Fans of the television show Friends got a treat last month when Netflix made all 236 episodes of the blockbuster hit available to stream online. At first glance actors Lisa Kudrow, Jennifer Aniston and the rest of the star-studded cast might not be your first pick to peg as formidable negotiators, but at the height of program’s popularity they banded together to pull off an unprecedented salary negotiation, walking away with a $1 million each per episode for the final two seasons, which aired from 2002-2004.
The leadership skills and negotiation tactics they used are ones that anyone should employ to come out on top in a hard negotiation. Here are five tips on effective negotiation you can take from their experience:
1. Assess your own situation—Cast member David Schwimmer took a hard look at his odds of success going into negotiations alone. Then he decided not to. The actors were uniquely close and accustomed to working together under high pressure. Each one had different leadership styles that would be useful in a negotiation. If they negotiated individually, studio executives could pit them against each other. Instead, Schwimmer correctly assessed that a strong team comprised of the entire cast would be better for everyone in the long term.
2. Clean up your own side—Effective team building requires an honest sense of how the other side will see the value of a deal. For the cast of Friends, studio executives valued one cast member more than all the others. As a result it was important for the actors to agree to an approach that would encourage them to stick together. Since they were making different amounts and knew that executives might offer different pay raises going forward, they agreed to seek equal pay for all members. As Elizabeth Mannix of the Johnson School of Management at Cornell University has shown, successful negotiating teams discuss negotiations, assess each members’ skills, and plan a way forward, all before heading to the bargaining table.
3. The anchoring effect—Asking for $1 million for each cast member per episode may seem outrageous. Yet research has consistently shown that one important factor in getting more out of a negotiation is clearly and quickly stating exactly what you want and constructing the conversation around that anchor. Executives may have scoffed at the cast’s demands as unreasonable, but with nine successful seasons, dozens of Emmy nominations, and over twenty million viewers each week, they couldn’t ignore the demand as irrational.
4. Weaken the other side’s alternatives— Understanding how to weaken the other side’s Best Alternative to a Negotiated Agreement (BATNA) is an important key to succeeding in difficult negotiations. The cast correctly saw themselves as contractors, a position that is often weak, but not always. After nearly a decade on television, they had gone from anonymous actors to household names. Friends was the foundation for the studio’s entire Thursday television line-up and all of the advertising revenue that came with it. Previous salary negotiations had gone down to the wire, but the cast understood the connections between their show and what mattered most to the studio. Every day without an agreement was costing the network and reinforcing the costs of not reaching an agreement.
5. Know when to walk out—Different types of leadership styles are well-suited for different parts of a negotiation. As negotiations went on without an agreement, the executives took an especially hard line against one cast member in particular. Some cast members had already made it clear that they would be content to walk away and pursue other shows and films. In response to the increased pressure, the entire cast walked out in the middle of filming an episode, costing the studio up front, showing them what the consequences of not reaching a deal would be in the long term, and encouraging them to negotiate at the table in good faith.
With creative leadership and good negotiation skills, the cast of Friends got just what they were asking for, making them the highest paid ensemble cast in the history of television. The show aired for two more seasons to the delight of fans and relieved studio executives alike, and continues to draw viewers a decade later. Its lessons for negotiators are equally enduring.