In June 1989, Donald Trump picked up a copy of Business Week magazine and read an article. Genesco, a footwear company, was in trouble. The banks had insisted on the appointment of a new chief executive. They had settled on John Hanigan, a turnaround artist best known as an asset stripper. In The Art of the Deal, Tony Schwartz describes Hanigan in Donald Trump’s words: “He came to companies without any emotional attachment to its people or its products,” he says. “As a result, he had no trouble being ruthless. He was a tough, smart, totally bottom-line-oriented guy.”
Trump had been trying for years to buy Bonwit Teller, Geneco’s Fifth Avenue retail store. Now he saw an opportunity. He called Hanigan, who understood exactly why Trump was calling and asked Trump when he wanted to meet.
“As soon as possible,” Trump said.
Hanigan asked him to be there in half an hour.
They met that morning, and had what Trump called “a very good meeting.” Trump left convinced that there was a good chance they’d make a deal very quickly. After a delay, they met again and the two sides agreed to a $25 million sale of the building and the lease of the land on which the building stood. To keep out other bidders, Trump insisted on a Letter of Intent and persuaded Hanigan to take out a clause conditioning the sale on the agreement of Geneco’s Board of Directors. The result of the negotiation was Trump’s purchase of the Bonwit Teller building, the destruction of its art deco friezes, and the construction of Trump Tower.
That’s how negotiations are supposed to be happen. They take place in person, eye-to-eye, between one person trying to make a purchase at the minimum price and another trying to make a sale at the maximum price. It takes patience, skill, psychology, and an ability to read the body language of the person in front of you in order to come to the best agreement possible. There was a reason that Hanigan invited Trump to come over instead of trying to conduct the negotiation on the phone. He understood that the physical presence of both parties in the same room was essential to understanding each party’s priorities, recognizing each other’s concerns, and building an agreement that delivered benefits to both sides.
That’s no longer happening. In the age of coronavirus, people are staying put and business is taking place online. Sales meetings are being held on Zoom and negotiations have to be conducted in a home office while each party stares at a screen and a small camera points at the top of their forehead. The easy small talk before the negotiations begin, the smiles and frowns at offers made, the direction of pointing feet and crossed arms, the shakes of the head, and the firmness of handshakes are all missing now in negotiations that take place over the Internet and with a slight delay in the communication.
It’s not a perfect solution. Video chat might be a novel invention and a technology promised since the laying of the first phone line but it’s still not very good. Pictures freeze. Downloads buffer. Speech is chopped, vanished, and returns a few seconds and a few sentences later when the speaker has already moved onto the next point. Users are left to wonder whether they should ask the speaker to repeat what they said—again—or bluster through and hope they didn’t miss anything important. It doesn’t matter how strong your Internet connection might be, Zoom and Skype are always ready to tell you that “your internet connection is unstable.”
And that’s before you encounter the problems posed by Zoom-bombing and that application’s weak privacy and security issues. Negotiating using a video conference can feel a long way from an eyeball-to-eyeball conversation over a cup of coffee as each side looks for the other’s red lines.
There are no figures that describe the difficulty that negotiators are experiencing as they try to close deals using Zoom and other video applications but Marty Latz, a negotiation trainer, has reported that more people are asking him how to negotiate via video conference. “It’s a new way to interact,” he says, “especially for negotiations, and many people are interested and curious.”
Look ‘Em in the Screen
One important problem is eye contact. Until laptop makers figure out how to put a video lens behind the monitor, each user will be looking down at their computers even though the camera is placed above them. Users of video chats are always looking beneath each other instead of at each other.
That lack of eye contact has an effect. People who refuse to look you in the eye when you’re speaking can appear bored and uninterested in what you’re saying. When they don’t make eye contact when they speak themselves, they can come across as dishonest. Can you trust someone who won’t look you in the eye as they’re promising to meet their obligations?
The effect is measurable. When researchers at Cornell University photoshopped the eyes of a cartoon rabbit on a cereal box so that the rabbit looked out at the viewer instead of down at its breakfast, volunteers favored the Photoshopped rabbit by a margin of 16 percent. That’s the degree of likeability that video chat removes from each negotiating partner.
That instinctive reaction is a mistake, says Latz. “Perhaps the biggest mistake is to misperceive the almost certain lack of eye contact and connection to mean a disinterest in you and what you are discussing or proposing,” he says.
But knowing that a lack of eye contact during a video-based negotiation doesn’t mean insincerity isn’t the same as not feeling that lack of trust. We’ve been negotiating in person and reading other people’s body language much longer than we’ve been making offers and counter-offers on devices and laptops. We might accept that a counterparty isn’t being dishonest when he looks down as he describes what he’ll deliver but it will create a distance. And that distance affects our willingness to say “no.”
Latz argues that a refusal creates conflict, and people are generally uncomfortable with conflict. We try to avoid it. The discomfort is even greater when we have to refuse and create that conflict in person.
“The more personal the interaction, the harder it is to say ‘no,’” warns Latz, “and the less personal the interaction, the easier it is to say ‘no.’”
On an interaction spectrum which places face-to-face conversation on the most personal side, and written communication on the least personal side, video leans towards the personal, says Latz. So negotiating through a video conversation encourages agreement but at the same time, the lack of eye contact and the greater distance it engenders still makes refusal easier than a negotiation that takes place entirely by email or by letter.
That creates an opportunity to strategize your negotiations and look for an advantage. Latz suggests first evaluating what you want to accomplish in a negotiation. “Decide whether you’re looking for your partner to agree or whether you’d prefer to refuse an offer, then negotiate how to negotiate. For instance, if you anticipate saying ‘no’ to your counterpart’s proposal, consider doing it by email instead of a video call. But if you’ve made a proposal and want a ‘yes,’ video away!”
Zoom or Telephone?
That makes Zoom not just a channel for negotiation but a subject of negotiation. If you’re looking to refuse a counterparty’s offer, if only to extract a better one, you might want to turn down an invitation to talk on Zoom and instead propose that you talk on the phone.
“Be strategic about what you want to accomplish in each interaction – and incorporate this into your strategic planning,” says Latz. “Don’t just default to Zoom or video because it’s become the norm.” You might even try to delay the negotiation until it’s possible to meet in person, although that might be some time away.
For Ed Brodow, author of Negotiation Boot Camp, the difference between video chat and a face-to-face negotiation is huge. He takes a harder line on video applications and argues that the lack of body language means that negotiating via video call is less like meeting in person and more like talking on the phone. “Nothing can take the place of face-to-face negotiation,” he says. “The video screen is great, but you will still miss many of the cues that you get in person.”
Similarly, the preparation for any negotiation should be the same, he adds. Whether you’re talking via video chat or just on audio, you’ll need to prepare and let the other person do most of the talking. Brodow applies the 70/30 rule to negotiations: listen 70 percent of the time and talk 30 percent of the time. “Ask questions, then shut up,” he advises.
You should also be prepared to take your time to come to an agreement. Tell the counterparty that you want to sleep on it and write a “deal memo” that summarizes the terms of the agreement. Above all, he notes, you should be prepared to walk away—or politely hang up—if you can’t get what you want.
But while the delays and buffering mean that video chat doesn’t easily lend itself to small talk, it is still possible—and important—to build a rapport before diving into the details. It might even be easier when the conversation takes place between two people sitting in their spare bedrooms. You might want to avoid commenting on the pictures on the mantelpiece or the books on the shelf of your counterparty’s home office but commenting on the cat when it meows to be let into the room or asking about the dog barking in the background can help to reduce distance and build a relationship. We’ve now become accustomed to interruptions from pets and children during business calls. What we once found unprofessional, we now find endearing and human. That’s an advantage that can help in a video negotiation, especially when you’re looking to create the kind of personal connection that, like in a face-to-face negotiation makes it difficult for the other party to say “no.”
So negotiating via Zoom or other video applications has its challenges. You won’t be able to read body language. You’ll have to cope with the buffering and the broken audio. There will be some distance which can make refusal easier than in a face-to-face negotiation. But you’ll also have one more tool that you can use in your negotiation strategy and if you do find that you have to make offers and counteroffers by video, you can reduce the distance by spending a few minutes before you get started with standard small talk—especially if there are pets or kids in the vicinity.
Ultimately, though, the channel in which the negotiation takes place is less important than the nature of the agreement itself. Trump’s negotiation for the Bonwit Teller building went well. But he also negotiated in person the agreements for his Atlantic City casino. We know how that deal turned out.
Recent Comments