Chris was a lead FBI hostage negotiator for 24 years. The amount of negotiating knowledge he has is unprecedented. ANYONE can find value in this episode, you can never have too many negotiating tips you can use anywhere. If you enjoyed today’s episode remember to subscribe in iTunes and leave us a review!
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Chris Voss Background:
–Founder The Black Swan Group, firm solves business communication problems with hostage negotiation strategies
-Author of the national best-seller Never Split The Difference
-After 24 years as a lead FBI hostage negotiator, he founded The Black Swan Group
-International keynote speaker, negotiation consultant, and award-winning business school professor.
-Say hi to him at http://blackswanltd.com/
-Based in Los Angeles, California
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Joe Fairless: Best Ever listeners, how are you doing? Welcome to the best real estate investing advice ever show. I’m Joe Fairless, and this is the world’s longest-running daily real estate investing podcast. We only talk about the best advice ever, we don’t get into any of that fluffy stuff. With us today, Chris Voss. How are you doing, Chris?
Chris Voss: Fantastic, Joe. Thanks for having me on?
Joe Fairless: Well, my pleasure. Nice to have you on. I’ve got a daily podcast, so I interview a bunch of people, and I always ask “What’s the best ever book you’ve read?” and lately I’d say about 20%-25% have been mentioning your book.
Chris Voss: Wow, that’s very cool!
Joe Fairless: They love it, yeah. Real estate investors love your book. The book is Never Split The Difference. It’s a best-selling book, and certainly among the real estate community it’s a very popular one. I have bought it and I didn’t know I was interviewing you today, because if I did, then I would have done some reading on it… It’s still on my shelf, I’ve gotta read it. So I’m really excited to talk to you about it. So many people who we’ve interviewed have read it, and as a result, I bought it and I’m looking forward to reading it.
Chris is also the founder of the Black Swan Group, which is a firm that solves business communication problems. He has a background in hostage negotiating. He was a lead FBI hostage negotiator, and then he founded the Black Swan Group. So let’s talk about first your background… Do you wanna give the Best Ever listeners a little bit more about your background and what you’re focused on?
Chris Voss: Yeah, sure. This is about applying hostage negotiations to business negotiations, and your personal life too, because so many times your family members take you hostage. I’m originally a small town Midwestern guy, son of Richard Joyce Voss from Mount Pleasant, Iowa; a town of about 7,000 people. My father was an entrepreneur, so I grew up in that environment, always thinking like an entrepreneur, as a businessman.
I became an FBI agent, worked in counter-terrorism, counter-kidnapping my whole career, and ended up being responsible for the negotiation strategies of every American kidnapped overseas for about seven years. So in trying to get better at that, I turned back to the business negotiating world first, Harvard Law School, to help us get better. When I went through the course at Harvard Law, they said “Look, you’re doing the same thing we’re doing, you’ve just got better stories.”
Then while I went through there, I just used my hostage negotiation stuff on the Harvard lawyers and did really well, came out with the upper hand most of the time. So I started teaching in business schools when I left the Bureau in 2007. I’ve been doing business negotiation coaching/teaching/training ever since.
Joe Fairless: Let’s talk about the negotiation of a kidnapping overseas that you took the lead on. If an American was kidnapped overseas, you were taking the charge on that negotiating. What’s your approach? And I know we can easily tie this into business too, but I just wanna hear what your approach is in that situation.
Chris Voss: It’s pretty easy, really… Kidnappers are businessmen. The business they happen to be in is kidnapping, but they’re commodities dealers, and they’re like any hard-bargaining negotiator that you will run across anywhere. So they’re remarkably susceptible to deference, as are all people. I like skills that work 360 degrees with everybody; deference is one of those skills. And they wanna be in charge, they’re control freaks; control freak negotiators are really easy to deal with, because all you’ve gotta do is make them feel like they’re in charge, and you drop their guard… Because they wanna be in charge.
Then we’d just call that empathy, now I call it tactical empathy, because we know how to get through people’s reasoning and get at their emotional architecture, if you will… And get them to feel like they’re in charge, and get them to make deals. So we just used weaponized empathy on them. [laughs] Made them feel like they were in charge, made them feel like they were calling all the shots. Then the kidnapper will let a hostage go when they feel like they’ve gotten everything they can, which is what everybody else in business will do – they’ll make the deal when they feel like they’ve gotten everything they can.
Now, there’s a real distinction between whether or not they GOT everything they could and whether or not they FELT like it. So my job was always to make them feel like it, and we’d cut a deal, that they’d stick to – that’s the other important thing. You’ve gotta cut a deal that they’ll stick to and that also, if you run across them again in another environment there, they’re happy to deal with you. So you can’t have bad blood, you can’t lie… It’ll catch up with you. You can’t deceive, you can’t [unintelligible [00:06:32].00] Interestingly enough, you’ve gotta be really genuine.
Joe Fairless: Let’s just play this example out and then we’ll switch into business; I know you’re overlapping the two, so it’s great… But what is a deal that you can stick to that a kidnapper overseas would feel like they got everything they could? What do they receive?
Chris Voss: Well, international kidnapping is about ransom, so they’re gonna get a payment. Now, what you wanna do is you’ve gotta run it like a sting operation. Basically, it’s the same reason why banks have dye packs. You give bank robbers money, so you get people out of harm’s way, so they’ll leave the bank, but most importantly, so that you plant evidence on them. Now, there’s a possibility that the bank robber is gonna get away with the bank robbery money anyway – that’s why you don’t give them all the money in the vault, you just give them enough to make them happy so they’ll go on their way, so that ideally you can follow up afterwards to not only scoop them up, but scoop up everybody that they do business with illegally. But you have to run it as if it’s gonna take a while to catch them, so you don’t wanna put too much money in their hands.
An international kidnapping is about tough as nails, bare-knuckle bargaining, without making the other side mad, and without making them feel out of control. It’s about top bargaining in a really soft fashion, that’s what it’s really about. Then you cut a deal, and then also you’ve gotta pay and then they’ve gotta comply. It will be like any business deal where you pay the other side all the money upfront, and then wait for them to comply. So you have to know what somebody looks like when they’re telling the truth, and you have to know the tiny little emotional/psychological edges that capture every single edge, so that the kidnapper, once they’ve got the money, they’ve got [unintelligible [00:08:21].12] the hostage go, whether or not they let the hostage go, as per their agreement. So it’s cutting any deal where the other side is gonna comply because they feel like they got everything they could. You pay them, and they’re gonna let the person go, as agreed to.
What are you gonna do? Are you gonna sue a hostage taker for not letting somebody go? No. You’ve gotta make implementable deal that the other side is happy with, that they feel like they got the best deal they possibly could.
Joe Fairless: With the tough bargaining in a soft fashion so that you don’t make people mad – is that where the tactical empathy comes into play, or are there other things to accomplish that?
Chris Voss: Yeah, different applications of it. Tactical empathy is a primarily emotional trigger, it’s what makes people feel good; it’s learning how to say no without saying no. The book starts with (in the first five pages) when I first went to Harvard Law School, I sit down with the head of the program on negotiation, Bob [unintelligible [00:09:15].28] and I know what he’s angling for, because I can smell it. He wants to do a role-play with me, he wants to see if I’ve got any game. So he says “If you negotiate with a kidnapper, what kind of strategies do you use?” So I give him an answer that makes me sound weak and innocuous, and I say “You know, we’re just asking open-ended questions, that’s all.” And he goes, “Really!?”, and he kind of laughs. He says, “That’s it?”, I say “Yeah, we’re gonna ask him open-ended questions.” Now, I’ve got some ridiculously powerful open-ended questions, but he doesn’t know that because it sounds like it’s something that’s stupid and simple, and he’s not impressed with it.
It pretty much happens wherever I’m in a new environment. They go, “You’ve gotta be kidding me. That would never work fine.” So he literally calls a couple people in to watch. He gets a tape recorder, and he looks at me and he says, “Alright, Voss, we’ve got your kid. Give me a million dollars by tomorrow morning, or we kill your son. I’ve got your son and I’m gonna kill your son. Give me a million dollars.” And I look at him and I say, “How am I supposed to do that?” Just like that. And he kind of blinks a couple times, and he goes, “No, no, we’ve got your kid! You don’t understand! We need a million dollars, or I’m gonna kill your son.” Now, already I’m listening, and he doesn’t know it. Because his initial intention was to make a demand and get off the phone. I’ve already extended the conversation, he feels in charge; the secret to getting the upper hand in any negotiation is giving the other side the illusion of control, which is the point of that question that I just asked. It triggered something that Daniel Kahneman calls deep thinking, which slows him down, doesn’t make him feel threatened, but he doesn’t know that I’ve already boxed him in.
And then I say, “How do I know that my son’s alive? How am I supposed to agree to pay you if I don’t even know he’s alive? How am I supposed to pay you if I don’t know you’re gonna let him go? How do I know you’re gonna let him go?” Just one, after another, after another.
This goes on for a little while, until finally one of the people watching says “Don’t let him do that to you!”
Joe Fairless: [laughs]
Chris Voss: And he looks at her and he says, “Well, you try it!” And she says, “I have your kid! A million dollars! Tomorrow morning!” I say, “How am I supposed to do that?” We start over again. “How am I supposed to do that?” is the number one way to say no in negotiation. You’ve gotta say it deferentially, because what’s said with deference, you’d be amazed what you can get away with saying. And the other side feels in control, they don’t know you boxed them in.
Joe Fairless: Since we’re real estate investors on this show, let’s say we’re talking about a deal… It’s a house, it’s worth $300,000, and the seller says “I want $400,000.” I say, “Well, how am I supposed to do that?” in a deferential, warm and fuzzy way. Then they’ll say, “Well, you get your checkbook and you write out $400,000, that’s how you’re supposed to do that.”
Chris Voss: Oh, let’s role-play.
Joe Fairless: Cool.
Chris Voss: You think they know what they’re gonna say, let’s role-play.
Joe Fairless: Alright, which one do you want me to be?
Chris Voss: You’ll be the seller.
Joe Fairless: I’ll be the seller. So the house is $400,000.
Chris Voss: Alright, you know what? You’ve got an amazing house. You’ve put your hopes and dreams in that house, you had cherished memories there. Cherished memories of the past, your hopes and dreams of the future… It’s a beautiful house, it’s worth every penny of that. It’s probably worth more than that; I’m really embarrassed, because… But how am I supposed to do that?
Joe Fairless: Well, you write a check for $400,000, and that’s the amount you pay.
Chris Voss: And it’s worth it. I mean, it’s a beautiful house, but how am I supposed to do that?
Joe Fairless: [laughs] I would almost think you’re a little loony, because you keep repeating that. You just write a check, and that’s it! I mean, I don’t know how were you planning on buying it in the first place if you weren’t gonna pay for it?
Chris Voss: Well listen, how long do you want your house to stay on the market? Because no one can do that.
Joe Fairless: I’d like to get it sold pretty quickly.
Chris Voss: Yeah, do you wanna fail?
Joe Fairless: No, I don’t wanna fail. That’s not an option.
Chris Voss: Your house is a fantastic house, and I know that from your perspective it’s worth way more than what you’re asking, but it’s gonna stay there as long as you’re asking that price. How long do you want it to stay there and not sell?
Joe Fairless: Well, I’d like to sell it pretty quickly, that’s for sure. And I also would like the price that makes sense for me, which is the 400k.
Chris Voss: Yeah, I mean… Why me? I mean, you don’t even have to be in this conversation, because I’ve already let you know that I can’t do that and you’re still talking to me, so it sounds like you’ve got some sense that nobody’s gonna pay you that.
Joe Fairless: Well, I don’t know. I guess it’s just something that I’m looking for, and if it’s not a right fit for us, then I guess it’s not a right fit.
Chris Voss: Yeah, you know what? You’ve been enormously generous with your time, enormously generous. I’m surprised that you’ve talked to me for this long at all… And you know what I’d like to do? With your permission, I’d like to have your permission to come back to you and talk if nobody else comes along.
Joe Fairless: Absolutely, yeah. That sounds like a good next step.
Chris Voss: Right. Okay, so a couple things here. First of all, you’re in your holodeck. Do you know what the holodeck is?
Joe Fairless: I have no idea.
Chris Voss: In Star Trek, the holodeck is the room where in our imagination we create whatever we want to have happen. So there’s a little bit of difference between a conversation that you’re imagining might happen, than one you’re in the middle of.
Joe Fairless: Yeah.
Chris Voss: So I didn’t make this “How am I supposed to do that stuff?” up on the spur of the moment. Actually, how you would have answered if in fact you weren’t gonna take anything other than 400k, instead of slowing down and saying it as slowly and gently as you would have, you would have said, “You know what, because if you want the house, you’ll pay it.” Now that’s an actual indicator when people are telling the truth — this is not 1000% correlation, but it’s a really high correlation… They get a lot more direct. It’s a great way when somebody’s testifying in front of Congress, when a congressional witness is being accused of nonsense that they haven’t committed, they look at the congressman and say “Because congressman, because that’s the way it is!” As an FBI agent I’ve learned directness and impatience correlates strongly with truth-telling. So you were role-playing a role that you weren’t feeling, and that’s why you didn’t say it that way. You said, “Well, you know, because…”
Joe Fairless: Yup. I buy that, for sure.
Chris Voss: You were a little slower, so you were a little out of character in a role, but let’s get back… What happens if the other side says what you’ve said, only more directly? That’s your job as a negotiator, actually to push you till you say “Because if you want the house, you’re gonna pay $400,000.” Because my job as a negotiator is not necessarily to make the deal, my job is to find out what the deal is there that could be made, and then decide if I wanna make it, which in that case I didn’t, but now the most important thing for me to do is — the last impression is a lasting impression.
Let’s say that you’re selling a house and the market says it’s worth 300k and you want 400k, and you’re genuinely not gonna budge off 400k, which means your house ain’t gonna sell… Which also means that eventually at some point in time you’ve gotta be willing to go back to somebody. The last impression I left you with was nothing but with respect and deference. The last impression is a lasting impression. I actually intentionally seeded our next interaction by instead of using the last word to say “Look, pal, you’re gonna beg me to buy your house someday when you come to your senses.”
Joe Fairless: Right.
Chris Voss: Which is a mistake that a lot of people make in negotiations. When they know the other side is crazy, they make the worst possible impression at the end, which is like, “Alright, fine, you’re gonna be begging me to buy this someday.” But instead of doing that, which is what people call cheap shots for last… We actually call this the Oprah rule. Oprah is the toughest negotiator on the planet. Is that her reputation? No.
I know someone who’s worked as Oprah Winfrey’s broker for 17 years, and everybody that works with Oprah, their overwhelming goal is everyone they interact with has to feel, especially at the very end, like they were treated exceptionally well, no matter how it went. And the Oprah rule is “the last impression is a lasting impression”, and it sets the scene for my next impression.
Let’s say you really are crazy and not coming off the 400k. I know that house ain’t gonna sell because the market is not for 400k, but I do know that I’m gonna get another crack at it as long as I treat you with respect and deference and empathy throughout — you noticed I used empathy every step of the way before I said anything?
Joe Fairless: Oh, absolutely. Yeah, it was soaked in empathy.
Chris Voss: Yeah, and so what that does is it sets me up for the next interaction, which when I come back around, your memory is gonna be like “Yeah, you know, that guy wasn’t that bad last time. He didn’t give me what I wanted, but he treated me really respectfully.” I don’t like where I’m at, but since I don’t like where I’m at, the only people that I’m gonna deal with are the people that made the least bad impression on me the last time around.
Joe Fairless: It makes sense. The takeaways I’ve gotten from this so far, to summarize this, is to have empathy, and just soak the conversation with empathy, but also do it in a genuine way, versus you trying to apply it when it’s not natural for you.
Chris Voss: Yeah, and there wasn’t anything that I said that wasn’t utterly true. Anyone in the real estate industry, when you’re selling a house — actually, a home seller has the exact same profile as the family member of a kidnap victim… And the real bread and butter of kidnap negotiations is how we handle the family members, because we would have the family members deal with the bad guys… And what does a child represent to their parents? Their cherished memories of the past, their hopes and dreams for the future. What does a house represent to the seller? Cherished memories of the past, hopes and dreams of the future. It’s the same psychological profile. And that’s what I said when we were talking – empathy in the form of utter respect for how you actually feel about this. Not agreeing with any of it, but just recognizing it. That’s cognitive empathy, it’s a recognition… It’s not adopting it, but it’s just recognizing what you feel. It’s not sympathy.
I know what that profile looks like, or I can pick it up really fast in any given industry, because whatever anybody does in any sort of business, their hopes and dreams for the future are on the line at some point. All I’ve gotta do is listen for it and respect it, and it gives me a tremendous advantage.
Joe Fairless: What’s been the most challenging negotiating circumstance you’ve been in, and how did you work through it?
Chris Voss: Well, the other side is negotiating in a fashion that is just not gonna work out for them, they’re not gonna get anything that they want – they’re new to it, they’re bad at it, there’s a deal here, and they’re just not seeing how what they’re doing is gonna screw everything up for them. That rarely happens in kidnapping, but it happens sometimes.
One of the cases I talk about in the book – interestingly enough, it turns out there’s a business term for what happened in that negotiation… I ran across salespeople that call it being single-threaded, where your point of contact is out of touch with their team, and they’re negotiating in a way that the deal is never gonna happen and they’re gonna lose their job over… Interestingly enough, since kidnapping is a business, that’s exactly what happened to the negotiator we were dealing with in the Phillipines. On the second go-around, the [unintelligible [00:21:05].22] and ultimately the hostages died, in a botched rescue attempt about 13 months after the kidnapping happened.
I ended up finding everything out about the kidnapping. The upside to a hostage negotiation is at the end of the day you’re gonna find out everything that happened on the other side through the follow-on investigation. And I felt “What do I do when the point of contact is out of touch with their own team?” And we actually developed some more openended questions, which we now call “calibrated questions”, that are just specifically designed to deal with what we call “deal killers” on the other side – people who won’t come to the table, because all they wanna do is kill the deal once it’s been made.
There’s no shortage — 50% of the business deals that don’t go through, don’t go through because the deal killers on the other side stayed away from the table just so they can torpedo the deal when it came to them… And you learn how to deal with that.
Joe Fairless: What are some calibrated questions?
Chris Voss: Calibrated questions are a version of an open-ended question. What it really is is “I need you to think about implementation”, which is gonna be “How do I know the deal is gonna go through? How do I know that if we make the payment under these terms, that everybody on your side is gonna do what they’ve gotta do?” Now, what your point of contact will say is “It’s gonna be fine, don’t worry about it. I represent everybody”, which is why you repeat the questions three or four times, because then it makes your point of contact nervous and they actually go back to their team and they say “Hey look, this is what they’ve been asking me, and I just wanna make sure I’m on firm ground here.”
What will happen is then the deal killers love the fact that they’re now being consulted, which is what they wanted all along. Now they’ll start to become engaged, and it decreases the chances that they’re gonna torpedo the deal.
Joe Fairless: I’m noticing the word “How” come up frequently, versus “Why” or “When.” Is that intentional?
Chris Voss: Yeah, it’s a good observation on your part, very astute. The open-ended questions are “Who?”, “What?”, “When?”, “Where?”, “How?” and “Why?”, right? Also referred to as interrogatives or “the reporter’s questions.” Now, we’ve pretty much cut them down to — “How?” and “What?” is our bread and butter. We’re really careful with “Why?”, because “Why?” makes people feel accused and defensive; you have to be extremely cautious with it; there’s only one tiny, limited, surgical instance that “Why?” is a good question. Most of the time, instead of asking “Why?”, instead of “Why do you want that?”, you should say “What makes that a choice?” Substitute “What?” for “Why?” and you’ll eliminate the defensiveness.
But they’re very deferential. People love to be asked “How?”, people love to be asked “What?” It’s a great way to gain the upper hand in a negotiation by giving the other side the illusion of control. So those are the two biggest ones that give you the upper hand, but the other side feels in control.
With enough practice, you can turn nearly any question into a “How?” or “What?” question. The other side is gonna love to answer it, because people love to tell you how to do stuff, and they love to tell you what to do… And that’s all part of the deference, giving them the illusion of control that gives you [unintelligible [00:24:15].27] advantages.
Joe Fairless: Anything else that you wanna mention as it relates to negotiating that we haven’t discussed before we wrap up?
Chris Voss: Yeah, the flipside to open-ended questions are labels, and in many cases – probably about in almost half the time, the best way to get somebody to talk is not with an open-ended question. You just switch it to a label, because you’ll open it up more. Instead of saying “What do you think?”, I’ll say “It seems like you’ve got something in mind”, and actually you’ll give me a lot better answer to that second one than the first one, just because it hits the brain in a different way.
So we use those, and then we train on it, how to flip back and forth. Because you’ve gotta gather information, and it doesn’t necessarily mean that the best way to gather information is by asking a question.
Joe Fairless: Got it. Great stuff. How can the Best Ever listeners get in touch with you?
Chris Voss: Our newsletter comes out once a week, it’s called The Edge. It’s free, it’s complementary. A friend of mine loves to say, “If it’s free, I’ll take three.”
Joe Fairless: [laughs] Careful what you take free three times… There could be some scary instances there.
Chris Voss: [laughs] Right, right. It’s worth at least looking at it, right?
Joe Fairless: True, true.
Chris Voss: So send a text to 22828, send a text “fbiempathy”, all in one word; don’t let your spell check put a space in there. It’s gotta be “fbiempathy” all in one word. It’s not case-sensitive, so it can be lower case… To 22828. You’ll get a text message response back, signs you up for the newsletter. It’s a gateway to everything we’ve got.
Our website is blackswanltd.com. The newsletter will take you there. It tells you about the training products we have. If you wanna buy the book, which I strongly encourage, Amazon has the best price. I buy my book on Amazon, but I give it away. But subscribe to the newsletter. We’ll help you get better, we’ll help you learn a lot of stuff.
Joe Fairless: If I go to the website, which I’m on right now, where do I sign up for the newsletter on the website?
Chris Voss: There’s kind of a menu bar towards the top, and you should see it into the right of that. It says “Blog: The Edge.”
Joe Fairless: Yeah, I see it.
Chris Voss: Click on that, and it’ll take you right–
Joe Fairless: Oh, there we go.
Chris Voss: And you can search past stuff. You’ve got a search tool in there that can help you if there’s a specific thing that you’re looking for.
Joe Fairless: Great stuff, yeah. I am officially signed up. Well, this has been informative, and I’m grateful that you were on the show, Chris. As I’ve mentioned at the beginning, I’ve had a large amount of people being interviews, so high-performing real estate investors mentioned your book recently, and it compelled me to buy it… And coincidentally, my team booked you for the interview today too, so that was great. I had you on my list of people to reach out to anyway, so that’s great.
Some of the takeaways from this, as we can apply your lessons learned to real estate investing, and negotiating in particular – ask open-ended questions, in some circumstances… You mentioned at the very end the labels part. I think we’ll need to read the book to learn a little bit more about that. But what we talked about – open-ended questions, and using “How?” and “What?” Those are, as you mentioned, the bread and butter, and people love that. They love to talk about the how and the what; be careful with the why.
Also, be empathetic and use the Oprah rule of treating everyone exceptionally well at the end, because that really sets the stage for the next interaction. And really, one other thing we didn’t talk about when we were doing the role-playing back and forth – your approach put me in a state, it was almost like you were putting a trance on me… [laughter] It’s the way that you talk, and just the sound — you’ve got it down to a certain science, obviously. So that does something else [unintelligible [00:28:08].26]
Thanks for being on the show, I hope you have a best ever day. Oh, and lastly, two things. One is – because I have this in bold – directness and impatience correlates to people telling the truth. That’s really interesting. And then two is that you mentioned your job is not to make deal (and our job is not to make a deal), it is to find out what the deal that could be made is. That’s an important distinction, because we’re not always negotiating to get the deal done, we’re negotiating to identify what is the deal that could be made, and I think that’s an important distinction. So thanks for being on the show. I hope you have a best ever day, and we’ll talk to you soon.
Chris Voss: Thanks, man. Thank you very much.