What Have We Learned about Negotiation from Donald Trump?

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Originally published in the Wiley Online Library.

Trump’s Advice to Negotiators

In his earlier career, Donald Trump was a successful builder who made, lost, and remade lots of money. Forbes puts his current fortune at more than three billion dollars, which is mostly in buildings in Manhattan. In a series of books, he has described and attempted to explain his achievements. In his first and most famous book, Trump: The Art of the Deal (1987), he presents guidelines for business negotiators including the following:

1. Know the territory. He learned a lot from his father who built residential structures in Queens and Brooklyn. When he moved to Manhattan, where he did most of his building, he quickly mastered the city’s intricacies (politics, building permits, and sources of capital) and put together some complex projects including Trump Tower, which yielded him an opulent penthouse for his family and a lot of money selling expensive apartments.

2. Plan carefully. Always have several options. Consider the ways in which your project could fail and protect against them. “Don’t act on an impulse – even a charitable one – unless you’ve considered the downside” (1987: 264).

3. Seek leverage over the other side before negotiating.

4. Be tough. When negotiating, ask for a lot. Concede slowly, holding out as long as possible. Be persistent and fight back hard.

5. “Be a promoter.” Show enthusiasm for what you are proposing. Argue that your offer is good for both parties and that the other side’s options are inferior to it. Denigrate competitors.

6. Do your own thinking, don’t rely on others’ opinions. Don’t go public because it requires having a board of directors and invites Wall Street critics. Have a small staff and do most of the work yourself. Gather your own data and don’t bother with consultants. Ignore poll results. Trust your instincts.

7. Sell yourself to the public. Try to look like a big player. Seek publicity, exaggerate your competence and accomplishments. Embark on large, flashy projects and put your name on whatever you can. Make a lot of noise. Even bad publicity can be better than none.

Few if any of these guidelines make useful new theoretical contributions. The first two are sound advice for decision makers but hardly novel. Guidelines 3 to 5 describe standard competitive negotiation tactics. Trump mainly talks about such tactics, which are one side of the coin in successful negotiation. But occasionally he endorses efforts to achieve win-win agreements, which are the other side of the coin. Thus, at one point he says, “Deals work best when each side gets something it wants from the other” (1987: 335). Competitive tactics – especially threats, harassment, and refusal to compromise – often succeed in the short term, but they produce resentment, which may erode long-term success, especially if the target can turn to less competitive negotiation partners in the future (Pruitt and Carnevale 1993).

Guideline 6 may make some sense in a fast-moving market, but trusting your instincts seems contradictory to Guideline 2 which urges against impulsive decision making and promotes careful weighing of alternatives and possible outcomes. Heeding others’ advice can only help in that regard. Perhaps this guideline is reasonable advice for people who know the territory well and can rely on their intuition as a preliminary screening device before moving to consultation and careful analysis.

Guideline 7 is novel but questionable as a general principle. Most successful business people operate more quietly than Trump did, mainly trying to impress those with whom they are dealing. Public efforts to look like top dog can easily produce ridicule among knowledgeable observers and resentment by others who feel put down. The tactic may have backfired when Trump proposed to rebuild in six months a skating rink on which the city government had worked unsuccessfully for six years. In a grandiose statement, he told the media, “So far the Wollman Rink has been one of the great losers. I’ll make it a winner” (Kula and Hatkoff 2015). Public pressure forced the city to hire him and he quickly rebuilt the rink. But his publicity annoyed the mayor and other city officials, who later turned him down when he requested tax relief for a much larger project that would have solidified his reputation, forcing its abandonment.

In the 1980s, Trump embarked on so many disparate projects – more “Trump” buildings in Manhattan, three “Trump” casinos in one small city (Atlantic City, New Jersey), a football team, and a “Trump” air shuttle – that he barely escaped personal bankruptcy during an economic downturn at the beginning of the 1990s. It seems as if his overweening ambition and adherence to Guidelines 6 and 7 had overwhelmed his Guideline 2; and his Guideline 1 had been largely forgotten when he ventured into the unknown territory of casinos, football teams, and air shuttles.

In his third book, Trump: The Art of the Comeback (1997), Trump describes how he rebuilt his fortune. This book is much darker than the first. He attributes his near bankruptcy to his earlier sense of “invincibility,” but also blames others for not coming to his aid. He says that he believes in “an eye for an eye” and is enjoying “screwing” people who “forgot to lift a finger … when I was down” (1997: xiii). He describes the world in zero-sum terms. His negotiation tactics, while not novel, have become much more competitive with a big emphasis on threats. In two negotiations, he successfully threatened endless lawsuits against his bankers and the city of Palm Beach.

Nothing is said in this book about careful planning (Guideline 2). Rather, he emphasizes his reliance on intuition (Guideline 6), saying, “I buy buildings before I know what I’m going to do with them. It’s my instinct, my sense that I know it’s going to work out” (1997: 66).

He praises himself incessantly. The book is full of stories about his triumphs, often in contrast to other peoples’ failures. One of his chapters is titled “Master of the Universe,” and the book includes many pictures of him with celebrities: President Ronald Reagan, singer Michael Jackson, and Soviet Union leader Mikhail Gorbachev, among others.

Trump and the Presidency

Trump’s behavior in his current project, winning and enacting the presidency of the United States, reflects many of the experiences and guidelines described above. His mastery of selling himself to the public (Guideline 7) and denigrating competitors (Guideline 5) was important for winning the election (see Kapoutsis and Volkema 2019 in this issue for an extended analysis of Trump’s presidential campaign). As in his business, he sees most foreign policy issues in terms of money saved and money made. His fascination with competitive negotiation tactics (Guidelines 3 to 5), especially threats, is regularly seen in his efforts to influence Congress, force American allies to contribute more resources to the North Atlantic Treaty Organization (NATO), and wangle more favorable trade terms from other countries. His reliance on his own data gathering and intuition, and his tendency to ignore expert opinion and advice from associates (Guideline 6) have been described in detail by journalist Bob Woodward (2018), who interviewed several current and former White House staff members.

There is reason to believe that his self-confidence (master of the universe) and adherence to Guideline 6 are hampering his performance in this new role. He came into the presidency with little understanding of the territory – the federal government and international relations. But again – as with the casinos, the football team, and the air shuttle – he has largely ignored the advice of more knowledgeable others and relied heavily on his own intuition. This appears to have created what Woodward has described as a continued crisis in the White House, as his staff tries desperately to educate him and reverse some of his worst decisions. And it could well precipitate a larger outside crisis. Here again, he seems to be violating his Guideline 1 without knowing it, and you can hardly prepare for the downside of decisions (Guideline 2) if you don’t know the territory.

Trump’s Possible Contribution to Our Understanding of Negotiation

So, what have we learned about negotiation from Donald Trump? Not much that is new and clearly reliable. But his business record and performance in the presidency provide an opportunity to explore some new issues that are not currently under study including three that I describe below.

Timing and Intuition. In his career as a builder, Trump repeatedly entered negotiation at just the right time to buy valuable properties at bargain prices before his competition got wind of the opportunity. He attributes these successes to his ability to move quickly without regard to associates’ opinions and his outstanding intuition. Negotiation researchers have largely ignored the timing of entry into negotiation and its impact on the quality of the outcome. Case studies of Trump’s successful purchases and his competitors’ lack of success could yield an understanding of that neglected topic and thus contribute to the theory and practice of negotiation. Along the way, the value of his Guideline 6 and the nature and impact of intuition should be examined.

Transferability of Expertise. Another new topic that is worth studying is the transferability of expertise. Can the knowledge and guidelines of a master builder be successfully transferred to the national and international scene? Or more broadly, what are the critical elements of success in various types of occupation, and which kinds of knowledge and experience transfer readily from one occupation to another and which do not?

Unconventional Tactics in International Negotiation. Trump has been using some unconventional negotiation tactics to get what he wants from other countries: erecting high tariff barriers, insulting world leaders, starting negotiation with a summit meeting, questioning multilateral treaties, and withdrawing from some. It is too early to assess the impact of these tactics. Will they be successful at getting what he wants? Will they have harmful side effects? But, however they turn out, we will have learned something.