Effective Negotiating Lessons from Donald Trump

In 1987, Donald Trump first published his book The Art of the Deal. In his book, Trump outlines tactics needed to become a “winning” negotiator, and in his recent presidential campaign, we have observed first hand some of his negotiation principles.

So how do Trump’s methods compare to research findings on effective negotiations?

The negotiating principles discussed in his book align with the behaviours he has exhibited in his presidential campaign which has also created some controversy.  These behaviours include:

• Thinking big and depending on intuition
• Competing to win and fighting back hard when he senses unfair treatment
• Building an image of strong power base

However, in order to negotiate a good agreement (one that satisfies both parties’ interests), a different set of negotiation tactics are required. Good agreements are ones that satisfy and actually optimize both parties’ outcomes and are based on trust that each party will work within the boundaries of the agreement. Effective negotiators recognize the importance of understanding the other party’s interests as well as their own and spend time preparing for a negotiation. They recognize the value of continually searching for relevant information and asking relevant questions.

The Importance of Thinking Big, Setting Goals and Being Prepared

We agree with Trump - ‘big thinking’ negotiators tend to achieve better results. Big thinking involves identifying all of the issues in an upcoming negotiation and setting clear, specific goals to work towards.

Although intuition plays a role in negotiations, a skilled negotiator comes well prepared and does not rely on intuition alone. Preparation is the key to a successful negotiation and will help even the most novice negotiator achieve a better outcome. If you go into a negotiation feeling overconfident and rely on intuition, be prepared to be taken advantage of by a skilled negotiator.

The Myths: Competing to Win and Fighting Back

Trump sees negotiation as a battle or a game with winners and losers. In reality, the best negotiators work hard to ensure that both parties have their needs met. Instead of thinking of negotiation as a battle, think of it as an opportunity to work together to create value. Trump takes a very distributive stance (win/lose). The problem with a distributive stance is that often it will be mirrored by the negotiating counterpart. Hardball tactics lead to other hardball tactics, which destroy value.

Good negotiators will leave the other party feeling good about the transaction, which could lead to future successful negotiations. If your counterpart never wants to negotiate with you in the future, were you really successful? Remember, your reputation as a negotiator will follow you and could have an impact on future negotiations.

Trump seems to let his emotions get the best of him. This could be a hardball tactic, but who wants to negotiate with a bully? Further, negotiators don’t make good decisions when they let emotions get the better of them. Have you ever tried negotiating with a significant other when they are upset with you? How did that turn out?

Does a Power Position Really Work?

Trump does an outstanding job at reminding us of his power and success.  Many of us find this inflated sense of power quite humorous. One point both Trump and any skilled negotiator would agree on is that humour is critical – especially when tensions can run high.

Power, however, is relative when it comes to negotiations. Successful negotiators can get around a position of power by being prepared with a BATNA (Best Alternative to the Negotiated Agreement). There are times when you may find yourself in a negotiation where the person across the table exhibits a power position. When an assertive negotiator actively works through power tactics, such as extreme positions and lack of recognition of others’ interests, it is a signal the negotiator is unprepared or hiding weaknesses. As a skilled negotiator, you have a choice of attempting to communicate with this negotiator or walking away. If you have a good BATNA, the best choice is to walk away. It is important to note that negotiating parties will rarely have the same level of power, but by being prepared, you are able to assume as much power as possible, but remember, the overall goal is not the power – it’s to find a win-win solution.

Negotiations can be very complex and intimidating, and the thought of negotiating with Donald Trump would strike fear in the hearts of many. However, negotiations can be very rewarding.  By developing negotiation skills, it is possible to avoid common pitfalls and personal biases that limit effectiveness in negotiating.

If you are interested in developing your negotiation skills, check out Haskayne Executive Education’s High Performance Negotiating, November 3 and 17, 2016.

About the Authors:
Loren Falkenberg is the associate dean (research) and an associate professor in the Organizational Behaviour and Human Resources area at the Haskayne School of Business. An expert in negotiations and corporate social responsibility, Loren focuses on examining ethical and social responsibility issues in companies, and exploring the relationships between companies and not-for-profit organizations. Her current research is exploring how companies can optimize value creation for both the company and community.

Leighton Wilks is an instructor in the Human Resources and Organizational Dynamics Faculty and a PhD candidate at the Haskayne School of Business. Leighton has a significant consulting background in diverse areas including real estate development, strategic planning, and cross-cultural training. He is currently the manager of real estate studies at the Haskayne School of Business and has received numerous awards and scholarships. Leighton holds a MBA (thesis-based) and a BA in Psychology from the University of Calgary. His dissertation research looks at corporate social responsibility within the oil and gas industry, with a specific focus on strategic partnerships that are enacted to achieve social value.