Successful negotiations for successful women
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This class was written for Georgetown Univ alumnae. This class discusses the concepts and strategies of negotiations as well as the key steps to take in a successful negotiation. Many of the attendees had salary negotiations as their area of interest (e.g. asking for a raise or a promotion). However, this class is appropriate for any type of negotiation. Enjoy!
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Successful negotiations for successful women
- 1. Successful Negotiations for Successful Women ANNE H. JONES PITON INC MARCH 15, 2011
- 2. Background Anne H. Jones Piton, Inc. Founder and President Assistant Dean at McDonough School of Business, Career Management & Alumni. VP Citigroup. Recruiter and Manager of MBA Training M.A. University of Massachusetts M.B.A. Cranfield University, UK The Mission of Piton Inc is to provide career education and support the goals of men and women experiencing career change and to support the organizations that serve them.
- 3. Success for Today A positive point of view about negotiations, more likely to negotiate in the future, more prepared and positive negotiation outcome.
- 4. Women Don't Like to Negotiate 2.5 times more women than men said they feel "a great deal of apprehension" about negotiating. Men initiate negotiations about 4 times as often as women. Male metaphors for negotiation: “ballgame "wrestling match," while women picked "going to the dentist.” Women will pay as much as $1,353 to avoid negotiating the price of a car.
- 5. Women Suffer When They Don't Negotiate By not negotiating a first salary, an individual stands to lose more than $500,000 by age 60.
- 6. Definition of Negotiation General: Bargaining (give and take) process between two or more parties (each with its own aims, needs, and viewpoints) seeking to discover a common ground and reach an agreement to settle a matter of mutual concern or resolve a conflict.
- 7. Negotiation: Try it, you’ll like it! Choose something to negotiate that you otherwise would not. For your next negotiation, raise your goals a little bit and see what happens.
- 8. Negotiation Terms and procedures
- 9. BATNA Best Alternative to a Negotiated Agreement Ego Need BATNA
- 10. ZOPA Zone of Possible Agreement Ego Need BATNA ZOPA
- 11. Seller’s Buyer’s expectation expectation
- 12. Seller’s Zone of Possible Agreement Buyer’s expectation expectation
- 13. BATNA BATNA Seller’s Zone of Possible Agreement Buyer’s expectation expectation
- 14. The Anchor The party making the first reasonable offer should prevail over his bargaining partner who must respond in the range set by that party.
- 15. The Negotiation Equation a BATN n BATN A c A h o Seller’s r Zone of Possible Agreement Buyer’s expectation expectation
- 16. Preparing to Negotiate How can we reach a mutually beneficial and durable agreement? By ascertaining their interests, preferences, priorities, needs, desires, constraints, strengths, and weaknesses, as well as our own
- 18. Preparing to Negotiate • Agreement reached must be better than no agreement at all (“BATNA”) • Bottom line or “reserve” price • Plan Your Opening Offer/Demand • Plan the Number of Bargaining Moves (concessions) you’re willing to make in Advance
- 19. The Dance of Negotiation • Begins with the Anchor • Dance ends at Midpoint Between First Two Reasonable Offers • Each Concession tends to be half the size of the previous concession and takes twice as long to be made
- 21. Salary Negotiations This is not the end of the interview process-It is the beginning of the employment relationship. Negotiation begins the minute one side wants something the other side is not ready to grant. You are not adversaries -- You are collaborators.Your mutual goal is a win-win solution.
- 22. Pace Yourself You do not need to close the deal in one conversation. Instead seek to expand the conversation to explore possibilities. Know what success means to you and write it down.
- 23. Do your homework. Near-Monetaries • Benefits • Overtime/Comp time • Company car • Travel awards • Relocation assistance Monetaries • Expense coverage Non-Monetaries • Salary • Title • Promised increases • Training/Education • Yearly bonuses • Access to technology • Signing bonuses • Promised review dates • Profit sharing • Travel assignments • Stock option/ESOPs • Home equipment usage Evaluate the value of each package component and prepare to comment.
- 24. Salary Negotiations Choose your timing. Own the negotiation from the start Give yourself some quiet time Make your decision promptly and accept in writing
- 25. Negotiation Rules of the Road 1. Be Prepared. 2. Negotiate With the Decision-makers 3. Get All Issues On the Table Before Compromising 4. Be Truthful 5. Listen and Look Carefully 6. Treat the Other Party With Respect 7. Be Sure Each Party Understands the Other 8. Understand Who Needs the Deal the Most 9. Be Prepared to Compromise. 10. Be Unemotional.
- 26. Negotiating with Difficult People (aka negotiating with jerks)
- 27. Negotiating with Difficult People Cooperative Responses to Difficult People: • Sub-divide concessions by dividing issues into smallest parts & offer concessions only on sub-parts; • Make hypothetical offers that can be disowned later; • Demand principled justifications for positions; and, • Respond tit-for-tat, i.e., to intransigence with intransigence and cooperation with cooperation.
- 28. Negotiate from Strength "When others sense your willingness to walk away, your hand is strengthened. Sometimes you are better off not getting to yes.“ Robert Rubin, Chairman of Citigroup Executive Committee, former Secretary of the Treasury
- 29. Words of Wisdom From Other Women The gender relationship needs to be top of mind in business negotiations Use mentors to help refine your negotiation skills. Women tend to think of getting along vs. getting what they want Negotiation is a conversation and you may risk getting off-track Gaining buy in along the way will get you closer to your goal faster. Successful negotiating requires preparation. It is not always about money. Be prepared to compromise and expect the other party to compromise as well. Being fair is not a loss. Negotiating is a process not an event.
- 30. Summary • Know you competitor’s motivations, concerns, preferences, desires, needs, priorities, risk tolerance, optimism/pessimism about the future….and know your own as well. • Know Your Best Alternative to a Negotiated Agreement (“BATNA”) • Plan Your Opening Offer/Demand, that is your anchor • Plan the Number of Bargaining Moves (concessions) you’re willing to make in Advance • Keep emotions in check
- 31. Recommended Reading www.careerwomen.com Deborah Tannen: "The Power of Talk: Who Gets Heard and Why."Harvard Business Review 73 (1995):5. www.womendontask.com “Getting to Yes" (Fisher &Ury) “Difficult Conversations” Sheila Heen
- 32. Thank You and Questions Anne@pitoninc.org 347 782 1715 www.pitoninc.org
Hinweis der Redaktion
- BackgroundPiton Inc was founded with the goal of providing men and women who are experiencing career change with the same professional development that is taught at elite business schools. Piton Inc helps people successfully engage in the job search and networking. It provides a valuable venue for professionals to share their expertise and sharpen their skills. Currently, our focus is the veteran community and we take pride in serving this valuable group of career changers.We also provide individual coaching and career strategy. That is my big pitch.
- In surveys, 2.5 times more women than men said they feel "a great deal of apprehension" about negotiating. Men initiate negotiations about four times as often as women.When asked to pick metaphors for the process of negotiating, men picked "winning a ballgame" and a "wrestling match," while women picked "going to the dentist.”Women will pay as much as $1,353 to avoid negotiating the price of a car, which may help explain why 63 percent of Saturn car buyers are women. Women are more pessimistic about the how much is available when they do negotiate and so they typically ask for and get less when they do negotiate—on average, 30 percent less than men.20 percent of adult women (22 million people) say they never negotiate at all, even though they often recognize negotiation as appropriate and even necessary.
- By not negotiating a first salary, an individual stands to lose more than $500,000 by age 60—and men are more than four times as likely as women to negotiate a first salary.In one study, eight times as many men as women graduating with master's degrees from Carnegie Mellon negotiated their salaries. The men who negotiated were able to increase their starting salaries by an average of 7.4 percent, or about $4,000. In the same study, men's starting salaries were about $4,000 higher than the women's on average, suggesting that the gender gap between men and women might have been closed if more of the women had negotiated their starting salaries.Another study calculated that women who consistently negotiate their salary increases earn at least $1 million more during their careers than women who don't.In 2001 in the U.S. women held only 2.5 percent of the top jobs at American companies and only 10.9 percent of the board of directors' seats at Fortune 1000 companies. Women own about 40 percent of all businesses in the U.S. but receive only 2.3 percent of the available equity capital needed for growth. Male-owned companies receive the other 97.7. percent. 8 times as many men as women graduating from Carnegie Mellon negotiated their salaries. The men who negotiated were able to increase their starting salaries by an average of 7.4 percent, or about $4,000.A study calculated that women who consistently negotiate their salary increases earn at least $1 million more during their careers than women who don't.
- EGONEEDBest Alternative to a Negotiated AgreementIn negotiation theory, the best alternative to a negotiated agreement or BATNA is the course of action that will be taken by a party if the current negotiations fail and an agreement cannot be reached. BATNA is the key focus and the driving force behind a successful negotiator. BATNA should not be confused with the reservation point or walkaway point. A party should generally not accept a worse resolution than its BATNA. Care should be taken, however, to ensure that deals are accurately valued, taking into account all considerations, such as relationship value, time value of money and the likelihood that the other party will live up to their side of the bargain. These other considerations are often difficult to value, since they are frequently based on uncertain or qualitative considerations, rather than easily measurable and quantifiable factors.
- ZOPA is the area in which possible agreement. The range in which a possible agreement that is satisfactory to both parties can take place.
- EGONEEDBest Alternative to a Negotiated AgreementIn negotiation theory, the best alternative to a negotiated agreement or BATNA is the course of action that will be taken by a party if the current negotiations fail and an agreement cannot be reached. BATNA is the key focus and the driving force behind a successful negotiator. BATNA should not be confused with the reservation point or walkaway point. A party should generally not accept a worse resolution than its BATNA. Care should be taken, however, to ensure that deals are accurately valued, taking into account all considerations, such as relationship value, time value of money and the likelihood that the other party will live up to their side of the bargain. These other considerations are often difficult to value, since they are frequently based on uncertain or qualitative considerations, rather than easily measurable and quantifiable factors.ZOPAis the area in which possible agreement. The range in which a possible agreement that is satisfactory to both parties can take place.I want to sell my car. 15,000 and I would have made a sweet deal. 10,000 I have gotten enough money to pay off my other bills and buy a moped. 8,000 is my best alternative.YOU need a car. 5,000 and you can afford to go on a skiing vacation. 9,000 and you have a decent car. 10,000 is your batna. (after that, just walk or take a cab).
- ZOPA is the area in which possible agreement. The range in which a possible agreement that is satisfactory to both parties can take place.
- ZOPA is the area in which possible agreement. The range in which a possible agreement that is satisfactory to both parties can take place.
- Preparing to NegotiateKnow bargaining partner’sstrengths, weaknessesMotivationsConcernsaspirationspreferencesPrioritiesfearsKnow Your Best Alternative to a Negotiated Agreement (“BATNA”) Agreement reached must be better than no agreement at allBottom line or “reserve” pricePlan Your Opening Offer/Demand Plan the Number of Bargaining Moves (concessions) you’re willing to make in Advance
- Know yourselfKnow them: Are they really the decision maker?
- If you try to short-circuit dance, your bargaining partner may be encouraged to use the mid-point offer to claim more value for himselfExtreme OffersMake them softMonitor responseAnticipate making concessions Reasonable offerDemonstrate commitmentMake only modest concessionsStress meritPart of the reason for this is cultural. We are not comfortable staying in negotiations for a lengthy period of time. Some cultures don’t feel as if they have BEGUN bargaining until three of four sets of offers and counter-offers. We become uncomfortable when we reach three sets. This is why it is so important to commence bargaining in a range that is reasonably close to our true settlement range.
- This is not the end of the interview process-It is the beginning of the employment relationship.For so long, the offer was your singular goal. Once in hand, there is a tendency to start dancing and forget the business yet to be accomplished. The employer is hoping you will accept their invitation to join their company. They have already pictured you walking in their hallways. Be sure that your post offer behavior is congruent with the you they met. There is no need to “put on the gloves.” Be you. Be the you they’ve come to know and respect. Treat your prospective employer the way they would treat their most valued business associate. Negotiation begins the minute one side wants something the other side is not ready to grant.You really begin negotiating when you present your credentials in a way meant to convince the employer to make the offer. They’ve got. You want. Once they’ve made the offer, they want the acceptance. You’ve got. They want it. You are not adversaries.You are collaborators.Your mutual goal is a win-win solution.Stephen Covey’s chapter on win-win relationships develops this work principal beautifully. Your goal is to work together with the employer to find terms that both parties feel good about. It can even work very well for you to voice this intention.
- This is not the end of the interview process-It is the beginning of the employment relationship.For so long, the offer was your singular goal. Once in hand, there is a tendency to start dancing and forget the business yet to be accomplished. The employer is hoping you will accept their invitation to join their company. They have already pictured you walking in their hallways. Be sure that your post offer behavior is congruent with the you they met. There is no need to “put on the gloves.” Be you. Be the you they’ve come to know and respect. Treat your prospective employer the way they would treat their most valued business associate. Negotiation begins the minute one side wants something the other side is not ready to grant.You really begin negotiating when you present your credentials in a way meant to convince the employer to make the offer. They’ve got. You want. Once they’ve made the offer, they want the acceptance. You’ve got. They want it. You are not adversaries.You are collaborators.Your mutual goal is a win-win solution.Stephen Covey’s chapter on win-win relationships develops this work principal beautifully. Your goal is to work together with the employer to find terms that both parties feel good about. It can even work very well for you to voice this intention.
- You do not need to close the deal in one conversation.Instead seek to expand the conversation to explore possibilities.Again, because the offer is often seen as the end of the process and not the beginning, there is a strong tendency to want to get it over with. Resist this temptation. A few more days of patient, focused work will bring dividends beyond dollars. Examine your intentions and develop content in line with those.There is a great job search myth that negotiation is a game of hard ball; that the employer is out to low ball you and you must protect yourself- OR- equally damaging, that if you play hard to get, make up competing offers, or in another way bully your way into an improved offer, you’ll win. Sta
- Always negotiate the base salary first. Everything builds out of that.Do your homework. Clarify your value in the market.Analyze the offer meticulously and be clear about how it compares. Evaluate the value of each package component and prepare to comment.Determine what it will take to make an unacceptable offer acceptable, and what items are negotiable: MonetariesSalary Promised increases Yearly bonuses Signing bonuses Profit sharing Stock option/ESOPs Near-MonetariesBenefits Overtime/Comp time Company car Travel awards Relocation assistance Expense coverage Non-MonetariesTitle Training/Education Access to technology Promised review dates Travel assignments Home equipment usage
- Choose your timing.Again there is no one size fits all answer. General wisdom is that you should discuss salary as close to the offer as possible because only then will you fully know the entire value of the opportunity. Once you have received the offer, you may not want to negotiate until you completed the interview process with other companies and can make comparisons. You then have the tricky task of explaining that you are in process with others and that you would very much like to complete those processes in order to have a full view of the possibilities for a great fit. That you find their offer attractive and don’t want to loose it, but hope you can agree to a time frame that meets everyone’s needs.Sometimes, you need an employer to produce an offer earlier than they had planned because you face loosing a different offer with an early deadline. In this case they must perceive your superior value. You may need to get in front of them again to clarify that. Set the table: “I will seriously consider the terms you propose and will get back to you promptly with my questions and feedback.” Get it in writing.Once you have agreed to acceptance terms, ALWAYS, ALWAYS, ALWAYS get the offer in writing. NEVER, NEVER, NEVER, accept and offer unless you have taken time to review it carefully, ask questions and explore the possibility of modifying the terms. You can say something polite like, “I am confident that the terms we’ve discussed will be acceptable. I want the chance to review your final proposal and be sure we have an understanding. May I call you for our next conversation when I’ve done that?” Make your decision promptly.No one likes to be left waiting. If you have handled the negotiation phase of the relationship carefully and thoroughly, there shouldn’t be a reason for you to delay. If more than 48 hours passes, the employer will begin to doubt not only your acceptance, but your sincerity. Unless you have already negotiated a special response time arrangement, get back to them right away. When one proposes, there is nothing better than a “Yes!” Accept in writing and say Thank You.Thank everyone who helped you along the way. Everyone- mentors, human resource representatives, interviewers, hiring managers- everyone who worked toward your success.
- The best prepared party generally has the upper hand in negotiations. Being prepared includes (a) clearly developed objectives so that you will know what is important and what can be compromised; (b) learning everything you can about your "adversary" and trying to anticipate what your adversary's objectives will be, the reasons for those objectives, and the anticipated means of achieving them; and (c) anticipating areas of disagreement and designing alternative solutions to resolve areas of disagreement. I often advise clients to carry on initial negotiations without an attorney or accountant present, but well-prepared clients will always have reviewed the elements outlined above with their professional advisors in order to avoid being blind-sided by an unanticipated tax or legal consequence.2 . Knowing who will be making the decisions is critical in negotiations. Most of us have witnessed negotiations in which tremendous progress is made, only to learn at the end of the day that the party across the table had no authority and was required to report back to management. Sometimes this is unavoidable, but it is often used as a negotiating tactic, and if recognized it in advance, should generally be avoided. . In order to follow your strategy and achieve your objectives, you must know what all of the issues are before compromising on any one of them. It is very easy for the other party to raise seemingly small issues, resolving them one by one on seemingly mutually satisfactory terms, until you suddenly realize that you have been painted into a corner without realizing what was happening. If all of the issues are first put on the table, there is a greater opportunity to prioritize needs and design mutually satisfactory solutions to issues. Furthermore, you are less likely to give the impression that you need the deal more than the other party (which is the one thing you should never do in negotiations).4. It may come as a surprise to learn that there is no substitute for truthfulness and honesty in negotiating business transactions. Bending the truth, providing inaccurate information or even outright lying is sure to backfire sooner or later. If the other party loses confidence in your credibility during negotiations the deal will not occur. If the other party experiences surprises following the closing of a transaction in which inaccurate information was tendered, costly legal entanglements will surely follow. On the other hand, truth and honesty, even when it hurts, will win the trust and confidence of the other party (both during and after negotiations) and will give you more credibility when negotiating serious issues.5, . Listen carefully to everything the other party has to say. Often one word will give away the other party's hidden agenda in a transaction. Sometimes a facial expression will reveal the other party's true position on a point. I have on more than one occasion had the privilege and good humor of observing the other party's attorney state that his client "would never agree to . . ." while his client's expression was clearly suggestive of the contrary. Generally speaking, the more you can get the other party to talk, the more you will learn (in a subtle way) about the other party's true needs and intentions.5. . Always treat the other party with respect, even if you have concluded it is undeserved. If the other party senses hostility, discussions will become strained and highly structured and the opportunity to gain critical information from comfortable discussions will be lost. You will be far more effective holding your true feelings about the other party close to your chest and you will not burn any bridges in the process.. If the parties have reached an impasse, it is important to review the nature of the impasse while at the negotiating table so that all concerned may be satisfied that the impasse is not by virtue of a misunderstanding. I recall one occasion in which the other party's attorney and I were convinced that there was no middle ground on a particularly important issue. Everyone was frustrated and preparing to leave the room. I suggested that because of the importance of the matter, we should review the nature of the dispute to be sure there were no misunderstandings. As the other attorney and I described our impression of the impasse, my client announced that he had apparently misunderstood our discussion of his rights under an arrangement suggested by the other attorney, and that if his enlightened understanding was correct, he was prepared to agree to the other party's terms. The deal was saved. I suspect many deals are lost through misunderstandings.. I mentioned this above, but it is so important that it bears repeating. Experience tells me that the party who needs the deal the most will give and give and give again. The other party need give little. If you determine the other party needs the deal the most, enjoy the ride. If you need the deal the most, don't let the other party know. This is why rule number 3 above is so important if you are the party who needs the deal the most. Oftentimes the first party to compromise on an important point is the one who needs the deal the most, but the rule is fraught with so many exceptions that I would never adopt it as an ironclad negotiating principle.This is why having clear objectives and a strategy is all important. In business transactions a spirit of compromise often leads to advantageous business combinations and opportunities. The key is to know where you can compromise without sacrificing your overall strategy and objectives. Bargaining points are seldom equally important to all parties in a transaction. The key is to sort them out so that each party obtains the benefit its most important issues.One should generally be patient and unemotional in negotiations (although I will admit that there are times when one can advantage through outward impatience and emotion). Nevertheless, the point I am trying to
- Mutual problem-solving inquiries include: what the parties believe would be a "fair" solution to the problem; whether the parties can agree on criteria for a "fair" settlement; and, what priorities each party has, i.e., which issues are most important to each party and which unimportant.
- 1. The Mars/Venus relationship needs to be top of mind in business negotiations. Communication styles between men and women are different and as a result, negotiations can be complex. Our advice: keep your communication style direct by sharing plans, not concepts. Think collaboration not confrontation. 2. Use mentors to help refine your negotiation skills. Given that you will be negotiating with both men and women, pick a mentor from Mars and Venus to get perspective from both sides of the communication spectrum. Practice makes perfect, so our advice: Practice, practice, practice. 3. Women tend to think of getting along vs. getting what they want. Be clear about what you want and practice asking for it in a calm, direct manner. Our advice: don’t be confrontational. Getting fired-up and emotional may have an adverse reaction. 4. Negotiation is a conversation and you may risk getting off-track. Our advice: stay focused; remain on point and on course to avoid a negotiation disaster. 5. Gaining buy in along the way will get you closer to your goal faster. Making sure that the other party is being heard is a sign of respect and will be appreciated. Our advice: repeat the points of the other side and use language such as “Let me make sure I completely understand your point.” 6. Successful negotiating requires preparation. Be prepared with a strong understanding of your needs and motivations, as well as the other side. Our advice: do your research, gather together relevant information and if it’s complicated, get outside expertise from a mentor or colleague. 7. Creative solutions are well respected, especially if they demonstrate a strong understanding for the goals of the business. Our advice: Most points are negotiable and remember; it’s not always about money. Think add-ons, better terms or additional services. 8. Starting with your bottom line may close the door on negotiations. Our advice: be prepared to compromise and expect the other party to compromise as well. 9. Being fair is not a loss. It shows that you are willing to adjust your expectations to meet the needs of the other side. Our advice: ask the question, “Why don’t you tell me what you think is fair.” You may be surprised at the answer. 10. Negotiating is a process not an event. One conversation may not culminate in a final decision. Our advice: be willing to say, “Let me think about that and get back to you in 24 hours.”