Cash Rules Everything Around Me: What can the Wu-Tang Clan teach us about the art of negotiation?

Robert Fitzgerald Diggs, better known as The RZA, de facto CEO of The Wu-Tang Clan knows a thing or two about strategy. When Wu-Tang’s seminal self-funded debut single Protect Ya Neck first hit the clubs in 1992, major labels with a keen ear for for a success about to explode swarmed over them.

On the back of that one record, The Wu-Tang Clan were on the brink of what defines success for most of the DJs and MCs they came up with – signing a major record label. But for RZA, success would be defined only by the terms predetermined in his Five Year Plan. The Wu-Tang Clan, at that time nine members strong, was in RZA’s mind, just part of what would blow up into the first major hip hop brand. The Five Year Plan included elevating The Wu-Tang Clan to major record sale and stadium success; promoting The Wu-Tang Killa Bees – a broad network of affiliate hip hop solo artists and groups - supported, financially and otherwise, by the Clan; and Wu-Wear – the Wu-Tang brand as a clothing label.  

As RZA put it, ‘I used the bus as an analogy, I want all of y'all to get on this bus. And be passengers. And I'm the driver. And nobody can ask me where we going. I'm taking us to No. 1. Give me five years, and I promise that I'll get us there.’

RZA didn’t see a model in the record industry that was capable of realizing his ambition. He needed to break the mold if the Wu-Tang empire was to come close to its potential, so how was one major label – one controlling element of what to RZA was a rigid, restrictive and inefficient system, ever going to propel his success? No matter how vast the label, there existed no example of the level of commitment required to promote both the Clan and each member as a solo artist (there were nine strong personalities there), let alone the swarm of Killa Bees. RZA thought – why have one label promoting us, when I could have nine or ten?

Once RZA had satisfied himself that he had the partner that was most closely aligned with his vision to make Wu-Tang the biggest hip hop brand of all time, which he found in Loud Records, he entered negotiations with his killa clause – every member of the Clan must be free to sign a separate solo deal with any label they choose.

This was an audacious move – it was unheard of for a label to invest in any artist only to give them a free pass to go and make money elsewhere, but it was a negotiation which RZA won, and with that stroke of creative negotiating genius, RZA now had not one, but nine of the world’s major record labels each individually investing their resources into the promotion of the force of the Wu-Tang.

‘We reinvented the way hip hop was structured, and what I mean is, you have a group signed to a label, yet the infrastructure of our deal wasn’t like anyone else's’ RZA told one interviewer ‘We still could negotiate with any label we wanted, like Meth went with Def Jam, Rae stayed with Loud, Ghost went with Sony, GZA went with Geffen Records’ and critically ‘all these labels still put "Razor Sharp Records" (RZA’s brother Devine’s independent label) on the credits’.

Not just Razor Sharp Records of course but also the infamous Wu-Tang ‘W’ logo, reminiscent of the Bat-Sign, which RZA commissioned from Ronald Bean, a.k.a. Mathematics, who was later the producer behind Wu-Tang Clan's The SagaContinues album. ‘Wu Tang was a financial movement. So what do you wanna diversify...? Your assets’ explained RZA.

Between 1994 and 1996 a slew of Wu-Tang ‘solo’ albums dominated the charts:

RZA’s side-project The Gravediggaz came first, releasing 6 Feet Deep (released on Gee Street Records), followed by Method Man's solo debut, Tical (Def Jam), Ol' Dirty Bastard’s hip hop classic Return to the 36 Chambers:The Dirty Version (Elektra), Raekwon's OnlyBuilt 4 Cuban Linx... (Loud), GZA's LiquidSwords (Geffen) and Ghostface Killah’s Ironman (Epic). Each adhered to the terms of the contract as they are named as a solo release, but RZA’s production and the frequent ‘guest appearances’ by fellow Clan members made them, to the listener at least, full-force Wu-Tang Clan records.

So, what can the Wu-Tang Clan teach us about the art of negotiation?

Firstly, we need to understand the purpose of negotiation, which is simply to reach an agreement in which all parties’ needs are met.

The end result of a negotiation must be that all parties feel they have benefitted by entering into the deal. If everybody benefits then both (or all) sides will be internally motivated to deliver success. The mark of a good deal is that both (or all) parties want to deal with each other again – which if they are delivering success with you is surely a great thing. A negotiation sets the terms that establish a relationship and a good deal is the beginning of a good relationship.

There are several outcomes of a negotiation:

Win-Lose is sadly an all-too-common outcome of negotiation. Win-Lose is reached when one, both or all parties enter into negotiation believing it to be a competitive process. If you achieve a Win-Lose, you have achieved or exceeded all of your target outcomes for the negotiation at the expense of your opposite number, who has been pushed below their ‘walk away point’ yet still been coerced into making the deal.

This is achieved by monopolizing an asymmetry of information, holding the favorable portion of an imbalance of power or manipulating your ‘opponent’ to continue to negotiate beyond their interests.

There is a great deal of literature available on how to deploy the art of manipulation in negotiating a deal, this blog post will certainly not be adding to them.

Achieving a Win-Lose deal is achieving a very near-sighted win. You have not gained a partner who is intrinsically motivated to deliver success for or with you, but a rival who resents their being shackled to you. You have not built the foundations of a great relationship, but poisoned the well of any future deal you may need that partner for.

It is only marginally better than reaching a Lose-Win outcome – which is where it is you that has compromised beyond what should have been your walk away point. 

This usually occurs in the social sectors when you – the social enterprise, charity or whatever values-based organization – perceive an imbalance of power that is not in your favour.  As Method Man recites on Wu-Tang’s classic 1994 12” C.R.E.A.M. ‘Cash rules everything around me’ and the third sector hold a misconception that the public sector holds all the trump cards in commissioning as they have all of the money. But Mo Money, Mo Problems as the Notorious B.I.G put it. The reason that the public sector commissions the third sector to deliver its statutory duties is that the third sector has the answers to the public sector’s problems in delivering on its statutory duties. We have the power to innovate, we have the access to communities – cash does not rule everything around you.

As Uncle Ben told a young Bruce, or Peter (depending whether you’re a Spiderman comic or Spiderman film fan) Parker ‘with great power comes great responsibility’. Power will always be a deciding factor in negotiation and you should neither use it irresponsibly nor allow yourself to fall victim to its irresponsible use. I was on the raw end of numerous Lose-Win negotiations when living in Hackney in the early 2000s – before it became the highly desirable location it is now – as a result of the imbalance of power. Men wielded power either with weapons or numbers and would win in their objectives for the negotiation (to relieve me of my phone, wallet and watch) whilst I would lose in all of my objectives (to make it home with my phone, wallet and watch and without being subject to violence). Needless to say, I never chose to return to these people to negotiate further deals. Never wield your power unwisely in negotiations as it will not be an investment in your future. And never allow your organization to be mugged in negotiations – the people you are negotiating with do not wield knives.

A third potential scenario is Lose-Lose. It is a ridiculously common outcome given that its very definition is that neither party achieves their objectives in the negotiation, yet still press ahead with a deal. It often occurs when both or all parties make too great concessions in a misguided attempt at fairness. The poor consequence of a Lose-Lose outcome is that all parties end up in a worse position than they were when negotiation began.

In truth, there are only two outcomes which you should consider acceptable. Win-Win or No Deal. As Stephen Covey explains in The 7 habits of HighlyEffective People, if a mutually beneficial outcome can’t be reached through negotiation, then both or all parties should simply walk away. It is far easier to walk away from a negotiation respectfully and courteously and go on to build a strong and successful relationship with the other party than to try to build relationships from a foundation of Win-Lose, Lose-Win or Lose-Lose deals.

Reaching a Win-Win agreement in which all parties’ needs are met is our core aim. It is possible that each party’s starting position is one of wanting to enter into a deal in which their desired outcomes happen to coincide. In which case, you are in a mutually beneficial position, skip any further negotiation and head straight to planning – together!

More often, there is significant gap between either party’s starting positions, which would mean that one party would need to concede ground in their desired outcomes so that the other could meet theirs. Many well-intentioned negotiators look at this as desirable – to find a fair middle ground in which both parties give a little and are compensated with further concessions from the other. However, this is in fact mutually dissatisfactory and is already heading down the path to Lose-Lose.

Truly successful negotiators recognize that, rather than competitive, negotiation is both co-operative and creative. These people approach any negotiating impasse looking for a creative third solution. A third solution is one which does not concentrate on objectives set out in either party’s starting position as the roadmap for a satisfactory outcome, but seeks to find alternative approaches to achieving the outcomes that both parties seek. When this approach is committed to by both (or all) parties, the outcomes for each could be far greater than those envisaged in their respective starting positions. RZA’s creative third way did not force the negotiator from Loud to compromise on the budget he had to negotiate with, the number of albums he would attach to a deal or how much promotion Loud would commit to, but to look outside of the normal way of doing things to allow for other companies to invest in the promotion of their core deal.

From my own experience I can recall a time that a Clinical Commissioning Group wanted to commission my team to produce a Health Outcomes Framework. The budget they had available would not allow for us to produce anything of quality and so I felt that we had reached a No Deal outcome. My concern, however, was that the result of the No Deal outcome would be that the CCG would then simply commission a low-quality model from another organization, which would be a waste of public money and deliver no social or public health outcomes for the community we worked to serve. As such, we came back with a third solution which was to produce the Health Outcomes Framework for their price but to retain 100% Intellectual Property Rights over the framework, which we were then able to re-sell and modify many times over – surpassing, for the original commissioner, what was imagined to be achievable within budget and, from our point of view, re-casting the original contract as an investment into the research and development of a new product, the ultimate iteration of which was eventually sold to a much larger NHS Trust for a substantial profit. RZA had shown me that many organisations could invest in development and each have their financial (and in our case, social) objectives met without compromise.

However, at times there will be a need to concede on some desired outcomes. In such cases, preparation will be everything. Ahead of any negotiation, be clear on what your starting positions are. Do both parties actively want to make a deal? It is important to understand whether you are selling a concept or negotiating details. Be clear what the issues of contention will be and have a strategy for addressing each and every one.

I wholeheartedly recommend working all of this out on paper ahead of any negotiation. On the first page list every non-negotiable item – every element that without strict adherence to, a deal would not be of benefit to your organization. Once you have trained your third solution muscles, you will hone skills in approaching all seemingly non-negotiable items and find approaches in which creative compromise is achievable, as such you will become adept at whittling the non-negotiable items down to a short list.

On the second (and maybe third, fourth, fifth…) page, list every other objective you are entering negotiations with, along with a Desired Outcome, an Acceptable Outcome, a Lowest Tolerable Outcome and the attached conditions that would make the lowest outcome tolerable for each objective.

Be ambitious with your Desired Outcomes. Your opening gambit in negotiation should be your dream position, that which delivers the fullest value you could hope to expect for your organization. Once you get into the habit of highballing in negotiations in which you are selling, or lowballing in negotiations in which you are buying, you will frequently be surprised by what others think is acceptable.

Your Acceptable Outcomes are the lowest (when selling) or highest (when buying) you can go and still find the deal beneficial for your organization. This is not the deal that you would want to do, but the bare minimum which would still deliver, for example, profitability. In most cases you should expect the agreement for each item negotiated to lie somewhere between your Desired and Acceptable outcomes.

Your Lowest Tolerable Outcomes are those which fall below an Acceptable Outcome, but become deliverable if tie-in-concessions are made elsewhere. 

Once you have made your list, put them in order of priority starting at the top with those which were borderline page-one items and remain integral to a successful deal down to items at the bottom of the list which are in fact somewhat supplementary and concessions could easily be made if items further up the list are met.

Never give away your Acceptable Outcomes, and certainly not your Lowest Tolerable Outcomes, easily. Putting up resistance to being negotiated down gives an important element of persuasion by reciprocation – and for this we will look to what we can learn from the Classical Greek philosopher Socrates.

The Socratic Method (also known as method of elenchus, elenctic method) is a philosophical tool which engenders co-operative argumentative dialogue to bring out definitions implicit in the in one’s counterpart’s beliefs and lead them to contradict themselves in order to help them further their understanding. Basically, it is a method of hypothesis elimination that philosophy students use to win arguments.

We use this to create a warm environment where both minds are open and adaptive before going on to the things you disagree on and is achieved by simply going through every item on the list, slowly and methodically and saying ‘yes’ to every point which is uncontentious. If we hit any sticking point, it is vital to say ‘let’s come back to that’. It is important that we don’t hang on points that we don’t agree on at this stage, to do so will poison the climate of the negotiation. Cross every item off your pre-prepared list as they are agreed.

We will invariably find that from a list of, say 50 items, we have said ‘Yes, yes, yes…’ to 40 of them and have created an enthusiastic negotiation. It is now time to ‘come back to’ the sticking points. Our technique now is to start from the bottom of our list – those that we have predetermined we can concede on easily, and do so. Agree slowly. Aim for fairness. But be sure that they are sure that you are giving.

At this point we will have cleared most of the items away and paved the way for persuasion by reciprocation – or tit for tat negotiation. We are in a position to say ‘look, we agree on nearly everything and I have given on everything else so far. I just need you to give a little on these last items’ – which will be your page-1 items. The final minutes of the negotiation are where we achieve 80% of what we came to do.

Lastly, understand that negotiation is a game. Have fun with it. Some people actively love negotiating for everything and as such they become very successful at it – just change your focus to enjoy it too and you will lose any disadvantage you may have from your fear of negotiation. We learn fear at a very young age – and what is it a fear of? It is a fear of being told ‘No’. And what happens when we are told ‘No’? Nothing.