>> Narrator: The Wynn resort in Las Vegas It's theCUBE. Covering .NEXT conference 2016 brought to you by Nutanix. Now here are your hosts, Dave Vellante and Stu Miniman. >> Welcome back everybody. Professor Deepak Malhotra here. He's with the Harvard Business school and author of Negotiating the Impossible: How to Break Deadlocks and Resolve Ugly Conflicts. Parenthetical without money or muscle end parenthetical. Deepak, welcome to theCUBE, great to see you. Thanks for having me here. Happy to be here. So what do you do in here? Well among the other things that I do with my time, I happen to be on the board of advisors for Nutanix. And I've been working with Nutanix for the last, a little over two years on various aspects of negotiation, deal making, training, etcetera. And so I attend a few of their conferences a few of the sessions. I talk at a few of their conferences as well. So that's what brings me here. >> So it's somewhat odd, right to have a negotiations expert come and talk to customers about negotiations. But I guess the angle would be if you're stuck in sort of a legacy world. You need to negotiate your way out is that. >> Well there's a couple of things going on there, right. So under one hand I think it shows a little bit about Nutanix's perspective. That it isn't a zero sum game. It's not we're going to train the Nutanix people so they can get an advantage over customers. I think the company really is focused on creating as much value as possible for the end user. And when you take that mind set it actually makes sense to be inclusive. And bring everybody in the ecosystem into the room. So it's not just, "Hey Professor Malhotra can you train our sales people?" It's you know we want to share your ideas with everybody. And I think that's really a good sign when a company is willing to do that. The second thing is as you just eluded to, a lot of the folks that are coming here and a lot of the people that are customers were thinking about moving in the direction of Nutanix. Or have bought into the idea. They still may need to sell it internally. They still may need to negotiate internally how do we change our organization or how do we move our organization from what its been doing to what it wants to be doing or it should be doing. And they're also many of the same skills can be useful. So why not educate them about some of the things they might not have thought about yet. >> So let's talk about your book a little bit. The premise. I guess I told you I haven't read it yet but I do have it. In the book you talked about a three thousand year old Treaty of Kadesh. And things that we can learn from three thousand years ago. Give us the basics and the premise. >> So this was. The books starts out with this story of the Treaty of Kadesh which I don't think is something that many business books start out talking about. Certainly, I hadn't seen it before I started researching it. And one of the interesting thing that happens is that there's a lesson embedded in the story of the Treaty of Kadesh that I think is as relevant today in negotiations of just about every kind in the business world and outside that, that's worth telling. And the basic story goes as follows. The Treaty of Kadesh is the most ancient peace treaty known to man kind. As far as we know it's as old a peace treaty as we have evidence of. And it was between the Egyptians and the Hittites. And these two parties were at war. And at some point they must of decided enough of this we need to put an end to this. There's too many cost internally and externally. Too many other threats. We need to find a way to resolve this kind of conflict. What often happens in these situations is that nobody wants to look weak. Nobody wants to be the one asking for peace because that might just embolden the other side. So what ends up happening is that somehow they overcome these hesitations. They reach this agreement. Now what's interesting is that we actually have access to both language's version of the treaty. So we have the Arcadian and the hieroglyphics. The hieroglyphics being the Egyptian version and the Arcadian being the one from the Hittites. And if you were to read both of these or if you were to first learn how to read these and then to read both of these. What you find is as you'd expect, they have a lot of the kinds of things that you would normally expect in a peace treaty. You know exchanging prisoners of war. Mutual assistance packs and things like this. And they're basically identical as they should be because they're the same peace treaty. But there is one difference. When you compare the two peace treaties the one difference that sort of stands out is that in the Egyptian version it says it's the Hittites who came asking for peace. And in the Hittite version it says it's the Egyptians who came asking for peace. And what it goes to show I think is that no matter how far back you go this need for every side to declare victory at the end of a negotiation at the end of a conflict. That need for every side to declare victory is as old as human beings themselves. When you understand that. I think it actually changes the way in which you try and negotiate these deals. How you think about what stands in the way of getting the deal done. Sometimes it's not the substance of the deal. You're already proposing something that's good enough. You're already have something on the table that's rich enough, valuable enough. They should say yes. But they might be other reasons they can't say yes. For example they might lose face. Or they may look bad. And when you recognize that I think you come at it a different way. >> Looking at your research. One of things you focus on is trust. And one of the challenges we have in technology is you know, people are entrenched with the way they do things. They're not likely to you know be first or go there. We've now got thousands of people using Nutanix but you know. How does Nutanix or others that are new get a proper seat at the table and be able to be part of a discussion that you know when you've got (mumbles) in there and the old ways of doing things. >> You know the way I see it. You have to get the economics right and you have to get the psychology right. The economics is you have to have a good product. It needs to be price appropriate. You need to be bringing value to the table. And be pricing based on that value proposition. So that's sort of basic business stuff. The problem is as I mentioned earlier. You may have the right product. You may have something that people, quote should be using. It is better than the alternative. But they might be these psychological hurdles that you need to get over. A prominent one being what you just eluded to which is when nobody else is doing it, nobody feels the urgency to do it. If you get the sense that you know there's not a mass of folks running after your product. They sort of feel like, well maybe that means something. Maybe it means it's not a big deal. Maybe it means it's not so urgent. Maybe it's not that good of a product. So the early hurdles that companies like these face are really big ones. You don't have a long list of customers that you can use to prove to other people that this is the way you should be going. There's always a risk that somebodies going to take a bet on this and if something goes wrong. It's sort of the old nobody lost their job buying IBM kind of mentality. And so as a negotiator and as a company that's starting out as an early stage company, especially in technology where you're doing something disruptive, you need to start thinking a little bit about how do we get them over that. How do we get them to start understanding that you know what. Here is a list of customers that are using it. And here's the testimonials, etcetera. You think about the pricing. The most common thing that happens when you walk into the room with a new disruptive technology is that the person on the other side says, "Are you crazy? "You're charging ten times what your competitor is charging. "You know you're sitting here telling me "to pay x. "If I do nothing I have to pay zero." Alright. "Nobody pays this kind of money for this kind of thing." That is a very common response sales people get when they are in an environment like this. And one of the things I advise people to do in that situation. Is to make sure they don't make the worst mistake a sales person can make in a moment where somebody says, "You're price is ten x what everybody else "is charging. "Nobody pays this much." The worst mistake a sales person can make is to apologize for the price being too high. Now they don't always do it by saying, "Oh my god I'm so sorry." But they seem apologetic. You know they're very quick to say, "Oh yeah I know it's high." >> "Let's see if we can do something." >> "I'm sure we can work something out. "But yeah you know I know it's a lot of money." The moment you go in that direction what you're basically doing is you're giving the other side a license to haggle with you. 'Cause what you're telling them is even you don't think the price is appropriate. A better response in a situation like this is for the sales person to say, "Listen I think the question you're asking me is, "how is it that despite our price being ten x "what some other people are charging, "we have a long list of people wanting to buy our product. "What kind of value must we be bringing to the table "for so many people wanting to buy this product? "Now I'm happy to talk about that value "because at the end of the day we all know nobody's "going to pay more for something than it's worth. "Nobody would do that, you're not going to do that. "So why don't we figure out what it's worth "and then you can make the right decision." And what you're doing there is you're shifting the conversion from price to value. You're shifting the frame of this conversation from how much am I having to pay and what's the cost to me to what is the value proposition. >> Stu's laughing. I mean your price is too high is the best sales objection ever. Right, you love to hear that as a sales person. Much better than your product sucks. (chuckles) Now the answer of this question is probably it depends. But when you advise your clients and your friends. When I go into a negotiation am I trying to get the best deal or am I trying to find common ground and get a win-win? >> Actually I don't think it depends. I think. (exhales loudly) Well I would. I would articulate the question slightly differently. Because in my experience it is possible to get a great deal and a great relationship. It's also possible to get neither. And so what you're trying to do is you're trying to optimize on both. What's interesting is that very often we assume it's a zero sum game enough. That the only way for me to get a good deal is for me to sacrifice the relationship in some way. That's not how it works in most sort of richer context, more complicated deal scenarios. Because what people evaluate when they walk away from the table isn't just did I get a quote, good economic deal. When people think back and say, "Do I want to work with this person again? "Do I like this person? "Did I get a good deal?" Often what they're thinking about is not so much of the substance of what they got. What's in the agreement. But the process they went through. For example. You know did the negotiation go as long as should of or did it drag on too long or end too abruptly? Was my voice heard? Did both sides move away from their opening positions? Did the person haggle with me on every little thing, even though they knew and I knew it's not a big deal to them and is a big deal to me? Those sort of process elements if you navigate the process more effectively you can often get to a point where you get the deal that you think is right for you and you get a relationship that both sides can walk away feeling good about. And from my perspective you know what does depend in, on it. It depends on the situation is what kind of feeling do you want them to have walking away. You don't always need to have them love you. But at the very least they should respect you. Right? And I think it's perfectly fair even in a very contentious negotiation to keep as one of your objectives. You know when the deal ends I want them to be able to walk away saying, "You know what, I maybe didn't agree with this person. "It didn't go exactly the way I wanted it to go. "But you know I can respect this person "for the way they handled the situation. "And if I were them I hope I would do it the same way." >> So I wonder. If I look at the society as a whole, it seems as if we kind of retreated to our sides and I find that lots of people aren't open for debate. They're intractable in what's going on. How do I get beyond that? >> How do we change society, is that the question? >> Stu: Yeah. >> How much time do we have? >> Am I wrong. (laughs) Is it only ten percent of the people that are intractable or are most people reasonable? >> So I think what happens is, there's a few interesting dynamics. Now I wouldn't have the precise numbers. What I can say is that it is certainly the case that even a minority of people being in those entrenched positions, they get a lot more of the media. They get a lot more of the attention. They tend to be louder, etcetera. And they can often drive our sense of what's actually happening. And it can drive the narrative. Now that doesn't mean there aren't real differences. Like strong differences. You know what's interesting is if you take people that are not on the extremes. You take the moderates. Sometimes the way in which we engage with people on the other side of the argument pushes them to be more extreme. See when we ourselves show up, thinking of ourselves as relatively moderate, enlightened people who have a set of point of view. But you know what I'm very open to other peoples perspective. But then we get into the conversation. And we end up challenging people in a way they don't find particularly useful. We start poking holes. We start making it's about a winning and a losing and a debate. And there's going to be at the end of the day points, score based on who wins the argument. Then people end up getting more and more entrenched. Even in ways that they otherwise wouldn't be. So the question is can we get to a point where at least those people on each side. And I find on any political issue I can find people on both sides that I think are trying to do the right thing and have perhaps limited information but they're trying to do the best they can with that information. They have good intentions and they're reasonably smart people. In my experience, you don't need two people one of whom is either evil, or crazy, or irrational to have conflict. You just need two people. You see good, smart, reasonably well-intentioned people getting into conflict all the time. Which then becomes the question of this book, which is how do we manage those situations? How do we get people to back away from these entrenched positions? How do we overcome deadlock that allows both sides to walk away feeling a little bit better about the situation? >> So examples are instructive. So let's talk about some great negotiators. Who are they? Let's start with sports. Scott Boras. You know you think of him as an agent. I mean grinding the teams, the general managers. Is he a good negotiator? >> So I don't follow many of the sports deal making and negotiations enough to be able to really elaborate on who would be a good negotiator in sports. But I can say this. That in a context where it's really just about things like price. Just about the money. And a sports agent often is, it's not really all about that but it is the most (mumbles). It is the most (mumbles) issue. You're going to go at it a certain way. And it would be similar to a negotiation in the business world where all you care about is price. You're buying or selling a house. You're buying or selling a car. And from my perspective there are people who are very good at haggling. There's people who can hold their cards to the chest and they can be aggressive when they need to be. And they can be persuasive in certain things. But when you look at negotiation as a whole. I think of haggling as a very, very thing slice of what negotiation is about. That's sort of the easy stuff. You may not be naturally good at it. But what it takes to be good at it is not so hard. We teach that on sort of day one of class. Day one of class is the price haggle. It's the you know there's two sides and you want opposite things. And how do you frame it in the right way and what kind of concession rate should you make or not make. How do you justify your proposal etcetera. We cover that on day one. And the problem is there is in our owner president program where I teach there's 15 more days left. In our MBA program there's like 27 more days left. And there the question becomes how do we get past just being a good haggler. Somebody who can just put fist to the table and say take it or leave it. And all that kind of stuff. Which will work in certain defined contexts but will not carry over to more important deals. >> You're right. That is a narrow context in sports because the agent has all the leverage of the players performed. How 'about Donald Trump? He's negotiating isn't he when he says Mexico's going to build the wall. He wrote the book, Art of the Deal. >> He did write that book. Yeah we co-authored that book actually. So is he negotiating when he says that. In the broader sense of the word negotiation which is basically how do we interact with other human beings who see things differently than we do. He absolutely is negotiating. If the question then becomes is he doing it effectively. My view would be that, that he is not. (chuckles) And I think if you actually were to look at the evidence and then stack it up. I think you would find that he's not a very effective negotiator. >> We don't have to go there. That's good. >> Deepak: That's okay I don't mind. >> We'll leave it there. But how 'about (mumbles), right. I mean you've had like an epic negotiation to bring those two. Is that an example? I mean even though it ended in tragedy on both sides is that an example of a successful negotiation? >> So it's an example of a, it is an example of a successful negotiation. And I think even more instructively it's an example of one of the biggest barriers in conflicts like this. The hardest part is often to bring your own side with you. And that is a challenge for leadership. It's not just in the bubble of negotiation. This is about leadership generally. To be able to have someone who can not only personally be willing to do the kinds of things that make the kinds of sacrifices but to be able to move a group of folks who for years, sometimes decades or centuries have been thinking differently. And to your point what often happens with these peace makers is you know the risk is you do one of these things and you're going to get killed. And usually you get killed by your own side. And exactly in the context you're talking about that's usually what happens. And so here what we see is not only an impressive set of events that led to negotiation and the negotiation itself but you see a certain amount of courage that leaders don't often enough show. And again some leaders aren't placed well. They don't have the support going in. Or they just don't have the ability to do it. But even those that do. The question is are you willing to expend the social and political capital necessary and put yourself on the line to be able to do something that you think is worth doing? >> I said I wasn't going to ask you but I am going to ask you 'cause your answer is so good. The Iran Deal. Good deal, not a good deal? You see to your point about getting killed by your own side. >> So I was not involved with the Iran deal. I do work with sometimes governments negotiating difficult conflicts and such. But I was not in any way involved with the Iran deal. What I can say is, based on the folks I've talk to leading up to the Iran deal and then after the Iran deal. It is my sense looking at what was accomplished that is actually a phenomenal deal for when it was done. Could a better deal have been done ten years earlier? Yes. One of the hardest things to negotiate against in the real world is the status quo. It's a lot easier to negotiate don't create center (mumbles) when there are none than it is to negotiate remove the center (mumbles) you have already created. So if you could go back in time which I have not met anybody yet who's able to do effectively it would be possible to get a better deal. Where things were last year and the year before I can say that pretty much everybody you talk to before the deal was announced on either side of the political spectrum, Republicans, Democrats, left, right, Hawkish, Dovish, you name it. Nobody would of expected a deal this good for the American side at the time. Now you may still not like it. You may be against any deal and that's okay. You can certainly have that perspective but if you're going to get a deal in this environment and what was being said leading up to this. I think both sides were pretty surprised and I would even say impressed. Until it came time to start talking about it publicly at which point of course you have to go back to your narrative. So you know again, I had nothing to do with it. But when you look at it, it surprised most people in terms of what it came out to be. >> So what are you working on? Next projects? Things that are exciting you these days. >> So I have sort of three areas where my attention is going. One is on ethnic conflict and armed conflict. As I was eluding to earlier I do some work with governments that are dealing with insurgency and conflict. And looking at what we know and what do we not know about resolving these kind of things. And how we can maybe push forward in that direction. So that's an area of advisory work but also research that I'm doing. Second area is I'm working with doctors. Thinking about how they can be more effective in prescribing a course of action to patients. How they can have more effective kind of conversations when a patient comes in and has a strong set of beliefs about what they should and shouldn't do. Or they're resistant to change. Or they're unwilling to do things. How can you be more effective in the time you spend with patients. And I do work on gun violence. And we've been looking at mass shootings. And we just had some research that got a lot of coverage unfortunately because of the tragedy that took place in Orlando not so long ago. Looking at whether mass shootings really have any impact on gun laws. And we find some interesting results there. So in a sense I'm sort of looking at insurgency and dealing with cancer patients and then gun violence. >> Interesting topics. >> Deepak: All of the darkest stuff we can find. >> It's a tragic but timely. And then there's another sequence there. Do gun laws have an impact on mass shooting. >> Deepak: And that's basically the next set of projects. >> Excellent. Well thank you very much. (mumbles) >> Deepak: It was great. >> Fantastic. >> Deepak: Absolutely. >> Alright keep right there everybody. Stu and I will be back with our next guest. We're live this is theCUBE SiliconANGLE's flagship production from .NEXT in Vegas. Be right back.