- Eviction moratoriums enacted due to the coronavirus are expiring across the country and being unable to pay the rent is not only an issue for individuals but also many small business owners.
- Chris Voss, a former FBI hostage negotiator who now consults with business clients on the art of negotiation, says every entrepreneur needs to be prepared for landlord leases and other contracts to be renegotiated during Covid-19.
The Covid-19 crisis is requiring everyone to do something that former FBI hostage negotiator Chris Voss built a career on: make tough, stressful decisions.
"I like action, I hate inaction and inertia, and with the pandemic, it is requiring us to make decisions," said Voss, who now runs his own consulting firm, Black Swan Group.
That is not a bad thing, the way Voss sees the world. Stressful times are an opportunity to reassess relationships, and that includes the business world. Right now, many small businesses across the country are facing the same financial struggles as many American individuals: income that has disappeared while bills, from rent to debt creditors, are not going away.
Eviction is not only a looming threat for millions of residents, but for Main Street businesses as well. States around the country have included small commercial tenants in eviction moratoriums, but Voss said no business owner should take comfort in that because in a crisis, there is nothing that will not come up for negotiation at some point.
"Everything is being renegotiated now and if someone you are doing business with hasn't called you yet to renegotiate, they are going to," Voss said, speaking at the recent CNBC Small Business Playbook virtual summit.
Voss provided 10 tips to prepare for negotiations that may not be the life-and-death decisions he dealt with at the FBI and National Security Council, but can make-or-break a business's chances of survival.
Voss said any time there is a renegotiation, whether rent or otherwise, to be undertaken, the first step is to consider whether the counterparty is someone with whom you want to continue to be in a relationship.
On the other side of the pandemic, that will only be more important, he said. If you can answer that question in the affirmative, then you start by knowing this is someone you want to collaborate with in the future, not someone with whom you feel forced to collaborate.
"How productive has the collaboration been with this lanyard? Have they treated me well?" Voss said.
He cautioned about making up your mind too quickly, but ultimately, you do need to determine if a counterparty like a landlord has your best interests in mind, too.
Voss's "Black swan" method starts by hearing out the other side, not making your case. He said it is important to learn whether a counterparty really has their backs up against the wall, is really under extreme pressure, and the only way to learn that information is by focusing on what they are saying.
Some counterparties are renegotiating to take advantage, and you can learn that by listening. But, "lots of people are under pressure. Landlords are under pressure. Their bills haven't gone away because yours haven't," Voss said.
You need to focus on the specifics. For example, right now a restaurant business is under serious pressure because it is difficult for them to duplicate what they do, unlike a business that can shift online. Understanding the specifics of the other party's view is critical.
He said slowing down and listening becomes even more important in a world where negotiations are taking place on the phone or Zoom due to the pandemic. "It is has to be over the phone, slow down a little bit and focus a little more on making sure you heard the other side out. Being in person has a certain special feel and you can make up for it by slowing down," he said.
Another way to think about it is empathy, and in Voss's "mercenary" definition of empathy, it means understanding the pressure another party is under. And it means checking your own ego before the negotiation starts and identifying what the other side needs.
When you start articulating your argument, it should be focused on what you've learned from their experience: "'Wow, it sounds like you are really backed into a corner right now.' That is simple empathy statement," Voss said.
One of his favorite negotiation skills is called "mirroring," which means repeating the last one to three words, or selected words of what someone just said, and it is the simplest skill of all.
Negotiators who get good at mirroring know it saves them from ever going down the rabbit hole of negotiating with themselves. "Get good at mirrors, and sprinkle them into conversation, and you will find 90% of the time, the other side is talking."
Negotiators need to be very careful with the word "why" because it causes people to be defensive. For example, "Why are you raising my rent?" is not a way to start a negotiation.
If you must use "why," understand there is a way to use it properly,
"Why do you want to stay in business with me?" Or, "Why would you want to be in business with me after the pandemic?"
But not, "Why are you renegotiating?"
Voss says when you ask a "why" question seeking the cause of something you don't like — such as over rent — the negotiation is not likely to go well.
In his days as a hostage negotiator, Voss learned that by asking a kidnapper why they want to deal with you, he was able to learn more than just whether the hostage was still alive. He could gauge whether the enemy is the type of mercenary who wants to cut your throat, or someone who wants to be in business, and that applies to the actual business world as well.
When framing questions, Voss says don't make the mistake of looking for a "yes."
In negotiations is it best to change "yes" questions to "no" questions, for example, "Is now a bad time to talk?" And not, "Is now a good time?"
Not, "Do you agree?" but rather, "Do you disagree?"
Giving the counterparty a chance to say "No" makes them feel safer and feel like there is more of a collaboration.
"It sounds crazy, but everyone who does this loves the impact it has on their lives.," Voss said.
If you have found yourself angry at someone for not wearing a mask in a public place, or you are a business owner who has to deal with the confrontations that may occur between you, and your staff, and patrons, there's a key lesson available about the art of negotiation playing out every day in America and it comes back to empathy as the foundation for reaching an agreement.
"What's causing someone to not want to wear a mask? We know why. They feel like it is infringing on their freedom and rights, and wearing a mask is a political statement. The definition of empathy is to know where the other side is coming from," Voss said. "So if somebody comes in without a mask say, 'it looks like freedom is important to you, you don't want to be constrained, you feel backed into a corner by this mess.' ... That will catch them off guard," Voss said.
If a store owner or employee is successful in the empathetic approach, the question then becomes, "How can we feel comfortable with each other if I think a mask is important and you don't?"
"You want to leave decision-making in the other person's court, so to speak, but frame it in a way where they need to make a choice between options," Voss said.
That is the definition of confrontation known as "focused comparison." In this case, safety versus freedom and in a business, leaning towards safety because it wants to be with customers for a long time.
A landlord may want to argue over price, but the best case for a tenant to make is focused on value.
That's because like any business, a landlord values a client, in this case a tenant, that keeps a place clean, doesn't bust up a residence and pays rent on time, Voss said, and he knows: "I've been a landlord," he said. "I would have been happy to not raise rent on a tenant that paid on time, kept the place clean and didn't bang holes in the wall," he added.
That's why Voss said if a landlord is trying to renegotiate rent, the tenant should be focused on making the case that "it sounds like something is not valuable" to the landlord.
"I always pay rent on time and it sounds like that doesnt have value," Voss said, mimicking what a tenant could say, though he cautioned that the tone matters. "It sounds to me like it didn't matter to you that I always paid on time?" can be said with a tone of curiosity or accusation. "It helps when the words land softly and not like a slap in the face," he said.
Voss also said to be aware that if someone starts talking price and terms immediately, there's a good chance, close to 75% chance in his experience, they are playing you off another offer. "You are the rabbit or competing bid, or they are looking for free consulting," he said.
It makes sense if your gut tells you this is what is occurring to revert back to the techniques of arguing their position and mirroring, rather than offering up your own information: "It sounds like you are still gathering info on this ..."
"That's an observation they will respond to with more information, and then mirror whatever they say to you back. ... they will talk more," Voss said.
What you are trying to learn is if they are just shopping prices and wasting your time.
At the elite level of negotiation, gender makes no difference, but for those still learning to master the practice, "Women pick up our method faster than men," Voss said.
While he said this is a finding from his experience that is closer to anecdotal than scientific, negotiation is ultimately about long-term relationships and long-term success, and "maybe women are more encouraged to focus on relationship," Voss said. "I don't know, but they do pick up this style of negotiating faster than men do."
Trying to negotiate with a narcissist is a frustration experience because their offensiveness sets off our own negative emotions and Voss says he has learned that negative emotions are bad for negotiations.
"When negative emotions are triggered, you are dumber," he said. "When you are in a positive mindset, you are 31% smarter. That's a huge tactical advantage."
Voss recently had a client whose landlord was raising the rent on her. When she sat down with the landlord, they explained that their taxes were going up, their bills were going up, and they had bills and a mortgage to pay.
Voss's client could have countered with her own problems, starting with "but ...", but instead she said nothing. That was the right strategy.
"When the word 'but' is about to come out of your mouth, you should shut up and let dynamic silence work for you," Voss said.
This tenant went back to the strategy of feeding back to the counterparty their own concerns. "She said, 'look, you feel like you need to raise my rent because bills are not going away, you are under no shortage of pressure yourself.' And then she shut up. She didn't try to make her case at all. And here's exactly what happened: The landlord said, 'yeah, but if keeping you requires me not to raise your rent, you're a good tenant. I'm not going to raise your rent."
Voss said this may not work often, but every time it does work it will make a huge difference,
"What different does it make if it works 1% of the time. I can always make my value case after, but if I can make any percentage of deals make themselves just by articulating the other side's perspective ... I am willing to take those off the table. Saves me a massive amount of time," Voss said.