Turn Negotiations into Winning Outcomes with Rick Czaplewski

Mike: Negotiation is at the heart of leadership, and today my guest is Rick Czaplewski, an expert in turning tough conversations into winning outcomes. Rick is no stranger to overcoming challenges. A 30-year, two-time cancer survivor, he embodies resilience and grit. He’s a CPA, PMP, an MBA. That’s a whole lot of letters.

And he has had stints, here comes more letters, with KPMG, Hewlett-Packard, and Siemens. Some fun facts about Rick. He’s worked with several clients across many industries, resulting in hundreds of millions of dollars in closed deals and cost saves. Rick is a member of the National Speakers Association, as am I.

Rick, we probably ought to talk about that. And he speaks to audiences around the world, and you can find him outside concert venues and stadiums haggling with scalpers for tickets, because negotiation is not just a job skill, it’s a lifestyle. Regardless if you’re here to learn negotiation skills for the boardroom or for the streets, Rick is the guy to teach us those techniques and sec- secure winning outcomes.

Rick, welcome to the show.

Rick: Hi, Mike. Thanks for having me

Mike: Rick, what do you believe is the one most important characteristic of a great leadership team?

Rick: It’s a great question. I think it’s team chemistry. I would put that team cohesiveness, chemistry, the ability to get work done, make tough decisions. That, that to me would be the top characteristic. and seeing a number of these types of teams in my career, being on them and also working with them as clients, the teams that seem to get along the best have the best company cultures overall and have the best retention and ability to get the work done in the right way.

So if you wanna beat the market, put together a good team. Make sure that they enjoy working with each other

Mike: Yeah, and the way I’ll wrench that into our episode, it doesn’t take much wrenching, is to have that kind of chemistry, you need to be able to have the difficult conversation, make the difficult decisions, and sometimes the good negotiation,is at the heart of that. So, so it all kinda comes together.

Rick, I wanna start with a little bit of your background, you know, w- way back to when you were 19 years old, and kind of researching you. you walked to cancer treatment alone every day at 19, and you told no one. How did that experience of going through that, you know, being a cancer survivor, how does that experience,impact the way you teach people to navigate the high-stakes situation?

Rick: when I think about that, I was diagnosed with cancer at age 19. I was a freshman in college. There was a hospital next to the campus, and I needed radiation treatment. So what I would do is I’d wake up in the morning, go to class, then I’d walk to the hospital in the afternoon for radiation, and then I’d come back to the dorms and study and do whatever and repeat.

And I got very sick doing that. I didn’t have a person to support me or a group or anything. And this was the ’90s, folks. Things have changed. But back then, that’s how we did it. We fought things in closets. And so I ended up, beating it eventually, but without that support, my survivorship was challenged.

So I’ve named my business No One Walks Alone, LLC. And when we deal with negotiations or tough situations, people, conversations, which happens all the time in business, what I want you to feel as a client is supported. And that’s really the ethos of my business, is that I’m there to walk with you through your darkest times or most challenging moments, and we’ll get through it

Mike: how did you get started in this business? how did you get into training on negotiation? what were you doing before, and how did it lead here?

Rick: Kind of a long answer. I started my career as a CPA, and I realized early on that CPAs were very good at identifying problems in businesses but didn’t have their finger on the decision button. A lot of times I’d go up to a client and say, “Hey, you could save money by doing this and this. You could boost your cash flow by doing this.”

And clients over and over would say, “Thank you. That sounds great. I’d love to do that.” So then a year would go by, and I would come back and say, “Well, how did all those things go?” “Yeah, we didn’t do them. Yeah, we didn’t get to it.” So I realized early on as an accountant that if you were in a position in operations within business, if you took action, you’d have immediate impact on its financials.

So I received an MBA, and I went back into those types of roles, and I started realizing that even faster, an even faster path to performance is negotiation. If I asked for something more, that would translate into something on the financial statements, or it could result in improved pricing, expanded contracts, money saved, problems put to bed, a lot of different things.

And I just started to negotiate, and all the jobs that I had at that, from that point forward were more and more escalating in terms of trying to get good at negotiating in totally different circumstances. So then I took a job as a project manager, and I was dealing with contractors all over the country, including on the East Coast, Mike, Philadelphia, New Jersey.

These are tough people

Mike: You’re damn right we are

Rick: You’re damn right you guys are. Ugh. So you need a guy like me to deal with that. What I learned here was, as a negotiator, people started to take notice, and they were saying, “Well, how are you dealing with these guys like Mike Goldman? I mean, that guy’s really tough. What are you doing?” So I just started explaining this to people, which eventually turned into a full-day course for a leadership summit.

And I built that course kind of as a novelty, right? This is kind of like a fun thing. I just wanted to see what was gonna happen. And I was gonna teach people with no commercial background, folks like engineers and certain project managers who never really thought about the financial or commercial aspect of negotiation.

I did that training, but what I did not realize was gonna happen was that group of people took those skills and started saving tens of millions of dollars immediately. I’m like, “Wow, this is powerful.” Well, of course, the word got out. I got a little bit famous. They were sending me all over the country to teach negotiation, and I realized this is a business.

And so I opened up my own business, No One Walks Alone, LLC, and Mike, that’s how I got my start

Mike: In relating this to the leadership team, right? that’s our audience. To, in relating it to the leadership team, when we think about negotiating, I guess the obvious place people go is, “I’m negotiating on, price or terms with one of my vendors.” But what do you see when you’re training leaders on negotiating skills?

What are the most typical situations when negotiation has a big part?

Rick: So I, I’m glad you asked that question. I have the data to back this up. I’ve asked over 1,000 CEOs, “What are you negotiating? What are you getting involved with?” And through Vistage, I meet several CEOs every week of small, medium businesses, and the big four are sales, purchasing, contracts, and something related to HR.

That could be compensation, that could be internal matters. Those are the big four that come across all the time. And then there are other issues, buying and selling a business, real estate, insurance, one-off issues. certain businesses are negotiating claims, like in project businesses especially.

Those are the big ones. The most surprising data point that I’ve gotten in that survey, to the point where it’s actually been questioned by people, 10% of CEOs report they negotiate nothing. That’s a huge surprise. Nothing. We’re negotiating all the time. Sometimes you don’t realize as a business leader that you are negotiating and that as an executive, your presence alone and how you’re simply conducting yourself in your office is a negotiation with your entire company for its culture.

So those are certain things that we emphasize in our sessions

Mike: Yeah, so the, that 10% that says they negotiate nothing, your point is they are, they just don’t realize they are, or maybe they don’t realize there’s an opportunity to

Rick: Absolutely right. yeah, and just by virtue of being a leader, you’re negotiating for attention, for buy-in, for loyalty, and for conformance with whatever type of culture you’re creating. You’re asking your entire organization to do those things. Some people don’t realize that, but when we start to take a look at this deeper, they start to realize, all right, well, this is my personal style will really impact how my business performs, how my people perform.

And just that alone has improved some of my clients’ retention by three to fourfold

Mike: When it comes to negotiation, what’s the biggest mistake that you see leaders make?

Rick: Knee-jerk negotiating is the biggest mistake that I see people doing, and that’s not a surprise. Peop- we’re pressed for time. I don’t have a lot of time. I just, I’m just gonna pick up the phone and get this thing out of the way and finish it off and that’s it . Folks who are doing that, who are negotiating without preparing, without trying to understand what their outcome is, without going at it with a personal style, and they’re just picking up the phone and aiming f second and shooting first, that’s the mistake that I see a lot

Mike: So let’s dig into that, ’cause it’s super important is, ’cause it’s good to say, well,

people, it shouldn’t be knee-jerk, people should prepare, but let’s talk about how they prepare. And if we take an example of, you are, I’m about to go negotiate with a vendor, because… Well, actually, no,I’ll make it more client-driven. I’ve gotta go negotiate with a client.

my costs have gone up, and I’ve gotta go negotiate with my client because I need their costs to go up as well so I can still make some margin on the business. So I’m about to walk in and negotiate with you. What should I be thinking about and preparing for before I sit across the table from you?

Rick: So that’s a numeric type negotiation, and that’s also something that’s pretty common. So a lot of businesses now are feeling margin pressure and have to increase prices or inflationary concerns. So when different parties along that value chain hear that prices are going up, it’s not a shock. That’s not something where that’s really happening in a vacuum, and chances are that your customers who are buying from a lot of different people have already heard that if you haven’t gone there.

The best thing you can do to arm yourself with data and be successful is to demonstrate with backup why your costs have gone up. That doesn’t mean showing them every penny or exposing your entire cost model, but you need to explain some type of justification behind it. Where these types of discussions fall short, Mike, are where folks go in and say, “My costs have gone up.

Here’s a twenty-five percent increase.” Well, okay, how did you get to that number? That’s where that stuff starts to fall apart, and then you have, it turns into a more emotionally related discussion. If you can go into this with a more data-backed approach, you’re gonna be more successful

Mike: So what, and so if we think about that and, this happens to be a numbers-driven one, but they’re, of course, they’re not all numbers-driven. It may be me negotiating with a team member to change their responsibilities or move them to another team or something like that. So whether it’s, I’m assuming, and you may tell me I’m wrong, that whether it’s a numbers-driven negotiation or it’s not a numbers-driven negotiation, I’m assuming there’s some standard set of things we should be thinking about before we enter into those negotiations.

Like, what our objectives are or, like what are those standard things? and maybe you’ll tell me they’re not standard, that every negotiation is unique

Rick: Well, I teach Mike what’s called the operate model that addresses exactly those points. So when I ask teams, what do you think of– Let me ask you this question, Mike. When I say the word negotiation, what do you think of? What comes to mind?

Mike: Honestly, I think about it from a very positive standpoint. so the, if this was a psychological test, when you said negotiation, my mind went to, to win-win

Rick: Yeah. Win-win. So the most common answers to that question are words like bargaining, haggling, conflict, win-win. Those are all pointing to the point in time where the two of us are talking and we’re making trade-offs and trying to get to an outcome. But negotiation, in my opinion, is a series of steps before and after we get to that point, and it starts with your outcome.

This is what I call the operate model, and the first word is outcome, as in, what are we trying to accomplish here? It’s the result in the relationship we want on the end of the negotiation. Some results are more important than relationships. In other cases, like your HR example, maybe the relationship is more important.

It depends, and in business, it’s a trade-off between the two of those things. The next is…

Mike: you said an important word there, Rick, before we move o-out of outcome, and I wanna see if you used it purposefully or not. You, when you said outcome, you said it’s what we want the outcome to be, not what I want the outcome to be. Is that truly like, am I going in thinking what do I want?

Or should we be thinking, from a relationship standpoint, whether it’s me and a client, me and a vendor, me and a team member, me and a peer, is it what I want that I need to think about or what we want, or is it both?

Rick: It’s for sure both, and it depends on the type of negotiation that you’re in. There are certain survival type negotiations where you’ve gotta get the outcome, and the other party’s objectives and the relationship are secondary. And there’s other ones where we both wanna be mutually successful.

Thinking customer partnerships, onboarding, those types of things. Looking into the future, we wanna be working together. So it depends on the context of what your negotiation is, whether that’s,I’m looking out for myself or we’re working together as a partnership

Mike: And either way, I would think it would always be healthy to say, what do I think the other person wants?” Or the other, person or the other,organization wants out of this. Okay, so the O is outcome. Now let’s go to the P

Rick: the P is your personal style. So whatever you’re putting out there, you’re gonna be getting back. So if we were to do business together, Mike, what one word would you use to describe how you do business?

Mike: Maybe, maybe passion

Rick: Passion. Okay, that’s a good one. A lo- a lot of answers to that question are collaboration, partnerships, relationships, integrity, and so forth. I had one meeting where a guy said tooth and nail. “The way I’m, the way I’m doing business is tooth and nail .” Like, dude

Mike: was he from Philly?

Rick: No. No, he wasn’t. He’s a char- this guy was a character.

But when I think about that, what do you think the tooth and nail guy gets back when you put that out into the business world when you’re talking with somebody? It’s a great, it’s a great example. Whatever you’re putting out there, Mike, that’s what you’re gonna be getting back. And this is well before we start even thinking about bargaining.

We’re starting with our end in mind. The P is personal style. What you’re putting out there is what you’re gonna get back. And the next word, the E, is environment. Environment. The environment is your win-win zone. This is also an area where a lot of negotiators don’t think about it. They neglect this area.

This is where you’re setting up mutually beneficial partnerships with your counterpart. It can be partnering, it can be social proof piloting, it can be be- it could be as simple as being easy to do business with, calling people back on time, being responsive. If you’re doing all those things, those aren’t table stakes, those are advantages to you, because when you make an ask to someone later, you’re gonna be a tougher partner to deny or to walk away from if you’re working really hard to be a good business partner.

So the environment is really critical in negotiation, and we’re not even close to the table yet, but we’ve already set ourselves up to be successful there

Mike: Excellent. Okay, let’s go to the, the R

Rick: Yeah, as we move on then, the R is readiness, and this is traditional preparation. And I think there are three things you need to have ready going into a negotiation. Number one is you need to be ready. Are you ready to negotiate? Some people are real nervous to do this. They gotta get kinda psyched up or confident.

A lot of CEOs report, “I don’t feel confident negotiating.” You feel confident when you prepare, when you know what your outcome is, what you want, and you know the arguments to get to that point, then you’ll feel better getting into it. The second thing to prepare is your counterpart. Mike, I used to have a boss who– he would come into work, grab his phone, pick up the phone.

All day long, he would just be… This is in a procurement role. He’d be calling vendors and talking to them and just trying to get everything he had, just surprising them. He wasn’t ready. He was just shooting before, before aiming again. This was called dialing for dollars, and everybody thought he was a great negotiator, but really, because he wasn’t prepared, he left a lot of money on the table, and a lot of his deals fell apart.

Preparation is understanding your leverage and understanding when the counterpart is ready to make a decision. It’s the timing piece. Making sure the other party is ready, especially in a very large, difficult negotiation, you gotta get over the top. You can’t surprise somebody into that situation ’cause they’ll resist making a decision.

And your business case is certainly the last of the three. What is your leverage? What’s my starting point? What does a win look like? Where’s my walk-away point? What are my anchors? Those sorts of questions. When you’re preparing that, that’s critical going into a negotiation. And the bigger, the more complicated negotiations you have, there can be a very, lengthy commercial, financial, or time-based piece behind it.

Or you might be looking up, well, what are the facts of the situation? What happened here? When you have those elements, yourself, your counterpart, and your business case ready, you’re finally at long last ready to get to the next step and sit at the table And

Mike: Yeah, go ahead

Rick: yeah, I was gonna say the next step is advocate.

Advocate is bargaining. This is haggling. You are now sitting there, you are making trade-offs. You’re trying to get to an agreement. That is your final– That is your, your next step. Notice all the time it took to get here. Started with the outcome, your own style, building a relationship, prepping, and now we are here to sit down face to face and negotiate.

But there’s one more step, Mike. We’re not done yet. We’re not done. A lot of negotiators will be like, “Oh, this feels great. I got a yes. Oh, this is awesome.” And then distraction hits, and we move on to the next thing and then what happens? The deal falls apart, right? I thought we had a deal. What, you were gonna do this, I was gonna do that?

Fell apart because we didn’t write it down. The final step in the OPERATE model, the T and the E, is the end.The end looks like a contract amendment, MPA, an email between two parties saying, “I’m gonna do this, and you’re going to do that.” That’s the final step. When you’ve closed your negotiation, you are now done, and you move to the next thing, and you execute what you agreed to.

So yeah, that’s the OPERATE model. when you take that model, and you can, put that into any type of business process, EOS or anything you have. When you take the model and put it into a process, you then become a much more effective company, and you have much better outcomes because you’re doing it that way

Mike: So important to have a model like that, and I love the idea that there, there are four steps there, the O, the P, the E, and the R before you even get to the table.

And I would also imagine, and maybe this is readiness, maybe this is environment, may- maybe this is kind of, all of the above, but one of the things that I’ve seen, and I wanna know what you think, is that when we go into a negotiation with someone, maybe a difficult discussion and, haggling with someone, really important that we have the right mindset about the other person.

If I’m about to go into a difficult discussion negotiation with you, and I think you’re just out for you and you’re up to no good, you’ve got negative intent,

then I’m probably gonna have some level of frustration and anger almost in that negotiation. As opposed to even if we’re on very different ends of the spectrum with the outcome we want, if I believe that you’ve got positive intent in your heart and you’re just, trying to do the best you can with the resources you have, if I believe those positive things about you, then there’s a much better chance we’re able to have a nice collaborative discussion and wind up with a win-win.

Rick: W-what I always encourage people is go back to the environment. You’ve created a relationship with that party upfront before you’ve gone to the table. If this is a long-term business partner and you need to make an ask, it’s a lot easier to make an ask from an ally than it is an enemy. Now, if it’s somebody you haven’t met yet, if it’s someone new, if you’re buying a company from someone, get to know them, ask some questions about them.

Get to know and start to create that relationship before you start the bargaining discussion. That works all the time. I’ll give you another example. Let’s say, this actually happened. a contractor that I was dealing with, this is in the construction industry, was really frustrated with me and our company because something went wrong on the job, and this person was calling everybody on my staff, engineers, project managers, going around the office.

Finally, he got to me, and I knew this was coming. So he called me, and the first thing I asked him was, “How is staffing in your area for programmers?” He was totally taken off guard. Like, why is he asking me about something not related to this negotiation? I had never met the guy before. But what it started to do was build rapport between the two of us, and I was also collecting information in an area that was important to me, but not important to this discussion.

But I got an extra data point. We then became close by doing that, and it brought his guard down. I then just simply asked, “I heard something went wrong. Can you tell me what happened?” I’m not exaggerating. For three hours, this guy was yelling in my headset at jet engine level noise. it was so bad and so continuous, I put my headset down at one point and went to the bathroom, came back, and he didn’t realize I had left.

That’s how, that’s how fired up he was. But at the end of all of that, his storm ran out of rain, and we had a discussion. He said, “Finally, someone’s listening to me. Someone’s listening to me.” That’s how you gotta treat counterparts. Sometimes being a negotiator is extremely hard, and in a situation like that, I took that home.

I felt that one overnight. That was hard. But I got an outcome for my company that was a winner. It’s a lot easier to get a winning outcome, even in an adversarial situation, we are able to build some level of a bridge to the counterpart, even if it’s not, even if it’s not strong. But if you’re going in there to be combative with that mindset, chances are you’re gonna miss something.

So focus on your outcome and focus on that relationship

Mike: Yeah, and I think and it sounds like in focusing on, p- people could take focusing on your outcome as I’ve gotta, I’ve gotta keep talking about what I want. but what you’re bringing up, which I’ve got to imagine is a super important part of the process, is being curious about the person on the other side.

Truly being curious about what challenges they’re dealing with, what situation they’re in, what they want out of it. talk a little bit more, more about that, and I think you kind of just did, but I wanna dig a little deeper into how important asking questions and that curiosity piece is to finding more about the other person so there’s a better chance you can actually get what you want and make it a win-win.

Rick: Yeah, when you’re asking more, especially in a situation where you’re trying to make a sale and it’s not an adversarial situation, you’re gonna learn exactly what your customer wants and how to sell to them. Listen to those things. If you go into a sales pitch armed with your bullets and your, your words and what have you, but you don’t listen to what the other side says, you’re gonna miss what they’re looking for.

Instead, if you’re asking those questions and trying to find out what their needs are, you’re gonna be more successful because you can apply your material towards exactly what they want. That feels pretty intuitive. It also is very intuitive to do that on the adversarial side. If you’re listening to what happened in a situation, a lot of us, I’ll say, I’ll volunteer myself as being guilty of this, sometimes we’re leading with ego.

I’m right, you’re wrong. Well, wait a second. That’s not quite how a third party would see this. Am I drinking my own Kool-Aid here? You have to figure that out by understanding the other side’s point of view. Now, if the other side’s point of view is something that just doesn’t hold up, or they don’t have contractual or some type of third-party support, then you’ve got a very strong case and you stick to your guns.

But wait a second, looks like both of our companies are at fault here. I could understand why you’d be upset. You can start to develop an outcome that would work for both parties, so it’s not a unilateral outcome. That’s extremely hard to do. That’s extremely hard to do and put ego aside and sometimes bite the bullet, especially as a small, medium business.

If you’re able to do that, if you’re able to put out a fire before it turns into a gigantic inferno, in the long run, you’re gonna be saving yourself. It really depends, Mike, on the situation, how to apply that, but that’s what I would– that’s how I would approach that

Mike: Are there, when you’re in the negotiation,are there certain ways to get leverage in that negotiation that most people miss?

Rick: Yeah. I always think about leverage heading into your negotiation before you get to the table. Some negotiators, some, like on the law enforcement side, they’re there to read the other party and try to solicit leverage at the negotiation. I think you need to look for it ahead of time. The major sources I think of leverage are, deadline-based leverage, which is anything time-related.

Expertise leverage, the things that I know that are important to you that I can share with you. Advantage leverage, that’s anything scale related, scarcity, could be payments, cash flow, or could even be a bundle of services. that’s advantage. And then also legitimacy leverage. Who’s right? Who’s wrong?

Both parties think they’re right, while this third party thinks party number two is right and party number one is wrong. That’s that’s a ton of leverage. When you’re able to find leverage in those areas, you have a lot more power over the other person. And to me, the word that I substitute for leverage is influence.

Leverage to me means I’m able to influence a decision maker. I’m able to push those neuroeconomic buttons to get them to make a decision in my favor. And so using those four sources and others, that’s a way that you can get that job done

Mike: So I wanna spend a few more minutes on those four sources. And by the way, if you weren’t paying attention and I was writing them down, the deadline, expertise, advantage, and legitimacy, that’s DEAL for those of you that weren’t paying attention. So, so I like that. Very creative. but, Rick, let- let’s spend a little bit more time kind of explaining each one of those.

So when we talk about using a deadline or deadlines to gain leverage, what’s an example of that? How do we use that?

Rick: All right. Let’s, So you live in New Jersey, you said, Mike?

Mike: I do

Rick: All right. are you familiar with Rutgers University?

Mike: I am

Rick: All right. Let’s assume that Rutgers University is gonna build– they wanna build an engineering building, on campus, and they hire a contractor and an electrician to do the work. And they want the building to open on September 1st in time for the fall semester when the students come.

Now, in the process of construction, the contractor and the electrician get into a huge fight. Something went wrong, they can’t agree on what the outcome looks like or how to settle this, so they stop working. But the closer they get to that September 1st deadline, the more leverage one of those two parties has.

Does Rutgers care who’s right and who’s wrong in that case? They don’t. They just want their building opened. So if you’re not right, if you can’t justify your position, you’re looking at delaying that project, and you’re looking at severe consequential or some type of damages. That’s time leverage. When you start to use those time barriers against parties, especially in a project setting, people start to make decisions.

another common one is payments. I haven’t been paid in a long time. Somebody’s using me as a bank. Okay, I know they have a deadline, so I’m just not gonna– I’m not gonna start up my equipment, or I’m not gonna give you my warranty. I’m not gonna close you out even though you’re promising me you’re gonna pay me.

You gotta pay me now before we move forward. That’s another example. And of course, there’s a lot of– Yeah, go ahead

Mike: yeah, no, that’s, so that’s deadline leverage. Now let’s go to expertise. What do you mean by that? How do we use expertise as leverage in a negotiation?

Rick: Think of those people in your organization who know a lot more about a subject than others. This can be access to stock pickers, advisors, engineers, technical accountants, whatever your business looks like. A great example in my background was I used to work in the wastewater treatment industry, and we had people working for us who were process engineers who were experts in biology and chemistry.

If a wastewater treatment plant had a problem, a chemistry problem, they couldn’t figure it out, well, they were gonna start, violating EPA permits. When that happens, there’s some serious consequences to those violations, so they’re looking for help all over the place to find somebody who’s an expert in that area to help them fix that.

The people that we had in our company, those process engineers, there were gates to contacting them. You couldn’t just call them up, that you had to go through some steps to be able to get to them. That’s a huge value proposition that we had that, hey, if something goes wrong, we’ve got the people behind us that’ll take care of you in that instance.

That’s one of those things where it’s like, “Well, I don’t really need that,” until you really do. That’s expertise leverage, is making sure that you’ve got people inside your organization that can step in when problems really hit the fan and clean them up quickly. That’s a very in-demand thing

Mike: Okay. And then the next one was advantage

Rick: Advantage leverage is anytime you can create scarcity. I can’t tell you the… A-a-anytime you create scarcity, and it’s also the traditional, “I’m way bigger than you, and I can demand a higher price.” the Walmart, Home Depot. I used to work for Hewlett-Packard. we were able to use our size as influence and drive some low prices because of the volumes that we had.

Those are large volume, low margin type accounts. That’s advantage leverage. But if you’re a small, medium business, think about creating scarcity in one of your product lines. I can’t tell you the company, and I can’t tell you the product that they made, but I had a customer, or I had a client who said, “I wanna be the Tiffany’s of this product line.”

What does that mean, the Tiffany’s? What they ended up doing was they sold to large auto manufacturers, and so the bulk of their revenue were auto parts to them. But they made a very high performance part that would go into hot rods and muscle cars and stuff like that. And when they released this part, once a year, they limited the release to only 5,000 units.

Easily, this company could make 500,000 of these units, but they specifically limited them, and then they did like a bourbon release type situation at their plant, where people would go to the plant, line up, and buy the part right from the factory. People would drive from all over the country to get these parts because they wanted them in their vehicle.

Now, that product line represented maybe 3% of total revenue of the company. But because they did that, they were perceived as an extremely high-end manufacturer of auto parts, even though they were just making regular parts for the big three. And so that is an example of driving scarcity or driving brand using advantage leverage.

What I encourage small businesses to do, if you can’t do something like that, bundle your services together and create a unique offering that would do the same type of thing for your customers.

Mike: Beautiful. And then the last of the four, areas for leverage was legitimacy

Rick: Did it happen? And did it happen according to our agreement? A lot of companies will use leverage, delays, non-payments as a way to drive extraction or margin reduction from you as a vendor. Legitimacy leverage is looking into situations that happened, making sure they happen as they unfolded, and making sure your contract makes sense.

My favorite example of that goes back to the wastewater, industry. We had a customer who had to use cement and anchor some parts into, a wastewater tank. Instead of anchoring the parts into the tank, they mixed the concrete and filled up all of our parts with cement. This has made everything completely useless, and you had to remove and replace everything that was in there.

And so, of course, they said, “Well, we read your manual, we used your cement, we used your procedures. We did everything according to the book that you wrote. You are at fault for this situation.” Okay, fine. So legitimacy leverage is now double-checking that what they’re saying makes sense. We sent an inspector out to take a look at this.

This is a multimillion-dollar issue. And while they’re walking through the plant, our inspector, who was walking with, an engineer from the site, the engineer just casually says, “Oh, that’s an orange mixer over there.” And our guy said, “What do you mean?” He goes, “Well, last week it was yellow.”

Okay. So after further investigation, we found out that the yellow mixer had an attachment that overmixed the cement, and it flowed all over the plant. They switched out the mixers, realizing what the mistake was, but they were hanging their hat on, “Okay, you guys told us to do this,” and et cetera. We had an inspector, an engineer, who was in our camp and said, “No, that wasn’t due to the, due to the procedures.

That was due to what you guys used to mix. It was due to the equipment.” That person, legitimacy leverage, that third party joined us and supported our argument, and we got out of that one because we had a another person joining us to do that. Legitimacy leverage means making sure that you’re following the agreement that you had, and also find somebody who can help you out.

Find some allies. If you’re able to do that, you’re gonna come out a lot better

Mike: So it sounds like if I’m gonna, if I take these two models, the operate model and this DEAL leverage model and put them together,where my head goes is number one, some of those, you know,the D, the E, the A, the L are things I would imagine as a company, as a leader, you ought to be thinking about when you’re entering into a deal, let alone any future negotiation.

But then also in the operating, in the operate model, that readiness step, that fourth step is, sounds like a good place to kind of look at, deadline,deadline expertise, advantage and legitimacy, and kinda use that almost as a way to get ready by looking at those four areas of leverage and saying, “Which, which of these can we really leverage?” Is that accurate?

Rick: That’s exactly where you put it in, is in the, in the readiness section. You start to apply your business case and you look for leverage there. You build leverage by having a good relationship. You really build leverage by hitting those points and finding how can I find an advantage over my counterpart to influence that decision?

And then you take it to the advocate step and you present it in a way where they see what you’re having, what you have to say, and you make the decision

Mike: What else should we be thinking about over and above everything we talked about? Very often, or I imagine most often when we’re entering into negotiation, there is hopefully, if all goes well, a future relationship here. but we’re also trying to achieve our outcome in the negotiation. How do you, what should we be thinking about in, in getting the outcome we want without screwing up the relationship?

Is there anything else we ought to be thinking about to, to ensure the relationship is still there when we’re all done?

Rick: Yeah, it’s a series of steps of how to present your argument that I call neuroeconomics, and it’s how you prime, frame, use anchoring, use risk, and also make it easy for someone to accept. We make decisions based on emotion and rationally justify the outcome later, which means we make the decision, you make it easy for them to cement the decision.

And then after the fact, they think about it and, ” Yeah, okay, this is why I did that, and here’s the rational reason why doing it.” But a lot of these decisions are made only on the emotional side of our thought patterns. And so neuroeconomics is an application of behavioral psychology and behavioral economics to get somebody to make a decision without needing four or five years of FBI training to be able to do it

Mike: Got it. So that, so, so let’s jump from there ’cause that sounds like there’s a whole other conversation and way of being and actions there, whi- which gets to your training and negotiation.

Say a little bit more about your business, the kinds of organizations you work with, and the kinds of programs that you have

Rick: Yeah, my business is called No One Walks Alone, LLC, and I work with all sorts of businesses and executives who want better outcomes by teaching negotiation skills. I offer half-day and full-day seminars. I offer lunch and learns, and I’m also, a negotiation trusted advisor and agent, which means if you’ve got a problem, you can call me, and we can walk through what you’re looking at, and I can help you build your argument and find out what to say, as well as sit down at the table with you.

So if your organization is looking to get better and have better results, which are both your hard business results and relationships, investing in negotiation training is fairly low cost compared to investing in all sorts of different efficiency types of improvements. And let’s face it, culturally, when people are winning, they feel good about their work.

It’s a real cultural enhancement as well to be a winner when you’re able to have negotiations and someone has your back. And so that’s what I offer.

Mike: and do you find yourself, are there certain types of organizations, whether it’s size or maybe industry type, are there certain types of organizations that,that you tend to work with more because they, th-those are the organizations that tend to get more value from this? Or is it really all across the board?

Rick: The, I mean, the major companies I’ve worked for included wealth management, manufacturing, project-based businesses, anything that’s like a customized engineering project or construction. I’ve also worked with not-for-profits who wanna stretch the dollar, and service businesses, people who wanna really enhance, lead generation and convert more leads to clients, those types of businesses.

It really runs this skill runs the gamut, and I’ve been very popular, with certain associations like Project Management Institute and Engineering Management Institute, and also, a couple wealth and finance groups as well. Yeah, if you’re looking to get… If you’re looking to convert more leads to sales or put down some of those very difficult problems that you have in your business with other parties, I’m the guy to call .

Mike: There you go.

Well, let’s find out how to call then. So Rick, if– We’ll put this in the show notes, but if someone is interested, whether it’s an organization that wants to bring you in to do some speaking or a company that, that wants some of that, that half-day or full-day training, what’s the best– where’s the best place for people to go to find out more and contact you?

Rick: Real easy to find. I’m at noonewalksalone.com and all of my contact information is there. If you go to noonewalksalone.com, you can read a little bit more about me and our business, and then I’ll– and then you can get in touch with me right from there. So that will work

Mike: Beautiful.

I always say if you want a great company, you need a great leadership team. Negotiation is absolutely a part of that. So, Rick, thanks for helping us get there today

Rick: You bet, Mike. Thank you very much. It’s been a pleasure

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