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Are You Doing a Slow Burn? Don't Hyperventilate, Says Herb Cohen—Negotiate

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Monty Hall notwithstanding, most Americans don’t like to make a deal. So thinks Herb Cohen, founder and major asset of the Power Negotiations Institute of Northbrook, Ill. But for a fee that averages $3,700 a day, Cohen has preached the joy of bargaining at Harvard and the Brookings Institution and to clients like IBM and Chase Manhattan Bank. Now 48, the Brooklyn-bred lawyer learned to negotiate during his four years as an insurance claims adjuster. In 1977, while working at a Toronto bank, he talked a berserk patron who had taken hostages into releasing them; this led to a training film on hostage negotiations for the FBI, and a new career. During the 444 Days at Tehran, Cohen proffered suggestions to both Jimmy Carter and Ronald Reagan, though only Reagan seems to have listened. Says Anthony Quainton, director of the State Department’s Office for Combatting Terrorism: “Cohen’s a leader in the field. He’s thoughtful whether the problem is dealing with the Russians or selling cars. “Herb lives on Chicago’s North Shore with wife Ellen, 42, and their daughter and two sons. Though on the road some 200 days a year lecturing or staging seminars, Cohen found time to write the current best-seller You Can Negotiate Anything (Lyle Stuart, $12). Anything? “Money, justice, prestige, love—It’s all negotiable,” affirms Cohen, who shared more Herb-al essences with PEOPLE’S Giovanna Breu.

Are Americans good negotiators?

We used to be. Buying Manhattan was a pretty good deal—we low-balled the Indians. And look at the purchases of Louisiana and Alaska. People would say, “Watch out for Yankee traders.” But in becoming an affluent society, we didn’t refine our deal-making skills. Today not only can’t we buy a rug at bargain, but we have trouble negotiating over principles concerning national security, like the SALT treaty.

How do you rate the Carter administration’s handling of the hostage crisis?

The first month and a half called for a lot of restraint, and they performed well. But then we should have given the Iranians the incentive to negotiate. They are rug merchants in the classic bazaar sense. And they had merchandise for sale—52 “rugs,” for which they wanted top dollar. What did President Carter do? He said, “I need the rugs, they are the centerpiece of my foreign policy. I pray for the rugs morning, noon and night. I won’t even leave my house if I don’t get the rugs back.” Now, any ol’ rug trader knows what that’s going to do to the price.

What was your advice to Reagan?

In October 1980 I told his campaign manager, William Casey, that by taking a very tough position, Reagan—who doesn’t look like the type who’d ever bargain for rugs—would force the Iranians to deal with Carter. That is exactly what happened.

As President, how is Reagan faring?

With Congress, sensationally. Though not yet through the checkout line, his domestic package is already sold. He will make adjustments in individual programs, but not until the end—if you start compromising too early, you raise the other side’s expectations and they nibble you to death.

Has Margaret Thatcher of Great Britain dealt wisely with the demands of the Irish Republican Army?

Nothing short of a complete British cave-in could have prevented Bobby Sands from committing suicide. But now Mrs. Thatcher should stop the knee-jerk retribution and build the middle ground by giving the Catholic minority some share of political power.

Are there different styles of bargaining?

Yes—competitively and collaboratively. Competitive negotiators see almost everything as either win or lose. They use emotional tactics—intimidation, guilt, silence and anger. By the way, people who lose their tempers usually do so deliberately. In its extreme form, I call competitive negotiating “the Soviet style.” You don’t have to be from the Kremlin to use it—you could be negotiating a used car in Des Moines—but the Soviets are very fond of it. Remember Khrushchev at the U.N. pounding the table with a shoe?

Do threats work in negotiations?

As The Godfather, Don Vito Corleone, said, “Never make a threat. Reason with people.” I don’t think you have the right to victimize anyone. You can negotiate successfully and still operate on a very high ethical standard.

What is collaborative negotiation?

A game played with the head, and not with emotions. It involves satisfying needs, but not trying to win at someone else’s expense. For instance, take salary raises. If you first find out what you’re worth on the market and then go in with options, you get the boss involved. Budgets don’t come from the sky. They can be revised.

What if your boss pleads red ink?

Negotiate for the future—what about next year? Or in lieu of immediate money, ask for more medical benefits, more time off, a club membership, a bigger office, extra days off to spend with your children.

How do you prepare for negotiations?

By understanding the three crucial variables: information, timing and power. Getting the real scoop on the other side’s problems, needs, costs, deadlines and prejudices obviously enhances your position. Always ask more questions than you answer; even if you know the answer, ask as a test of the other side’s credibility. With information, it’s easier to negotiate collaboratively, and to be able to tell if the other side’s “rock-bottom” position is real rock bottom or really rock bottom.

What about timing?

Move quickly if you are better prepared than they are. For instance, when you go into a new job you have the most leverage in terms of negotiating salary, benefits, responsibilities. But if the other side holds the cards, go slowly. For instance, when most people visit a new-car dealer they want the smell of leather right away—they want to drive the car out immediately. And they pay for that instant gratification. So create a little bit of ambiguity. Don’t take the salesman’s card—give him yours. When his inventory gets too big, I guarantee that he will call you.

And the third variable, power?

Power is based on perception. If you think you’ve got power, then you’ve got it. If you think you don’t, you don’t—even if in reality you do. Treat negotiations as a game which you care about, but not too much. This relieves stress and, by letting you appear thoroughly relaxed, conveys power.

Most Americans aren’t used to negotiating prices, especially for everyday merchandise. Should they learn to?

No seller ever sells anything at less than a profit—are you really worried for an airline when it offers half-fare standby seats? It is certainly in your interest to negotiate for big-ticket items that are sold on commission. You can wear a clothing salesman down by trying on 39 suits, buying the 40th, and as he’s writing out the slip asking him to throw in a free tie. Will you get the tie? Yeah. Can you shop that store again? Probably not.

Should parents negotiate with children?

Sure, when the kids reach the age of reason. The act of listening alone meets many of their needs. And if you don’t negotiate with them, they will just present you with a fait accompli.

Won’t this spoil children by giving them too much power?

Not if parents let kids know there are certain things they won’t concede. Children are always seeing how far they can go. I concede mine the length of their hair, their dress—but I expect them to concede things that are fundamental to me, such as honesty and being spared unpleasant surprises. And I always try to explain why I feel the way I do.

Can collaborative negotiations help a marriage?

Yes, in that they can make you more aware of the job your partner does. For instance, both should share menial and rotten jobs like washing dishes.

In what areas do you and your wife negotiate, and who wins?

She doesn’t like to cook, so we order in and eat out a lot. But this compromise requires me to make more money.

What’s her part of the bargain?

Everyone sells himself short, me included. When my wife started negotiating my lecture fees, they went up.