Never Split the Difference: Negotiating as if Your Life Depended on It

THE THREE TYPES OF LEVERAGE
I’m going to come back to specific techniques for
uncovering Black Swans, but first I’d like to examine what
makes them so useful.
The answer is leverage. Black Swans are leverage

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multipliers. They give you the upper hand.
Now, “leverage” is the magic word, but it’s also one of
those concepts that negotiation experts casually throw about
but rarely delve into, so I’d like to do so here.
In theory, leverage is the ability to inflict loss and
withhold gain. Where does your counterpart want to gain
and what do they fear losing? Discover these pieces of
information, we are told, and you’ll build leverage over the
other side’s perceptions, actions, and decisions. In practice,
where our irrational perceptions are our reality, loss and
gain are slippery notions, and it often doesn’t matter what
leverage actually exists against you; what really matters is
the leverage they think you have on them. That’s why I say
there’s always leverage: as an essentially emotional concept,
it can be manufactured whether it exists or not.
If they’re talking to you, you have leverage. Who has
leverage in a kidnapping? The kidnapper or the victim’s
family? Most people think the kidnapper has all the
leverage. Sure, the kidnapper has something you love, but
you have something they lust for. Which is more powerful?
Moreover, how many buyers do the kidnappers have for the
commodity they are trying to sell? What business is
successful if there’s only one buyer?
Leverage has a lot of inputs, like time and necessity and
competition. If you need to sell your house now, you have
less leverage than if you don’t have a deadline. If you want
to sell it but don’t have to, you have more. And if various
people are bidding on it at once, good on you.

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I should note that leverage isn’t the same thing as power.
Donald Trump has tons of power, but if he’s stranded in a
desert and the owner of the only store for miles has the
water he wants, the vendor has the leverage.
One way to understand leverage is as a fluid that sloshes
between the parties. As a negotiator you should always be
aware of which side, at any given moment, feels they have
the most to lose if negotiations collapse. The party who feels
they have more to lose and are the most afraid of that loss
has less leverage, and vice versa. To get leverage, you have
to persuade your counterpart that they have something real
to lose if the deal falls through.
At a taxonomic level, there are three kinds: Positive,
Negative, and Normative.