Negotiation

We are all negotiating, in one way or another, every single day.

In this episode, we’re joined by someone that has not only mastered the skill of negotiation, she’s traveling worldwide doing negotiating training, particularity for technology companies; Tine Anneberg, Founder & CEO of CREOSUM Create Impact – part of the SMARTnership Negotiation Organization.

Tine and Robby talk about the benefits of taking a collaborative approach to negotiations, the value of trust, and why curiosity is the most important thing to bring with you in a negotiation.

Tine also shares what she’s observed to be the biggest pitfalls, how technology and AI is changing her industry, and how she is using her negotiation background to view the current geopolitical climate.

Transcript

Speaker 0:06

From our headquarters in Oslo, Norway, and on behalf of our host Robby Peralta, welcome to the mnemonic security pod cast.

Robby Peralta 0:15

Whether we enjoy them or not, we all do a lot of negotiation. Apparently eight to ten thousand times a year. Some are more important than others, of course. And everyone has their own style or tactic of negotiation. You can ask for something crazy and unrealistic from the get-go, which will probably make the other party angry and make them dislike you. But it may also force them to readjust their own expectations and strategy to your advantage. Another way of going about it is to take a long-term partnership approach. Where you work together to identify what is important to each party and negotiate to find a so-called golden middle ground. Where everyone is happy and can live with the results over time. So, what's important for you in your job and life situation to know about negotiation? Tine Anneberg Welcome to the podcast.

Tine Anneberg 1:20

Thank you very much, Robby. I have been looking so much forward to being here today.

Robby Peralta 1:24

Likewise, likewise. Last time I saw you in person, we were babies. IBM sales school.

Tine Anneberg 1:30

We were real tech babies at that time.

Robby Peralta 1:32

They taught us a bunch of things. I'm pretty sure negotiation was one of them.

Tine Anneberg 1:37

I recall that we were in teams having to pretend like we were sellers already towards some very experienced sales guys. And part of it was also negotiating deals.

Robby Peralta 1:48

That is right. And today you are the founder of a company that does negotiation training. So you're a negotiation expert.

Tine Anneberg 1:59

Yeah, so I'm the founder of CREOSUM, which is the Danish company that I'm running in the Nordics and also in Germany, doing negotiations, part of a larger global organization called the Smartnership Negotiation Organization. So yeah, traveling worldwide to do negotiations, advising, and doing trainings, and especially also for tech companies, because it's really an area where there is a lot of negotiations going on. And I'm sure that you also know that from yours.

Robby Peralta 2:32

Yeah, but not just in in business. There's also the life aspect of negotiation. Would you mind telling us the story about your dog?

Tine Anneberg 2:41

Yeah, absolutely. So just you are absolutely right in what you're saying about that there is much more than just business negotiation. So if I can start just shortly in a different spot, what we usually say is that we have between 8,000 and 10,000 negotiations each year. And then you can count yourself how many negotiations that is each day. So you probably start out negotiating with your spouse, with your kids before with your colleagues, your partners, your manager, whomever you are encountering. There is plenty of negotiations each day. And now you mentioned the doc. I think uh due to the post that I made on LinkedIn. So I made a comparison between what is going on these days between Greenland, Denmark, and the US. And that we in Denmark said, um, yeah, you should take Trump seriously, but don't necessarily take his words for what they exactly are. Take it a bit easy, calming down, before we realized that it was actually very serious. And that made me realize that I made the exact same mistake myself. So my partner has been talking about a dog for a long while, like three years, I think. But uh, and I did the exact same as the prime minister in in Denmark did, right? Yeah, yeah, I hear what he is saying. Don't take it literally for the words that he is saying. And uh suddenly what happened? I received a message on my phone. I was in Denmark and uh he was in Germany with the dog in our living room, and you know, a little bowl saying Rocky on it, which is apparently now the name of the dog that we are having. So I would say this is a lost negotiation, right? I did not even realize that it was starting until the dog was there. So we have plenty of negotiations, and one of the biggest pitfalls is not to realize that they are starting.

Robby Peralta 4:47

In your case, you end up with the dog, which is not the worst that can happen. But what is what is a bad thing that can happen by

Tine Anneberg 4:53

yeah, so this is actually what is going wrong. If we should take a bit more serious note to it for a lot of people, also in business, that it's too late that we realize that we are actually in a negotiation with a counterpart. Somebody is calling you saying, Robbie, your services are looking great. Unfortunately, the price is too high. What can you do? Like you need to come down by 3%. You are not prepared. You did not expect the call. Maybe you are tempted to answer straight in this moment, right? And my warmest recommendation is make sure that you take a break. That you want to call back, thank you for calling. If you want to say that it's a bad timing or that you want to call back later, but for sure, don't rush into any conclusions, which is usually what we what we want to do and what we are tempted to do because we want to answer, right? But this is actually the start of a negotiation. So the question is: do we realize that the negotiation is going on? Did I realize that the negotiation about a dog was going on? No, because I was ignoring it. I thought he's just talking about it. And in the end, I lost it, right? Because I didn't see all the signs that was obviously there. And then it was a done deal. And this also happens in business life, right? That all of a sudden we have maybe put ourselves into a weaker position than if you were prepared to having this phone call. Then you would have acted differently.

Robby Peralta 6:18

Besides taking a break, once once you realize that, okay, wow, this is important, this has like implications. What do you do in your training to like help people pick up on those subtle little signs?

Tine Anneberg 6:29

Yeah, first of all, this is the most important, right? That you make sure to break out of that conversation, that you actually have a chance to prepare. Because what we see overall when we talk about negotiations is that people are in general not prepared. And whatever they have prepared is usually not what we say that you need to prepare. So, of course, we need to know where we want to go ourselves. But besides the pitfall of not realizing you are in a negotiation, let's say that now you do know that you have a negotiation, maybe it's even planned or you want to prepare for this phone call. You want to know your own position at this point, but you also want to have an idea of what is the interest of the other party that you will be negotiating with. Because what happens in many negotiations is that we ourselves get very caught up in our own wishes, in our own position, where we want to go. So I completely forget to be interested about where do you want to go? What is your interest? So curiosity is one of the most important things when you are in negotiation because you do know everything about yourself before you arrive to the negotiation, but you do not necessarily know anything about your counterpart. I'm often asked this question, you know. So when I do trainings for corporations, they get these uh simulations, cases that I have made that they need to practice on. So they need to practice what I have just been talking about. And then they say, because I'm I'm walking around helping out, and then they say, But Tine, we don't know this about the counterpart. And I usually answer, and when there's something that you don't know, what would a good mood be? You need to ask a question, right? Don't assume anything. You need to know things, you need to be curious.

Robby Peralta 8:24

Hopefully your other counterpart is not trying to put you in a corner and um what do they call that? A zero sum game? Nobody really everybody wants to win together in a healthy partnership, I guess.

Tine Anneberg 8:36

Yeah, so that's the opposite of each other. Zero sum means that if you need to win 100 bucks, it will be at the expense of me. It will cost me 100 bucks, right? One is winning at the expense of the other. And this is what we see most typically. Uh, because there's also something about how we are raised. Like we believe that the hard, the tough negotiator, the one who's hardballing, might be the best negotiator, coming out with the best result, winning over the other. All research, all real practical negotiation shows that this is not leading to the best possible agreements, like a collaborative approaches, meaning that you just mentioned partnership. So when we are more open and transparent towards each other, actually sharing where we want to end, that's where we actually make the best deals for you and for me, that we are able to create more value together, that it doesn't need to be that you are losing something for me to win something.

Robby Peralta 9:36

I I don't want to talk shit about IBM, but that's just not how it was there back in the day. Like software companies, like they want the they want the most amount of money for whatever they're giving, right? So do you agree with me there, by the way? That's my feeling at least.

Tine Anneberg 9:50

Well, uh, I would not generalize in this perspective because there is also the other side of it. And you know, when you are a stock listed company, which is exactly what you also saw in IBM, there's actually a lot of people on the procurement side who knows. Like, okay, are you either owned by a capital fund or are you stocklisted? What happens? Every quarter, every half year, you need to come up with the numbers, right? And these numbers need to look good. What happens? The salespeople are getting desperate. They need to close some deals, they need to create some top line. What happens? They can just squeeze down the price. This is a typical zero-sum strategy and it's used widely. And you also know how much all of us were working on the 31st of December, right? Last day of the year. Because these big corporations knew that's when you need to strike a deal with a stock listed company, at least when they have like, you know, that their numbers um are ending at that point.

Robby Peralta 10:55

Yeah, wow. So by being more upfront and having a more collaborative approach, actually could bet could have been better for IBM by not having to wait until the end of the Q4.

Tine Anneberg 11:04

Yeah, but but this has been a strategy from the procurement side, right? But uh what is also uh commonly known for a lot of software companies is that you know they're used to giving high discounts, which is usually because the only one variable where there is no potential to create more value is on price. So it's just binary, right? If you need to have more, I need to have less. So that that's how it is. It's a matter about negotiating on more variables. First of all, you need to identify these variables. Second, you need to capitalize those. So, what is the worth of having a better or worse security solution or number of years the contract is running? There will be plenty of variables that we are typically not negotiating on. When you have capitalized them, you also need to realize them. And in what I'm preaching with Smartnership, we believe in a more open, transparent, and collaborative approach. So saying what is actually the value of these variables? Because some of them might not have a high cost to you, but they have a big value to me, which is worth uncovering then, that there is actually an asymmetric value between your cost and my value or opposite around. And this is where we are actually creating better agreements. So I would absolutely recommend to look at more than just price. Of course, price is a parameter, it always is, but like more variables into the discussion.

Robby Peralta 12:43

I had a sales meeting just before this, right? And uh, you know, did our pitch. It went really well. Or I think it went really well. But I'm I'm realizing now that there are a lot of questions I probably skipped over and should have, you know, dove more into.

Tine Anneberg 12:56

So was this a negotiation meeting or was it like initial sales meeting?

Robby Peralta 13:00

Initial sales meeting.

Tine Anneberg 13:02

I differentiate also between like where we are in the process. Uh of course, initial sales meeting, it's extremely important how you ask questions. This is also very important when you're doing negotiations. So, like the questions that will open up the conversation, right? In this case, what would be because the negotiation is already starting now.

Robby Peralta 13:24

Yeah.

Tine Anneberg 13:24

It's starting when you're building the relationship with the client. Trust is a factor that is hugely impacting the result of a negotiation. We know that we are willing to pay up to 34% more when we are doing business with somebody that we are trusting, if it's a complex business. So trust has actually a value. We normally call it trust currency because there's money in trust. So what is important for you to know in this respect is not only what you might think is important. And I could imagine what you think is important is, of course, the price, as we have touched upon, uh, length of the contract, uh, the SLAs, if there needs to be any guarantees or anything uh related to that. So this you would be interested in. But what kind of question did you ask to understand what is important to them?

Robby Peralta 14:23

Yeah.

Tine Anneberg 14:24

This is the mindset that you need to go into it with. Like there's the things that is important for you, but you to get an A plus need to come out of this meeting understanding what is important to them. Also, what you might not have at all imagined on beforehand. So I can give you an example from this was a software deal that I was involved in. Um the client had put into the document that we should answer to that they would like 24-7 support. We didn't have that set up. It would be so expensive that we would for sure be out of this competition to win the contract. And it was an attendance process, so you know how the communication is, it's harder. And I asked them, yeah, you are asking for uh 24-7 support all year round. And they said, Yeah, it's super important for us when it's Easter and it's Christmas, then we don't have anybody uh to watch over it and monitor that everything is as it is. And I said, now you mentioned Easter and Christmas. Does it mean that it's only when it's Easter and Christmas that you have this issue? And they said, Yeah, yeah, it is, because we need to have it all year round. And on these specific uh dates, we are not possible to do it. I said, Okay, but that changes everything. Right now I'm making a price on doing it every single day in a year, and when you actually need it is at Easter and Christmas. So when you don't uncover this, is when we're also making bad contracts, right? Because you put a lot of price into the proposal and the client cannot understand why will this become so expensive? Because you had actually not understood the fundamentals of what they need, and they have maybe also not been able to communicate it.

Robby Peralta 16:09

I feel like I'm back global sales call again. You would be one of the you'd be a great teacher there. Uh you should you should go back. Um, but I'm thinking like, what should clients or my listeners who are hopefully clients of demonic or potential clients, what what should they be doing on their side to also prepare and also get the most out of um get the most out of their negotiations with their all the billions of vendors they have.

Tine Anneberg 16:33

So what I usually recommend is that when you go into negotiations, it's all about setting the frame around how do we want to negotiate this deal. Are we on the same page? Because it's also about choosing the right strategy. If I'm choosing to be collaborative and you are choosing to be zero sum oriented, then I will for sure lose. So you need to be sure that you are on the same page in terms of wanting to be collaborative in your approach. And that you and this is typically when the parties are important to each other. So, and I assume that the clients that you have are super important to you, and you're very important to them because you are delivering critical software, right? So it is important for the business. They might not realize it until they have some security incident, but then for sure they will remember, right? So, in terms of that, it is important that when they are sitting in the room to also say, okay, Robby, uh I'm interested in making a good deal for both of us. So I would introduce by saying, I'm here today to lower your risk, lower your cost, and increase uh the profits for you. Would you be interested in that? And you would probably say, Yeah, well, I'm interested. And on the other hand, I would say, but Robbie, would you be willing to do the same for me? I would like to do it in a transparent and open way. I have here listed the variables that are important to me. And then you have, like, as your preparation work already listed these variables. And they should also list their variables that you can actually have a talk about. Okay, what is important to each of us? Because when you have two qualified, trained negotiators, you're realizing absolutely the best deals. They know it's about finding a good solution, not about winning over the other.

Robby Peralta 18:15

Yeah, exactly. Promotes a long-term partnership, which I guess is uh probably the best way.

Tine Anneberg 18:21

Um Absolutely.

Robby Peralta 18:23

How does negotiation actually apply and not just a vendor uh procurement setting, but in a personal setting? Like uh if you were to apply some of the same or do you do you cover that part in your in your courses, like the negotiating with people and not just in like a business context?

Tine Anneberg 18:40

Uh yeah, so you could say I do not differentiate between uh people and business because all business is also people, right? End of the day, it's another human that you're sitting with. So what I'm covering is also emotional intelligence, behavioral economics, how are we thinking? How are we understanding? I usually make a little test in the beginning of a training asking everybody how many in here consider themselves rational. Usually everybody are raising their hand, right? And then we make a test, and then nobody are rational. So uh we believe something that is actually not true. Like we have another belief and then we are acting differently. And this is also what is happening when we are negotiating. So I cannot recall if I shared the study with you, but we have made a study across 35,000 negotiations, and this is negotiations where the parties could actually realize an agreement. In one third of the cases, the parties are leaving the table saying it's completely impossible to make a deal with Robbie. And you would go back to your manager and say it's completely impossible to make a deal with Tina. And the only thing that is hindering the two of us from making an agreement is the two of us and our competences as negotiators. And this applies both in private life and in business life. So it's a lot the same dynamics, like how do we actually understand human behavior? How are we asking questions? How are we using empathy? If you put me in a position, this could be business-wise, this could be private life. And it's something where I have no clue how I should fulfill what you're asking me to do. I simply don't have the possibility. If I then ask you, but Robbie, what would you do if you were in my shoes? How would you solve this? This forces you to think about okay, what would I actually do in her position? Instead of being focused on your own position, you then suddenly need to think about my position. And I in general also advise, as a rule, like the golden rule, don't ever ask for something that you would never accept yourself, which is a good quality check if you are actually asking for something that is reasonable. If I, on the other hand, uh asked you, would you then accept it? And I introduced by saying take a break whenever a negotiation that you are not prepared for is starting. Because when we are acting emotionally on these decisions, it's rarely what is giving the best resolved, right?

Robby Peralta 21:20

Yeah, absolutely.

Tine Anneberg 21:21

Because we can't be tempted if you if you are unfair in a negotiation, whether it's private or business, I suddenly want to also be unfair to you, right? To give you back.

Robby Peralta 21:31

Yeah.

Tine Anneberg 21:31

But this is not constructive for the solution.

Robby Peralta 21:34

No. Do you have Ukraine and Russia and the US? Um you never really have any insight into these like negotiations and what's actually going on. And as an outsider, I just say like it's just theater. Like they're they're not real negotiations. How do you look at geopolitical items that are going on in the world right now through your lens?

Tine Anneberg 21:56

Oh, it's very, very interesting these days. So I hear some people saying this is not even a negotiation. I disagree. I think it is a negotiation. And what we are seeing here is also like very hardcore zero sum of negotiations. We are seeing a lot of combated behaviors using threats, using hard language, not necessarily doing what you're saying that you want to do. And then another, which is a very effective tool, what we refer to as the anchoring effect. I don't know if you have heard about it, but anchoring means that you are placing an anchor at a very high or very low level. Let's imagine that I'm your client. You will propose a price, but before you even get to that, I say to you, Robbie, we only have $2 million to buy from. And you would probably have asked for $1 million, knowing that your minimum would be 3 million. What happens in the second that I say $2 million? Your mind immediately goes to like, I can go to three, but what do I do from there? If you're not really trained, you would immediately stop thinking about the four that you originally wanted to propose. And like your mind goes to your minimum. How do I cover the gap between the two that I mentioned and the three? And suddenly this is the area that we are negotiating in. And this is also what is happening, right? Whenever Trump is putting all of his statement forward, it forces uh Europe to think about what do we do? If he is no longer protecting us, what can we do? It doesn't matter if it will happen or not, because he already got the reaction that he wanted. So this is what is happening with the anchoring effect. Like it's a very strong mental tool to use.

Robby Peralta 23:53

So what is the counter of that anchoring? What should uh what should Mette Fredriksen have done?

Tine Anneberg 24:00

Yeah, so so it's a very hard uh situation, right? Because you heard me also in the beginning when they said, calm down, take it easy about Greenland. Uh because this is one strategy, and sometimes it's working, sometimes it's not working. And there's also a position in like who will be the first one to put the anchor. And in your context, you could say, when are you actually ready to put the anchor? So it has a positive effect on the negotiation when you are the first one putting the anchor. On the other hand, if you are not far enough in your negotiation to actually know where to put the anchor, it might also play you out of the negotiation. So it can be a very powerful tool, but it's also a tool where you really need to consider carefully uh when to use it.

Robby Peralta 24:49

Yeah, because it's very risky.

Tine Anneberg 24:52

Yeah. And what we also see these days, politically speaking, is not the finest kind of negotiations, right? This is really uh hardcore using leverage threats, zero-sum, combative-oriented behavior. And what you also see is that we have not yet seen great results out of it. Without this being me commenting on what Trump wants to uh achieve and what Putin wants to achieve, like how metaphorics should handle it, but saying, okay, how do we actually come to a solution? Instead of just fighting against each other. And usually showing pictures where there's soldiers in trenches. So when we have zero sum, you see, if you can imagine like two trenches towards each other, the soldiers are having guns pointing towards each other. This is what I compare to zero sum. When we are in smartness, I have like a round trench where the soldiers are together, and instead of pointing the guns at each other, they are pointing them outwards. So they are actually trying to achieve the goal together. And this is how we should think about it. Like, what is it that we want to achieve? Whether it's minerals or peace between countries, it needs to be the purpose and not the ego. So what is actually the great solution for us to come out with? And this has proven sometimes, without this being a gender discussion, to be even harder when we only have men in the negotiation rooms.

Robby Peralta 26:33

Due to ego.

Tine Anneberg 26:36

Exactly.

Robby Peralta 26:37

You said Does not surprise me whatsoever. Yeah.

Tine Anneberg 26:41

No, so there's actually studies made about peace negotiations that they are significantly improving when there is also women present. And I have not yet seen any women from the pictures that I've seen from the peace negotiations. I wouldn't put it to men and women, but I would put it to like feminine and masculine traits. Yeah.

Robby Peralta 27:01

I really love that example though, where you have the trenches aiming against each other and aiming outwards. That's like very uh easy to understand what you're trying to accomplish at that uh great example. Um I usually ask my uh my guests like how is AI gonna change your industry or like your specific problem moving forward? What do you think of when I ask you that question? Like, how is technology influencing your industry?

Tine Anneberg 27:22

Yeah, so uh absolutely, absolutely great question, uh Robby. AI is definitely gonna change it. It's very clear that negotiators that are using AI will outperform negotiators that are not using AI. So my partner, Kel Jensen, who is running the Smart Negotiation, did together with WorldCommerce and Contracting a big study last year about AI and negotiations, where it was negotiations just peer-to-peer without any AI, where one side had AI, the other didn't, and where both sides were using AI. And the results were speaking very clear that where AI was used on both sides were the most uh successful. So they came out with the best result and they were the fastest to reach an agreement. But I also have to admit that it was actually quite hard using it during the negotiation, but as a preparation tool and as a debriefing tool, it's excellent.

Robby Peralta 28:24

Yeah.

Tine Anneberg 28:24

The danger is like with everything on AI, if you're not a skilled negotiator yourself, it can also lead you in very wrong directions. So you need to understand how to run the negotiation process yourself first. And also to call the right decisions during your negotiation. But as a preparation tool, making the right prompts, it can be a fantastic assistance to you.

Robby Peralta 28:53

In your course, what would I learn and what would listeners learn by going through your course?

Tine Anneberg 28:57

You will learn like how to handle complex deals. You will know how to use the right techniques and strategies no matter what kind of negotiation you are facing. And then I'm very focused on commercial negotiation. So, how are we making more profitable agreements, more sustainable agreements in terms of like keeping in good relationship? So you will also learn what we have covered here today about psychological aspects, how do you use questioning techniques, how do you use emotional intelligence in terms of negotiations, because it's part of it is a hardcore skill and part of it is a soft skill, right? How do you actually handle people? And this is what we are training. So, how I'm doing it is that you will get your hands into it, you will work on it, I will record it on video and give you live feedback afterwards. So I will stop the video, I will explain what is happening, like from negotiation perspective, from body language, communication, and like you will learn how to how you should have done ideally. Um yeah.

Robby Peralta 30:04

Awesome. Um for people that aren't maybe in that role, if I'm just working in security and I just want to be better at uh getting more relationships internally. Uh, is negotiation a part of that? Or do you think that's uh no point to actually dive into negotiation unless you're in procurement or or if you're a salesperson?

Tine Anneberg 30:24

I definitely think that there's a reason to dive into it. So it's also recognized as the fifth most important skill to master, no matter what kind of position you're in, no matter what kind of industry. So it's something where you will benefit way more in life, I would say, when you are actually able to master negotiations. Because it's also a matter of understanding people. And it's about understanding how to create the best possible outcomes for you and for your counterpart. So I also have plenty of people within project management, client support. So there's a lot of roles where you are exposed to negotiation and also to like how to handle communication in the best possible way. A lot of conflicts are arising out of failed negotiations.

Robby Peralta 31:13

Right. Do you have any like books or podcasts or things that you recommend just for people to sort of get in that mind frame?

Tine Anneberg 31:22

The organization that I'm representing has released both a book last year and the year before, and will also release one this year. So it's like three books in a row. The first one called Negotiation Essentials, which gives like very good framework around what is important in negotiations. It's a really small, handy book which gives you good high-level introduction to what is a good negotiator, uh, how do you do, what should you be doing. And when you are like wanting it more as a working tool, there is a book called 100 uh three steps, which is a bit more like a toolbox. You look into body language or like how to create asymmetric value. So it's a bit more like a cookbook. Uh, you go into them and you find the topic you can also read all the bit, but it's very, you know, uh practical. And then the newest book that will come uh later this year, which is The Smart Negotiator, which is actually about AI and negotiations.

Robby Peralta 32:23

Cool. Awesome. So if you had one last final word that you're gonna say to the listeners today, what would that be?

Tine Anneberg 32:29

I guess I would say you are for sure negotiating every single day. And negotiation should be like on top of your mind to master this skill. I don't believe in born negotiators. It's something that you need to train and work on, and you need to work hard on it for your own success and for the success of the people around you.

Robby Peralta 32:51

Well said, Tine. Thank you so much for your time. And I I was gonna say I was gonna say I'm looking forward to negotiating with you in the future, but uh, I don't want to negotiate against you. I want to negotiate with you.

Tine Anneberg 33:02

Exactly. Negotiating with me. It would be a pleasure. And I'm happy to come to Norway.

Robby Peralta 33:09

Until then, take care. Thank you.

Tine Anneberg 33:11

You too.

Robby Peralta 33:12

Bye. Well, that's all for today, folks. Thank you for tuning in to the mnemonic security podcast. If you have any concepts or ideas that you'd like us to discuss on future episodes, please feel free to hit me up on LinkedIn or to send us a mail to podcast at mnemonic.no. Thank you for listening. We'll see you next time.