Effective Negotiation: The Compatibility Principle

National-Louis University Professor Dr. Michael Benoliel, author of Done Deal: Insights from Interviews with the World’s Best Negotiators, describes the compatibility principle--a strategy used by master negotiators.

In the late 1970s, Robert Johnson was a Washington lobbyist for the cable industry trade association. At that time, African-Americans had a lot of buying power, but no TV outlet. Examining the programming offered on the cable system in 1979, Johnson quickly realized that filling the gap – offering a cable channel devoted to African-Americans – had tremendous business potential.  To become a cable programmer, Johnson needed money, which he didn’t have. But he knew people with money. One of them was John Malone, “the King of Cable,” whom Johnson knew through industry meetings.

Today Johnson says, “The biggest negotiation I did in business was to convince John Malone to invest in my idea, in creating Black Entertainment Television (BET).” To convince Malone, Johnson applied the compatibility principle, which is appealing to the things that Johnson felt were important to Malone as well as to himself.  “I knew Malone and what he believed in,” Johnson says. “Malone, for example, believed in entrepreneurial initiatives and in individuals helping themselves and relying on the government to help them. And so everything that I talked about with him was designed to hit these points. I had to convince him that I shared his value system in a way that he would come into this deal."

 When Johnson was ready to make the pitch, he flew to Denver to meet with Malone and present his business plan. “How much money do you need?” Malone asked him. “It would take $500,000 to get it going,” Johnson replied.

At that time Malone was interested not only in owning the cable wires (hardware) but also in owning the programming (the software).  “I’ll buy 20 percent of your company.…and I’ll loan you the rest,”  Malone offered.  Johnson said yes and a one-page agreement was drawn up immediately. A few moments later, Johnson got a check for $500,000. The deal, which took less than one hour to put together, became a great financial success. Twenty-two years later, BET was sold to Viacom International for more than two billion dollars. 

The compatibility principle, which conveys the concept that “we are similar,” was used in a different way and under different circumstances by Armand Hammer. In the mid-1960s, Hammer, the founder and former CEO of Occidental Petroleum, applied the principle when he made his first bid for oil concession from Libya. To win the competitive bid, Hammer presented his bid in Arabic, written on a sheepskin parchment, rolled up, and tied with ribbons bearing the Libyan national colors, green and black. By using Libya’s cultural symbolism, Hammer showed the Libyans that he had studied their culture and respected it. It meant a lot to them, and Hammer won the concession.   

Inexperienced and poor negotiators tend to focus primarily on incompatibilities and are trapped by differences between the parties. They, unfortunately, let the differences “take over” and drive the negotiation process, which often lead to deadlocks and poor results. In contrast, Master Negotiators, like Johnson and Hammer, are aware of the differences, but focus primarily on the similarities and on how to creatively bridge the differences.

Dr. Michael Benoliel is an Associate Professor at National-Louis University’s Northern VirginiaWashington, DC Campus, a senior consultant with the Negotiation Academy–Europe, and a speaker with The London Speakers Bureau, and The Australian Speakers Bureau. Recently he has given presentation on the profile of Master Negotiators in Washington, D.C.; Cincinnati; Paris; Venice; Tel-Aviv; and Kampala. He has more than 15 years experience in academic teaching, organizational consulting and corporate training.

In his  book Done Deal: Insights from Interviews with the World's Best Negotiators (Platinum Press, 2005),  Dr. Benoliel reports on personal interviews with some of the world's best negotiators in diplomacy, business, politics, law, labor, and sports. Done Deal was selected by The Chicago Tribune as one of 2005 best business books.