Ronald Reagan, whom no one ever accused of digging deep into the policy details of nuclear disarmament, certainly spent a lot more than an hour and a half strategic prep time before negotiating this with Soviet Leader Mikhail Gorbachev in 1986.
How important is strategic preparation before complex, significant negotiations?
RESEARCH: Harvard Law Professor Robert Mnookin, Chair of the Harvard Program on Negotiation, noted in his excellent book Bargaining with the Devil, When to Negotiate, When to Fight, it’s appropriate to spend around 90 percent of your time in these negotiations “on preparation behind the table.”11
In my training and consulting, I usually recommend at least twice as much time on strategic planning as “at the table” negotiating. Here’s how I describe this crucial element in my book, Gain the Edge! Negotiating to Get What You Want (St. Martin’s Press, 2004) (Gain the Edge!):
The Power of Preparation Always Makes a Difference
What is the most universally ignored but most effective negotiation tool? Preparation. I conclude every one of my seminars with this statement: “Prepare. Prepare. Prepare. It’s guaranteed to succeed. The more you prepare, the better you will do.”… Renowned UCLA basketball coach John Wooden said: “Failing to prepare is preparing to fail.” He’s right…. Negotiation research unmistakably illustrates the concrete value of preparation.12
Of course, Donald Trump would dispute the characterization that he doesn’t do his homework.
First, he would likely suggest he does his homework where it’s needed. A perfect example would be his first big real-estate negotiation when he was 27—a complex deal involving multiple parties in which he redeveloped the Commodore Hotel in New York City next to Grand Central Station (now the Grand Hyatt).
He may be right. In fact, his long-time lawyer and co-star of The Apprentice, George H. Ross, in Trump-Style Negotiation: Powerful Strategies and Tactics for Mastering Every Deal (Trump-Style Negotiation), wrote:
Donald Trump spends a great deal of time preparing himself and members of his team for every negotiation—not just for the big deals, but every negotiation he enters. He knows that by being as well prepared as he can be, there will be fewer surprises.13
Ross is probably right, at least for the 1970’s Trump. This is confirmed in possibly the most comprehensive Trump biography by Village Voice investigative reporter Wayne Barrett, who met Trump in 1978 and compiled 14 file drawers of documents on Trump and his deals. In Barrett’s 450-page book, Trump: The Greatest Show on Earth published in 1992 (Trump Show), he wrote about Trump’s 1974 purchase of some bankrupt Penn Central railways properties:
[Ned] Eichler and Donald cut the deal over the next six months, winding their way through a 65-page contract and working out a timetable for the first phase of the anticipated zoning changes and housing subsidies that reached 13 years into the future.14
While Trump probably did his homework early on, he did less as he became more prominent in the mid-1980s and beyond.
Barrett described Trump in the mid-1980s here in two Atlantic City casino negotiations.
The Hilton Castle Casino Acquisition
While the Plaza deal took four years, from Donald’s initial lease negotiations in the spring of 1980 to the grand opening, the Castle acquisition took less than four months…. He proudly boasted that he purchased the Hilton without ever having taken even a walk-through….
The Taj Construction Catastrophe
The catastrophe at the Taj was a symptom of [Trump’s] sudden inability to focus—he’d visited the site rarely and lost contact with the detail work that was once his trademark…. By and large, he’d transcended his Hyatt and Trump Tower days of creating value and repositioned himself as a player in the far less demanding league that merely traded in it. [Emphasis added.]15
Trump’s loss of focus and attention to detail became increasingly problematic.
Second, Trump would likely indicate that negotiation leaders should delegate to take advantage of their team’s strengths. Doing detail-oriented homework is neither his strength nor in his interest, he might note. That’s why you hire experts and lawyers, right?
Ross would again agree with Trump, noting:
To my knowledge, Donald Trump has no negotiating weaknesses except maybe the fact that he doesn’t like to discuss minor details. He lacks the patience to work on unimportant paperwork, because he likes to focus on the big picture as a more productive use of his time…. Being a smart deal maker, Donald has learned to see the forest and let his subordinates see the trees.16
Delegation is a critical negotiation strategy. Negotiation leaders should rely on experts and others. But effective negotiation leaders still need to understand the interests, details, and interconnections between the issues to fully appreciate the strategic negotiation landscape.
RESEARCH: Professors Roy Lewicki, David Saunders, and Bruce Barry, co-authors of Negotiation, the world’s bestselling business school negotiation textbook and the gold standard, wrote:
We cannot overemphasize the importance of preparation, and we strongly encourage all negotiators to prepare properly for their negotiations…. Preparation… should be right at the top of the best practices list of every negotiator. Negotiators who are better prepared have numerous advantages.17
One final note on preparation. So far, we have focused on the substantive preparation for negotiations. Learn the facts.
You also need to do your homework on the negotiation process. Most successful professionals do their due diligence on the facts. But they give short shrift to the process and wing it when it comes to preparing for the actual moves in the negotiation. Do both.
How well has Donald Trump prepared on the substance and process in his negotiations over the years? On a scale of 1 to 10, 10 being the most prepared, I would give him a three. I expect he would agree he’s not much for preparation.
His gut dominates.
Trump’s Win–Lose Mindset Impacted All His Business Negotiations
“We are going to start winning again…. We are going to win so much.”18
“I have a winning temperament. I know how to win.”19
“I’m not big on compromise. I understand compromise. Sometimes compromise is the right answer, but oftentimes compromise is the equivalent of defeat, and I don’t like being defeated.”20
“We [the U.S.] don’t win anymore. We don’t beat China in trade. We don’t beat Japan, with their millions and millions of cars coming into this country, in trade. We can’t beat Mexico, on the border or in trade.”21
“I win, I win, I always win. In the end, I always win, whether it’s in golf, whether it’s in tennis, whether it’s in life, I just always win. And I tell people I always win, because I do.”22
