An Interview with Master Negotiator Herb Cohen

By Noah Graff

For more than three decades, Herb Cohen has been a practicing negotiator, intimately enmeshed in some of the world’s headline dramas, from hostile takeovers to hostage negotiations. His clients have included business executives, entrepreneurs, and sports agents plus large corporations and governmental agencies. He is the author of New York Times Bestseller You Can Negotiate Anything.

NG: How did you get into the negotiation business?
HC: People think you must have the genes for negotiation. Both my parents were immigrants to the United States. They were happy to be here and didn’t negotiate for anything. If they sustained a loss, they didn’t report it to the insurance company because they were afraid the insurance company would either raise their rates or cancel them. And as a kid, I didn’t really negotiate. But during law school I got a job as a claims adjustor. My job was negotiating with people in New York City from different socio-economic levels. One day you’re in Bedford-Stiverson and the next day Park Avenue. [Other employees] were settling three cases a month. I settled 12 cases a month in half the time while going to law school full-time. They asked, “What are you doing, and could you teach other people?” I began teaching a three-week course in negotiation for attorneys for Allstate Insurance Company.

NG: Where have you been working lately?
HC: I was in South Korea, Hong Kong and the People’s Public of China, and more recently in London and Prague. I gave lectures in Beijing and Shanghai about negotiations to try to change some of their attitudes and outlook about how conflict should be resolved.

NG: I was reading that a lot of cultures have different customs for negotiating. Is it more difficult for you to negotiate with people in other countries?
HC: No, for some reason, I do well. It surprises everybody, especially my wife. I do very well in strange places. People somehow relate to me because I always see myself as an outsider. If you’re Jewish, you’re always an outsider, no matter how accepting the culture is. You see yourself as a little different, and it is a tremendous advantage because you tend to see what more accustomed eyes miss, and that kind of sensitivity puts you a little bit ahead of everyone else. My major strategy in negotiations is to make the other side feel they’re superior to me. I work very hard to have them relate to me on human terms.

NG: What are the biggest mistakes people make when they enter a negotiation?
HC: Fall in love with the people, but don’t fall in love with any deal. Don’t fall in love with things that are material or involve money. The biggest mistake people make is they get too emotionally involved. You want to be a little bit more detached. Another mistake is coming across as having too much authority and make quick and precipitous decisions. If your reader owns a company, he or she can say “yes” or “no.” That’s a mistake. They should say, “I’m the owner of the company, but I’ve got to check this out with my board,” even if they have no board of directors. Or, “Let me check this out with my banker. In fact, let me speak to my wife.” This means you are not forced to make quick decisions, and causes you to emanate tremendous power.

NG: If I had to hire a new salesman and was trying to figure out who’d be the best negotiator, what qualities would I look for?
HC: I would look for someone who’s at ease with people; someone people would trust; who is an amicable individual, and a high achiever; who has good expectations of life. I’d also look for someone who isn’t confined to what the “norm” is and who is optimistic about the future, who looks for new ways to do things, and has a track record of achievement, even a modest one.

NG: On your tapes you mentioned how important it is for you to be the caller. Would you elaborate on that?
HC: Many negotiations are more competitive than they should be. When you’re the caller, you tend to be prepared. You’ve got the file with you. You have an outline, you know what questions to ask. You’re in a quiet place and can concentrate. The person being called didn’t know you’d call. They don’t have the file. They’re not prepared. When dealing with a competitive situation, you should say, “Hey, let me call you back.” As simple as that. If people are egomaniacs, they don’t want to do that; they will rely on their memory, but your memory won’t work – it will fail.

NG: You also talk about the art of making the deal.
HC: There are four key ingredients to making the deal. To start with, you want to use some form of legitimacy, like car dealers do. They’ll show the sticker price, which you know is legit because it’s literally stuck to the car. The sticker price is $39,346.11. The car salesman shows the actual factory invoice price of the car, a printed document which gives it a high form of legitimacy. You’ve got to invest time and energy; you must use some form of legitimacy; you must look at how concessions are made. With the car dealer, the first concession is $2,000. Then they drop the price $2,000, then drop it $1,000 more, then $400 more, then $100 more. Then they go see the dealer or sales manager in the backroom then says, “He could knock off another $33.” When you list the pattern of concessions, you say, “Gee, I’m really at the end now.” They’ve gotten you involved in the process, and people support that which they helped create, which would cause you to close the deal.

NG: How do you negotiate with a family member?
HC: Let’s say you’re dealing with children. Kids are little people in a big person’s world. They are people without formal authority and power, yet they seem to get a lot of what they want. How do they do it? Kids aim high. They know if you expect more, you get more. Sometimes they make unrealistic requests of their parents, but it raises the expectation level of parents. That’s a good thing. Kids understand that decision making process within a family, which means if they ask the mother for something, and the mother rejects them, they go to the father. The father rejects them. The parents are united against them, so what do they do? They form coalitions or alliances with the grandparents. Kids understand that the word “no” is an opening bargaining position. Most of us, when we hear “no,” we think: Oh, it’s over. Kids understand “no” means “no” at this particular moment in time with these facts. Change the facts, change the time, it’s altogether different. Kids persist; they persevere; they wear you down. They are tenacious. And they are very good negotiators.

NG: How do you negotiate with irrational people?
HC: The truth is crazy people are the most difficult people to negotiate with. But the way to negotiate with irrational people is behave the way they behave. If they say something that doesn’t make sense, you say something that don’t make sense. In other words, all behavior makes sense from the standpoint of the actor. Crazy people don’t think they’re crazy. Irrational people think they are behaving normally/correctly, but it’s based upon their whacked out experience. So you’ve got to try to understand the experience of the other side. I remember in dealing with Iran and Saddam Hussein, I tried to give advice to our government to understand why this person was behaving the way he was. His behavior made sense. He didn’t fear the United States; he feared Iran. When the government said, “He’s got weapons of mass destruction,” I said, “I don’t know whether he has weapons of mass destruction, but he wants Iranians to think he has.” He killed millions of their people during the Iran/Iraq War when they invaded them, and I couldn’t get people to really understand it.

NG: That’s what happened with this war.
HC: As Americans, we tend to ascribe our values and our beliefs to the people we’re dealing with, which is a mistake. We assumed that they would do what we would do in a situation, which doesn’t make sense. Look at the situation in Iraq: It took us awhile to realize there are Sunnis and Shia, and they hate each other. We have yet to realize Iran has tremendous leverage with Shia in Iraq. You’ve got to understand; Iranians are Persians and the Shia and Iraqis are Arabs. There’s a big gap between those two and they’re not going to be friends. Here’s how we look at things. There’s a movie Broadway show, Oklahoma by Rogers and Hammerstein, and the songs show that the farmers and the cowboys are friends. The farmers milk their cows and the cowboys herd their cattle. We see the world in those simple terms. We look at the Israeli situation and see it in very simplistic terms. Even the Israelis sometimes are more simplistic than they should be in terms of negotiations.

NG: Do you see an end in sight for the Israel/Palestinian conflict?
HC: Sure. 60-65 percent of the Israelis want to make concessions for peace, which means that they would accept the proposal put forth by Ehud Barak which would involve a division of Jerusalem. What Israel should do, in my opinion, is try to make some concessions that will work for them, and not just make concessions. You must make the other side negotiate for any concession that you give them. When you make the concession they feel they earned it, and they give something in return.

NG: Do you think the Palestinians really want peace or just all of Israel?
HC: They’ve already spent so much time talking about the whole thing and gotten nothing. Most realistic Palestinians will take something less than the whole thing, which means they will accept Israel’s 1967 borders, maybe a little bit more. They want their own state with some way of each part communicating with the other. There must be a way for Palestinians to get from the Gaza Strip to the West Bank without passing through Israeli checkpoints and a way for people to fly in and out. They won’t be happy, but probably 65 percent would take a state like that.

NG: But Hamas doesn’t see things the same.
HC: Hard-line Hamas people will fight to the bitter end. The leadership of Hamas is not sacrificing their lives, they’re sacrificing the lives of young Palestinian kids who don’t even know what the hell they’re doing. You want to try to isolate that group and have them be seen by all Palestinians as a radical group; that if they follow Hamas, it’s going to be another 50/60 years before they’re going to get anything. They’re not getting anything. The standard of living of the people in Gaza and the West Bank is pathetic compared even to the rest of the Arab world.

NG: But do they only understand power, and not the “you scratch my back, I’ll scratch yours” mentality?
HC: You’re right. They don’t respect reciprocity. When I was a little boy my mother said to me, “Herbert, if you’ll be nice to people, they’ll be nice to you.” This is how American kids are raised. That’s reciprocity. Arabs respect power. If you show them you’re going to be tough, you’re going to be strong, and this is the way things are, you could really make progress with these people. I wouldn’t trust them one iota, but I would make concessions to them, bargain hard in return for something else. Right now, I think the Israeli government, which is strong, should be negotiating with the Abbas government on the West Bank. Not Hamas. Israelis should make the Abbas government look good.

NG: Tell me about some of your most difficult negotiations. How have you dealt with terrorists and hostages?
HC: The first thing you must recognize is what the terrorists want; what are their needs. Very often they want to publicize their grievances. That’s why terrorists’ acts occur in a place with the most media exposure. I wrote a memo to President Reagan, in maybe ’85, telling him the next attack would most likely be in New York City, London, then the Olympics. Why? Because that’s where there’s the most media coverage. If a terrorist act occurs in Lagos, Nigeria, there’s no media to cover it. It’s worthless.

NG: What if you’re in a plane hijacking situation?
HC: You try to recognize the situation. You as one individual will have very little power. In today’s world, you must try to take back the plane while it’s in the air. Flying within the U.S, you’ve usually got people on the plane who have worked for the government. They will know what to do. If that’s not the case, try to get the flight attendants to do something. If they don’t do it, it’s up to you. We live in a very dangerous world. I’m big on not allowing yourself to be batted about. I believe in taking control of your world as best you can. You have to understand, I am a product of Jews in the Second World War. We were virtually extinguished. I believe you always have options; you always have power. It is better die on your feet than on your knees. [That leads] to a point where a lot of people who know me think I’m a little crazy.

NG: Thanks Herb.