Ken Hegan Negotiates Like a Fiend
Article: Ace Negotiator
Writer: Ken Hegan
Published: Financial Post Business magazine
Nominated: National Magazine Award (business category)
I'm sweating like a fiend as I descend into the bowels of the University of British Columbia's Sauder School of Business.
Sauder's downtown campus is a stuffy underground fortress that's built to survive a full-scale nuclear attack. I selected the Sauder school because it sounds like a terrorist training camp for ruthless Saudi billionaires. Which is perfect, because I'm here to learn how to negotiate like a bastard.

I'm one of 24 students signed up for a two-day Advanced Negotiation Skills Workshop. The workshop is taught by a rosy-cheeked whippet named Charles Holmes, and Dr. Tom Knight, a burly professor who moonlights as a labour negotiator and looks like he could rip your arms off with his smile.
My classmates are bankers, hotel execs, and government housing drones. The one black sheep is a jet-lagged Bob Hope look-alike who claims he's a "diamond merchant who negotiates with African warlords and mercenaries."
Me, I'm desperately hoping to get my negotiating mojo back.
The past few years have been a negotiating nightmare. I can't seem to haggle my way out of a wet paper bag and people have talked me into the Dumbest Deals in History.
The sad part is that I used to be a helluva good negotiator. Ten years ago, I even convinced my landlord to slash my rent by $150. But after moving into my current house, on the corner of Crackhead Street and Stabbing Victim Lane in Vancouver, I realized my negotiating skills had shrivelled and died.
Our nice new landlady ("Why certainly you can have a dog!") swindled me on the utilities. Our hydro bills were so ludicrously high, it looked like we'd cooked every meal with a dozen hair dryers. Turns out we supplied free gas and electricity to the neighbours above, below, beside us, plus the garage out back, where some jackass runs an illegal motorbike repair shop.
When I complained to the landlady, she threatened to evict us because we'd adopted a dog without her written consent. Fearful of being evicted, I've been paying for my neighbours' electricity for three years. Total cost: $5,400. You can imagine how thrilled I am when my neighbours leave their lights on during their month-long jaunts to Cuba.
But last week, a Toronto-based Australian (who we'll call Roger) phoned to give me a chance at negotiating redemption. He was offering me a dream job: series producer/head writer for a new documentary series on how TV is warping our lives. Roger liked my Rolling Stone articles so he woke me up at 7 a.m. and offered me $12,000 to write four scripts. "If the network greenlights the series, then you'll move to Toronto and produce it," he said.
Too tired to haggle, I mumbled, "I don't know who you are, but this sounds great."
"Welcome aboard, mate! Just don't fuck it up. What's your salary expectation for the series?"
"Lemme mull it over," I blurted. Then I hung up and quickly enrolled in this workshop. I knew I'd need professional help to out-negotiate an Australian who uses sleep deprivation as a bargaining tactic.
To start the class, Tom asks us to give our reasons for enrolling. I tell the group about Roger's job offer and how I'm hoping for $90,000 a year plus moving expenses to Toronto. "Oh, and I'm a freelance writer who works at home in my pajama bottoms, so this'll be a humongous jump in responsibility, clothing, and salary. Usually I make about 37,000 bones a year, plus two free drinks whenever I host the local film night."
My classmates describe their impending negotiations, and then Tom asks for our BATNA, which stands for 'Best Alternative to a Negotiated Agreement'. This is a backup plan, in case we don't come to terms with whatever demons we're butting heads with. So I say my BATNA is "to apply for jobs with Roger's competitors (that'll teach him)."
Charles asks, "What's the most challenging aspect of this negotiation for you?"
I say: "My wife badly wants to move to Toronto. Plus it's such a fun opportunity, I need to control my boneheaded urge to say 'I'll do the show for nothing!'."
Then Tom and Charles launch into a tag-team PowerPoint extravaganza. They're so smooth handing off the PowerPoint remote, I bet they practice during their morning carpool. Here are their 'Nine Effective Negotiating Behaviours':
• Proposing a new idea
• Building on someone's idea
• Supporting
• Disagreeing
• Testing Understanding
• Seeking Information
• Giving Information
• Summarizing
• Bringing a party into the negotiation
I imagine that a typical negotiation might sound like this:
"I propose we start by outlining the delivery schedule for your Kalashnikovs, Vladimir"...."In summary, Muammar, you agree to shave 5 percent off the sticker price of your land mines and provide a service contract for two years"...."We have 10 minutes to complete this arms deal, King Mswati III."
Tom and Charles taught two negotiating tactics to avoid: Shutting Out ("You're not tall enough to sit at the big boys' table, Kim Jong") and Attacking ("How typical of you to suggest that, Pol Pot.")
At lunch, I email Roger and propose that he send an offer to my entertainment lawyer, Kim. I figure once Roger realizes I've enlisted a kick-ass lawyer, he won't try to low-ball me.
After lunch, Tom and Charles turn me into a travelling leather salesman. I'm supposed to negotiate a raise, even though I've screwed the pooch on all my sales targets. So my 'boss' and I start by lying our asses off. He says he loves having me in the company. And I say I love selling leather shit. Then I blame the crappy sales results on my predecessor, so my pushover boss hands me a 5% raise and a rusty Honda!
My classmates are all super-jealous about my Honda. Bob Hope glares at me, as if I'm hiding blood diamonds under my tongue. But I don't care, because my negotiating mojo is back!
On the commute home, I practice negotiating with the bus driver. He opens with a $2.25 offer.
Me: "Mr. Driver, I think we'll find a win-win transit solution. I'll make a wonderful addition to your clientele. I'm skinny so I don't take up much room and I stand well behind the red line -- "
Him: "$2.25 or you're walking."
Me: "Now, considering your nearest stop is over a block from my house, I think $1.50 is more than reasonable."
Him: $2.25 or get off.
Me: "I don't think that idea will work, sir. Tell you what. Let's press pause on price and --"
Him: "You can either walk or fall down those stairs. What's it gonna be?"
Me: "Interesting. Building on that, why don't we stay in a creative place -- "
Irate passenger 1: "Just pay it!
Irate passenger 2: "Get off, loser!"

Eventually we came to an amicable solution and I walked home to improve my cardiovascular endurance. Which is perfect, because I need to be in top shape for my weekly garbage negotiation with my wife. In the 165 weeks that we've lived in Crazy Lady's house, I have dragged the garbage to the alley 162 times.
Wife: "Hi baby, how was your negotiating class?"
Me: "I scored a 5% raise and a used Honda! (We high five.) Say, did you know it's garbage day tomorrow?"
Wife: "Cool, because your dog just puked on the DVD remote."
Me: "My dog?"
Wife: "When he's good, he's mine, when he's bad, he's yours."
The negotiation is on! She sweetly says she's too busy to clean the vomit because she's cooking me a delicious chili. Then she gives me a spoonful of chili to taste - a clever negotiating ploy because, according to Tom, skilled negotiators start negotiations by "creating value for the other side while claiming value for yourself." Her chili represents 'hours of labour' (real or perceived) and gives me a reward to anticipate while I'm scooping up the greasy mound of kibble.
So I counter by saying her chili tastes "perfect" and requires no further attention. Translation: "You are free to clean the dog-yak off the remote." I add that, after she drags the garbage to the alley, we should talk about her opening a restaurant because she's such "a fast and brilliant chef." Touché!
After a flurry of haggling, she grudgingly agrees to mop up 30% of the vomit, if my 70% included the tough-to-get cracks between the buttons. Success! Sort of!
My final day at the negotiating workshop proves extremely eventful. First of all, Bob Hope disappeared overnight in what must have been a diamond negotiation gone horribly awry. Then my lawyer sends me this cryptic text-message:
!
-- and forwards this offer from Roger:
Kim,
What we have currently budgeted for Series Producer is $2600/week for 40 weeks. The typical series producer rate is between 2000-2500K/week. Ken has agreed to relocate at his own expense.
Let me know if this is acceptable to Ken.
Roger
"Holy crap!" I can't believe it. I jump up, spin around, and pump my fist as if I'm punching an invisible dwarf in the head.
I slip out of the class to phone Kim. "This is fantastic," I say, "way better than I dreamed of. I was worried Roger would low-ball me with 800 a week and a bag of peanuts. But $2600 a week is $104,000 over 40 weeks. This is Slay-All-My-Debts and Buy-An-Island-Cabin good!"
"How should I respond?" asks Kim.
"Ask for more!"
"Um, it's more than you dreamed of, Ken. Even I'm surprised. So why ask for more?"
"To be sporting. Why not? He might go to $3000."
Kim sighs.
"His offer's higher than average. Sure, top producers make $5,000 a week. But this is your first trip up river, Ken. I can ask for more, but you'll have to give me some rationale to back it up."

I promise to call Kim back, then I find the Writer's Guild of Canada (WGC) agreement. Their minimum: $5,752 for writing a 30-minute documentary script - a rate that many cash-strapped Canadian TV companies refuse to pay over an entire season.
But wait: since I'd be Series Producer and Head Writer, that's two jobs in one. I'll be scribbling 13 scripts while managing a team of researchers, directors, and minions. My notes to Kim:
13 scripts X $5,752 = $74,776 in WGC fees
Roger's offer ($104,000) minus $74,776 = $29,224 for producing. Divided by 40 weeks = $730.60/week for Series Producer - well below industry standard of $2,000-2500/week.
Kim replies, "OK, I'll send this on and counter with $3,000 per week. But he may balk on price, so this is a good time to ask for extras. Want flights home?"
"Sure! Make it $3,000 per week plus two roundtrip flights to Vancouver. Plus a 5% raise if there's a second season and I'll buy my own used Honda."
Excited, I head back to class for the final mock negotiation. This time I'm a talent agent for aging opera star Sally Soprano. My team is negotiating with two opera house flunkies who are offering Sally the last-minute lead role in Norma. Apparently her young nemesis, Renata Risingstar, has caught syphilis or something and won't get her ass out of bed.
Norma opens in just three weeks and I smell fear in the water. But Sally hasn't had a lead in five years, and Norma could lead to a lucrative TV special. The pressure is on. Tom starts videotaping, but then my partner and I waste our ten minutes playing rope-a-dope. I'm totally distracted by my own lucrative TV offer. Why should I care about Sally's swan song, when my own career is nervously waiting in the wings?
Ten minutes later, Tom and Charles play the video back for my classmates to laugh at. Total catastrophe. Both sides took turns praising Sally's waning skills, but nobody wanted to bring up $$$. I cringe as I watch myself raving and blathering like a maniac. It looks like I have a crush on dear old Sally, instead of a financial stake in her getting the gig and showing up sober.
Tom and Charles finish the workshop with:
'Top Ten Things to Remember in Negotiations'
1. You can never be "over-prepared!"
2. Seek to collaborate, be prepared to compete.
3. Be clear about your own needs and the needs of the other party that you can satisfy.
4. Use opening statements to get clarity on both content and the process.
5. Be clear on the purpose of questions and prepare effective ones.
6. Shut up, LISTEN, don't interrupt, and ask more questions!
7. Do not respond immediately to proposals - especially out of emotion!
8. Seek to be persuasive from the other party's perspective.
9. Summarize, paraphrase and feedback to ensure agreement.
10. Neither rush nor delay unnecessarily in closing the deal.
Three days later, Roger emails back:
Kim,
We stand firm at $2600 a week. Ken has never produced a factual series before and we feel this is more then generous.
We agree to two return economy airfares for Ken (Toronto-Vancouver).
No second season guarantee - for any of us.
Regards,
Roger
Aha, so Roger called my bluff.
As Leonard Cohen said, "It's closing time." I suck a deep breath, then I call my lawyer and say, "Sweet, tell Roger I'm in. When the network greenlights the gig, I'll prove my worth at 2600K/week. We can re-open the negotiations after the first season's gone well."
That night, my wife and I celebrate by guzzling champagne and searching Craigslist for movers and Toronto apartments. Just as my wife finds the perfect place at College and Bathurst, I pick up the phone and call the Crazy Landlady.
"Is this about the electricity again?" she hollers. "You won't find anywhere else that'll let you have a dog."
"Balls!" I say, "We've found seven condos in Toronto that welcome pets. And they're all cheaper and cleaner than your dump. So as Nelson Mandela famously said, 'See ya, and I wouldn't want to be ya'."
-30-
Ken Hegan has won three National Magazine Awards for Best Humour Article. His last article for Business investigated the collapse of an ice hotel in sunny Kamloops, BC.
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