the book, click here or on the image below!

  • Book: “Negotiation Genius” by Deepak Malhotra and Max Bazerman
  • Pages: 343
  • For: People who work in sales, deals, or similar business fields
  • Lesson: Learn the essential strategies needed to become a negotiation expert