Much of life involves negotiating—interactions with others that produce agreements. Those agreements might be formal (a binding contract, for example) or informal (a handshake deal). But in either case, a lot of what we get is the result of a mutually acceptable meeting of the minds.
That’s why we believe it makes good sense to hone your negotiation skills. Certainly we see that the Super Rich (those with a net worth of $500 million or more) often go to great lengths to pump up their negotiating muscles and keep them strong. In particular, we see that the Super Rich are highly focused on two aspects of negotiating that tend to help them achieve success time and time again: framing and empathy.
Here’s a look at both—and why they matter.
Aiming for the win-win
One of the biggest negotiation lessons we see the Super Rich using in their efforts is this: The best result of any negotiation is when both sides can walk away declaring success—and actually mean it. When everyone involved in a negotiation feels good about the outcome, the parties involved tend to see the maximum benefits of their efforts.
In short, in ideal negotiations, everyone wins.
Note: This doesn’t mean that everyone in the negotiation ends up getting exactly what they want. Instead, it means that each side walks away with two outcomes—concrete results that benefit them, and a sense of accomplishment.
One big reason why it’s so important to the Super Rich that everyone wins is that the Super Rich often think in the long term when it comes to the outcomes they seek (in business and in life). The positive feelings that are generated when everyone in a deal-making situation walks away feeling they’ve accomplished something that benefits them set the stage for great results from future negotiations.
Example: The next time Super Rich negotiators deal with the same people, they will be remembered for their reasonableness, fairness and good attitude—thus making it more likely that the negotiation will go well (maybe even better than the first time around). Taking an “everyone wins” approach can also help with any future negotiation, as the good reputation of Super Rich negotiators from past situations may be known to the other people involved.
There are many factors that go into successful negotiations. Two interacting factors that often are instrumental to mutually beneficial results are framing and empathy.
Start with framing. You’ve probably noticed that how you say something can sometimes be just as important as what you say. Well, that’s framing. It’s the process of structuring and articulating perspectives and viewpoints so that they strongly resonate with the other party.
Consider that, in all negotiations, the two sides come to the table with their initial respective positions and approaches. We see that the Super Rich are inclined to frame the way they are going to approach the negotiations with the objective of getting the other side to adopt that same mentality.
Example: In most business negotiations, the Super Rich will frame the negotiation as an opportunity for collaborative problem solving—and not a “winner takes all” situation. They’ll set this framing as early on as possible. Their framing communicates that they want the end results of the discussions to benefit everyone. Not surprisingly, that approach can often lead to smoother and more productive negotiations in which compromises are welcome instead of automatically pushed back against.
Ultimately, framing is all about sense-making. It helps people better understand your views and positions, and how your perspectives match up to their own. It is the psychological context used to create greater agreement and alignment between parties.
There are various ways to go about framing. Which frame to use is dependent on the situation. These are examples of different frames:
- Financial: how the deal or particular terms will be economically rewarding to the other side
- Strategic: how the deal or particular terms will enhance their business opportunities
- Social: how the deal or particular terms will be beneficial to their family or to society
- Precedent: how the deal or particular terms make sense because they fit with “the way these things are done”
Note: Framing is critically important beyond just the people sitting on the other side of the table. Framing is also about the optics surrounding the negotiations and how various stakeholders perceive them. In other words, bargaining success is not only about the people “in the room,” but also about how things will look to other people who matter in the situation. By taking optics into account, effective framing helps the other side “sell” the deal to their constituencies. For example, framing can help the other side explain to other stakeholders why concessions were made.
In other words, good framing by you will help the other side describe their victory—which, again, can help you if you deal with those people down the road.
As a negotiation progresses, it is essential to know where the other side truly stands on various issues. Empathy can be a very powerful tool to producing mutual success when negotiating. Indeed, it can be the cornerstone to building trust between the parties.
Throughout ongoing negotiations, there is usually a need to build and keep building trust. When there is confidence in the veracity and goodwill on both sides, the other side is more likely to open up and help you understand the issues that are most important to them—and what issues can be discounted.
By having such knowledge, you can become well positioned to frame the conversations so as to create an alignment of interest. This is crucial to getting optimal results.
However, not everyone recognizes the value of being empathetic. Some people mistakenly equate empathy with weaknesses. To the contrary, empathy equals strength.
That’s because empathy can:
- Create options. Knowing how the other side thinks and feels can provide you with the insights needed in order to be more innovative and productive.
- Enable people to focus on underlying interests. By shifting the focus from what people want to why they want it, you will likely find there are more possibilities to reach mutually beneficial agreements.
- Deescalate and mitigate conflicts. Failing to understand the other side can easily lead to escalations and tensions. Empathy helps avoid those problems.
Important: Being empathetic doesn’t mean you need to agree with the other side or feel sympathetic toward them. Your goal is to understand others—to put yourself in their shoes—not to approve of them. In fact, the more intolerable the other side’s behavior, the more potential benefit you might gain from better understanding them (and therefore the more important it can be to show empathy). The aim is to comprehend why the other side believes what they do and how that informs their actions.
You’re not being empathetic to be nice, but rather to advance your own agenda. Empathy expands the available set of options for resolving conflicts and reaching agreements. Bottom line: It is easier to find viable solutions when people truly understand each other’s needs, wants and perspectives.
Skills to be mastered
Framing and empathy are skill sets that can be mastered with practice. We’ve seen the Super Rich use both to communicate powerfully, to better understand the other side and to take negotiations in the direction they want them to go. If you’re going to negotiate in your life—and it’s highly likely you will, in various ways—consider becoming adept at framing what you say and using empathy to boost your effectiveness.
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ACKNOWLEDGMENT: This article was published by the VFO Inner Circle, a global financial concierge group working with affluent individuals and families and is distributed with its permission. Copyright 2020 by AES Nation, LLC.
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