Golden Rule Two: Maximize Your Leverage
Leverage—the most powerful component in negotiations—is based on two elements: 1) how much you and your counterpart need a deal, and 2) how well your deal, Plan A, stacks up to your best alternative, or Plan B. The better your Plan B, the stronger your leverage and vice versa.
Leverage makes its first significant appearance in chapter five. These were Trump’s sticks. Threats and bullying take center stage in chapters six and seven. Did they work?
Golden Rule Three: Employ “Fair” Objective Criteria
One word that most aptly describes Trump to many: unprecedented. Trump smartly used independent, objective standards like precedent, market value and experts to justify the “fairness” and “reasonableness” of his deals. We address these in Chapter eight.
Golden Rule Four: Design an Offer-Concession Strategy
Timing (when he makes his moves), speed (how often he makes his moves), and size (how big he makes his moves) comprise offer-concession strategies. Each move signals an important element in the negotiation “dance” that almost inevitably takes place between negotiation parties. Does Trump know this “dance”? This will be addressed in Chapter nine.
Golden Rule Five: Control the Agenda
If and when and how and where issues are addressed—and the timing and deadlines involved—greatly impact negotiation results. Chapter 10 focuses on how Trump controls the agenda in his business negotiations.
These first 10 chapters constitute Trump’s Top 10 Business Negotiation Strategies. Let’s see how Trump puts these into practice. Here’s a chart summarizing them.
FIVE GOLDEN RULES MAPPED TO TRUMP’S BUSINESS STRATEGIES
| FIVE GOLDEN RULES OF NEGOTIATION | TRUMP’S TOP TEN BUSINESS STRATEGIES |
| 1. Information Is Power—So Get It! | 1. An Instinctive Win-Lose Mindset |
| 2. Setting the Bar High: Super Aggressive Expectations | |
| 3. The King of Hyperbole: Exaggerate! | |
| 4. Targeting True Motivations: Using Carrots to Close Deals | |
| 2. Maximize Your Leverage | 5. The Art of the Bluff: When He Holds… and When He Folds |
| 6. Threats and Leverage: Real or Fake? | |
| 7. Business Bullying | |
| 3. Employ “Fair” Objective Criteria | 8. Helpful Standards Only Need Apply |
| 4. Design an Offer-Concession Strategy | 9. Outrageous Moves and Countermoves |
| 5. Control the Agenda | 10. A Towering Home-Field Agenda |
AN INSTINCTIVE WIN–LOSE MINDSET
“Some people have an ability to negotiate. It’s an art you’re basically born with. You either have it or you don’t.” 6
—Donald J. Trump
Donald Trump made millions from his starring role in The Apprentice and its progeny. And the publicity and persona he derived from it formed a fundamental basis for the millions more he made from subsequent U.S. and international licensing deals.
His celebrity and brand also proved indispensable to his successful presidential run. He almost certainly would not be president today had he not first been portrayed as such a widely admired and successful business titan in the popular NBC series.
So, how much preparation did he do for his first meeting and negotiation with Mark Burnett, the creator of the hit Survivor reality TV series who pitched The Apprentice concept to Trump?
None. Trump did it all on the fly based solely on his instincts.
According to Michael Kranish and Marc Fisher in their extensively researched and well-written biography Trump Revealed, The Definitive Biography of the 45th President:
Burnett walked out of that first meeting with a handshake deal to make The Apprentice. Trump secured not only a starring role on a show made by TV’s hottest producer but also 50 percent ownership of it. Trump had consulted no one, done no research. He liked the idea; he bought it. It was a classic Trump moment, an example of the gut-instinct decision making that he had proudly touted throughout his career. 7
How does this fit into Trump’s business negotiation approach? Two consistent themes run through Trump’s business negotiations:
1) his gut-level planning and decision-making, and
2) his win–lose mindset and approach to business and life.
Trump’s Gut Drove His Business Negotiations—Not Strategic Homework
“I just think that you have an instinct and you go with it. Especially when it comes to deal-making and buying things.” 8
—Donald J. Trump
Lack of planning in The Apprentice deal was typical Trump. In 1986, Trump sought to take over Bally’s, a public company that owned three casinos, one in Atlantic City, where Trump already owned two casinos. Trump eventually became Bally’s biggest shareholder after investing $63 million and buying up 9.9 percent of its stock.
His interest in Bally’s originated from Daniel Lee, an analyst at Drexel Burnham Lambert, the infamous Wall Street investment bank led by Michael Milken that went bankrupt in 1990 due to its involvement in illegal activities in the junk bond market.
According to Lee, who informally advised him on this effort, “[Trump had] begun buying the stock without even reading the annual report.” [Emphasis added.]9
As with The Apprentice deal, though, Trump’s gut proved profitable. While Bally’s fended him off, he made over $20 million when Bally’s bought him out.
Trump acknowledges this tendency and considers it a strength. In a 1984 interview with Lois Romano of The Washington Post in which he discussed negotiating nuclear disarmament with the then Soviet Union, he said that—while he was no expert on missiles—“it would take an hour and a half to learn everything
