Harvey McKay: How To Negotiate!

I love Harvey McKay. From one of his first books, Swim with the Sharks, I saw a real professional who was not shy about revealing his tried and true business secrets. He is a one-of-a-kind leader! By Harvey McKay

I got a phone call from a Fortune 500 CEO one week whom I had never met. After decades of begging the government to relax their regulatory grip and let his industry experience the joys of competition, his wish had been granted—and his bottom line had plummeted. He wanted me to talk to his top executives for two hours and zero in on negotiating strategies.

A bit overwhelmed, I said, "I'm very flattered but, frankly, I don't know if I can talk for two hours on negotiating." Then I realized I was actually negotiating with myself. As my brain finally reconnected, I cut myself off. "Well, let me sleep on it and I'll get back to you."

Later that evening, I began to write down some of my negotiating experiences and saw that my problem was going to be holding the speech down to two hours. I'd already brushed up against the first and second laws of negotiating that morning in my conversation with the CEO:

1. Never accept any proposal immediately, no matter how good it sounds.
2. Never negotiate with yourself. You'll furnish the other side with ammunition they might never have gotten themselves. Don't raise a bid or lower an offer without first getting a response.

Here are some more negotiating rules and insights:

• Never cut a deal with someone who has to "go back and get the boss's approval." That gives the other side two bites of the apple to your one. They can take any deal you are willing to make and renegotiate it.
• If you can't say yes, it's no. Just because a deal can be done, doesn't mean it should be done. no one ever went broke saying "no" too often.
• Just because it may look nonnegotiable, doesn't mean it is. Take that beautifully printed "standard contract" you've just been handed. Many a smart negotiator has been able to name a term and gets away with it by making it appear to be chiseled in granite, when they will deal if their bluff is called.
• Do your homework before you deal. Learn as much as you can about the other side. Instincts are no match for information.
• Rehearse. Practice. Get someone to play the other side. Then switch roles. Instincts are no match for preparation.
• Beware the late dealer. Feigning indifference or casually disregarding timetables is often just a negotiator's way of trying to make you believe he/she doesn't care if you make the deal or not.
• Be nice, but if you can't be nice, go away and let someone else do the deal. You'll blow it.
• A deal can always be made when both parties see their own benefit in making it.
• A dream is a bargain no matter what you pay for it. Set the scene. Tell the tale. Generate excitement. Help the other side visualize the benefits, and they'll sell themselves.
• Don't discuss your business where it can be overheard by others. Almost as many deals have gone down in elevators as elevators have gone down.
• Watch the game films. Top players in any game, including negotiating, debrief themselves immediately after every major session. They always keep a book on themselves and the other side.
• No one is going to show you their hole card. You have to figure out what they really want. Clue: Since the given reason is never the real reason, you can eliminate the given reason.
• Always let the other side talk first. Their first offer could surprise you and be better than you ever expected.
• You must be fully prepared to lose a great deal in order to make a great deal!
• "Make every bargain clear and plain, that none may afterwards complain." - Greek Proverb

The Future of Work: Yes, We'll Still Make Stuff.

Presenting Part Nine of a Ten-Part Series on The Future of Work from Time Magazine. By David Von Drehle at Time.

The death of American manufacturing has been greatly exaggerated. According to U.N. statistics, the U.S. remains by far the world's largest manufacturer, producing nearly twice as much value as No. 2 China. Since 1990, U.S. manufacturing output has grown by nearly $800 billion — an amount larger than the entire manufacturing economy of Germany, a global powerhouse.

But growth does not mean jobs. While sales soared (at least until the recession), manufacturing employment sank. Using constantly improving technology to make more-valuable goods, American workers doubled their productivity in less than a generation — which, paradoxically, rendered millions of them obsolete. (See pictures of retailers which have gone out of business.)

This new manufacturing workforce can be seen in the gleaming and antiseptic room in Southern California where Edwards Lifesciences produces artificial-heart valves. You could say the small group of workers at the Edwards plant, most of them Asian women, are seamstresses. Unlike the thousands of U.S. textile workers whose jobs have migrated to low-wage countries, however, these highly skilled women occupy a niche in which U.S. firms are dominant and growing. Each replacement valve requires eight to 12 hours of meticulous hand-sewing — some 1,800 stitches so tiny that the work is done under a microscope. Up to a year of training goes into preparing a new hire to join the operation.

Highly skilled workers creating high-value products in high-stakes industries — that's the sweet spot for manufacturing workers in coming years. After an initial surge of enthusiasm for shipping jobs of all kinds to low-wage countries, many U.S. companies are making a distinction between exportable jobs and jobs that should stay home. Edwards, for example, has moved its rote assembly work — building electronic monitoring machines — to such lower-wage and -tax locales as Puerto Rico. But when quality is a matter of life or death and production processes involve trade secrets worth billions, the U.S. wins, says the company's head of global operations, Corinne Lyle. "We like to keep close tabs on our processes."

Recent corner-cutting scandals in China — lead-paint-tainted children's toys, melamine-laced milk — have underlined the advantages of manufacturing at home. A botched toy is one thing; a botched batch of heparin or a faulty aircraft component is quite another. According to Clemson University's Aleda Roth, who studies quality control in global supply chains, the successful companies of coming years will be the ones that make product safety — not just price — a "big factor in their decisions about where to locate jobs."

Innovative companies will also stay home thanks to America's superior network of universities and its relatively stringent intellectual-property laws. Consider, for instance, the secretive and successful South Carolina textilemaker Milliken & Co. While the rest of the region's low-tech, backward-looking textile industry was fading away, Milliken pushed ahead, investing heavily in research and becoming a hive of new patents.

U.S. manufacturing will also be buoyed by a third source of power: the American consumer. Even in our current battered condition, the U.S. is the world's most prosperous marketplace. As global economic activity rebounds, so will energy prices. The cost of shipping foreign-made goods to the U.S. market will begin to offset overseas wage advantages. We saw that last year when oil prices zoomed toward $200 per barrel.

Thus, even if fewer cars are built by America's wounded automakers, there will still be plenty of car factories in the U.S. They will be owned by Japanese and Chinese and Korean and German and Italian firms, but they will employ American workers. It just makes sense to build the cars near the people you expect to buy them.

Raised on images of Carnegie and Ford, we rue the loss of once smoky, now silent megaplants but are blind to the small and midsize companies replacing them. Ultimately, what's endangered is not U.S. manufacturing. It is our deeply ingrained cultural image of the factory and its workers.