The Real Trump Deal. Martin E. Latz
understands the crucial need to find out his counterparts’ Plan Bs as his actions in these deals consistently reflect this.
What should you do if you find out your counterpart has a good Plan B, which weakens your leverage? Improve their perception of your deal (Plan A) relative to their Plan B. By making your deal appear better without any statement regarding their Plan B, it strengthens your leverage vis-à-vis your counterparts’ Plan B and differentiates you.
I have trained thousands of sales professionals since I started studying and teaching negotiation in 1995. The most powerful sales-related strategy leverage-wise? Help your customers understand and evaluate how you (Plan A) can meet their needs and interests better than their alternative, or Plan B. Their Plan Bs? Your competitors.
Sales and marketing is fundamentally about this component of leverage—what differentiates you from your competitors.
Has Trump done this? Absolutely. He built and sold Trump Tower condos as an incredibly luxurious residential living space. This Plan A for his buyers, due to the features he included, was then evaluated relative to nearby luxury condos. He did this effectively.
And he didn’t trash his competitors (usually an ineffective strategy despite Trump’s comment about sometimes having to denigrate your competition). By building Trump Tower this way, he and his sales staff could act as trusted advisors and help possible buyers differentiate it from their competitors.
What else has Trump done to change his leverage? Focus on his competitors’ weaknesses and inability to satisfy his counterparts’ needs and interests, impacting their perception of their Plan B.
Here’s how Trump has done this.
Trump’s Threats: Worsen Their Perception of Their Plan Bs
Donald Trump hired New York Governor Hugh Carey’s chief fundraiser Louise Sunshine in 1974 for many reasons. One, according to Sunshine, “Everybody thought Donald was this brash, hard-charging young kid…. I was the one who took Donald everyplace…no matter who it was, because they didn’t really know Donald. I was Donald’s credibility factor.”205
Trump also “was not shy about using [her] political connections.”206 Donald Trump and his father had city connections. But Sunshine brought state connections, influence, and access.
Along with the Trumps’ political contributions to Carey’s gubernatorial campaign—$390,000 in 2016 dollars, more than anyone except Carey’s brother—Donald Trump gained political influence by hiring Sunshine.207 This brought him leverage in his real-estate deals involving political entities.
One way he attempted to exercise that influence/leverage: threats. What is a threat from a strategic perspective? A very aggressive leverage-related statement communicating, “I can make your Plan B really, really bad!”
The classic threat comes from The Godfather: an “offer you can’t refuse.”208 Your Plan B? Death. Bad Plan B. You might as well accept our deal (Plan A) by comparison, right?
How consistently did Donald Trump issue business-related threats? Often and in many different negotiation contexts. Threats constituted a regular part of Trump’s strategic repertoire. Here are three typical Trump threats spanning several decades of Trump’s business career.
The Trump World Trade Center Threat
Trump wanted to buy the World Trade Center in the mid-1970s. But several other developers were interested (the World Trade Center’s Plan Bs). Here is a classic Trump political threat, meant to make the World Trade Center’s owners more likely to sell to Trump.
The following negotiation, according to Trump Revealed, occurred between Trump and Peter Goldmark, the executive director of the Port Authority of New York (owner of the World Trade Center). Goldmark was also a political appointee of New York Governor Hugh Carey.
Trump’s chances truly soured when he started flexing his connections. “He threatened, ‘You wouldn’t last in your job very long if Governor Carey decided you weren’t doing the right thing on this,’ Goldmark recalled [Trump saying]. “‘You should know I have a lot of weight in Albany.’” Trump [then] dropped Sunshine’s name. “As soon as he threatened, I made [it] clear I didn’t want to talk anymore,” Goldmark said. “He’d expected me to quake and shake.”
Trump denied Goldmark’s account, saying, “I really don’t talk that way.”209
Trump’s leverage-related message? My deal is your best Plan A. If you don’t believe it, I can make your personal Plan B really bad as I can get Governor Carey to fire you.
The Trump NFL Threat
Here’s how NFL head Pete Rozelle described another Trump threat, from his USFL-related meeting with Trump. Recall that Rozelle took notes of this and discussed it with the NFL’s finance chairman. Trump, noted earlier, disputed Rozelle’s characterization.
Rozelle’s version was a Trump shakedown. Trump opened the meeting, said Rozelle, with warnings [that] he was busily developing an antitrust suit and arranging for new ownership of two floundering USFL teams….According to Rozelle, Trump then warned him that if the NFL did not agree right away to his demands, he would have to push forward on the lawsuit.210
Trump threatened antitrust litigation.
The Trump Reporter Threat
Trump has also consistently threatened litigation against reporters and editors when they published something unfavorable or considered doing so. Jim Brady, a gossip-page editor at The New York Daily Post, recounted the following, described in Trump Revealed.
One summer [Brady] heard that Donald and Ivana had been granted a temporary summer membership at a club in East Hampton, where they were renting a home. The Trumps wanted to become permanent members, but Brady learned that the club’s board would never approve them. Brady put that news on Page Six [the gossip page] and got a quick call from Trump. “He was cursing me with every four-letter word,” Brady said. “‘You SOB. You bleeping this. You bleeping that. I’m going to sue you. I’m going to sue the Post. I’m going to sue Murdoch [the Post’s owner]. I’m going to sue everyone.’”
A moment later, the phone rang again. It was Cohn [Trump’s lawyer]. Expecting another tirade, Brady told Cohn if he was going to sue, he should call the newspaper’s lawyer. “Jim, Jim, Jim” Cohn said. “There’s going to be no lawsuit. It’s very good for Donald to let off steam. That’s just Donald. And we encourage that kind of thing, but no one’s going to sue anybody. I’m just telling you that there will be no lawsuit.” There was no lawsuit.211
Of course, Trump sued in many instances. But not every time he threatened it.
“Wait,” you might say. “What’s the difference between a threat and a promise to exercise your legal or other rights that negatively impact your counterparts’ Plan B/alternative? Isn’t it legitimate to identify the steps you might take to strengthen your leverage by increasing your counterparts’ downside risk, or making their Plan B worse? Isn’t that just differentiating yourself?”
Excellent questions. Here’s a research-based framework in which to evaluate Trump’s threats. This relates to implicit or explicit actions or statements (“threats”) that can be made to impact a counterpart’s perception of their Plan B.
Implicit or explicit threats, of course, can be either effective or ineffective. Just calling them threats—which has a negative connotation—doesn’t strategically help determine if they work. Nor does the label address whether threats should be used in a negotiation.
RESEARCH: Initially, understand the nature of threats. Columbia Professor Adam Galinsky and Brigham Young Professor Katie Liljenquist define a threat as “a proposition that issues