Some latest conventions in business negotiations

Thanks to Paul Trevino and for this guest blog post!

When it comes to negotiating, it is important to establish an equal standing among both individuals. 21st century negotiating has become tailored towards identifying both parties as business partners, as opposed to the old-fashioned supplier vs client approach.

The trend towards a more open and sincere direction in negotiation has become gradually accepted among Western society. The previous method, which generally consisted of self-satisfied or boastful exercises, has since been stripped in favor of approaches that benefit both parties, not just an eternal struggle to satisfy one’s ego.

By establishing an even playing field, it allows both people to be heard equally and voice their opinions in a fair manner.

Open Up

Contemporary negotiating methods and techniques suggest that sharing more information (than what was previously expected of) is valuable in establishing trust among both parties. By sharing more information with your business partner, it displays confidence and admiration in their skills and abilities.

Being open and honest is about convincing someone why you’re suitable for a job or task, through evidence of previous experience or examples of past achievements. By sharing this information with your colleague (and listening to theirs), it displays mutual confidence and admiration for one another. By establishing trust early on, it can lead to further promising experiences to come.

Don’t Rush

Accepting or declining a deal/offer on a tight deadline is a potential recipe for disaster. Negotiation consulting precise details can often be time consuming, and for good reason, if the deal or offer is an important career change or opportunity.

Establishing a generous time frame to discuss details is crucial to remember if you wish to secure a deal that benefit both parties equally. A rushed decision can lead to accepting less-desirable terms, which could result in conflict between individuals later on.

Be Willing to Say No

If both parties are to form a mutually bonding alliance or partnership, then the deal needs to be equally fair between them. The ability to say ‘no’ is an important step in maintaining assertiveness, a trait that even your business partner may find admirable. As willing as you may be to please the other member, consider the terms that affect you and decide whether you understand the results of your decision.

The inability to refuse an offer could lead to accepting a poor deal. Saying ‘yes’ to a less-desirable offer may display weakness to the other party, and disturb the even playing field previously established. Saying ‘no’ is the ability to consider options other than your desired goal, straying too far towards the demands of others can be demoralizing and costly in the future. Consider your choices and whether the offer being made equally satisfies both of you.

Understand the Other Side’s Situations

Social standards often mistakenly lead us to focus on our own problems or pressures, without perhaps considering others. When negotiating, it is important to be sympathetic to your partner’s situation and consider what they may want out of a deal.

Understanding another person’s motives helps you see the bigger picture. It can justify an offer you perhaps don’t particularly agree with, or it may allow you to see why the other party may reject your requests.

Being able to identify another person’s pressures can allow you to persuade a better deal, or perhaps even change it completely to better suit their needs (without being at the expense of yourself). Providing potential solutions to someone’s problem can result in similar treatment for you. Consider the possibilities and decide based on the circumstances.

Get Higher Pay by Focusing on the Meal not the Ingredients

f96db88c-35c4-4faf-8db9-09bd0f390154Showing financial impact is the best way to get a raise from your current employer and a high first offer and ultimately an even higher final offer from your next employer. If you are like many working women, you probably don’t think you have much financial impact making it hard to get higher pay.   My advice to you – Think Recommendations and Decisions, Not Reports.

I can’t remember the last client who did not have a least one line on her resume about the amazing reports she created. They were sexy. They had pivoting charts. They were 3-dimensional. People wept when they read them. Unless you are an administrative assistant, report specialist, or report designer the inclusion of them on the resume lessens the value of your work. Oh, I know, reports take time. It takes time to pull all the data together. It takes time to organize them in a meaningful manner. It takes time to design them so the important information stands out. What would a business meeting be with a report or PowerPoint presentation to mull over? How dare I say reports are not important!

The thing is that it is not the creation of the report that is meaningful. It is either the recommendation you make to the people who see the report or the decision you make based on the information in your report that is important. For example here’s a line from one client’s resume:

“Created tracking & reporting tools to measure progress, improve budget accuracy and aid forecasting.”

I asked her about the decisions based on these reports.   For one project this report saved 3 months work. Three months of payroll. Three additional months of being able to sell the finished product. Her ability to make decisions that save three months are what people want to hire. The ability to save $X and generate an added $Y is what employers pay good money for. The new bullet point on her resume now looks more like this:

“Created a net increase of $W by eliminating 3 months in project time by consistently reviewing progress, budget, and forecasting metrics in my own proprietary reporting tool.”

A similar example is:

“Conducted cost benefit analysis, modeled long-term costs, presented data for Executive review.”

When we were done discussing it became:

“Proposed $X in savings to the Executive team based on cost benefit analysis and modeled long-term costs.”

Good recommendations and decisions are made based on information. The collection of the information is not the end result. It would be like a great chef listing that she can shop for good ingredients. That she can tell when a tomato is ripe. A good chef boasts about her signature dishes, her Baked TroutZagat’s ratings, and her Michelin star ratings.   It’s not the collection of ingredients that is important. It is what she does with them – the finished dishes – that are important. In business the finished dishes are your decisions and your recommendations. So stop flaunting that you know how to grocery shop and start getting your future employers hungry to hire you for top dollar by telling what you make – amazingly good and profitable decisions.

1 Thing You Can Do Now to Get a Bigger End-of-Year Bonus

iStock_000014355652SmallThe end-of-year bonus will be here before you know it. Some companies have a written-in-stone procedure to determine bonuses such as using a factor of the employee’s salary and the company’s profit to formulate a bonus.   Many other (often smaller) companies use a more seat-of-your-pants process. It may be each manager is given an amount to split amongst the department as s/he sees fits.

Regardless how the bonus is determined, now is the time to remind management of your impact this year. The people who do this will be top of mind for managers while those who do not will be seen as being okay with whatever is given them. Really, do you want to be okay with just any ol’ thing?   Even if you think your manager has no say, it is worth having a bonus conversation. It is a good reminder for raises, promotions, and not to be on the next round of lay offs list if it doesn’t impact bonus.

Remind yourself of the work you have done before popping in on your manager. Your impact on revenue and costs are the best arguments for additional money. Employees tend to think in terms of their actions when discussing work, i.e. “I managed the Smith project.” Try figuring out what the Smith project generated or saved the company and talk about that instead. Let’s face it; money is the fuel of all organizations including non-profits. When you show that you know how you are creating more fuel then you have a much better shot at getting more money (fuel for your household). Did you complete the project on time or even early? Did you bring the project under budget? Can you compare this to other projects managed by other people? When all was completed would the project itself bring in more money for the company or save money? Most likely the project would not exist if it did neither of these things.

Don’t worry if you are not management. Each employee is considered a revenue generator or cost center. Take a great waitress. What makes her better than the other wait staff is that she is brining in more money each shift. She probably is doing this by pushing higher end liquor and turning her tables over quicker in the friendliest of manners. Don’t talk about turning the tables over. Talk about the average revenue per shift. Here is a sample of things to consider for different types of employees:

  • The money saved in vendor contracts that you negotiated to lower rates
  • The money saved in your widget redesign that takes less time or material to produce
  • The increase in revenue based on the customer service improvement you implemented resulting in a higher percentage of return customers

The list can go on and on depending on the type of work you do. As the saying goes “follow the money” and you will figure out your financial impact.

Once you know your impact it is time to pop in on management. Notice I refer to it as popping in. You don’t want to make this a big deal. It truly is a quick touch base. You state your case and leave. You are not waiting for a more meaningful response from your supervisor than “I’ll take it into consideration.” So, what do you say to start the conversation?

You: Hi, boss. I know the end of the year and bonuses will soon be here. Just a reminder, I saved our company $X by doing Y and made the company an additional $Z by doing Q which is why I believe I deserve the high end for bonuses this year. Do you agree?

From there you and your boss are having a conversation. It may be very brief or it may open up a longer conversation.  Regardless, the fact that you had this conversation just gave you a better shot at more money come bonus time.

Top 5 Salary Negotiation Tips for Women: The Boston Edition

Paul Revere StatueBoston, my hometown, is a great place for inspiration to set yourself free of the fear to negotiate pay and benefits.  As the birthplace of our revolution reminds us, one is not handed equality; one has to fight for it. In the same manner, women need to speak up to have a shot at equal pay. As an added bonus, one estimate shows that people who negotiate can earn as much a $1 million more during a career. So, women here are five tips to negotiate your pay and benefits inspired by the many historic sites and a holiday that are Boston.

The Old North Church: “One if by land, two if by sea.” The British could arrive one of two ways. Either way, the patriots were ready.   They created options to handle the potential situations. Similarly, there is nothing as effective in negotiating as not needing to take a job. Create options so you do not need to accept anything offered.  You can do this by talking to recruiters who contact you especially when you are perfectly happy at your current job. Hey, they will need to offer you the world to get you to leave something you love. Guess what? They often do.  If headhunters are not contacting you, then apply to a dream job that you think you have no shot of getting from time to time and update your LinkedIn profile so recruiters will start contacting you.

The Battle of Bunker Hill: It’s been decades since I walked to the top of the Bunker Hill Monument. I could say the lesson from the Monument is stamina. Keep going until you reach the top but I’m going another route. The expression “don’t fire until you see the whites of their eyes” came from this battle. The saying means don’t use your vital resources (bullets) before you are sure they will have impact. The same is true with answering two common questions; 1) what is your current pay and 2) what do you want to earn. Don’t shoot this information out in the application. Just skip over the questions or enter “0” if the field is required in an online application. Your pay will first be used to compare you to other candidates and then to benchmark your salary offer when you get the job. With the gender pay gap at 23%, your current pay will make you look less desirable than the male candidates and hinder you from getting an interview. When you do get a job offer, the salary will be lower if you had a low previous pay. Also, as a woman, you will most likely state a desired amount of pay that is 30% lower than the guys are saying. Once again, lowering the amount of pay offered should you get the job.

Tea Party Ship: Say NO just like our fore fathers and mothers said. Instead of no to taxation without representation, say no to the first salary and benefits offered. Managers expect negotiations so that first offer is never the best one. You don’t even need to say the word no. Try “That offer seems low based on the current market.”

Evacuation Day: I know, it’s not a physical place but it definitely is part of the background of Boston. Growing up, Evacuation Day was one of my favorite holidays. Let’s face it, Evacuation Day creates a way for Irish Proud Boston to celebrate St. Patrick’s Day since Evacuation Day falls on March 17th. This is a great lesson in finding creative solutions. Incorporate your benefits package in the negotiation so you can be creative. You can’t increase the base salary. How about a signing bonus? Commuter allowance? Cell phone allowance? Additional vacation time? Putting more things in the mix allows both parties to find a fit that works.

USS Constitution aka Old Ironsides: The warship survived very lengthy and close range battles. Just like a warship, you need to be ready for a few shots to come your way. The more ready you are, the more likely you are to overcome the pushback in the negotiation.  Classic NOs from hiring managers and recruiters include:

“We can’t afford to offer you more.”   You can prepare your response by having researched the organization’s finances for the past few years.   Your response will be something similar to, “Wow, that’s surprising. I saw your profits grew double digits for the past three years.”

We can’t pay more because that’s the highest pay in the department.”   You are looking for pay that is the market rate for the job. Research salaries on one of the many salary research sites or job boards that exist. Check with a trade association for your industry or job function.   Then respond with, “That’s interesting to know but not what matters. I’m looking to make market rate for the job and that offer is below market.” You can see more responses to Classic NOs in this free download.

Take to heart the five tips above and you can emulate the Boston sports teams and become a champion at salary and benefits negotiation.