754: How to Get More by Negotiating So Everyone Wins with Barry Nalebuff

Pete Mockaitis
Barry, welcome to How to be Awesome at Your Job.

Barry Nalebuff
So awesome to be here.

Pete Mockaitis
Well, I’m excited to talk about some of the wisdom from your book Split the Pie: A Radical New Way to Negotiate. But, first, I want to hear a cool story to the extent that you’re at liberty to share from your involvement in the NBA negotiations.

Barry Nalebuff
So, I’m not really at liberty to share but I will say that what I enjoy is the negotiation part as opposed to I’m not a giant sports fan. And so, I was probably, at times, the only person in the room who didn’t recognize all the other people in the room.

Pete Mockaitis
I am guilty of that as well, like, “Who’s in the Super Bowl again?” when it comes to sports and general awareness, yeah. Well, in some ways, that might have helped you keep your cool, like you weren’t intimidated, like, “Whoa, these superstars.” You’re just like, “Okay, hey, hey, let’s see what makes sense for everybody.”

Barry Nalebuff
The most intimidating factor was they had really great custom suits because, of course, none of these folks can wear off-the-shelf anyway, and they did look sharp, I got to say.

Pete Mockaitis
Did you ask where they got them?

Barry Nalebuff
I did not.

Pete Mockaitis
I got a custom-made suit to my measurements in Shanghai and I wore it until it was just about tattered but I also don’t fit anymore because that was when I was 20, and, bodies have a way of changing over time. Cool. All right. Well, so we’re talking negotiation. If you think back on your research and career, is there a particularly surprising or counterintuitive or extra-fascinating discovery you’ve made along the way?

Barry Nalebuff
I think so. So, let me start with what it’s like to teach negotiation.

Pete Mockaitis
All right.

Barry Nalebuff
Because my students at Yale, they are smart, they are empathetic, they care about the world. I love them as people until they start negotiating, and then many of them become like jerks.

Pete Mockaitis
Just because they think that’s the game they’re supposed to be playing or what’s behind that?

Barry Nalebuff
So, I don’t know. It’s a little bit of they read in some novel about this tough negotiator person who makes ultimatums, they’re scared, they think they’re in a police procedure where somebody’s read them their Miranda Rights, anything they can say can and will be used against them, and so they throw out all of their IQ, all of their empathy, all goes out the window. Moreover, they’re not good at being jerks, they’re not naturally jerks, and so they perform terribly in these negotiations.

Pete Mockaitis
Okay. Well, that’s a great takeaway right there.

Barry Nalebuff
Yeah. And so, that to me is a surprise, “Why do people who…?” So, people ask me all the time, they’re like, “How do I negotiate with jerks?” And one of my responses is, “Don’t you be the jerk that other people have to write to me about.”

Pete Mockaitis
Okay.

Barry Nalebuff
“And understand the other person has a mother who loves them, and maybe they aren’t really actually a jerk. They just don’t know any better in terms of how to negotiate.”

Pete Mockaitis
Yeah. Well, you’re bringing back some memories when we were closing on a house, and the lawyers, it’s like they made things so intense. No offense to the lawyers listening. I know they’re not all that way. But it was like, “Man, can we just like talk about what our concerns are and just see if we can figure something out. We’re getting very accusative over here.”

Barry Nalebuff
Absolutely.

Pete Mockaitis
Okay. Well, so your book Split the Pie, tell us, what’s the big idea behind this? And what is this radical new way to negotiate in your subtitle?

Barry Nalebuff
So, truth be told, it’s not new. It’s 2000 years old in the sense that it comes from the Talmud, it comes from this idea of the principle of by the cloth, but I think that the idea has been lost for 2000 years, and you bring it back, maybe you can call it new, so I’m hoping that’s okay.

Pete Mockaitis
We’ll let it count, yeah.

Barry Nalebuff
And the big idea is this funny notion that people don’t generally understand what it is they’re negotiating over. And, as a result, because they’re confused, they make arguments that don’t really make sense, they make proposals about fairness that are based on where they sit but aren’t really truly fair so they throw around the fair word in ways that aren’t appropriate. They’re confused about what power is, and actually that’s one of the reasons why people end up acting like jerks.

Pete Mockaitis
And so then, I imagine, Barry, is it fair to say that each of these dimensions is fairly unique negotiation by negotiation? Or are there some universals here, like, “What people really want is this”?

Barry Nalebuff
So, we’re jumping ahead a little bit and happy to do it in life. I want to give the other side what it is they want, not because I like them, not because I’m just generous or a pushover, but if they get what they want, then I can get what I want.

Pete Mockaitis
Yeah, we got some Zig Ziglar in there. I like it.

Barry Nalebuff
Absolutely. And, of course, I also want them to give me what I want so that I can then want to do the deal as well. Again, the universal point that I think the surprise, or perhaps not so much in hindsight, is to understand why we’re having this negotiation, what’s the value we can create through an agreement. And once you recognize that, you recognize symmetry that is, otherwise, not apparent.

Pete Mockaitis
That’s intriguing. Can you elaborate with an example?

Barry Nalebuff
Sure. My mother was living in a rental house in Florida where she’d lived the last 10 years. And the Florida real estate market has been heating up, and her landlord decided to put the house on the market for sale. Now, he thought, he wrote to her in an email saying something like, “I’m planning on listing this house for 800,000. I’d be glad to sell to you at a $10,000 discount, 790. Are you interested?”

And she is interested, she likes living there, she doesn’t want to move but, of course, that’s not really what the negotiation was about. So, what are the real reasons why it makes sense for her to do this transaction with him? And I’m flipping the cards a little bit by turning the question to you but let’s give it a shot.

Pete Mockaitis
Well, actually, we’re in a similar situation. We moved to Tennessee and so we’re renting in the first year and it sounds like the landlord may be looking to sell or may not, so I can relate. But one thing that’s big is like, “We don’t want to move. Moving is a pain.”

Barry Nalebuff
Moving is a pain.

Pete Mockaitis
My stuff is here. I’ve set it up the way I want it, and then to just go through the shopping round and the searching, and then all that stuff, yeah.

Barry Nalebuff
Great. So, moving is a pain for you. It’s both time-consuming and costly. It’s more so for my 88-year-old mother.

Pete Mockaitis
Oh, yeah.

Barry Nalebuff
At the same time, fixing up the place is a pain for him because she doesn’t care about the stains on the carpet, or the walls that are perhaps a little bit more yellowing maybe, the paint isn’t as white as it was 10 years ago, the appliance are a little outdated, all those things she’s learned to live with.

Pete Mockaitis
And all the showing. He’s got plenty of hassles as well.

Barry Nalebuff
Yeah, but there’s something else that’s even a bigger factor, which is there’s no real estate agent commission, there’s no 5% that needs to be paid. And on this $800,000 sale, that’s about $40,000, and he’s just offered her 10,000 of that.

Pete Mockaitis
Yeah, how generous.

Barry Nalebuff
And so, my response is, “I think this negotiation is really over $40,000. It’s not actually over the price of the house. It’s over how much we’re going to each save of the real estate agent commission. If you sell this house to somebody else for 800, you’re going to clear 760.” If my mother buys this house, a similar house in the market, she’s going to have to pay 800, so it’s a $40,000 gain that can be created by the two of them doing that transaction with each other.

So, he says, “Well, look it’s a hot market, and, therefore, I should get more of a gain.” And my view is the fact it’s a hot market means the price is high, but it doesn’t mean that he’s entitled to more of that 40,000.

Pete Mockaitis
Yes, I like this.

Barry Nalebuff
That he needs her to make this purchase to save that 40,000 to avoid the real estate agent just as much as she needs him to be the person who she buys from. So, I say they should split it 20,000-20,000, and that she’s prepared to pay market price for the house. So, if you’re willing to sell this at $20,000 below market price, you’ll be $20,000 ahead and we’ll be $20,000 ahead. And so, he gives a tentative yes to that.

And, fortunately, there were five other sales on that street in the last six months so we can look at the price per square foot, on exterior space, interior space, do the adjustment for the size of the house, came up with a number, 763,492 or something like that, so it’s actually 20,000 and we were done.

Pete Mockaitis
That’s good.

Barry Nalebuff
And what it does is turn negotiation into a collaboration and a data exercise as opposed to an argument.

Pete Mockaitis
I like that a lot, and so I guess what feels radical there is so we’re splitting a pie but the pie we’ve defined very precisely as the $40,000 savings that we uniquely have the opportunity to do because, “I know the house, I’ve lived in the house as tenant, and we don’t have to do all the shopping rounds.” So, that’s the pie that we’re splitting as opposed to simply splitting the difference, which can be a very different concept.

Barry Nalebuff
Completely. So, let’s be clear, you mentioned one part of the pie, which is knowing the house, not having to move. There’s also him not having to fix things up and there’s the $40,000 real estate agent commission. All three of those things are the pie, and what we did is we said her not having to move and him not having to fix things up ends up being awash. So, we call those two things to cancel and we call the rest, the 40,000, what it is that we split.

Pete Mockaitis
Okay. Cool.

Barry Nalebuff
And then, having reached an agreement to do that, it was, “Well, okay, we have to hire a lawyer. Rather than each of us hire separate lawyers, it’s going to be a simple deal, let’s just hire one lawyer between the two of us and split the cost of that, so we’ve saved another thousand dollars in the process.”

Pete Mockaitis
Okay. Yeah, wow, that has never occurred to me because I just think of lawyers and adversarial stuff is that, well, if the lawyer is getting paid by both clients, then their incentives are…they’re not more loyal to one than the other so that works fine.

Barry Nalebuff
Basically, said, “Look, we want the fair solution. We want the down-the-road, down-the-middle answer and that’s all good.”

Pete Mockaitis
Yeah. Okay. Cool.

Barry Nalebuff
And this also suggests a different way of negotiating, which is don’t start by talking about price. Don’t even start by talking about interests. Start by discussing how it is you’re going to negotiate and, in particular, say, “You know, I read this book. I listened to this awesome podcast on how to be awesome, and my awesome new way of negotiating is to discuss can we agree to create this large pie and split it. Because if we can agree on that, then from now, all of my interests, all of my focus is going to be on making a big pie, and I don’t have to worry about watching my back.”

Pete Mockaitis
Yeah, that’s cool. So, that’s one of the first things you say is just, “Let’s talk about how we’re going to negotiate. I’d like to take this kind of an approach. What do you think?” Just like that, is that how you’d recommend wording it?

Barry Nalebuff
Well, some people may find that a little bit too straightforward, and so you can always try the humor approach, which is, “What do you say we each act like jerks, lie to each other, try and take as much advantage of each other as possible?” And the other person says, “I’m not so keen about that.” Say, “Me neither. I got this other idea that’s a much better way of doing it.” So, you could have a little bit of throat-clearing, talking about the weather, have a little fun with sort of the why you don’t like the traditional approach, and then ease your way into split the pie.

Pete Mockaitis
Okay. Cool. And I know you’ve also got a boatload of tactics, and I want to dig into a few of these. But maybe before we do that, I want to address some of the emotional elements when it comes to negotiation. Many of us have a fear associated with asking for more or, “Am I allowed to negotiate?” And so, I’d love to get your take on that. How do we address the…maybe it’s a mindset or fear associated with, “Ooh, I’m just not really comfortable pushing the envelope, asking for too much, don’t want to seem pushy or needy or greedy”? How do you address that?

Barry Nalebuff
Well, first, let me say that a lot has been written about emotions in negotiation, and if you’d like, I am adding a little bit of Mr. Spock. I’m trying to bring a little bit of logic to bear. And one of the things that’s good about bringing logic to negotiation is it takes down the temperature. One of the other lessons we talk about in the book is fight fire with water, don’t fight fire with fire.

And to the extent you can add a principled approach to negotiation, it brings down the temperature, you’ve created a notion of fairness that’s objective in terms of splitting the pie, it doesn’t depend on which side you’re on, and, therefore, it makes it easier because we’re not actually fighting anymore over how we’re going to divide the pie. We’ve agreed on that.

Instead, what we’re working on is cooperative in terms of how to make the pie bigger. So, that’s a sense in which it’s easier to do this because, essentially, I’m asking for things now that are going to work for both of us. I want to try and make that pie as big as possible.

Pete Mockaitis
Yeah, certainly. That makes good sense. Well, then maybe let’s talk about the application of that in terms of let’s say someone, they got a job offer, and they say, “Okay, this is pretty nice but I’ve heard on the podcast, I’m supposed to negotiate but I feel a little weird about that. If we get all logical and talk about making the pie as big as possible and splitting it, that’s one way to tackle that.” How would you apply this principle, we heard about it in a house? How do we apply it in, say, a job offer situation?

Barry Nalebuff
Let’s also take a step back. Oftentimes, when you’re interviewing for a new job and they’ve given you a position, the negotiation over your salary is really the first time they’re getting to know you. It’s the first confrontational or challenging conversation you may have had, and so appreciate that how you go about this negotiation is really going to be a first impression, if you like.

Now, one point to make is, “Look, I’m negotiating for this job because, guess what, one of my jobs is to negotiate for the company. And if I can’t negotiate it for myself, how am I possibly going to negotiate for you?”

Pete Mockaitis
Yeah, I like that.

Barry Nalebuff
And that argument works pretty well if you’re in sales or marketing, perhaps a little less if you’re in accounting, so it may depend on your different position. And then it can be either, “I think I’m going to be awesome at this, and I’m pretty sure you’re going to agree. Can we talk about what type of bonuses are available and how we’re going to measure them, how you capped it in the past, so that if I am as awesome as I expect to be, and you expect me to be, what type of rewards are likely to follow?”

And people, in general, are not scared of or afraid to give you that type of information. They may say, “We haven’t figured out the bonus pool for this year,” and you can say, “Fine. Let me understand the bonus pool for last year. And what are the metrics by which bonuses are determined?”

Another way of making the pie bigger is to understand what leads to the pie getting smaller. And people don’t like to talk about failures, but failures actually help you here. So, one of my favorite questions to ask is, “Can you tell me about cases where you’ve hired people who you thought were going to be awesome and turned out not to work? What went wrong?”

Pete Mockaitis
That’s a powerful question, Barry. I always ask that when I’m keynoting somewhere, it’s like, “Who are some of the other speakers you’ve had? You don’t have to name names if you’re uncomfortable. What went really well and what was disappointing and why?” Because that just surfaces things like you never would’ve thought, like, “Huh, okay. People really don’t like that. Good to know.”

Barry Nalebuff
And it does two things for you. One is you may say, “Oh, I am like that, and so this isn’t going to work, so maybe this is the wrong gig for me. Wrong company, wrong keynote.” Or, you learn, “You know what, I understand that and that problem is not something as an issue for me, never arises for me, and that’s why we’re going to be extra great.” And so, therefore, it’s a way of convincing the other side that there’s actually going to be a bigger pie by having you be their keynote speaker.

Pete Mockaitis
That’s true. It’s like, “No, don’t worry. I’m not going to try to sell the audience on…” well, insert program, “I’m not going to try to sell them on an epic coaching package or DVDs.” I guess people aren’t selling DVDs that much anymore. Maybe in little corners.

Barry Nalebuff
What’s a DVD?

Pete Mockaitis
Have you heard of a DVD, Barry?

Barry Nalebuff
They’re coasters, I think.

Pete Mockaitis
All right. Okay, cool. Well, then let’s say we’re in the midst of a negotiation. What are some of the top do’s and don’ts and tactics that you think people should be equipped with?

Barry Nalebuff
One thing I suggest to people is not to say, “No, unless…” and instead say, “Yes, if…” I want the other side to go the extra mile for me. I want them to go above their head, to the head of HR, to the managing director, to somehow stretch themselves in terms of what they’re going to do to bring me on board. The worst thing from their perspective is they do that, and I use this offer to get a higher salary where I currently am, or at some other job I’m negotiating with. They don’t want to be used as a stocking horse. And so, I want to give them the confidence that if they do what I’m asking them to do, my answer is yes. So, that’s a “Yes, if” rather than a “No, unless.”

Pete Mockaitis
That’s good. I believe your colleague Daylian Cain had a turn of a phrase, like, “Don’t list deal-breakers. List deal-makers.” Like, “Boy, if you could do this for me, ooh, I’m going to say yes on the spot.”

Barry Nalebuff
Exactly, “I want to say yes. And these things will allow me to do it right now.”

Pete Mockaitis
And that just creates a nice bit of excitement as well in terms of…

Barry Nalebuff
We’re trying to get to the same place.

Pete Mockaitis
Yeah. It’s like, “Ooh.” If someone says that to you, it’s like, “Ooh, I’m in the position to make your day and have this done at the same time,” ooh, what a burst of dopamine all at once. Thank you. Can you share some examples of that in action?

Barry Nalebuff
Well, one of the cases that we had in my own life was a company I started with my former student, Seth Goldman, it’s Honest Tea, and we had a chance to sell that to Coca-Cola. And they had offered us something called a call which is their right to buy the company at a specified price but we didn’t have a put. And the put is our ability to force them to buy it at that price. And we wanted that.

The people we’re negotiating with didn’t have the authority to give that to us. Only the board of directors could do that. But the last thing this team wanted to do was go to the board, get that permission, and then discover there was some other requests we’re going to make, or the price wasn’t high enough, or that Pepsi was going to steal it from underneath them.

And so, what we said is, “If you do this, we are done, done, done. There was no other request. This is what we want. This will seal the deal. We’re ready right now. We’ll sign and you can go and have the board sign on the other side.” And they took it to the board, the board said yes, we were done, done, done, and the deal closed.

Pete Mockaitis
That’s cool. Beautiful. All right. So, that’s so great. What else do you got, Barry?

Barry Nalebuff
And to connect it to that is I’m not a big fan of saying no. Now, I’m prepared to say no if what they’re asking me to do is unethical, illegal. Okay, so let’s take those things off the table. But, instead, it’s back to the “Yes, if.” If you’re willing to do this, then I’m prepared to say yes. So, at one point, speaking of keynotes, somebody asked me to give a keynote speech in Seoul, Korea, and the timing could not have been worse.

I’m teaching on Mondays and Wednesdays, which meant I would have to leave Monday night right after my class, fly halfway around the world, be in Korea for eight hours, take the next flight back in order to teach my Wednesday class. I was going to be in eight hours flight, like, “This does not make any sense.” So, I could’ve said no. Instead, I said, “Yes, if you’re prepared to pay this somewhat crazy amount of money. I don’t think I’m worth it but, you know what, it’s not for me to decide. It’s for you to decide.”

Ultimately, they said yes. I flew halfway around the world for six hours. I discovered if you do that, you don’t get jetlag, so it wasn’t as bad as I quite thought, and my daughter learned this trick for me, not to call it trick, tool, when I suggested to her that I would like her to join the high school math team on her list of a hundred favorite things to do, that wasn’t on the list.

And she said yes. She didn’t say no to me. She said, “Yes, if,” “Yes, if we get a dog.” We got a dog, she joined the math team, it was not that well-written contract as I got one year in the math team for 13 years of the dog, but it’s all good. So, another example.

Pete Mockaitis
I love it. And this reminds me when I talking with my wife. So, we were in Chicago and she wanted to move, she’s like, “It’s cold and there’s potholes,” and so she listed these things. And I was like, “Oh, but all my friends in the Chicago area.” And so then, I said, and I didn’t even think it was going to happen because we’ve got two toddlers, and I said, “Well, I can see it working if I could, I don’t know, fly once a month to see all my friends in Chicago,” and she just said, “Yes,” immediately.

And I was surprised, and I was like, “Wait. Just so we’re clear, like three days a month, I will just disappear gallivanting around with my buddies while you are single-handed with two toddlers. You prefer that in another place that’s warmer and maybe near your family than…”

Barry Nalebuff
Maybe she liked having you away for three days a month.

Pete Mockaitis
Maybe she does. But I think one of the powerful pieces to that is you may well be surprised that you think, I’m at, like you said, you asked for an absurd amount of money, you’re like, “There is no way anyone’s going to go for this.” That could surprise you.

Barry Nalebuff
I can’t justify it but it’s not for me to say no. Let them say no.

Pete Mockaitis
That is good.

Barry Nalebuff
What does it take for you to say yes? And then we say people have said no to me in those circumstances. That’s fine. But there’s no real advantage in my saying no because if I say no, we end up with no deal, in which case I have nothing to lose by doing my “Yes, if,” because the worst I end up with is the same place.

Pete Mockaitis
And I like the way you…did you actually say that to the folks in South Korea, “I don’t think I’m worth it but this is up to you to decide”?

Barry Nalebuff
I said that exactly.

Pete Mockaitis
Okay, because that’s great because I’ve been in that position a few times where folks have asked me to do a workshop or whatever, and I was like, “Wow, for this actually be worth my while given all I’ve got going on, it would really need to be an outrageous sum of money,” but I kind of feel like a jerk even putting that forward. But that nice little line there, Barry, is golden because it’s like, “No, I don’t think I’m worth,” whatever, 30 grand, “for this but that’s what I will need to do it, so it’s up to you.”

Barry Nalebuff
“But if you feel like it’s worth your budget because of the timescale and schedule and so on, I’m there.”

Pete Mockaitis
Yeah. And sometimes it’s true. It’s like sometimes folks have a huge budget and they just want it to be done maybe desperately. I’ve hired DJs at all price points from zero dollars to many thousands. Now, in some ways, they’re doing pretty similar stuff. They’re playing music over audio-video equipment for people to dance to, not to insult the DJs because I know there’s artistry and expertise and craft to it but it’s kind of wild how sometimes that budget really just is there, so go for it.

All right, Barry, this is good stuff. Got some more treats for us like this?

Barry Nalebuff
Sure. One of the things that I’m a big believer in is don’t go crazy with your attempt to anchor somebody. Don’t start off with a super high number if it’s an ask, or a super low number if it’s your offer. There’s a whole branch of economics called behavioral economics which talks about the power of anchoring, the first number somebody hears.

And this goes back to research done by Danny Kahneman and Amos Tversky where they asked people, “How many African countries are there in the United Nations?” And if you first asked them, “Is it above or below 12 or above or below 80?” what they end up thinking changes radically between those two cases.

The problem with anchoring negotiation is twofold. One, if I offer you a miserably low number for your business, your car, your whatever, your job, the person thinks I’m trying to take advantage of them and, therefore, they don’t want to work with me, they don’t like me, and that’s a big problem. If they say, “How did you come up with that number?” And my answer is, “Well, I read in this book that anchoring, the softening somebody up is a really good idea.” That’s not a great justification.

The second problem is that it forces you to make giant movements. So, you offer somebody $2,000 for the car, and they say, “You know, CarMax is willing to buy it from me for 7,200.” You say, “Okay, 7,500.” It’s like, “Wait a second. You just offered me two, now you’re up to 7500. What’s going on here?” And if I say, “Look, I think the right number is 9,000, and you say 7500 is the largest I can pay, it’s like you just made us a $5,000 movement. What do you mean that’s the last thing you can do?”

So, if you start by trying to anchor at a number that’s far away, you both insult the other side and you show that you’re like jelly, that you have no principles in terms of what you’re doing, and, therefore, you will be flexible. You will be like Gumby.

Pete Mockaitis
That’s true. And I also imagine, thinking about the African countries in the UN example, like if you were to ask, “Is it more or less than 5,000?” It’s sort of like that question is so nutty, I don’t know the psychology behind it. Studies have been done here. Let me know, Barry. Like, I’d say that number is so nutty, it doesn’t even factor…it doesn’t even sway me. It’s like, “Huh.”

Barry Nalebuff
Actually, the crazy thing is that when people ask whether Einstein first came to the United States before or after 1412, the year of the Magna Carta or something. It’s like it turns out that has an impact which is just insane versus whether or not he came to the United States before or after 1990, I don’t know, the year of Beastie Boys or something.

So, even absurd anchors can actually have this impact but the insulting feature. Like, when Trump negotiated with President Nieto of Mexico, and said, “You’re going to pay for the whole wall.” The Mexican president canceled his visit to the United States because he was insulted by it, he didn’t even want to begin the negotiation. So, anchoring is different in negotiation because it sends a signal to the other side.

Pete Mockaitis
Right. That’s good. Well, could you give us a third tidbit, Barry, that leaps to mind?

Barry Nalebuff
Sure. I think that people are too afraid of revealing information that they try and keep things hidden. So, I’ll turn the tables with you a little bit on this one.

Pete Mockaitis
Okay. I’m afraid to reveal information, Barry.

Barry Nalebuff
Yeah. Alice and Bob are negotiating and Friday is the deadline for both of them. If they don’t reach an agreement by Friday at 5:00 p.m., there is no deal to be done. However, Bob has a secret deadline of Wednesday at 5:00. Bob knows this, Alice does not. Should Bob reveal that deadline to Alice?

Pete Mockaitis
I see pros and cons but I’m leaning to…I almost think you have to if Alice is just going to slow-play and just be like, “Okay, yeah, I’ll think about that.” I don’t know if you’re in the same room or building or whatever, but if you’re like emailing and calling back and forth, and it’s Wednesday 2:00 p.m., and Alice is like, “Oh, thanks, Bob. I’ll think this over tonight,” and Bob is like, “Oh, no, you can’t.” That seems like a really dangerous place to be. So, I’m inclined to share it at some point, maybe not the very beginning, but some point before Wednesday 4:00 p.m. Alice probably needs to be made aware of that.

Barry Nalebuff
Yeah, I love your Alice voice there. So, I’m totally with you on this, which is, “What is Alice’s deadline? It isn’t Friday at 5:00. It’s Wednesday at 5:00.”

Pete Mockaitis
That’s her true deadline, yeah.

Barry Nalebuff
That’s her true deadline except she doesn’t know it because Alice’s deadline is the same as Bob’s deadline. And so, I think Bob should say right up front, “You know, Alice, I’ve got some bad news for you, that I really have to be done by Wednesday at 5:00, which means you have to be done by Wednesday at 5:00, so let’s stop screwing around and get cracking.”

And people think, “Oh, my God, this is bad news, therefore, I can’t reveal it. I had to somehow keep it hidden. It’s going to put me in a weak position because I’ve got this earlier deadline.” And, actually, it only puts you on a weak position if you keep it hidden. And people have this whole view of, like I said, the Miranda Rights, anything you say can and will be used against you, so they either keep silent or they tell white lies but they don’t reveal things that are essential to having this agreement happen.

Pete Mockaitis
That’s good stuff. Barry, tell me, anything else you want to make sure to mention before we shift gears and hear about some of your favorite things?

Barry Nalebuff
I’m not a giant fan of verbal jiu jitsus but here’s one that I think is helpful. Asking somebody where they are least flexible as opposed to asking them where they are most flexible. So, if you’re negotiating a job and you’re thinking about, well, there’s wages, there’s bonuses, there’s equity, saying, “Where are you most flexible?” the person doesn’t really want to answer that question for you. It’s scary.

Pete Mockaitis
Yeah, “Why would I tell you that?”

Barry Nalebuff
“I don’t want to tell you that.” If I asked you, “Where are you least flexible?” they’re happy to tell you that because they’re saying, “Don’t ask me this.”

Pete Mockaitis
“That’s fair. Like, I can’t give you equity any farther. We got a lot of people with their hands in the cookie jar. I can’t give you any more than this, so I’m least flexible there.”

Barry Nalebuff
So, basically, they are pleased to be able to tell you about something which is something they don’t have the power to give you. Now, when they say they’re least flexible on this, what is it telling you? They’re more flexible on everything else, and, therefore, you’ve learned where they’re flexible by asking them where they are least flexible. So, you get the information in a much safer, friendlier environment.

Pete Mockaitis
That’s cool. All right. Well, now, can you share with us a favorite quote, something you find inspiring?

Barry Nalebuff
I’m a big fan of “Often wrong, never in doubt.” So, essentially, having some confidence in what you’re doing but also realizing that maybe you’re not correct. And so, both looking for evidence that’s proving yourself wrong but not second-guessing yourself all along the way.

Pete Mockaitis
And could you share a favorite study or experiment or bit of research?

Barry Nalebuff
Well, we did an experiment on the pie where we gave parties who were traditionally viewed as less powerful, some information about what the pie wasn’t in a negotiation. Like, for example, telling them in the house case, “Hey, there’s this $40,000 real estate commission,” and it turns out that doing so moved people dramatically away from proportional division into splitting the pie. And so, what was remarkable is we didn’t even have to give both sides this information. Giving what was traditionally viewed as the weaker side, information about the pie, allowed them to persuade the other side.

So, if you go back, there was this famous experiment by Ellen Langer about Xerox machines, and asking people, “Can I jump in line and make a copy?” And what she found is that asking with a reason beat just asking. And the pie is a great reason, it’s a principled approach and it really is able to move the other side.

Pete Mockaitis
And could you share a favorite book?

Barry Nalebuff
I’m a big fan of biographies. I’m currently reading the biography of Ulysses S. Grant by Ron Chernow, and it is fantastic. I had no idea, in the end, what a remarkable leader Grant was in such challenging times. This is a man who would fail at just about everything he had done until he succeeded at everything he did.

Pete Mockaitis
And a favorite tool, something you use to be awesome at your job?

Barry Nalebuff
Well, I have to say this Yeti Blue Microphone is definitely making my life a whole lot easier these days. And so, I’m a big fan of the various ways…I mean, I’ve got ring lights. I’ve been doing so much teaching online. And the combination of having a big screen, ring lights, Yetis, actually, it’s great. I can see chats. I can have my students all ask questions that are better than having people raise their hands because now I can have 20 people asking things at the same time, not just one. So, this online teaching stuff is actually pretty good. So, Zoom, Yeti, ring lights, bring them on.

Pete Mockaitis
All right. And a favorite habit?

Barry Nalebuff
I think we should have addictions in life that are healthy addictions as opposed to bad addictions. And my healthy addiction is table tennis.

Pete Mockaitis
Okay. And is there a key nugget you share that really seems to connect and resonate with folks; they quote back to you often?

Barry Nalebuff
Well, as an entrepreneur, I spend a lot of time trying to convince people not to go into entrepreneurship. And partly is if I can convince you not to do it, then you shouldn’t be doing it because you have to have so much of a passion, so much of a belief into it, so many obstacles along the way that it has to be a force that’s propelling you. You have to really care about what it is that you’re trying to create and it’s not something you just go into lightly. So, therefore, real entrepreneurs don’t need encouragement, if you like.

Pete Mockaitis
Okay. And if folks want to learn more or get in touch, where would you point them?

Barry Nalebuff
SplitThePieBook.com has excerpts, has some videos, they can watch negotiations. There’s even a negotiation bot that you can play and see how well you do in an automated game. There’s a free online course on Coursera. It has over 400,000 people who’d taken it, actually are taking it now, 4.9 out of 5.0 rating so it doesn’t get much better than that. And, of course, the book Split the Pie, which is available everywhere.

Pete Mockaitis
All right. And do you have a final challenge or call to action for folks looking to be awesome at their jobs?

Barry Nalebuff
Figure out what it’s going to take to make the pie bigger, not just figure out what it is that you’re going to do to get more of the pie. And to the extent that you’re known as a person who’s out there creating large pies, everyone is going to want to work with you.

Pete Mockaitis
Barry, this has been fun. I wish you many large pies.

Barry Nalebuff
I wish you gigantic pies, and thank you for helping bake one with me today.