At the Table
In the late seventies the FBI sent an agent to Milwaukee under the name Tony Conte. His cover was modest: a man starting a vending-machine company. Conte rented an office, got a permit from city hall, bought a couple of machines and made the rounds of the bars and clubs. In a month he didn’t place a single one. Nobody threatened him. Everyone just said no, politely. Every place already had machines belonging to Frank Balistrieri, head of the local family, and nobody wanted to swap them.
So Joseph Pistone, Donnie Brasco himself, took the matter in hand and brought his mentor, Lefty Ruggiero, to Milwaukee. Lefty heard Conte out and laid it all out for him, like a teacher at the blackboard.
As Pistone tells it, Lefty’s reasoning went roughly like this. If you stay here on your own, the truck and all the machines will go for eight to ten thousand. In other words, you just lose the money. If I vouch for you, I talk to my boss. If he’s interested, I come back and take another look. If everything’s in order, the boss tells our Old Man, who’s sitting in prison. If the Old Man gives the nod, we get in touch with the right people here. Then there are three ways it can go. They say no, and you have to leave. They say yes, you hand them half the business and become the manager. Or, out of respect for New York, they give you back what you put in, but you still leave town.
Conte said he was confused. But Lefty, without knowing it, had just given him the best lecture on negotiation I’ve ever heard. Without a single clever word.
What Happens If There’s No Deal
The first thing Lefty did was work out what happens without a deal. A loss of eight to ten thousand. Every negotiation starts with that number, and most people forget it.
Before you sit down at the table, answer one question for yourself: what will I do if they say no? That is what you stand on. If you lose everything without the deal, you’ll agree to almost any terms, and the other side will smell it before you open your mouth. If you can walk calmly to another buyer, you can bargain. Giving away half of Conte’s business looked like robbery until Lefty put a price on walking away. After that it looked like a deal.
Now do the same sums for the other side. What happens to them if you don’t agree? Remember the Brooklyn artichoke dealers who knocked the camorristi’s price down from fifty dollars a wagon to twenty-five? The same gang, in the same years, had another go. A hoodlum from Coney Island went to the men who ran the lottery dens and demanded a thousand dollars a week. They flatly refused and told him straight out they would sooner shut their places down. First they settled on sixty per cent of the profits, but that turned out to be more than they could bear, and a few weeks later the gang agreed to a hundred and fifty dollars a week. Why did it go that way? Because the gamblers had an alternative: closing. The extortionist had none. A closed den pays exactly nothing. Whoever can get up from the table without fuss is the one who sets the price.
Three Currencies
Second. Money isn’t the only thing people pay with at the table. There are always three currencies: resources, time and a free hand.
Resources are money and anything you can touch. Time is your hours and your people’s hours. A free hand is your ability to do as you please: to leave, to refuse, to work with others. When you sign a five-year contract, you get money and pay with your freedom. When you drop a regular client for a one-off profit, you get money and pay with the time you’ll later spend finding a new one.
A director who made films in Sicily told Gambetta who took how much for “protecting” a shoot. In 1986 the small-time mafiosi took cash: anything from half a million to two million lire. The bosses took no money at all. They preferred simply to be acknowledged, and then, in time, to ask for favours in return. So the boss was paid not in money but in the future. Money is what you ask for when you expect nothing from tomorrow. A man of more substance takes a promise and collects more later.
When a negotiation gets stuck on price, don’t push on price. Look at the other two currencies. Maybe the client will pay more if you wait for your money. Maybe he’ll accept your price if you give him the right to walk away after six months. Sometimes what is cheap for you is dear to him. Look for those things.
The Table Is Laid in Advance
Third. Negotiations don’t begin at the table. That’s where they end.
Look at how Lefty handled Conte. First the boss, then the Old Man in prison, then the right people in Milwaukee, and only then a meeting. When the meeting finally took place, in a restaurant, Lefty briefed everyone first and only then invited Conte to the table. And before the next meeting with Balistrieri he gave Pistone clear instructions: let Frank speak first, not a word about the business, our job is to answer questions, not to ask them.
By the way, when Conte finally sat down at the table, Balistrieri burst out laughing. It turned out he had been watching this stranger for a long time, had decided he was a cop and was already planning to have him killed. When he’d finished laughing, he phoned his people and called it off. There’s the price of bad preparation for you: at best you lose money, at worst you learn about your own negotiations from somebody else’s phone call.
Negotiations live on three levels. The first is who will sit at the table at all, what each of them knows and wants, what’s going on around them. The second is how the offer itself is built: deadlines, shares, terms for getting out. The third is the conversation itself. Most people prepare only for the third, rehearsing lines and smiles. But it’s all decided in the first two. Nicola Gentile recalled that in New York the top boss’s aides would often settle any question before the big gatherings, and the gatherings themselves were there to announce what had been decided. A well-prepared meeting is boring. That is the highest compliment a meeting can get.
The Buffer
Fourth. Sometimes you’re better off not sitting at the table yourself.
A buffer is someone who negotiates in your name: an agent, a lawyer, a broker, an older friend. He’s useful when you’re too hot-headed, too important or too close to the other side. He can say “I need to consult,” and it won’t look like weakness. He can say no, and your relationship won’t suffer, because you weren’t the one who said it.
Don Vincenzo never haggled over prices with the hotels himself. I went. The Don came afterwards, to shake hands and drink a coffee. If I hit a wall, I always had the sacred right to say, “The Don will have to decide that.” He explained it like this: the man who says the final no shouldn’t be sitting at the table, or he has nowhere to retreat to.
Only choose your buffer wisely. In New York in 1903, the family of a young Sicilian doctor, Salvatore Romano, started getting threatening letters from the Black Hand. Giuseppe Morello offered to act as go-between. He took the letters, supposedly to study the handwriting, reported a few days later that he had settled everything by paying the bandits a hundred dollars, and promised he could easily get it back once they found out whom they were dealing with. He had written the letters himself, of course. He took them to get rid of the evidence. The grateful Romano went on to treat Morello’s relatives for free. First his in-laws came, the doctor recalled, then a cousin, and so on: about sixty people in all, by his count. Before you hire a buffer, check that he isn’t the one writing you letters.
One Good Turn
One last thing: reciprocity. People feel obliged to repay a kindness done to them. It is one of the strongest forces at any table.
Antonino Calderone, a mafioso from Catania, remembered that the prosecutor Sebastiano Campisi had once lifted a restriction order against him. He kept bringing the prosecutor presents: fish, cigarettes, Marlboro for the magistrate himself and Muratti for his family. Then one day a new road between Catania and Enna was due to run through the estate of Campisi’s wife. The road was being built by the Costanzo firm. Calderone leaned on them, the route was moved aside, and the entrance to the estate was rebuilt at the builders’ expense. Having told this story, Gambetta offers travellers a piece of advice: if you see an inexplicable bend in a perfectly straight road in Sicily, don’t be too quick to conclude that the local engineers can’t draw.
Reciprocity works in an honest office too. Do something useful first, with no strings attached, and you’ll be surprised how often people want to return it. Just keep a sense of proportion, and don’t confuse it with that road. A gift that expects something back is a loan. And a loan, as you know, always comes back with interest, and not always in money.