ARTICLES

Powers of Persuasion

By: Ron Shapiro

Okay, so you’re not getting a $5 million signing bonus like many of the athletes represented by sports agent Ron Shapiro…Yet you may be surprised at what you can learn from [him] about negotiating. Shapiro, president of Shapiro Robinson & Associates in Baltimore, represents baseball stars Cal Ripken Jr. and Dante Bichette and conducts negotiating seminars for corporations nationwide….Shapiro outlines what he calls his WIN-win strategy. Translation: Both sides come out winners, but his side wins more….

It’s humility time. I’m the guy who represented Oprah Winfrey before she became so big that she only needed a first name. I was her agent when her show was produced in Baltimore. Then I helped navigate her career toward the ABC affiliate in Chicago as she climbed the major-market ladder. She was hot. Audiences were drawn to her. Magazines and tabloids discovered her. There was, as they say, a buzz.

Not surprisingly, as her star ascended, she re-examined many things, including her career management. It happens to Triple A ballplayers who are brought up to the majors and have a red-hot rookie season. It happens to repertory actors who toil anonymously and suddenly win the lead in a Broadway show, to state governors plucked by their party to be national candidates, to painters, authors, and rock musicians. Are they being managed as they reach for the top as well as they were managed on the way up? Certainly, it's a legitimate question, one over which I've gained a few clients, but never lost one. Oprah proved to be the exception.

I could argue all I want about what a good job I was doing, but ultimately it wasn't my decision; it was hers. She had to do what she thought best. It wasn't long before I got a call from Oprah. She started with, "Ron this is really hard to say, but…" She went on to tell me how much she appreciated everything I'd done for her, how much she respected me, and how she hoped we could stay friends and maybe even work together again someday...

I lost Oprah Winfrey. But that’s not the humbling part of the story. According to one of the attorneys in my office, she still owed us commissions. On a strictly legal basis, he was probably right. My instinct told me to drop it, but I didn’t follow my gut. We sued. Oprah and her new agent fought it. We settled and got our money. We won a short-term gain, but lost long-term good-will. Maybe we’d never have done business with Oprah again. After we sued, it wasn’t even a question. That’s humbling.

That’s an example of how not to negotiate. I derived a career-long lesson from the experience: Don’t negotiate as if you’ll never again do business with the person across the table. More leases are renewed than written from scratch. More shipments go to old customers than new ones.

To practice "The Power of Nice®," begin by wiping out everything you know—or think you know—about negotiations. Forget about winners and losers. Forget about conquerors and victims. Contrary to the actions of novelized, Hollywood moguls—from Daddy Warbucks to J.R. Ewing, Duddy Kravitz to Gordon Gekko—negotiation is not war. It isn’t about getting the other side to wave a flag and surrender. Don’t think hurt. Think help. Don’t demand. Listen. The best way to get most of what you want is to help the other side get some of what it wants. It’s what we call WIN-win. Both parties win, but you win bigger. It’s not WIN-lose, or WIN-ransack-and-pillage. You don’t have to destroy the other side. In fact, you want them to survive, even thrive, to make sure the deal lasts and leads to more deals.

The cliché "win-win" is unrealistic. WIN-win is realistic. One party is bound to get more, even if both sides are content with the outcome. We want to make sure that the one who comes out ahead is you.

To achieve WIN-win, identify what you really need from the deal—not just what you assume you need. You may assume you must get a certain price for a piece of real estate. Is it because you hear that’s the current market value? Or because another seller supposedly got that price? Will you take less if it’s a cash offer?

Next, rank your needs in descending order of importance, then force yourself to give up goals from the bottom of the list up, until you’re left with the one most important goal of the deal.

Now, do the same exercise for the other side. Get someone to play the devil’s advocate for the other side. What if you learned they might pay more than you think if you let them push the deal into their next fiscal year? Maybe tax considerations are more important than return on investment.

Finally, determine how the other side’s interests conflict or mesh with yours. Find areas of mutual benefit. Now you have the advantage. You understand both sides’ needs and have created a response for any possibility. You can get most of what you want by helping the other side get some of what it wants. Instead of a one-time deal, this scenario can lead to a long-term relationship. Relationships pay dividend ad infinitum.

Here’s how it worked when I negotiated Cal Ripken Jr.’s 1992 contract. When we began talks with the Orioles, we were $30 million apart. The team proposed almost $20 million over four years, which they said was comparable with what baseball’s top shortstops earned. We wanted a five-year deal worth almost $50 million—on par with the top players, regardless of position. For a long time we were stymied in the "position" phase of negotiations, when both parties repeat high-minded rationales and make very little practical movement. How did we finally move from there to the level where we could lean more about each other’s real interests—or what we call the "probe" phase of negotiations? We changed locations—from our offices in downtown Baltimore to my farm in Butler, Md. Fresh air, a gentle breeze, and birds chirping instead of car horns blasting. Not everyone has a farm, of course, but a change of venue—say, from a cold office to someone’s den or a comfortable restaurant—can do wonders when you’re stuck.

At the farm we finally started to hear each other, to understand the other side’s issues and interests. Cal was a beloved baseball veteran who was on his way to breaking one of baseball’s most hallowed records: Lou Gehrig’s iron-man string of 2,130 consecutive games played. He wanted a contract that acknowledged his on-field accomplishments, contributions to community projects, outside business ventures, and future security. The team wanted to pay him an amount that acknowledged his recent decline in offensive statistics and met the team’s interests: to remain fiscally responsible, establish a reasonable salary for future negotiations with other players, and still keep Cal.

We finally started to talk about ways to recognize Cal’s contributions other than standard salary. For example, the Orioles eventually agreed to provide post-career compensation guarantees, which added dollars to the overall contract but did not raise his pay for active years. They also helped him gain the right to sell Ripken-related goods at Camden Yards to raise funds for the Kelly and Cal Ripken Charitable Foundation, which supports literacy and women’s health programs. The team also offered Cal special hotel accommodations on the road and special parking privileges, and allowed him to purchase a skybox for his family—moves designed to provide Cal with added security during his quest for the record. (He broke it on September 25, 1995.) These creative solutions answered Cal’s interests and allowed the team to get what it wanted.

On his birthday, August 24, 1992, Cal signed the biggest contract of his career: five years and $32.5 million. The deal took 333 days to complete, but it was a classic WIN-win. Both sides won, but we felt Cal won a little more. Cal got his five-year deal but the Orioles didn’t have to make him baseball’s highest paid player.

When you can combine all the elements of the negotiation—identify what you and the other party really want, overcome emotional positioning, and build a relationship by satisfying your interests well and the other side’s acceptably—you’ll make a real WIN-win deal. Five years later Ripken signed another contract, one that could pay him $19 million through 2000. That’s The Power of Nice®.