Margaret Neale: Negotiation: Getting What You Want

You have a job offer and now you have the option to negotiate or not. If you decide not to, your friend who received the same offer negotiates and gets a raise of $7,000.00. At the end of 30 years, your friend will earn $100,000.00 more per year than you. Think about it. My husband is a trained chef. Do you know that chefs don't have recipes for all those sauces? They know the structure of the sauce and no matter

what

ingredients they have, they can make a great sauce. And that's

what

I

want

for you. I'm not going to give you a recipe for a particular

negotiation

.

Rather, what I

want

to do is give you the structure of a

negotiation

, so that you can be successful, no matter what you face. I want to propose a new way of thinking about negotiation and what you are trying to achieve in that negotiation. And then what I want to do is give you four steps to help you be more effective in

getting

what you want. People often view negotiation as a confrontational process and feel uncomfortable because they worry that other people will see them as too demanding, too greedy, unkind, or socially awkward. What I want to do today is get you to change the way you think about negotiation.

Move from a contradictory process to one of problem resolution. And problem solving is collaborative. I want to solve our problem in a way that is good for you, but also gives me more of what I want. When negotiating, most of us consider the goal of a negotiation to be reaching an agreement. This is bad. The objective of a negotiation is not to reach an agreement. The goal of a negotiation is to reach a good agreement. We need to be able to separate what is a good deal from what is a bad deal. So, that means we need at least 3 data.

The first thing we need to know is what is our alternative? What happens to us if this negotiation fails? What do we have left? What is the status quo or what alternatives exist for us? And the research is very clear. He or she with a better alternative does better. Secondly, we need to know what our reserve price is. Why are we indifferent to saying yes or invoking our alternative? And when you negotiate, it is essential that you understand where that reserve price is, because that is the point at which you are indifferent, where a no seems as good as a yes.

And the third point, which is really important and which people often overlook, is that we not only have to think about our alternative and our reserve price, but we also have to think about our aspiration. What is an optimistic assessment of what we can achieve in this negotiation? So how do you get more of what you want? Let me suggest four steps will help you. The first step is to evaluate the situation. Is this a situation where I can influence the outcome? Change that outcome in a way that makes me feel better? And I need to weigh the potential benefits of trading against the potential costs of trading.

And will the benefits outweigh the costs? The second step is that I need to prepare. And, actually, there are two aspects of this step. Number one, I need to understand what my interests are. What I'm really trying to accomplish in this negotiation. And the second part is that I need to understand my counterpart's interests and preferences. Many of us can understand what our interests are, but few of us truly understand at a deep level what our counterparts' preferences and interests are. Thirdly, now comes the question. Interact with your counterpart. Look at these contested social situations as opportunities to negotiate.

You have information that your counterparts do not have. And this is what you bring to the table. If they knew all your information, if they knew your perspective, they don't need you. Because you have unique information and they have unique information, that's where value is created. Fourth, you need to pack. Now what do I mean by that? Most of us, when we negotiate, negotiate issue by issue. This is a really bad strategy, because when negotiating issue by issue, each issue is contentious. You win or lose. When you package issues, you now have the opportunity to swap between them.

So, think about coming up with solutions. Alternative solutions to its counterpart, in packages. And to help you, since your counterpart will probably want to negotiate on an issue-by-issue basis, consider using "if then" language. If I give you this, I understand that. What you are doing is combining several themes into one package. To get more of what you want, there are four steps. Assess, prepare, ask, pack. To give you an example, my dean recently sent me an email stating that I would have to go from five courses a year to six courses a year. Because I had received information from the rector that we needed to be consistent in the number of contact hours and course credits.

I was not happy with that email. So my response was: I think I need to talk to my dean. Let's negotiate. But, before starting a negotiation, I thought a lot: why was I doing this? What was your interest? His interest was probably in making sure the rector was happy. What was my interest? Do not go from five classes to six classes. And it turns out that I teach two different types of classes. MBA electives and then some specialty classes. There are many people who teach MBA electives. There are very few people who teach specialized classes. So I thought I should focus on specialty classes.

So I went to ask. I scheduled a meeting and part of that meeting was to verify the information I had gathered in my planning session. And it turned out to be true. I was interested in making the rector happy, then came the proposal that brought together our interests. He said he wanted consistency between contact hours and credit. So what he did was change the credit to match the contact hours. I suggested, why not change the contact hours to match the credit? Because it turns out that in my courses, in my specialty courses, we always overdid it.

So, although it was three hours, it was common for us to go from 3 and a half to 4 hours. So, let's do 4 hour courses. And keep me at 5 instead of moving me to 6. He told me, I never thought about that, and why didn't he? It wasn't that strange. Because he didn't have the information that I had, that my classes routinely ran over each other. So when I gave him that information, a solution was created that made him as good as he was and made me much better. By the way, I was the only faculty member who got an exception.

And why did I get an exception, because everyone else had the same email? For two reasons. First, I decided to negotiate. And, number two, I provided a solution that made us both better. So what are the unique opportunities and challenges that women face when negotiating? Let's start with an example that is quite far from what most of us consider negotiations. In 2006, the US Open Tennis Grand Slam tournament got new technology. And, for the first time, they were able to play the calls. And so they allowed the players to challenge the referees' decisions. Now it turns out that throughout the entire tournament approximately a third of the questioned calls were given to the player.

But interestingly, if we divide the number of challenges by gender, it turns out that men challenged 73 calls, while women challenged 28. Now, we can find all kinds of stories about why men's tennis is different from women's tennis. . Men's tennis is faster. Maybe the judges make more mistakes. Maybe judges are paying more attention to women. Maybe. But three times the difference in the number of challenges? Women just feel uncomfortable asking. Expectations drive behavior. If we expect to perform poorly, we will behave in ways that guarantee poor performance. This was demonstrated in research that I think is very revealing.

When women were told that people like them negotiate poorly, they performed significantly worse in their negotiating performance than their male counterparts. When told that people like them negotiate well, they did significantly better than their male counterparts. Expectations drive behavior. If you change your expectations, you will change your results. As women, we must be very aware of three aspects of negotiation. Why do I ask? How do I ask? And who am I asking for? First let's talk about why you ask. It turns out that women are much more effective in negotiations when they combine their competence with a community orientation.

Women need to show their concern for each other. So how do my skills help you, the organization, my employer, my team, do better? So, let me give you an example. A colleague of mine had received a wonderful job offer from a university on the East Coast. So she came to me and said, can you help me figure out how to take advantage of this offer? I really don't want to move. I said, no problem. We can do this. So I told him: make an appointment with the dean and get the offer. Be very clear. Dean, we have a problem.

I love Stanford, but I just got this offer and it's an attractive offer. I need some help. Can you help me figure out how to stay here? She wasn't making a demand. She wasn't giving an ultimatum. She was saying, can you help me? Resolution of community problems. How do you ask? Male evaluators penalize female negotiators in a single-issue distributive negotiation when I ask for more money. So they don't penalize their male counterparts. The evaluators penalize both men and women for asking for more. Why were women penalized? It was because they were perceived as too demanding and not kind.

Now note that I said only one topic. They were negotiating issue by issue. So how can I help you with this set of resources that I need to do my job more effectively and improve your situation and packaging? Community packaging. Next, who are you asking about? It turns out that if we distill the research and the negotiation, we have two big findings. Number one. You better negotiate for yourself if you are a man. Number two. If you're negotiating for me, I'll be much better off if you're a woman. Women outnumber men in representation negotiations by between fourteen and twenty-three percent.

This is huge. So, I use this all the time. When I negotiate, I don't negotiate for myself. I trade for my husband, my four dogs, my seven horses and my fourteen chickens. That's a lot of mouths to feed and it works. A client came to me to ask about one of our top consultants who was busy working on another project full time. So, she wanted to hire a different consultant. But the consultant the client wanted really wanted that project too. So, she came up with the idea: what if we hired a junior consultant to work under her and gave her the opportunity to work on both projects with that influence?

It worked for the client, made the consultant very happy, and really solved my problem. Before coming to business school, for me, negotiation was about preparing to beat a price or aim for a higher number. I now realize that preparing for a negotiation is much more than that. It's about identifying the issues that are important to me. But also the topics that are important to the other parties I interact with. And I think that allows us to be much more creative and really solve the problem. One of the most important things you can do when preparing for your compensation negotiation is to do your research and discover your market value.

Sometime people visit websites and enter their current field and title to find out what their salary range is. But I find that those websites are not that accurate and often compile an average salary. It's safe to assume that if you perform well and ask for a raise, you're above average. One of the other things you can do is survey a group of members or an association, whether online or offline, and ask those members what their salary range is. You can do this anonymously if that is more comfortable for you. I worked for a Fortune 50 company. I got the promotion of my dreams.

The best day of my life. That night I went out to dinner with a mentor to celebrate. I discovered that I was paid substantially less than my six male counterparts. He said you have to go back there and renegotiate. I was very afraid of losing that job, but I did it. I showed up the next morning and renegotiated. My boss's concern was that I was younger and had much less experience than all of my counterparts. However, I pointed out to him that my expectation of him was that he would achieve the same goals as my six counterparts for equally large accounts.

We discussed it and he agreed, and at the end of the day, I got the raise he really deserved. When you are thinking about negotiating, you should be very honest with yourself. How much are you willing to pay to avoid the discomfort of negotiating? And, if you decide you're going to negotiate, you need to be strategic in your asking. And finally, negotiation is an interdependent process. Every bad deal you've gotten, you've accepted. So, you must have the ability tosay no, and sometimes when you say no, the other party comes back and says, don't leave, let's talk.

How about this? It's good for you? But you'll never know unless you're willing to walk away. Recently, a client entered into a negotiation where the terms didn't really work for me, so I told them that it's just not economically rational for me to accept the deal. And he kept it objective, and not personal, which really worked for me and allowed me to walk away from the deal but keep the door open. When I got my first job, I didn't even negotiate the salary. I had no idea how to set a goal. I had no idea how to apply.

Now it's a little different. I understand how to set a goal to aim for and, in that preparation, I get to the point where I understand how it benefits all the different parties involved. But you really have to understand how you feel in order to understand what you want. Because if you don't know what you want, you can't negotiate for it. Early in my career, I realized that the types of projects I was going to work on and the people I was going to work with would be invaluable experience I could gain later. So when I received a promotion, I took that time to not only negotiate my cash compensation, but also my total package.

This way, I was able to ensure that I could focus on a particular industry and also work with team members who I knew would invest in my own development. When I was hiring people, it struck me that men negotiated quite frequently. And the women were not negotiating. And, when negotiating, the women had a figure in mind for what they wanted, but they couldn't explain how they got it. They didn't explain to me that they did a competitive evaluation. They didn't tie it to the outcomes and goals I was hiring them for and why, in their experience, they were a great fit and were going to meet those goals for me.

And therefore, they wanted a package that included X. They had to come prepared and simply convince me that they could meet my needs. I've been on both sides of the negotiation. First, managing compensation for a large organization, and now that I place people in jobs and where I've seen women be most successful is when they frame their request in terms of how it meets business goals. So, go ask. Always keep in mind how this helps the company as well. What I've noticed before is that candidates negotiate their compensation package, that sometimes the negotiation process can get so heated, and both sides can become so focused on what they're looking to get out of it, that the enthusiasm and hunger for work may be lost.

So, remember that when you enter this process you want your future employer and his boss to know that you are not only excited about the opportunity, but you are also hungry to get in and get the job started. Let's start with small steps. Don't start a negotiation where there is great risk to the relationship. Rather, enter into a negotiation where the relationship may not even be important. Where there is less risk for you to experiment, to try. Now let me give you an example. Think about going to a department store. And I don't know about you, but I'm a shoe addict.

I love shoes. Unfortunately, at my job, I spend a lot of time in boring black shoes. But sometimes when I go to shoe sales, there are shoes that sing to me. You can't wear them, you can't even walk much in them, but when you put them on you think: I'm fine. So, I go to this department store. It's the sale. They have a sale like once every six months. I'm there when the store opens and find the boring pairs of black shoes I'll have to buy. And then there is a shoe that, from the shelf, sang to me.

And I found them, and they were my size. It was great. I was so excited. But then I looked at the price and thought they were really expensive shoes. And they had not discounted the sale much. And I told the guy, I told him, I'm going to buy the shoes here. These are beautiful. I love them, but they are too expensive. Can you help me? And he said, no problem ma'am. This is what you do. Buy all four pairs, but don't wear these shoes. And then bring them back, in a week you return them, we discount them 50% and then you can come buy them again immediately.

And I said, it's an hour and a half round trip from my house to the store. It's not going to happen. Do you have other options? And he said, let me go talk to my manager. But when he came back he said, we'll take $75.00 off those shoes. And I said, that works. Thank you. Now, here is your task. Go to your favorite department stores. Find something you want and then negotiate for it. Find out how to solve the problem. This is what I want. It's too expensive for me and I'm asking for help. Start the negotiation.

Not everyone will always be successful, but you will be surprised how often they do. When I first learned about this research, it helped me understand why women sometimes don't ask. There is a social risk. Women are judged differently. And, with Maggie's work, she gives us tools to negotiate successfully and in a way that works for everyone. Malcolm Gladwell suggests that it takes 10,000 hours of practice to become an expert at anything. Negotiation is the same way. You need to practice, but you need to learn from what you experience. You need to view social situations as an opportunity to create value, so that you and your counterparts can get more of what you want.