Deepak Malhotra Shares His Award Winning Negotiation Tips | CNBC

Deepak Malhotra, a faculty member at Harvard Business School with 15 years of experience in negotiations and deal making, shares his diverse background working with businesses, governments, hospitals, and more. His work outside the business area has shaped his view on negotiation.

Negotiation is fundamentally about human interaction, regardless of the specific context or industry. It's not just about money, deal terms, emotions, conflicts, or even lives; it's always centered on engaging with others to achieve better understandings and agreements.

When dealing with someone who has a different perspective or interests, negotiation tweaks can be useful. The concept is inspired by golf coaching, where small adjustments have downstream consequences. In this session, we'll discuss 22 negotiation tweaks to consider for better navigation in deals and disputes.

In strategy meetings, invite more people than you think you need. Each person brings a unique perspective and shapes the conversation in a useful way. The goal is not to have all the right answers but to reward good arguments that contribute to complex negotiations.

In a negotiation, it's crucial to understand the consequences of not reaching a deal. However, becoming obsessed with your own outcome can lead to worse results. Instead, focus on what happens to the other side if there's no deal and how you can bring value to them.

The Importance of Negotiating Process Negotiating process is crucial for creating and capturing value in a deal. Focusing on substance alone can lead to overlooking the importance of process, which is essential for reaching the finish line of a negotiation. Negotiating process involves understanding the timeline, key decision-makers, factors that speed up or slow down the deal, and planning discussions beyond just substance.

Normalizing The Process Normalizing the negotiation process is vital to managing emotions during conflict resolution. Effective mediators prepare participants by explaining that emotions may intensify before they improve. By normalizing this emotional journey, participants are less likely to prematurely quit when facing heightened negative feelings.

A businessman in South Asia refuses to do business with anyone from the West unless they visit his manufacturing facilities. He believes that this will help them understand the local processes and reduce misunderstandings when issues arise.

In negotiations, asking questions is more effective than talking. Having a learning mindset before every negotiation helps to understand the interests and motivations of all parties involved. It's important to ask the right questions that uncover why people want certain things rather than just what they want.

Mike Tyson's story illustrates the importance of anticipating challenges and having a plan to overcome them. Just like in boxing, where opponents study their opponent's weaknesses, in sales it is crucial to address potential objections before they are raised. By acknowledging weaknesses upfront and being prepared with solutions, credibility can be maintained.

Negotiation Tactics In negotiations, it's important to set the opening offer and control the frame of reference. Presenting the first offer helps shape expectations and gives power to the party making it. It's also crucial to tell a story that goes with your offer, as a rich narrative makes your number more compelling and harder for the other side to ignore.

Managing Attributions When making concessions in negotiation, it's essential to manage how they are interpreted by others. The same concession can be seen in different ways depending on how it is presented. Negotiators should aim for their concessions to be perceived as wise and smart rather than desperate or naive.

Negotiation mistakes often involve mindless haggling, turning a rich negotiation into a series of separate haggles. Instead of focusing on one issue at a time, it's better to negotiate multiple interests simultaneously. This approach leads to wise trades and comprehensive offers rather than rigid haggling over individual issues.

In negotiations, instead of making a single offer, consider making two or three offers simultaneously. This signals flexibility and allows you to cater to the other party's needs. By offering different options, you create more degrees of freedom for them in the deal structure.

Initial reactions are crucial in negotiations. It's important to reject or signal a ridiculous offer immediately, rather than delaying and giving false hope. Being prepared to respond effectively is key.

In negotiations, it's important to understand and respect the constraints of the other party. Even if you deserve something rightfully, their hands may be tied due to various reasons. Instead of labeling them as irrational or untrustworthy, consider that they might have different interests or lack understanding about the value being offered.

In negotiations, it's important to consider the other party's need to declare victory. People may reject a good deal because they can't say yes without looking bad. The key is to write their victory speech for them and understand how they will pitch the deal to their audience.

When faced with an ultimatum, the speaker's response is to ignore it completely. The rationale behind this approach is that in the future, circumstances may change and what was once deemed impossible or against one's interest might become necessary. By ignoring ultimatums, the speaker aims to avoid forcing others into a dilemma between making smart decisions and looking good.

When making ultimatums, it's important to avoid being aggressive or inflexible. Only make an ultimatum if you are willing to follow through on it and if there is no other way of solving the problem. Using ultimatums can leave a negative impression and may trigger psychological reactance, so finding alternative solutions is preferable.

The goal of negotiations should not be to simply walk away with a deal, but rather to ensure that both parties are better off. A 'No Deal' is acceptable if there's a better partner or product available, and it only becomes tragic when real value could have been created for both sides.

Sending an email after a meeting is crucial for confirming agreements, reframing the situation if necessary, and obtaining additional information. It ensures that both parties are on the same page and helps in clarifying any misunderstandings or discrepancies that may have arisen during the discussion.

The Importance of Honesty in Negotiation In negotiations, it is crucial to always tell the truth and be honest. This does not mean revealing everything, but rather being prepared to answer tough questions with honesty. Guarding credibility is essential as it becomes the only leverage in a negotiation.

Continuous Improvement in Negotiation Skills Assuming that most people are already good negotiators, there's still room for improvement. The speaker encourages attendees to reflect on their negotiation strategies and consider new approaches or insights that could enhance their skills.