style="font-size:15px;"> On the Commodore and Trump Tower deals, Trump knew his interests, ascertained his counterparts’ interests, and found ways to satisfy them. Trump in his later deals, however, stopped doing his due diligence. This later proved fatal to satisfying his and his counterparts’ fundamental interests.
Uncovering interests takes time and effort.
Bribery and Conflicts of Interests
One final note on interests. Parties cannot simply negotiate based on satisfying mutual interests. Bribery, conflict of interest, and other laws prevent this. Society has determined fairness requires that business deals largely revolve around business interests—not the personal self-interests of those involved in negotiations.
You can’t personally pay Employee A of Business ABC to award you a big contract with Business ABC. Nor can you pay Politician A of State A to pass legislation favorable to you or zone some property that financially benefits you. These represent illegal acts.
The key in these types of criminal matters relates to whether a quid pro quo exists. You do this because I paid you this. If payment A does not cause or is not related to the deal or a benefit, no problem. The timing, then, was just a coincidence.
Trump has been investigated several times by federal authorities regarding whether he has crossed the line into criminal behavior. At no time has he been indicted or prosecuted. And he has consistently denied being involved in any criminal behavior.
He has, however, said “I’ll do nearly anything within legal bounds to win.”168 Keep in mind: Just because he hasn’t been indicted, prosecuted, nor convicted doesn’t mean he didn’t do it.
It just means the prosecutors decided they didn’t then have sufficient evidence to prove “beyond a reasonable doubt” that he engaged in the criminal conduct.
LESSONS LEARNED
| Trump’s Strategies and Tactics | Trump understands and seeks to fulfill his personal and professional interests in negotiations. |
| Trump’s greatest interest is in the perception of “winning.” | |
| Trump ascertains his counterparts’ personal and professional interests. | |
| Trump explores ways to satisfy his counterparts’ personal interests, the carrots. | |
| Trump deeply understands media and political interests. | |
| Lessons Learned | Uncovering parties’ true personal and professional interests and needs—not just positions—represents a crucial negotiation strategy. |
| Satisfying parties’ fundamental interests determines success or failure. | |
| Exploring underlying interests takes time and effort. | |
| Bribery and other legal restrictions prevent negotiations from solely revolving around interests. |
THE ART OF THE BLUFF: WHEN HE HOLDS… AND WHEN HE FOLDS
“The worst thing you can possibly do in a deal is seem desperate to make it. That makes the other guy smell blood, and then you’re dead. The best thing you can do is deal from strength, and leverage is the biggest strength you can have… Unfortunately, that isn’t always the case, which is why leverage often requires imagination, and salesmanship.” 169
—Donald J. Trump
Donald Trump knows leverage. In fact, leverage has driven almost all his deals.
How? To answer this, we must define leverage. Many consider negotiation power and leverage the same. Not true. Leverage is one type of power in negotiations. But other negotiation power exists, too.
What is negotiation leverage and how does it provide power?
RESEARCH: Leverage consists of two elements:
How much each party needs or wants an agreement relative to the other
The consequences to each side if no agreement is reached—that is, each side’s alternative to a negotiated agreement [each side’s Plan B if Plan A is their deal].170
Overall, leverage fundamentally relates to how easy it is for you to walk away, relative to how easy it is for the other side to walk away. The easier it is for you to walk away and the harder for the other side, the stronger your leverage.171
Trump knows the first “level of need” element well, writing, “Leverage is having something the other guy wants. Or, better yet, needs. Or, best of all, simply cannot do without.” 172
He also knows the second “Plan B/alternative” element well, stating, “Part of being a winner is knowing when enough is enough. Sometimes you have to give up the fight and walk away, and move on to something more productive.” 173 That “something more productive” would be his Plan B.
RESEARCH: Leverage also is relative and based on perception. Leverage is only strong or weak in comparison to the other side’s needs and wants.
Most of us naturally focus on how much we need or want what the other side has to offer. Don’t. Focus instead on the relative needs of all the parties. In leverage terms, your needs and wants don’t mean much independently. They only gain relevance when analyzed relative to the other parties’ needs and wants. It’s natural to focus on what we need. Ignore the urge. Focus instead on the parties’ relative needs.174
Parties’ perceptions of the other side’s needs and wants also impact the negotiation, not some “true” level of desperation. Perception trumps reality here. It especially impacts leverage.175
Leverage is also fluid, meaning each party can change their leverage. The most effective negotiators also know that everyone has the ability to change their leverage. Leverage is not static. Everyone’s level of need likely will change during the negotiation. At the least, a party’s perception of its level of need may change. This changes its leverage.
Likewise, you may be able to improve your Plan B. Or you might be able to make your counterpart’s alternative (their Plan B) less attractive. In short, you can change your leverage and improve your ability to get what you want even when it appears you have weak leverage.176
The lesson: Analyze your leverage—then strategize ways to strengthen it. Take charge of your leverage.177
Trump understands this. As he has written, “Leverage: don’t make deals without it.” 178
Trump has taken charge of his leverage in many business negotiations. Let’s analyze three:
his
