Jim Camp - Start with NO...The Negotiating Tools that the Pros Dont Want You to Know

To my wife, Patty

How often over the past couple of decades have we read or heard the phrase "win-win"? Thousands, I guess. Enough, I know. The term has become a cliche in our culture, the only acceptable paradigm for personal interaction of any sort. In business, its appeal rests on the proposition that no company has the right to plunder a market just because it enjoys a position of strength and dominance. We believe that a shared prosperitya win-win prosperityis the sustainable one.

It all sounds so good, what stick-in-the-mud could possibly disagree that win-win is the model to use in negotiation? Well, I disagree. Based on my nearly twenty years of experience as a negotiation coach, I believe win-win is hopelessly misguided as a basis for good negotiating, in business or in your personal life or anywhere else. This book and my system should be viewed as a rejection of win-win and all its kind. Of the various ideas in my system that I could have chosen as my tide, I selected Start with No expressly to emphasize my profound disagreement with win-win, which implicitly urges you to get to yes as quickly as possible, by almost any means necessary. Such negotiating is the worst possible way to get the best possible deal. In fact, it will get you killed.

Maybe you work for one of the many companies around the world that proudly display those shiny win-win trophies presented to the sales team by their largest customers. That's right, actual trophies, each and every one of which is testimony to a failed negotiation.

Testimony to a negotiation conducted without discipline and without a system. Testimony to a negotiation conducted by naive amateurs, to be perfectly blunt. I think it's great that eight-year-old girls and boys receive trophies in their baseball and soccer leagues regardless of whether they were the champions that season. I think it's astonishing that top executives don't understand that it is precisely the win-win negotiations that are grinding their businesses into the ground. But this is often the case. I know, because many times I've walked right past the win-win trophy case on my way to meet the executives who want to hire me as a negotiation coach because things have gotten so bad.

"But so many deals have been negotiated on the basis of win-win! So many headlines, articles, books! It must work!" My answer is simple: The fact that a given deal was negotiated and signed tells me nothing at all. Who said this was a good deal, much less the best one? Just as the fact that the Cleveland Indians scored eight runs tells me something, but not enough, because the Yankees may have scored nine, so I need to know the final score in these so-called win-win deals.

And I do. I know that a certain worldwide delivery company became an industry juggernaut by negotiating deals with hundreds of small vendors across America that the company then abrogated in order to obtain leverage for a better dealbetter for the delivery company, that is. Were those first deals good for the vendors? Just ask them. What about the second deals? Ask the vendors about these, too. I know that certain clothing retailers have made a specialty of squeezing vendors into signing pie-in-the-sky deals with production targets they cannot possibly meet. When they don't come through, the companies enforce the letter of the law, nullify the contracts, and then return in a month or so to renegotiate at the proverbial dime-on-the-dollar, because they now have all the leverage. Were those first or second deals good for the vendors? Just ask them.

When I became a full-time negotiating coach in the 1980s, after year of more informal tutoring, I didn't just say to myself, "Jim, there's always a niche for the contrarian in any field, so why don't you go challenge the win-win paradigm?" Nor am I a go-for-the-jugular tough guy who enjoys bullying people, as if this were the only alternative to win-win. The business world is certainly full of such individuals, and we will meet some of them in these pages, but I'm not one of them. No, I began to challenge win-win because I quickly learned that it's all too often win-lose. Make no mistake about it: a simply terrible but supposedly win-win deal is signed every minute in this country. The promise is just manipulation. It's all double-talk.

Think about the situation this way: If a company with a good product or service and with adequate resources goes bankrupt, which happens daily, what is likely to be more responsible for this fatality than poor negotiating with suppliers, customers, employees, someone? But even as the number of win-win losers grows and grows, the unwary are still legion. If I accomplish nothing in this book beyond alerting businesspeople to the dangers of win-win, I will have performed a valuable public service. I feel so strongly on this subject I'm now going to devote a couple more pages to it.

Some readersI'm among themtend to skim or even skip book introductions. Please don't do so this time. In order to understand my system, you must understand the dangers inherent in win-win.

I am not the first professional negotiator to understand the inherent weakness of the reigning philosophy. Not at all. Many, many corporate opportunists and shrewd negotiators in every field understand that a gung ho, win-win negotiator on the other side of the table is a sitting duck. In fact, one increasingly popular, high-level corporate strategy in negotiation commonly known in the business world by the acronym PICOS was developed for the sole purpose of defeating weak win-win negotiators.

This an instructive story, which I'll pick up in the early 1990s, when a man named Jose Ignacio Lopez de Arriotua was a main player in the procurement department for General Motors. (Many readers will remember Lopez for his subsequent highly publicized defection to Volkswagen in 1992 amid charges that he stole GM secrets. The federal government has indicted him for industrial espionage, but he's fighting extradition from Spain.) Lopez and his cohort at GM developed PICOS, or Program for the Improvement and Cost Optimization of Suppliers. (I've also seen it spelled out as Purchased Input Cost Optimization, so take your pick.) The advertised idea of this "costing method" was to help suppliers hold down their own costs in the design and production stage of the products they sold to GM. By holding down suppliers' costs, GM held down suppliers' prices and thereby GM's own costs.

So what could be wrong with helping suppliers hold down their own costs? That's win-win, isn't it? It sure wasfor GM, because when the rhetoric was stripped away, "cost optimization" was a politically correct euphemism for bludgeoning suppliers into submission. It was nothing more or less than a diligent, sustained, extremely effective way for the giant automaker to drive down costs by putting the squeeze on its thousands of suppliers, no matter the result to them. If a supplier went belly-up or couldn't deliver under the negotiated terms, there was always another supplier who believed that it could somehow live with these prices. PICOS and its win-win rhetoric sounded good in theory, but it was and is devastating in practice for many businesses.

Today, several major business schools have developed similar programs for cost optimization or "supply systems management," as they are also labeled, and I imagine many others will follow suit, because GM and other large corporations have had great success with them. The business school that teaches the win-win mantra in a course on negotiation might also teach, right across the hall, a course in "supply system management" that's expressly designed to destroy the win-win model! Mindboggling.