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CHAPTER 2

SETTING THE BAR HIGH: SUPER AGGRESSIVE EXPECTATIONS

When asked about his goals in a television interview, Trump once said “‘Goals?’ he repeated. ‘You keep winning and you win and you win, and you win.’” ⁶⁵

He also said, “to get momentum, you must first focus on a specific goal” and “remember, there’s no such thing as an unrealistic goal—just unrealistic time frames.” ⁶⁶

What has Trump actually done regarding goal-setting? He reaches for the sky. And he doesn’t let naysayers weigh in. He goes for it, often against conventional wisdom and so-called experts.

And he should set aggressive goals. To start, though, some strategic context. Setting goals lives within my First Golden Rule: Information Is Power—So Get It! The first Golden Rule is essential to success in any negotiation and is well-supported by the research.

RESEARCH: It’s critical to ask questions and get as much relevant information as you can throughout the negotiation process. You need sufficient information to set aggressive, realistic goals and to evaluate the other side’s goals.⁶⁷

This was essential to Trump’s success, especially early on. His father, Fred, built a highly successful residential real-estate company with thousands of apartments and projects in several states. But he shied away from Manhattan.

Based in Queens, Fred Trump made millions building standard housing for middle-class families. And when he expanded beyond New York, he bought inexpensive tracts of land from desperate sellers in California, Nevada, Ohio, and Virginia.⁶⁸

Donald Trump wanted more. A lot more. And he set his sights on Manhattan.

As Ned Eichler, one of his early negotiation counterparts recalled, Trump, in a walk around New York City’s Central Park during a break in their negotiations, viewed the park as “merely the lawn in front of his future properties.” ⁶⁹

During that walk, Trump pointed to the buildings on Fifth Ave and Central Park South and said, “I’ll be bigger than all of them. I’ll be bigger than Helmsley [a major New York developer] in five years.” ⁷⁰

Did he get there? Yes and no. It depends on when you look at him. Three Trump eras took place in terms of his goal-setting:

1) “Over-the-top” best describes Trump in the ’70s and early ’80s.

2) But then he got caught up in a deal-making frenzy in the mid-1980s and took a goal-setting U-turn.

3) Trump regained his signature aggressiveness again in 1990, though, when faced with financial ruin.

How aggressive should he have set his goals the entire time? Let’s evaluate his goal-setting in each “Trump era.” Then we’ll evaluate his goals versus the experts’ proven research.

Trump’s Goal-setting in New York City in the ’70s and Early ’80s

Three examples illustrate Trump’s extremely aggressive goal-setting in the ’70s and early ’80s.

A Fred Trump Convention Center

One of Donald Trump’s first Manhattan deals involved purchasing an option to a 34th Street property from the bankrupt Penn Central railways. After he bought the option, he hoped to build “a city-funded convention center and twenty thousand apartments, in one fell swoop creating an empire that would rival his father’s.”⁷¹

But New York City in 1978 decided to build its own convention center on that site. And it needed Trump’s option. Here’s how Peter Solomon, the city’s negotiator, described Trump’s effort to get the city to name it the Fred C. Trump Convention Center.

Trump told us he was entitled to a $4.4 million commission on the sale according to his contract with Penn Central. But he told us he’d forgo his fee if we would name the convention center after his father…. After about a month of knocking the idea around, someone finally read the terms of the original Penn Central contract with Trump. He wasn’t entitled to anywhere near the money he was claiming. Based on the sales price we had negotiated, his fee was only about $500,000.

But what really got me was his bravado. I think it was fantastic. It was unbelievable. He almost got us to name the convention center after his father in return for something he never really had to give away. [Emphasis added.]⁷²

Trump exhibited impressive “bravado” in even shooting for this goal. The question of his truthfulness, of course, also arose here.

The Commodore Hotel Redevelopment

Trump’s aggressive goal-setting also manifested itself in his first big negotiated deal—the redevelopment of the Commodore Hotel across from New York City’s Grand Central Station. In that deal, Trump requested a 99-year tax abatement from the city as an economic incentive to redevelop a run-down hotel in a depressed area.

The tax benefit he requested, if approved, would amount to around $400 million over forty years.⁷³ It would also be unprecedented—the first ever given to a commercial property in New York.

Richard Ravitch, a state official involved, described the following negotiation session with Trump. After offering Trump an option that would allow Trump to line up sufficient financing to redevelop the hotel (the alleged rationale for the tax abatement), he said Trump wouldn’t even consider it.

Ravitch said he told Trump “it would not be fair to deprive the city of the real estate taxes if the hotel was successful, but that at least would enable you to get the mortgage.”

“That’s not good enough; I don’t want to pay any taxes,” Trump replied, according to Ravitch.⁷⁴

That’s aggressive goal-setting.

Michael Bailkin, a key city official in those negotiations, said Trump “had the energy and vision and perhaps was hungry enough and maybe a little bit crazy enough to try to do things that were in the best interest of the city, whereas more traditional developers would never have taken on a task like this.”⁷⁵

Trump got his unprecedented tax break. How? According to TrumpNation, a well-researched biography by long-time investigative journalist Timothy L. O’Brien (previously an editor and writer for The Wall Street Journal and The New York Times), Trump “benefited from family connections, his own determination, an economically struggling city anxious to get new construction underway, and banks ready to ramp up real estate lending again.”⁷⁶

Trump envisioned his goal and charged ahead to accomplish it.

Trump Tower

Trump also set an extremely aggressive goal in his first negotiation move to build his signature 58-story tower on Fifth Avenue. This negotiation involved his purchase of an option to buy the lease on the property.

He achieved this “with a location that was so rich everyone else assumed it could not be bought.”⁷⁷

Learning that the department store that owned a 29-year lease on the site had recently gone bankrupt, Trump:

– Recognized the opportunity;

– Immediately flew down to Nashville to buy the option from the bankruptcy trustee; and

– Bought it for $25 million with no money down.⁷⁸

An extraordinarily aggressive goal. So aggressive, in fact, several other builders offered the trustee a better price for it after they learned of Trump’s deal.⁷⁹ But Trump’s deal was done.

And it turned out extremely well. Trump Tower was described as “an inspired, balanced business deal” in TrumpNation.⁸⁰ Trump at his best in negotiations.

Trump’s Goal-setting Took a U-turn in the Late 1980s

Donald Trump’s blockbuster autobiography The Art of the Deal came out in 1987. And it coincided with the stock market crash and an unparalleled Trump buying binge of widely varying high-profile assets.

It also coincided with a new Trump attitude toward goal-setting and negotiations—buy at almost any cost. As TrumpNation described it,

For Donald, the post-Trump Tower years were a heady rush into celebrity and entrepreneurial candyland as he snared one business bauble after another, sometimes in industries in which he knew next to nothing. While the vision he had shown in building Trump Tower remained, the discipline he had summoned to get the skyscraper built evaporated. Emboldened by easy money and a laudatory press, Donald went on a massive and ill-considered shopping spree.⁸¹

Two major purchases reflect his different goal-setting and negotiation approach: The Plaza Hotel Purchase and The Eastern Air Shuttle Purchase.

The Plaza Hotel Purchase

New York City’s Plaza Hotel was “one of Manhattan’s truly storied properties, steeped in wealth, glamour, power, and celebrity, and Donald snapped up the hotel in 1988 for $407.5 million with $425 million in borrowed funds that he could ill afford.”⁸²

How do we know Trump didn’t aggressively set a goal and negotiate a great deal?

First, the sellers flipped the hotel to Trump just four months after buying it—garnering at least a $50 million profit. And this occurred just months after the stock market crashed, when other real-estate developers were taking very conservative approaches to deals.⁸³

Second, Donald Trump himself indicated he lost sight of a financial goal here, to say nothing of an aggressive goal. “This isn’t just a building; it’s the ultimate work of art. I was in love with it…I tore myself up to get the Plaza…. The spirit of the city is in this hotel. How can you possibly put a price on that?… [It is] the ultimate trophy,” Trump said.⁸⁴

And he wrote in Surviving at the Top, “The buying and selling of world-class hotels is an emotional business. When a place like the Plaza is on the block, the toughest negotiators become soft, and logic often gets tossed out the window.”⁸⁵

He even took out a full-page ad in New York magazine and wrote, “I can never justify the price I paid, no matter how successful the Plaza becomes.”⁸⁶

Third, Trump paid more for the Plaza Hotel than anyone had ever paid for a hotel, amounting to $500,000 per room. He also took on $425 million in debt, $125 million more than the previous owners had—and those previous owners had been “concerned that it didn’t generate enough cash to support [its] $300 million mortgage.”⁸⁷

To even pay the interest on this debt, Trump would need to substantially increase the hotel’s cash flow—a difficult effort given the economy and hotel market. In 1989, its first full year of operation after its renovations, it would need to generate almost three times its 1988 cash flow just to cover the debt.⁸⁸ This would have required Trump to fully book its 814 rooms for the year at a $500-per-night room rate, more than twice its previous rates.⁸⁹

Trump’s purchase price was also tens of millions of dollars more than the next highest bidder, according to Trump Revealed.⁹⁰ While it’s unclear if Trump knew this, his overpayment reflects a poor deal for Trump.

Fourth, those close to him described him at this time as unfocused—the opposite of someone pursuing specific, aggressive negotiation goals.

Barbara Res, a longtime Trump employee who oversaw Trump’s renovation of the Plaza, said “[Trump] was in acquisition fever and he wasn’t himself. It was very hard to work with him at this time because he didn’t focus and was always changing his mind.” ⁹¹

Finally, it’s hard to even evaluate the aggressiveness of a goal without due diligence. As part of the negotiations, Trump agreed to purchase the hotel “as is” to allegedly outbid another purchaser. Trump’s purchase thus was not even contingent on the physical condition of the hotel. Trump’s later renovations, unsurprisingly, were demanding.⁹²

None of these elements reflect the strategy of an aggressive goal-setter, much less Trump’s ’70s and early ’80s aggressiveness.

The Eastern Air Shuttle Purchase

Trump signed a contract to purchase the Eastern Air Shuttle in October 1988 for $365 million. Eastern’s bankruptcy judge approved the deal in May 1989.⁹³

How aggressively did he set his goals here? Not very.

First, Eastern had internally analyzed its value a year prior to Trump’s purchase and assessed it at $300 million. An independent appraisal subsequent to his purchase assessed its value as between $150 million and $300 million, depending on market conditions.⁹⁴

Second, Trump noted—like in the Plaza deal—that he really wasn’t financially goal-driven here, despite it being a business deal. He said, “I like buying Mona Lisas; the Shuttle is the finest asset in the airline industry, the best…. I like collecting works of art. This is a work of art.” ⁹⁵

Third, he stuck with his purchase price of $365 million negotiated in October 1988 despite Eastern’s plummeting profits between his signing and closing on the transaction. During this time, Eastern’s share of the shuttle market declined from 56 percent to 17 percent after a March labor strike. Its rival Pan Am was killing it in the market. Pan Am had bought its shuttle business three years earlier for $76 million.⁹⁶

And while Trump did use the strike to renegotiate the deal, he only got four old planes out of his renegotiation, hardly the mark of an aggressive goal-setter given the precipitous drop in Eastern’s market share.⁹⁷

Finally, Eastern was bleeding cash partially due to its old fleet of 21 Boeing 727s. In his first year of operation, Trump spent $85 million in capital and operating costs. And Trump knew this would largely be the case, as he had predicted in bankruptcy court that he would need to spend $50 million to upgrade the aging fleet.⁹⁸

This brought his effective purchase price to well over $400 million, which is not an aggressive goal.

Trump’s Goal-Setting in his Financial Restructuring in the 1990s

Donald Trump’s aggressive goal setting, however, returned in the early 1990s and appeared to continue later. Examples abound, including his off-the-cuff negotiation for 50 percent of The Apprentice.

His biggest negotiation in this time period occurred in early 1990, when Trump and his empire faced ruin. Independent evaluator Kenneth Leventhal & Co., hired by banks to which Trump collectively owed $3.2 billion (of which Trump had personally guaranteed $833.5 million), found Trump was then worth a negative $295 million.⁹⁹

Trump himself commented that, “When I was in trouble in the early ’90s, I went around and—you know, a lot of people couldn’t believe this because they think I have an ego—I went around and openly told people I was worth minus $900 million.” ¹⁰⁰

Despite being financially underwater, and perhaps because of it, Trump’s aggressiveness returned. In fact, he negotiated a deal that gave him $450,000 a month on which to live after protracted negotiations with the banks.¹⁰¹

This was so large The New York Times at the time quoted a billionaire saying about this allowance, “I would have no idea how to spend $450,000 a month. It’s just phenomenal.” ¹⁰²

Trump said this negotiation “…was the greatest deal I ever made.” ¹⁰³

What does the research say about setting aggressive goals?

Do it. As I write in Gain the Edge!:

Set Aggressive and Specific Goals—Don’t Just “Do the Best You Can”

“I believe in always having goals and always setting them high,” said Wal-Mart founder Sam Walton. Be ambitious. Adopt aggressive goals. Remember that old saying: “You can’t get what you don’t ask for.” Your goals will set the upper limit to what you can achieve. Set aggressive-enough goals to ensure you don’t mentally concede anything before you have even begun. Answer the question: How much is enough? And answer it at the beginning, before you jump into the rest of the negotiation. A direct relationship exists between individuals’ goals and what they achieve. The more you expect, the more you will get. The less you expect, the less you will get…

Tie Your Goals to Realistic Standards

However, a cautionary note. It’s crucial to tie your goals to realistic standards. Don’t be too aggressive. Instead, be realistic. If you constantly set your goals so high you never achieve them, you will become discouraged over the long term. This attitude will negatively affect your performance and you will start to set your goals too low. No one wants to continually “fail.” Likewise, if you consistently set your goals too low, you won’t have sufficient motivation to achieve all you can.¹⁰⁴

Does Donald Trump tie his goals to realistic standards? No. He consistently and aggressively set unrealistic goals. Unprecedented, in fact. But—and here’s the rub—he has been pretty successful in achieving them, at least if we ignore his goal-setting hiatus in the mid- to late 1980s. He has not “become discouraged over the long term” due to unrealistic goals. And maybe they weren’t so unrealistic after all.

In other words, he is one of those rare individuals in which repeated failure to achieve his long-term goals—even colossal failure like what happened to him in the early 1990s—did not appreciably impact his future goal setting.

Consider this: The overwhelming majority of his businesses and investments failed up until the early 1990s: Atlantic City casinos, the Trump Shuttle, New York City’s Plaza Hotel, and the West Side Yards where he wanted to build the world’s tallest building.

He and entities he controlled or was involved with went through six bankruptcies, with investors and others losing more than $1.5 billion due to his business decisions.¹⁰⁵

He was even forced to take out a $10 million loan from his siblings in 1993 just to pay his monthly living and office expenses, according to TrumpNation.¹⁰⁶

Bottom line: His businesses failed and left him and the banks that financed him holding the bag.

Yet he still exhibited supreme self-confidence and set aggressive goals. He was “remarkably resilient” and a person who had “gumption in spades.”¹⁰⁷

Trump agrees that he doesn’t set reasonable goals, too. In Trump: Think Like a Billionaire, he approvingly writes, “In The Natural History of the Rich, author Richard Conniff put it this way: ‘Almost all successful alpha personalities display a single-minded determination to impose their vision on the world, an irrational belief in unreasonable goals, bordering at times on lunacy.’” [Emphasis added.]¹⁰⁸

Trump has taken that irrational belief and translated it into a passionate expectation of success in all his negotiations. That’s not irrational. That’s effective. As he has said,

“Passion is absolutely necessary to achieve any kind of long-lasting success. I know this from experience. If you don’t have passion, everything you do will ultimately fizzle out or, at best, be mediocre.”¹⁰⁹ And “nothing great in the world has been accomplished without passion.”¹¹⁰

Donald Trump’s confidence and attitude toward life—and negotiations—can be summed up by the only person other than his father he called a mentor—Rev. Norman Vincent Peale of New York’s Marble Collegiate Church.

Author of the 1952 bestseller The Power of Positive Thinking, a bible of the self-help industry, Peale preached that a positive attitude and mindset will lead to tremendous success.¹¹¹

Trump attended Peale’s sermons with his family in the 1950s and wholeheartedly internalized Peale’s message. In fact, “Trump credited Peale with teaching him to win by thinking only of the best outcomes.”¹¹²

And Trump told a New York Times reporter, discussing Peale and his general attitude in 1983, “The mind can overcome any obstacle. I never think of the negative.”¹¹³

Peale, who also had a radio show and newspaper column with millions of followers and later married Trump to his first wife, Ivana, reciprocated this admiration. In 1983, he said Trump was “kindly and courteous in certain business negotiations and has a profound streak of honest humility.”¹¹⁴

Trump’s can-do positive mindset has been to “accentuate the positive, eliminate the negative, latch on to the affirmative, and never mess with Mr. In-Between,” according to TrumpNation.¹¹⁵

Trump openly touts this, writing, “Even if you haven’t encountered great success yet, there is no reason you can’t bluff a little and act like you have. Confidence is a magnet in the best sense of the word. It will draw people to you and make your daily life…and theirs…a lot more pleasant.”¹¹⁶

How has Trump’s attitude manifested itself in his negotiations?

Confidence Is Contagious

Donald Trump sells an attitude, a belief, and a persona. It underlies his aggressive goal-setting and everything he does.

It also represents a fundamental factor of his negotiation success, especially early on with the Commodore Hotel redevelopment and the building of Trump Tower. Recall, Trump was in his late 20s when he negotiated an unprecedented 99-year tax abatement for the Commodore Hotel. Barbara Res, the construction manager for that project who worked for Trump for years, said Trump “had tremendous self-confidence, which is important.”¹¹⁷

And he was only in his mid-30s when he built the 58-story Trump Tower on Fifth Avenue in New York City.

Of course, his detractors would suggest it’s easier to exhibit confidence when you’re backed up by a highly successful real estate father. And your negotiation counterparts will be more likely to accept your bona fides when you surround yourself with experienced lawyers like Roy Cohn and George Ross and real-estate experts and contractors (and Trump wisely did).

Regardless, Trump would not have achieved such early financial and brand success without a highly confident attitude. Trump’s confidence was contagious in his negotiations.

Trump Tower serves as the ultimate testament to this. How?

One, he built Trump Tower on spec, meaning he got the land, lined up the financing, built the building, and simultaneously had to sell commercial and residential space in a 58-story tower in one of the most competitive commercial and residential real-estate markets in the world.

This could easily have failed. And Trump knew it. In fact, other residential luxury buildings available at the time didn’t achieve this same success.

Only a supremely confident individual would have even embarked on such an ambitious effort. Trump did. And he reaped the rewards.

Two, early successes like the Commodore Hotel and Trump Tower led to more deals and increased confidence. Success bred success. And confidence bred more confidence.

Finally, Trump Tower was his first named project. He branded it to himself. This building—and all it would represent, good and bad—would immediately reflect on Donald Trump the person and businessman. You don’t name something after yourself if you’re not supremely confident it will reflect well on you.

Of course, Trump critics would say naming it Trump Tower simply reflected the size of his ego. But, whether you love or hate Trump, naming the building after himself started a successful and profitable luxury real-estate brand that now spans the globe.

RESEARCH: Confidence of success aligns with the experts’ proven research. And it fully supports the positive and practical impact of Trump’s extreme confidence.

What should you do? Expect to succeed. A passionate, positive attitude makes a difference. Those with an optimistic, can-do attitude toward achieving their desired result will be more likely to succeed than those with a lackadaisical approach. So, consciously transform your mindset about goals from theoretical targets to genuine expectations. Goals are one thing: expectations another. Expect it. Your mindset and attitude will lead to improved results.¹¹⁸

There is a downside, though. Self-confidence might come across as arrogance. And arrogant negotiators face significant challenges, especially those involving future relationships.

There’s a fine line between confidence and arrogance. How can you exhibit confidence and not project arrogance? Support your attitude with facts, reason, data, and experts. Identify objective, independent standards that underlie your beliefs.

Does Trump come across as arrogant? You be the judge.

Trump Perseveres

Donald Trump also perseveres. A lot. In 2011 he told Forbes,

I’ve seen people that are extremely brilliant, and they don’t have the staying power. They don’t have that never give up quality. I’ve always said that other than bad ideas, which is a reason for failure, the ability to never ever quit or give up is something that is very, very important for success as an entrepreneur.¹¹⁹

Trump’s right. And it’s equally important to negotiation success.

RESEARCH: Perseverance leads to success. Persevere but don’t be stubborn.

Star sports agent Leigh Steinberg in his book Winning with Integrity wrote that his negotiations with the Atlanta Falcons on behalf of quarterback Jeff George lasted from 1995 through 1996 and involved “what seemed like hundreds of hours of phone calls…and seven trips to Atlanta during that time.”¹²⁰

Over the course of these types of negotiations, Steinberg said he might “have to revisit an issue over and over and over again.” Some might find this upsetting. A waste of time, right? Wrong. It’s an important part of the process. As Steinberg noted, effective negotiation requires “tremendous patience and persistence, as well as physical stamina, resilience and perseverance.¹²¹

Trump spent years putting together the Commodore Hotel deal. This required perseverance.

As noted earlier, however, Trump lost this focus and stick-to-it-iveness in the mid-1980s. His deals then came fast and furious. Perhaps too easily. As Trump Show noted,

[Trump in the 1980s was] buying up airlines, department store chains like Alexander’s, and majestic hotels. The Hyatt [Commodore] had taken him six tortuous years, while the campaign to acquire the Plaza Hotel was over in six quick weeks. Even Donald complained about how “easy” it had become.¹²²

His lost focus came with a big price: Almost all his assets in those deals later went to pay off his creditors when his businesses failed.

LESSONS LEARNED

Trump’s Strategies and Tactics	Extremely aggressive goal-setting marked many early Trump negotiations.
Trump lost sight of his goals in the go-go ’80s and got caught up in a deal-making frenzy.
Aggressiveness returned when Trump faced financial ruin in 1990.
Passionate expectations of success permeated Trump’s negotiations.
Trump’s confidence led to good deals and effective branding.
Hard work and perseverance characterized early Trump negotiations.
Lessons Learned	Getting sufficient information first should underlie goal-setting efforts.
Specific, aggressive, and realistic goals should drive strategic decisions.
Too much aggressiveness in goal-setting can lead to failure, lost confidence, and long-term harm.
Tying goals to realistic standards increases the likelihood of achieving them.
Passionate expectations and confidence lead to better negotiations.
Hard work and perseverance underlie effective negotiations.