Lessons in Persuasion From Apple CEO Tim Cook
A Note From The Editor
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There are good negotiators, and then there is Apple chief executive Tim Cook.
When Cook showed up for a Congressional hearing yesterday, the stage appeared to be set for him to take a beating over Apple's financial practices. Lawmakers were outraged over evidence that Apple was keeping billions of dollars of international revenue overseas, where the company enjoys low tax rates, rather than bringing the money into the United States, where it would be taxed more heavily.
Senators took Cook to task for Apple's so-called tax avoidance. But Cook turned the tables on his interviewers, converting the hearing into a discussion of a flawed Internal Revenue Code. "Unfortunately, the tax code has not kept up with the digital age," he said at the hearing. "The tax system handicaps American corporations in relation to our foreign competitors who don't have such constraints on the free movement of capital."
Robert Mnookin, director of the Harvard Negotiation Research Project and author of Bargaining With the Devil: When to Negotiate, When to Fight (Simon & Schuster, 2010), believes Cook brilliantly demonstrated the art of persuasion, a crucial skill for business owners. "Part of being persuasive is learning how to frame things," he says of Cook's testimony. "It's not simply changing the conversation so much as thinking through what frame might be most persuasive for the particular audience you're dealing with."
Cook also emphasized Apple's status as an American company to the panel. While you may never have to defend your patriotism in a business meeting, you can learn from Cook how to convince an opponent that you're on the same team. Underscore the connection you have with the person on the other side of the table, Mnookin says.
Related: How to Win a Business Negotiation
In response to his critics, Cook presented two clear messages. The first was that Apple has paid all of its taxes required under the law, both in the U.S. and abroad. The second was that while Apple's revenue shielding is legal, Congress has the power to change the tax code if it chooses. And Apple will comply in the future with any new tax structure, Cook said.
"The most important thing he did was think through what his primary messages were," says Mnookin, adding that much of his negotiation teaching at Harvard focuses on preparation. For someone walking into a confrontation, he advises doing a lot of advance work. That includes putting yourself in the other person's shoes. "Really think through what your own interests are, what you're hoping to achieve, what the interests of the other parties are likely to be, and what your approach is going to be," he says.
One prep strategy you can use: Have members of your staff play the role of your clients or other opposing parties before walking into a meeting. "My own hunch is that as part of [his] preparation, [Cook] probably had some people on his own team play the role of those who would be examining him," Mnookin says. "And they were probably much rougher."
Once you are in the meeting, keep a level head. Despite at-times withering criticism from members of the Senate Permanent Committee on Investigations, Cook stayed calm. "His tone was not in the least bit defensive," Mnookin says. A critical element of negotiation, he says, is "to be able to stay calm and even friendly in the face of adversity and someone being very challenging or aggressive." The natural tendency is to respond in kind, but it will serve you much better to defuse the situation with an open, amicable demeanor.
By the end of the hearing, senators were praising Apple products and reassuring Cook that they recognized his company as a cornerstone of American innovation. "You managed to change the world, which is an incredible legacy for Apple," Senator John McCain told him.