The Right Way to Negotiate with Andreas Winheller, Ep #443

[Music] Welcome to the Negotiations Ninja Podcast where we teach you the skills and strategies to become a master negotiator and communicator. Whether you're looking to close a big deal in business or navigate a tricky conversation, we've got you covered. Also, check out a negotiation training on our website at www.negotiations.inja and level up your negotiation and communication skills. So grab a notebook and get ready, let's begin. [Music] Hello friends, welcome to this new episode with my guest Andreas Winheller and we talk all about how to negotiate integrating several different approaches, building bridges between the Harvard style of negotiations and crisis negotiations. We also talk about the lack of irrationality in economic grounded negotiation approaches and the power of framing in negotiations. Enjoy. [Music] Hello Andreas, how are you? Yeah, hello Mark, thank you for having me. Please to finally have this conversation with you my friend. Wonderful, let's have a good talk on our most beloved topic right? Yeah, exactly, it is our most left topic indeed. We're going to get into maybe a couple of controversial things today about how people think about negotiation and I'm excited to do that. But before we do, maybe tell the listeners a bit about who you are and what you do. Oh yeah, my name is Andreas Winheller, I went to Germany, I went to 2001, I went to Harvard, I did the education as a negotiation instructor over there. Then I came back to Germany, I've translated the original training methodology of Harvard into the German language and I started my work as a negotiation consultant doing training, doing coaching in important negotiations. Things like that and then I traveled the world on seeing different institutes and collecting knowledge about what negotiation is all about. We've had a few German speakers on our show, cultural differences certainly are fairly significant when it comes to negotiating between US, UK, Germany, parts of the world. It can be fairly substantial but process seems to be something that remains fairly consistent at least with those folks that I chat with that have maybe got a broader education in negotiation. Totally agree. I think it is not very helpful to think too much in stereotypes on cultural differences and it's very important that we understand that it's not the distance in kilometer or so miles that makes a difference. There are a lot of people in Germany, they think that the Austrians behind the border are very similar to us so that's totally wrong. We have huge cultural differences and many significant topics, Americans from the US are much closer culturally to us as the Austrians are. I think it is important not to overlook it but not to take it too much as stereotypes but to see the individual on the other side of the table you have to deal with this person is the only thing that counts. A very good friend of mine who I grew up with now lives in Hamburg and he was explaining to me some of the differences between Germans, Austrians and the Swiss and he said Germans and Austrians are kind of similar but the Swiss don't consider themselves Germans at all. It's very interesting to me because I had no idea. Absolutely. There is no need to step outside of Germany. If you have a lawyer from a perspective from someone from Hamburg and you have to deal with someone from Debleibararia that's a huge cultural difference. I think it is most important to have a look on the individual differences on the specific person on the other side of the table and to try to be flexible enough to fit their needs. That's the only very important thing that counts if you want to be successful in negotiation. Speaking of differences, maybe this is a good segue to the first part of our conversation. In the early 1980s seminal work in negotiation was released by Yuri and Patton and Fisher called Getting to Yes. Some things I disagree with certainly in their text but you cannot discount that book. It was world changing in terms of the value that it added to negotiation. For the last 30 years, it's been the book on negotiation and then very recently obviously Chris Voss has come to popularity with never split the difference and that has become the book on negotiation. The discussion I was having with someone the other day is unfortunately the vast majority of people when they read any books they read the top selling book in that category and then they think they're fully educated on that topic. Unfortunately, that's just not true. It would be like reading one book on management or one book on marketing and thinking that you've now been fully educated on that topic. Let's maybe dive into that a little bit. Let's talk about maybe different approaches to negotiation, the two major different styles and how we can integrate it. How do you feel about that? When I started I was a Harvard God and the book getting to yes that you've already mentioned is the Bible for anyone of us and it has a huge impact of course at hand. When you start to teach it and when you start to try to implement it in a real world business negotiations you also come to that point that this is just one perspective but there are a lot of very important topics that are not covered enough. Chris Foss for example, he has the story that he came to Harvard and he found out that Harvard is nothing and all that theoretical stuff from the academics but he come with the FBI, the real FBI techniques from crisis negotiations and that is all you need. And his book is the sentence hostage taking is just a business as any other business and I think that's deeply wrong. It is not the opposite. It is not a question of Harvard or crisis negotiations. I think that's my philosophy. Negotiation is a craft and if you want to become a master craftsman you have to travel the world and you have to meet a lot of master craftsman. You have to visit them. You have to work together with them. You have to have a look at their specific techniques how they do and if you have traveled the world and if you have visit 10 or 20 master craftsmen you can try to become a master craftsman for your own and it's not a single book and it's not a single master since negotiation should not be a religion. It should not be a religion and we should not you know, go before our gurus or stuff but we should travel and we should collect every single piece of information where it is available the different techniques and there are a lot of techniques and how which are very valuable a lot of techniques with the FBI crisis negotiation approach and several other approaches all around the world that's my philosophy. I completely agree with you I love your analogy to religion I find that a lot of people feel that way about the thing that they now get into right they become very dogmatic about their approach and they almost develop an ideology about it and any sort of deviation from that ideology or from that dogma is met with condemnation and anger and frustration that's a great analogy for the list is listening in right now the reason that we're having this conversation is because Andreessen I had a. I had a previous chat about how sometimes people get wrapped up in one way of doing something and certainly there are a lot of any discipline whether it's marketing negotiation management that will say this is the way to do something there is no one way there is no the way to do something there are ways and certainly some of the ways are a way to do something but there is no one way to do something and that's essentially that's why I'm not talking about this conversation because it I find it's shocking how some people just get wrapped up in sort of one approach and one thing that you and I spoke about is that there's a the economic grounded negotiation approaches and rational versus irrational type negotiations maybe dive into that what do you mean by that yeah well in business negotiations we negotiate a contract it is on optimization that's all about optimization of an economic transaction the numbers so questions like value creation or self-inforcing contracts or contingency deals and all these beautiful things are important because they are very helpful to make money in the business world so this very rational approach coming from an economic perspective is helpful and that is what Harvard and LSE and Kellogg and Stanford and all the others are are focusing on and it's helpful of course it is it is not theory it is if numbers count if money makes a difference this is important yes but or and if you have to deal with real people and not with artificial intelligence or so if you have to deal with real people you have to be able to do something with the real people to influence these people to reach your economic goals. So nobody acts rational. One of the most beautiful sentences to describe how people work is from Russia, Tala, who got the Nobel Prize in economics in 2017. And he didn't speech there. He said, "Real people are less like Commander Spock and more like Hohma Sims." And I think that this is exactly the point. If you deal with real people who are highly irrational and emotionalized in their decision making, as they wear purely irrational, purely relying on mathematics, you simply do not get good results. And Chris Foss is totally right on that. So what I think is that we have to combine the ideas of economic optimization and beautiful complex strategies on the other, that from the one perspective, and at also what we know from crisis negotiations, what we know from framing research and things like that, on how you can influence another human being. And if you bring that together, if you integrate these both approaches, I think you will be much more capable in reaching your economic goals. (upbeat music) - If folks, we're gonna take a short break from this podcast to tell you all about the negotiation training that we offer at negotiations ninja. If you're part of a sales team, if you're part of a procurement team, if you're part of a customer service team, really if you're part of any customer or internal facing organization where communication sometimes fails, we probably have training that's gonna help you. If you're trying to figure out how to deal with conflict better, if you're trying to figure out how to get more value out of your negotiations, if you're trying to figure out how to deal with price increases, give me a call. The easiest way to be able to do that is to go straight to our website at negotiations.ninja. That's negotiations.ninja. Or reach out to me directly on LinkedIn. And let's set up a conversation. We'd love to chat with you all about that. Let's get back to the show. (upbeat music) I wanna dive a little bit deeper into rational versus irrational. This is, I mean, I especially remember this from long time ago in university when I was taking my first corporate finance class and we were talking about the efficient market hypothesis and how the market was efficient. And then someone who had been sort of a late-comer into the class but was a day trader said, "Well, actually the market is not efficient, right?" It's not, we believe that there are rational actors that take profits and all those kinds of things, but that's not necessarily true. And the same is true also for negotiation. And this is, I think, the major problem that I have with game theory in negotiations. I think the Empherea Negotiations is wonderful. I think it provides a lot of strategy. It allows us to map out a lot of different things but we are making some massive assumptions that people are going to take the most rational approach. - Absolutely, absolutely. One of the most beautiful examples for this problem, I found in the book Misbehaving by Richard Tallah. He's describing there that there is an investment fund, CUBA, it has nothing to do with Cuba, it has nothing to hold any assets from Cuba. But it went down the moment when the US declared economic sanctions against Cuba. So, and it is, it's an investment fund that is only bought by professional traders. It is not someone for the broader public. It's for professionals, they should know. But they decide not to buy a Cuba fund, which has nothing to do with Cuba as a country or as an economy, the moment when we do sanctions against Cuba. That's not a rational, mathematic way of decision making. And the world is full of that. So, if you think that with game theory, you can simply do negotiation as mathematics. That's not health. It is just a good way to get hypothesis, to get ideas, to test some sort of strategies. But at the end, I think the strategies that really work are strategies that address real people and real human needs and especially the unconscious emotional processes in our brain. - So, maybe we'll dive into this a little bit more. If we, and maybe this is a bit shocking for people as we go through this because they're maybe saying, well, hang on, I thought negotiation was about the, basically the sport of rational decision making. If we're dealing with an irrational person, how do we apply a rational framework to that, can we apply a rational framework to that conversation? - Well, first of all, there's a lot of research on these irrationalities and it's good to implement these research into your negotiation approach. Let me give you a very practical example. It is the example of the so-called give or take frame, it's done a study by the German researcher Lo Sheda. If I sell you some other oranges, I can do it in two different ways. One way is I can give you my oranges if you give me two dollars. The other way is if you give me two dollars, I will give you my oranges. From semantic, from a rational way, it's totally the same. It's purely exchange, it's trade off. Well, if you do empirical research, you find out that the difference in the end price is more than 30% higher if you choose the best frame for you. That's an example of framing research that we have where you can, if you know that, you can exactly choose the best frame that will give you some sort of power for your strategy. But, and that's the funny thing. Every one of us, every listener to that podcast has very often used frames like that. But without a bet, around 95% of them didn't know until now that there is a difference whether they say this way or that way. I give you my oranges, if you give me two dollars, or if you give me two dollars, I give you my oranges. So, and that's one example, I think, how you can try to implement professional ways to deal with the irrationalities that we have. Yeah, there's been a lot of stuff that I've read recently from Connemon on Framing and how he structures sentences differently to elicit different results. And if you are more prone to risk having it structured one way versus if you are less prone to risk having it structured another way, or generating a response that makes you more weary of risk because of how you've structured a sentence. And for the listeners, this is really important to dive into if you're gonna nerd out about this like Andreas and I do, you can change how someone feels about something that you say based on how you say that thing. Yes. So, for example, I could say to Andreas, "Hey, Andreas, if you give me two hundred thousand dollars, I will give you X, or I could say if you give me X, I will give you two hundred thousand dollars, or I might even say, "Hey, Andreas, if you do this thing, I will give you two hundred thousand dollars, or if you don't do this thing, you're gonna miss out on two hundred thousand dollars." The information is essentially the same, but the result is different. Totally different. And this is because the unconscious part of the brain is the most important part for the decision making. It is the part where we do the decision, yes, I buy, or yes, I agree, yes, I do the deal. And the example that we were discussing, the give and take frame, the thing is that from a semantic perspective, it is the same as there is an exchange. But one of these both trade goods are more highlighted. We call it the reference resource. So, I give you my oranges when you give it to do do do do do. That's the primacy effect. It's the first information. So, it got highlighted. Our attention focuses focused on that. And the result of that is that one of that, principles that came in and twerced key found within their research, the so-called loss aversion is gonna be activated in me because it is my orange. And I start to fear that I can lose these oranges. And the result is that I got more rigid, that I, you know, not so much open to make concessions. And the reason why I will get the better price when I say it in that way, I give you my oranges when you give me two do. The reason is because I get more rigid. So, I will negotiate stronger. You will negotiate losers since your reference resource is not activated in the brain. And that means that you will do, let's say, two concessions more than I do. And that's good for me at the end. And that's the, there's nothing rational or logical on that. It is simply the beautiful logic of the irrational part of the brain. And yes, that's very helpful. And it goes even further than Kainman and Torski said it. We know from the research that has been done in the last 10, 15 years, that also the physical framing, as I named it, when I wrote my master thesis on this research, the physical framing makes a difference. So, how we decide depends on what time of the day in what environment. Interesting. How we slept the night before. In what color the walls are painted around us what we're negotiating, what type of chairs we're sitting? Where are they? very soft or whether they're very strong, whether we drink hot or cold, hot or cold drink, all of that has influences on how we do the decision. And if you implement that in your strategy, you by far be more successful in reaching your goals. I was reading an article that was talking about how judges make decisions before lunch and after lunch and how the decisions are dramatically affected as a result of whether they're hungry or not hungry. Yes, it is the so-called decision fatigue phenomenon. The brain is not a muscle, but it acts a little bit like a muscle. If it has worked a lot on decision making, it slows down. It says, "Well, I'm done now." So it tries to avoid any complex situation, any complex decision making, go with the status quo and things like that. And it has been replicated. There are a lot of discussions around that study, but it has been replicated that study with the people who work in a bank and make decisions on giving loans. And they phone exactly the same results. So decision fatigue is a problem. So yes, a professional negotiator should be aware to make a decision what type of a day and what environment and what physical preparation you should enter that negotiation if you are and hands you a performance. Yeah, just for the listeners who are thinking like it can't be that dramatic. I want to read something for you. There's this article that I was referencing called that basically it's called the hungry judge of fat is basically finding that judges were more inclined to be lenient after a meal and more severe before the break. So basically the study of the decisions of Israeli parole boards was made in 2011. And this found that the granting of parole was 65% at the start of a session, but would drop to nearly zero before a meal break, which is outrageous. Right? Like when you think about that, you're like, how can this absolutely be? But this is the physical framing that you were talking about. Absolutely. And you need a break, a real break to regain your capacity and the judge of study from Israel. It shows exactly that. So after the break, after the lunch break, they started nearly as they were in the morning. But and now comes the bad. This is Israel. And we've talked about cultural differences. So in Israel, people go to lunch. They really stop their work. They go out and have lunch. Have lunch together with other people. They are talking about a lot of things, but mostly not about work. So compare that to how we deal with so-called lunch breaks in the business, in the Germany or in the United States. I think very often we don't do lunch breaks like that. We're sitting in a computer. We're eating some sort of snickers bar while we just check some emails or stuff. And there is no regaining of our performance during a break like that. So this problem, this decision fatigue problem is much bigger than we might think when we just read the study. Yeah. For the listener is just so that you know it is, when you start digging into the research, it will start to blow your mind how many external factors that you don't think impact your decision making, actually impact your decision making and how just the simple act of taking time to be able to separate yourself from work allows your brain to basically recalibrate itself and say, all right, now I'm ready to go again. But this whole idea that you can just sit at your desk and plow through lunch and your decision quality is going to stay as good or better, it's just not. It's going to get worse. Yes. A basic things count. So if you drink a hot coffee or you drink a cold coke makes a huge difference on how co-operative that negotiation is going to be. So with the warm drink, it is much more likely to be a co-operative and respectful negotiation and communication process that arises from that. It's a study from the U.S. that I mentioned here as if you drink a cold coke. That's amazing. It's insane. It's amazing. Yeah, but that's the way our brain is operating. And I think if we have a highly complex process between two humans, it's very helpful to read the manual on how our brain works and not only the manual on how our computer works. So yeah, to be interested in how the brain works is very helpful to get a new insight. And that's why I several years ago, I just go back to study and did a master in co-operative neuroscience with Professor Roderstein and other in Germany because I think it totally changes the game if you try to implement ideas like that in the way you're teaching negotiation and the way you're managing your negotiations on a daily basis. And it's all about the results and it's all about the money that you can make if you do things right. Yeah, Lister, if you get an opportunity, here's what I want you to do. I want you to pick up as much research as you can on how the brain reacts to certain stimuli and how the brain reacts to certain situations. Pick up the study on the hungry judge effect. If you just type in hungry judge effect, maybe that's a good starting point for you to be able to see how things affect decision making and speaking of decisions. You are going to be doing some upcoming training with a great Gary Nezner. Yes. Yes. What about Gary? Let's talk about what he's doing with you. Yeah. Well, I've learned a lot in Harvard and Kellogg and else, but I had some, yeah, not very deep knowledge about FBI crisis negotiations. I totally undervalued this approach over several years. But then some years ago, I started to get fascinated from the great results that they get in very high difficult high-tenth situations. And then I started to get interested in how they do that and to read a lot of the original literature that I reached out and to Gary Nezner, learn them and then get educated by him. And I can call him a friend and I'm very, very proud that I was able to convince him that he will do a two-day workshop together with me in Germany. We already did that twice last year. It's called effective influencing in business negotiations. We will do it again in the 16s and 17s of January next year and in that workshop, we do two days of real training, how you can use the techniques, the tools, the framework of the FBI and negotiators to enhance your ability to influence other people in daily communication situations in your negotiation. We'll do it in a short or a very small group on just 20 participants. So it is highly intense and you get a lot of skill building out of that. So I look forward to the next workshop because I learned so much in these workshops that we did last year. I've learned so much from Gary. He's simply the greatest negotiator when it comes on influencing an opposite person that I've ever met all around the world and it's fascinating. And it's like I said in the beginning, negotiation is a craft. And if you want to become a master craftsman, you have to travel to the world and you have to learn from the best master craftsman that they're outside and I think Gary is one of the grand masters of course. Certainly. Absolutely. He's been especially kind to me during my educational process and I've learned a great deal from him. He has some very nice things to say about my book, which I really, really appreciate. Andreas, as we wrap up here, how can people find you online and how can they reach out to you if they want to? Well, first of all, I'm very active on LinkedIn. I'm discussing and I'm posting there. I have a group on negotiation. That's the most easy way. Just my name on LinkedIn. That's the only social media platform where I'm active at the moment. And of course, I do have a homepage, but that's a very difficult German word. It's a phahandlungspurformance.de. But with my name, I think you will find it and I'm very happy to discuss if there are any questions left, the things that we have discussed today. Lister, just so that you know where to go, if you go to the show notes of this episode on our website, you'll be able to find all of the links to get to Andreas, his business, his LinkedIn profile and all of those things. Andreas, thank you so much for being on and sharing your wisdom. Thank you, Mark. For that great conversation. [Music]