I was recently asked about negotiation and i responded, I never negotiate. He responded with a laugh that its impossible to never negotiate. Of course what i do can be construed as negotiation but i don't consider it as such because i don't haggle and i never concede. I simply set the tone for the discussion and set the situation up in such a way where it will either be a yes or no and if its a yes, whoever i'm talking to will either be in agreement with me or will negotiate with themselves. Yes, this sounds arrogant but it's not, it's actually really simple. It's about understanding people and how we react.

Remember back in HS, all the guys that got the hot girls were the "cool" kids who didn't give a crap? The key is not caring and being able to walk away - this allows you to relax - when you relax, take things slow and don't rush - you either can easily take control or get your opponent to rush - in which case you win. Just chill.

Once you've chilled, the next negotiation strategy is to always set the tone. Some people say never talk first or never talk too much or never give a direct answer or commitment, i think those are tactics and not strategies and thus not nearly as effective. Strategy almost always overtakes tactics. Setting the tone is guiding the conversation, laying the ground work, stating your "bottom line" and laying the infrastructure from which your opponent will negotiate. An example you're in a meeting, you open it and start telling jokes and kidding around and then you move it to serious matters, you're in control and you lay down the ground rules. This is my goal, this is what i have to wok with - what do you think? Then you put the power in your opponents hands but in such a way that he has to agree with you.

The next component is setting "false bands". False bands are negotiation objects that can fluctuate but the barriers are set up in such a way so that no matter what you win. For example say you are trying to sell your company. You set the tone and say we both agree this is a good fit and you should buy us. We feel our company is worth $100 but would be willing to expect between $93-105 depending on the terms. You lay the terms on the table, each one with a band like the $93-105 but each band starts a place where you already win. The company itself was really only worth $89 but its not a big enough difference where they can prove otherwise. So in the end what happens? You end up with $94 + concessions when you would have been happy with $88. The reason you got what you want is by setting realistic but still false bands, your opponent is not going to be able to insist on going lower then each band so on some bands you will get an amazing deal while others you'll simply get a slightly better deal than its really worth.

Setting the tone & setting false bands allow you to play to the psychology of your opponent as it puts in you in control. The fact that you are willing to walk away and are relaxed are the only reason setting false bands work because they don't have a choice if they want to do the deal and you're not being unrealistic, just maybe a tad overvalued but if they've gotten that far, very few people will walk away over minor details(though some will.) Meanwhile those minor details just bought you a Bentley.

The exception is in a case where one party has an extreme upper hand and also when its a union. Union negotiation is very different than standard negotiation because the best strategy is to set unrealistic demands, going way beyond false bands and letting the employer buckle into a great deal. Powerful union NEVER negotiate - they dictate.

So the key to negotiation is simply to outplay your opponent and check mate them before you began and thus its not really a negotiation but more of a mental challenge. It's only a negotiation if you allow it to become one.