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

MISTAKE #1: THEY ARE ILL-INFORMED
Often the other side is acting on bad information, and when
people have bad information they make bad choices.
There’s a great computer industry term for this: GIGO—
Garbage In, Garbage Out.
As an example, Malhotra talks about a student of his
who was in a dispute with an ex-employee who claimed he
was owed $130,000 in commissions for work he had done
before being fired; he was threatening a lawsuit.
Confused, the executive turned to the company’s
accountants. There he discovered the problem: the accounts
had been a mess when the employee was fired but had since
been put into order. With the clean information, the
accountants assured the executive that in fact the employee
owed the company $25,000.
Eager to avoid a lawsuit, the executive called the
employee, explained the situation, and made an offer: if the
employee dropped the lawsuit he could keep the $25,000.
To his surprise, the employee said that he was going
forward with the suit anyway; he acted irrational, crazy.
Malhotra told his student that the problem was not
craziness, but a lack of information and trust. So the
executive had an outside accounting firm audit the numbers
and send the results to the employee.
The result? The employee dropped the suit.
The clear point here is that people operating with
incomplete information appear crazy to those who have
different information. Your job when faced with someone

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like this in a negotiation is to discover what they do not
know and supply that information.
MISTAKE #2: THEY ARE CONSTRAINED
In any negotiation where your counterpart is acting wobbly,
there exists a distinct possibility that they have things they
can’t do but aren’t eager to reveal. Such constraints can
make the sanest counterpart seem irrational. The other side
might not be able to do something because of legal advice,
or because of promises already made, or even to avoid
setting a precedent.
Or they may just not have the power to close the deal.
That last situation is one that a client of mine faced as he
was trying to land Coca-Cola as a client for his marketing
firm.
The guy had been negotiating a deal for months and it
was getting on to November. He was petrified that if he
didn’t close it before the calendar year ended he would have
to wait for Coca-Cola to set a new budget and he might lose
the client.
The problem was that his contact had suddenly stopped
responding. So we told him to send a version of our classic
email for nonresponders, the one that always works: “Have
you given up on finalizing this deal this year?”
Then something weird happened. The Coca-Cola contact
didn’t respond to the perfect email. What was up?
This was superficially quite irrational, but the contact
had been a straight-up guy until then. We told our client this

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could mean only one thing: that the guy had given up on
closing the deal by the end of the year, but he didn’t want to
admit it. There had to be some constraint.
With this knowledge in hand, we had our client dig
deep. After a batch of phone calls and emails he tracked
down someone who knew his contact. And it turned out we
had been right: the contact’s division had been in chaos for
weeks, and in the midst of corporate infighting he had
completely lost influence. Not surprisingly, he was
embarrassed to admit it. That’s why he was avoiding my
client.
To put it simply, he had major constraints.