In every negotiation, there is some hidden piece of information that, if it were known, would completely transform the dynamic of the negotiation and the final outcome. These are Black Swans. Finding them is the last piece of the puzzle to succeed in your negotiation.
You need to open your mind to being surprised. Don’t be bound by what you think you know for sure. Don’t overvalue your knowledge or experience.
There are three types of information. There are known knowns. This is what we know for sure. Things like your counterpart’s name, their offer, and your experience from past negotiations are known knowns. Unfortunately, you can be tunnel-visioned by them and wrongly assume that this is the only kind of information.
Then, there are known unknowns. This is information that we know exists but that we don’t possess ourselves. In a poker game, for example, you know that there are wild cards: you just don’t know who has them.
Lastly, there are unknown unknowns. This is the information that we lack— and don’t know that we lack. These are the Black Swans.
Your counterpart might not know how important their Black Swan is. Your task is to uncover it by asking the right questions. In a negotiation, those who can best identify and exploit the unknown unknowns come out on top.
(Shortform example: let’s say you were looking to buy a house from someone. If, in the course of your negotiation with the seller, you discovered that they were facing some sort of external financial pressures (from a lawsuit or a job loss), you would have great leverage over them. This information would tell you that your counterpart was a highly motivated seller who would likely accept a heavily discounted offer from you. This is a black swan: something you didn’t know before, didn’t know that you didn’t know, and that completely reshapes the negotiating environment.)
So how do you find the Black Swan?
Ultimately, uncovering a Black Swan gives you leverage. Leverage is the power to inflict loss or withhold gain. And as we’ve learned, calculating losses and gains is difficult for people to actually do. There are three types of leverage.
Positive leverage is the power to give someone something they want. This is when they want something you have. To exercise positive leverage, give your counterpart what they want by making them give you something that you want.
Negative leverage is the power to inflict harm or take away something that someone else values. It’s inherently based on threats and triggering your counterpart’s sense of loss aversion.
You need to figure out what, in their eyes, would constitute a “loss.” This is not always monetary or tangible. It can be a loss of status, prestige, ego, or reputation.
Use subtle labeling to allude to their fear of loss. For example, if you discover that your counterpart greatly values their reputation as an honest dealer, you would label their behavior by saying, “It doesn’t seem like you care about being seen as straightforward.”
Normative leverage is when you use someone’s own norms and standards against them. You do this by pointing out the gap between their behavior and their professed principles. Something like, “You say that you value transparency and openness, but it seems like you’re being evasive and indirect with your answers to my questions,” can be a powerful indictment that forces your counterpart to rethink their behavior. No one likes to feel like a hypocrite.
Black Swans also give you key insight into how your counterpart sees the world. Once you know this, you’ve cracked the code: you can speak to them fluently in a language they understand.
You access their hidden area, their deeper desires. This gives you great insight into their behavior and will enable you to predict what they’ll do next. When you don’t understand your counterpart’s behavior, avoid the trap of thinking that they’re “crazy.” They have a different worldview and their actions most likely make sense to them in the context of that worldview.
Think back to the earlier example of the Filipino terrorist and kidnapper Abu Sabaya.To outside observers, his actions were insane, reckless, and morally indefensible. But they made perfect sense to Sabaya: in his worldview, he was a freedom fighter for the Muslim minority, fighting the good fight against powerful oppressors. Any action would defensible in order to combat the evil forces that Sabaya believed he was up against. Still, the hostage negotiators needed to become fully immersed in Sabaya’s understanding of the world, as irrational and morally repugnant as it may have seemed to them. It was the only way they would be able to have any kind of dialogue with him.
What looks like crazy behavior by your counterpart may really be rational, because:
In 1981, an armed man named William Griffin took hostages at a Rochester bank. Police expected it to be a straightforward hostage negotiation where nobody ended up getting killed. Based on prior experience, this was the most likely outcome. However, Griffin shocked police and onlookers by executing one of his hostages whom he had instructed to walk out of the bank’s front doors. Griffin then proceeded to calmly walk out of the bank, where he was immediately killed by police sniper fire.
This baffled police and the FBI. Why would anyone kill a hostage? A kidnapper needs hostages, otherwise they don’t have any leverage. The whole point is to threaten to harm them.
But in this case, the authorities made the tragic mistake of not understanding Griffin’s real motivations. Griffin wasn’t after money, or recognition, nor was he pursuing some sort of political agenda. His real motivation was to die: and he knew that executing a hostage would provoke the police into shooting him (the case was one of the first of what’s now called suicide-by-cop).
The tragic killing of the hostage happened because the authorities failed to recognize Griffin’s true wants, needs, and incentives. This was a classic Black Swan: something that the authorities didn’t know, didn’t even consider (because it had never happened before), and would have completely changed their response had they known it.
The story of Dwight Watson presents the opposite case. This was an instance where the authorities successfully identified a Black Swan and used it to de-escalate what could have been a dangerous situation.
In 2003, a North Carolina tobacco farmer named Dwight Watson drove a tractor full of (what he claimed were) explosives to Washington, D.C. He said he was doing this to bring attention to the economic woes of the country’s tobacco farmers and to protest what he believed to be the government’s complicity in the farmers’ plight.
In their discussions with him, the FBI learned that he was a devout Christian. They discovered this through close observation and analysis of references Watson made as he was speaking to the negotiators. This Black Swan gave the authorities valuable insight into Watson’s state of mind, his motivations, and how to craft appeals to his religious ideals that would let him surrender without losing face.
One of the days during this standoff happened to be the Dawn of the Third Day, when Christians believe that Jesus rose up out of the tomb and ascended to heaven. The FBI used the Black Swan of Watson’s devout Christianity to speak to him in his native language. They said, “If Jesus could come out on this day, so can you.” He surrendered immediately after.
This worked because the authorities put in the hard work to gain a holistic understanding of Watson’s view of the world. They were thorough: double-checking, comparing notes, and using back-up listeners. Above all, they were willing to listen.