Donald Trump’s The Art of the Deal has gone down in history as the bible of negotiation, but the book is a lot deeper than that. It’s a masterful tome, one which is at once a psychoanalysis of human decision-making as well as a tale of despair and comeback. That despair and comeback is not Trump’s, but rather, the City of New York’s, in which Donald Trump was a key player in reviving from the malaise of the 70’s and 80’s. The Art of the Deal is a manual, memoir, and history of New York City in a raucous time all at once. As a personal aside, a mentor of mine, who was involved in the city administration at the time, is mentioned numerous times (and not always in the most flattering light), so that was humorous to me.
Some passages I found particularly compelling are found are described below.
Protecting the Downsides, Securing Leverage:
It’s been said that I believe in the power of positive thinking. In fact, I believe in the power of negative thinking. I happen to be very conservative in business. I always go into the deal anticipating the worst. If you plan for the worst – if you can live with the worst – the good will always take care of itself. The only time in my life I didn’t follow that rule was with the USFL. I bought a losing team in a losing league on a long shot. It almost worked, through our antitrust suit, but when it didn’t, I had no fallback. The point is that you can’t be too greedy. If you go for a home run on every pitch, you’re also going to strike out a lot. I try never to leave myself too exposed, even if it means sometimes settling for a triple, a double, or even, on rare occasions, a single. (pg. 48-9)
A lot of people say they want to win (but aren’t serious about it, a point Trump makes on an earlier page of The Art of the Deal) and have grand desires, yet, this allows them to be led along on fool’s errands which turn to disaster. That’s because their avarice leads them on. While it’s important to let your greed overcome your fear, it shouldn’t do so at the expense of your grand plan. Your grand plan needs to account for the potential downsides so you don’t walk away a loser should things not go your way.
Avarice is however, a great way to manufacture leverage when you have none:
The worst thing you can possibly do in a deal is seem desperate to make it. That makes the other guy smell blood, and then you’re dead. The best thing you can do is deal from strength, and leverage is the biggest strength you can have. Leverage is having something the other guy wants. Or better yet, needs. Or best of all, simply can’t do without.
Unfortunately that isn’t always the case, which is why leverage often requires imagination, and salesmanship. In other words, you have to convince the other guy it’s in his interest to make the deal.
When the board of Holiday Inns was considering whether to enter into a partnership with me in Atlantic City, they were attracted to my site because they believed my construction was father along than that of any other potential partner. In reality, I wasn’t that far along, but I did everything I could, short of going to work at the site myself, to assure them that my casino was practically finished. My leverage came from confirming an impression they were already predisposed to believe. (pg. 53-4)
Does this sound familiar to his campaign? Most of his outrages are ways to dominate space, of which, leverage is a crucial portion. That’s covered in the second chapter of Stumped.
Judging types are particularly prone to burdening themselves with structure. It’s just the way they see the world. While Donald Trump is most likely an ENTJ, he’s able to bring strong perceiver tendencies to his work:
Most people are surprised by the way I work. I play it very loose. I don’t carry a briefcase. I try not to schedule too many meetings. I leave my door open. You can’t be imaginative or entrepreneurial if you’ve got too much structure. I prefer to come to work and just see what develops. (pg. 1)
This style, which he mentions at the very beginning of The Art of the Deal, has certainly bled over into Donald Trump’s campaign. While this has caused discomfort in some, the uncertainty factor is a help in this election cycle. More importantly, it shows that Trump can slow down, keeping his mind at ease despite the serious business he’s constantly engaged in. I often find that I work best in just seeing what develops myself (I think it’s a trait for intuitive types over sensing types), but I also often plan my day around “tasks,” even if the things I do aren’t really serious, such as telling myself I “need” to read certain chapters of a book at a certain time. This is the mindset that Trump seems to disavow.
Market Research & Naysayers:
I don’t hire a lot of number-crunchers, and I don’t trust fancy marketing surveys. I do my own surveys and draw my own conclusions. I’m a great believer in asking everyone for an opinion before I make a decision. It’s a natural reflex. If I’m thinking of buying a piece of property, I’ll ask the people who live nearby about the area – what they think of the schools and the crime and the shops. When I’m in another city and take a cab, I’ll always make it a point to ask the cabdriver questions. I ask and I ask and I ask, until I begin to get a gut feeling about something. And that’s when I make a decision.
The other people I don’t take too seriously are the critics – except when they stand in the way of my projects. In my opinion, they mostly write to impress each other, and they’re just as swayed by fashions as anyone else. (pg 51-2)
This is certainly a hallmark of Trump’s campaign, but it’s also smart market research. In a way, Trump intermediated directly with the desires of his target demographics prior to the age of keyword research and social media trends which made it a lot easier. He can be said to be a pioneer in that regard, and a very smart and efficient marketer.
Does any of this surprise those who have closely observed his campaign? It seems to.
Talk to the people and communities in your demographic and when moving forward with your plans, follow Trump’s and his friend Arnold Schwarzenegger’s advice of ignoring the naysaysers. They mostly just chatter to impress each other, and they, sensing their own inferiority to your boldness, will be envious. Their chattering is the release of that envy. Ignore them as you would the ramblings of a madman.
Don’t Squabble to Keep Risk Down:
Most people are risk-averse, but in business and life in general, too much risk aversion, worrying over every last thing to keep costs down, will only interfere in your ability to achieve success, and beyond that, True Glory:
If there was a single key miscalculation I made with the USFL, it was evaluating the strength of my fellow owners. In any partnership, you’re only as strong as your weakest link. Several of my fellow USFL owners were strong as hell financially and psychologically.
Unfortunately, I quickly discovered that a number of USFL owners lacked the financial resources and the competitive vision to build the sort of top-quality league necessary to defeat the NFL. They shuddered at the prospect of any direct confrontation with the NFL, they were quite content to play in obscurity in the spring, and they spent much more time thinking about ways to keep their costs down than about how to build the league up. (pg. 277)
Risk-aversion should mean not taking stupid risks, but as Louis XIV advises, once you have deliberated and think you’ve seen the best course on a path of action, you must take it to its conclusion. Many of Trump’s fellow USFL owners didn’t follow the great king’s advice. They were content with going half-hearted, content to fail because they were afraid to take the added steps and make the commitments necessary to succeed.
This psychology describes us all. The great challenge is to recognize it and push forward anyway, forcing ourselves to take the path all the way through by actions that make us commit.
Small Changes = Big Savings:
When Trump was trying to develop a property on Central Park South which would have forced tenants out (this sounds worse than it really was – many of them were very wealthy people getting a free ride off bargain basement rents due to rent control), he instituted changes which would save him money on the building he wanted to tear down while the legal issues played out:
High-wattage lights in the hallways were replaced with lower-wattage bulbs, because, as any cost-conscious landlord will tell you, that alone saves many thousands of dollars a year in electric bills. (pg. 260)
Small things add up a lot of over time. This is a smart way to minimize costs.
Trump concludes The Art of the Deal with this:
What I admire most are people who put themselves directly on the line. I’ve never been terribly interested in why people give, because their motivation is rarely what it seems to be, and it’s almost never pure altruism. To me, what matters is the doing, and giving time is far more valuable than just giving money.
In my life, there are two things I’ve found I’m very good at: overcoming obstacles and motivating good people to do their best work. One of the challenges ahead is how to use those skills as successfully in the service of others as I’ve done, up to now, on my own behalf. (pg. 367)
I’ll let this speak for itself.
The Art of the Deal is a masterful read. Donald Trump’s writing style immediately takes you by storm, and you’ll be holding up your pen, writing down the lessons conveyed in his career in your nearby notebook, almost as much as you’ll be reading the book itself. Its insight into the psychology of those across the table from you, those pieces of the deal you want done, but more importantly, its insight into your own nature and what might be holding you back, is invaluable for the man on his path to self-improvement, his path to True Glory.