Work Smarts: What CEOs Say You Need To Know to Get Ahead

Chapter 5

The Art of Negotiation

For the most part, we’re negotiating throughout our whole lives. At work, we’re negotiating for better jobs and assignments; ­outside of work, we’re negotiating for our next car or house; as a parent, we’re constantly negotiating with our kids and babysitters. If you don’t know the basics of negotiation, you’ll lose out.

I don’t negotiate billion-dollar deals, but Sam Zell, a billionaire, does. So I asked him how he approaches negotiating.

“There’s only one way to negotiate a good deal and that is to understand what it is that the other guy needs,” Sam said. “If you can prioritize his needs then you can respond to him in a manner that’s likely to ­create a high probability of success. Obviously the other part of that equation is you have to know what’s on the table that you absolutely have to have. So if I’ve done my homework, and I realize that I can’t give the guy across the table what he has to have, I’ll end the negotiations quickly. There’s no point to continue. This is not a torture test.

“I had a banker at the Continental Bank who had an orange sign on the corner of his desk, and the orange sign said, ‘Fastest NO in the West.’ And I loved it. We’ve tried really hard to run our business on that premise. Fastest NO in the West,” he continued. “I once made a deal with Carl Icahn to buy his railcar business. I walked out of Carl’s office and said to the guy who came with me, ‘He’s going to call tomorrow and renege,’ and he did. I knew it was ...