The Power of “Why” in Negotiations

Why, A great question for negotiatingOften when we think of negotiating we think that only one party can win.  Over this summer we saw the US Federal Government negotiate the Debt Ceiling in a manner that was very much a winner-take-all type of negotiation.   The Republicans wanted no new taxes and the Democrats want to add some taxes.  It becomes nearly impossible to negotiate with such polar opposite positions. A similar type of negotiation is when parties are negotiating for their piece of a fixed pie. The various parties usually are gaming to have the biggest piece of the pie or in some cases the whole pie.  Both types of negotiations can become very combative – again look at the Debt Ceiling Negotiations as an example.

I’m going to share with you a different type of negotiation in which both parties can get bigger pieces of the pie than they even thought available.  It’s called collaborative negotiating.  In collaborative negotiation the interests of each party becomes much more important than the actual position of each party.  This allows one or both parties to consider solutions that allow each person to meet their interests yet it may not be in the form of their original position.

Here’s an example of interest-based or collaborative negotiating.

Parent:  Be home by midnight.

Daughter:  Sue’s party won’t be over until 1 at the earliest.  How about 1:30?

Parent:  I have to work tomorrow morning and can’t stay up that late to make sure you get home safely.

Daughter:  Can I sleep over at Sue’s house instead? That way you’re not worrying about me driving home and I get to stay until the end of the party.

Parent:  Sure, if it’s okay with Sue’s parents.

Those of you who remember being 17 or have teenagers are probably laughing at how calm and sane I made this example conversation seem.  In real-life, this could be a very emotional exchange with a door slamming or a few tears or the silent treatment.  But notice, when including the reasons for each party’s position (midnight vs. 1:30) a solution that wasn’t in the original mix becomes the solution that works (sleeping over).  The same can be said for any negotiation even when only one of the parties involved takes the initiative to learn why the stated position is desired.  Let’s try a salary negotiation as an example.

Employee:  I’d like to talk to about my salary.  Based on the current market and the increased responsibility I’ve taken this past year, I believe I should earn an additional $6,000 per year.

Manager:  I agree you have taken on more responsibility but a raise is not possible.

Employee: Why is it not possible?

Manager:  One reason is that we only give raises during the review process and that won’t be for another 6 months.

Employee:  Are there any other reasons?

Manager: The job title you have is capped at $2,000 more than you make.

Employee:  Do you agree that I am doing work at a higher level than my title and salary?

Manager:  Yes, you have taken on more responsibility than you co-workers.

Employee:  Would a senior title and the larger salary be possible now?

Manager:  A promotion can occur outside of the review process and you have stepped up.  Let me look into this more and see what is possible.

Again, this conversation may seem overly calm and sane to you but negotiations can and do happen all the time in such a manner.  Inside you may be a nervous wreck about hearing NO but if you focus on the reasons of your manager’s opposition than you most likely will become calmer and start brainstorming on potential solutions.  Whether or not your manager engages in the brainstorming is not important.  The fact that you took the initiative to find out why will give you enough information to resolve the negotiation successfully.

So, the next time you hear no, don’t think of how to counter it.  Think of how to understand it and ask the question “Why?”

© Copyright 2011, Katie Donovan. All rights reserved. Reproduction without explicit permission is prohibited

Be Your Own Client

advocacyWomen are great advocates.  We can tell you everything amazing about our friends, our relatives, the neighborhoods, a movie, or cause.  This is not just an opinion.  There have been studies.  Research by Mary Wade shows that women asking for money on someone else’s behalf will request 9% more than men will request.  Yet, women ask for 8% less then men when they are requesting money for themselves. 1

So how do we keep this strength of advocacy when we negotiate for ourselves?  I recommend removing the personal aspect as best you can.  One way is to consider you, the employee, as a client of you, the negotiator.    I know it sounds silly but spend five minutes considering it with me with an exercise.

First thing as the negotiator is to put a proposal together for you, the client, to show what the negotiator intends to get the employee.   Stick with the data for you and your job but think of a daughter, niece, or dear friend as you create this proposal.  Put a picture of the person by you as you create the proposal. This is especially helpful if you are a visual thinker.   In the proposal include:

  • What salary would you target as the goal?
    • Bonus
    • Commission
  • What benefits would you want to improve?
    •  Vacation Time
    • Health Insurance
    • Life Insurance
    • Flexible Time/Work Schedule
    • Working Remotely
    • 401K contribution
    • Pension
    • Childcare/Eldercare
    • Termination package
    • Maternity leave
  • What are the lofty goals and what are the minimum goals for each item?

In the same proposal include the reasons why the company should agree to the terms?  This should include:

  • What is the typical compensation for the job in the region?
  • What information do you have on the company’s typical compensation for the job?
  • What are the accomplishments of the employee that you would highlight?
  • How do the accomplishments benefit the company?
    • Add to revenue
    • Remove costs
  • How has the economy as a whole and of the company in particular changed since the initial hire and/or raise?  This is important if you were hired during the recession and the company is now rebounding and paying a significant higher rate for new hires.

Finally include the reasons the company will not agree to the terms and your counter-arguments you have for each these reasons?

Now put the proposal away for a day.  Come back to it with your “Employee” hat on. Do you see goals that are impressive? Do you see minimums that are strong?  Are you swayed by the accomplishments? Do you feel the negotiator is ready to counter the company’s arguments? Would you pay this negotiator based on what you read?

Here’s an extra credit exercise:  Now have other people who have worked with you read the proposal.  Make sure it’s a mix of men and women.  Do both the men and women see the goals as lofty?  Are the bare minimum amounts obtainable but not giveaways?  Are there accomplishments that have been forgotten? Do the arguments ring true? Revise the proposal based on the feedback that you find useful and resubmit to your client.  Now as a client, would you pay this person to negotiate a better salary for you based on what you read?

Hopefully, this exercise helped you stretch beyond what you would normally consider as your salary goal and highlighted accomplishments that you have glossed over in the past.

1 Babcock, Linda and Sara Lasehever. Women Don’t Ask: Negotiation and the Gender Divide, Princeton: Princeton University Press, 2003

© Copyright 2011, Katie Donovan. All rights reserved. Reproduction without explicit permission is prohibited

Tactic: Silence is Golden When Negotiating

We are not used to quiet.  Your cell phone rings and chirps with calls, emails, texts, and social media updates.  Your office is a constant whir of people tapping on their keyboard, conversations, and the hum of the ever so pretty fluorescent lights.  Your home has the fridge running, the washing machine churning, the dishing washer scrubbing, the t.v. blasting a show or a game, and the tapping of keyboards as family members do homework, connect with friends, or watch cats doing oh-so-cute-things while teenage boys are doing oh-so-stupid-things.  When you think about it there are very few moments in our life that truly are completely silent.  I would say sleep but so many people fall asleep with the t.v. or radio on that even during sleep we have chosen to have noise sound us.  That is why this critical step to negotiating is so difficult for so many people but with practice it can be done.

The step is to be silent, hush up, or SHUT UP! When you are asking someone to do more or to do things differently you need to give them time to catch up and consider you comments.   I can’t tell you how many times I have been on a business call that people ask me if I’m still on the call just because there is a pause.  I like to consider for a comment before I respond.  It drives people crazy. More often than not they figure a cell phone has dropped the call.

There is an old sale’s saw that says “She who speaks first, loses.”  I just did a Google search on the masculine version of this saying “He who speaks first, loses” and got 11.4 million results.  As I said, this is an old saw that is widely practiced and amazingly effective.  This comes into play in every negotiation.   You can think of this two ways.  The first is you create power for yourself by embracing the uncomfortable silence.  Conversely you can think that you minimize your negotiating power if you prevent the other person from responding to your offer or counteroffer.  Either perspective works because the likelihood of receiving a concession increases greatly if the other person responds first.

Consider this conversation between a hiring manager and a candidate:

Hiring Manager:  Congratulations, the job is yours!  The starting salary is $40,000 and you get two weeks vacation.  The offer letter will spell out all the benefits.

Candidate:  Thank you for the offer.  I’m a little surprised about the salary though.  Based on my research I would have expected it to be in the $50,000 range.

Tic, Tic, Tic, Tic, Tic, Tic, Tic, Tic………Tic, Tic, Tic

Candidate: shows the median salary at $48,000 and I have so much experience.  Combined I don’t believe $40,000 to be a good offer.

The candidate just lost some power when she spoke after the silence.  The silence is important for a few reasons.  The hiring manager needs to consider your comments.  Remember, rarely is an initial job offer made at the maximum salary budgeted.   The hiring manager most likely will have the authority to increase the salary during the meeting. S/he may make a big production of it but there should be some money already approved.  So, during the silence the hiring manager is probably figuring out:

  1. How serious are you
  2. How much of the available money to offer
  3. How much of a show to give you for any additional offer

Think of this quiet time as the equivalent to the car salesperson who leaves you to check with the manager.  Oh, she said she has to run through the numbers and yada, yada but the reality is she is giving you to time to squirm.  She is giving you time to think that you may never get a better deal so you better jump on whatever offer she just gave you.

How do you master “She who speaks first, loses”? Practice.  Practice it with friends when they know that is what you are doing.  Ask them to play a hiring manager and not to respond to you for 2 minutes.  See if either of you can be quiet for that long.

Practice it when people don’t know what you are doing.    When people ask you a question count to five before you answer.  Ask people questions that you know will take them a moment to respond and give them the time to respond.

Practice by yourself.  Sit at home in total silence and do nothing but think.  Don’t read, don’t get on the computer, and don’t pick up the phone.  Try sitting there silently for five minutes but don’t time it.  When you think the five minutes are up…go look at the time.  It probably is closer to 1 minute than 5 minutes.  Work you way up to five minutes.

When you master this important tactic in negotiating it will give you the air of calm confidence.  A confidence that will scream  “I know what I’m worth and what the job should pay and I will accept nothing less.”

Good luck and enjoy the silence.


@ Copyright 2011, Katie Donovan. All rights reserved. Reproduction without explicit permission is prohibited

What Salary Can You Command?

How do you know where you should fit in the salary range for your job?  What makes you worthy of the top 90% salary?  Or do you truly bring the typical traits to the job and thus should receive the median salary? Understanding your own traits, skills, experiences, accomplishments, and uniqueness will guide you to the salary that you should command.

I propose a method to make this as objective as possible by using a scale of 1 to 10 with 10 being the highest.  Think of this like a Glamour Quiz …or was it Cosmo Quiz?

As you have probably guessed from my magazine quiz reference, this is not scientific but it helps to give you an impartial perspective of your capabilities.  More often than not we are either our worst critics or starry-eyed fans of ourselves.  The goal here is remove those biases.

Rate Your Education:

Let’s start with your education.  Education does impact salary potential.  The following chart on median weekly earnings from the US Bureau of Labor Statistics shows 300% premium for people with an advanced degree compared to people without a high school degree.

So, give yourself 1 point for each move down the chart

1 = Less than High School

2 = High School Graduate

3 = Some College or Associate Degree

4 = Bachelor’s Degree

5 = Advanced Degree

Rate Your Accomplishments:

Now on to your workplace accomplishments.  I’ve organized these into 5 groups. I like to think of it as NARRC.  This is similar to the expression of NARCing except you will need to Narc on yourself.  To realize a higher salary you will need to Narc on your accomplishments. Give yourself 1 point for each category you have contributed.

  • Network – The old saw of “It’s not what you know but whom you know that matters” does have merit.  Think about who you know that would be considered high profile “gets” for your employer.  This could be a new client, a new partner, an investor, or an advisor.   Another network is your social network.  Do you have a large group of business followers, friends, connections, or blog readers?
  • Alignment – Having experience that models the company’s goals is a great plus.  Have you worked for a start-up that has gone public? Have you worked for a public company that has gone private? Experience through transition times such as these is a huge benefit to a company.  Companies do not need to be going through a transition for you to earn a point in this category.   Have you worked in a similar setting and thrived?
  • Recognition – Internal awards such as employee of the month indicate your superb capabilities.  External awards indicate your superb abilities AND allows your company to promote it and thus themselves.
  • Revenue Generation – Sales people always have a direct link to this bullet but many other employees can tie their activities to revenue as well.  First, consider if you have referred any new customers to the company.  Second, perhaps you contributed a new product idea or suggested a new market to target representative. Third, remember if you have represented the company at any event such as a conference that generated PR.
  • Cost Savings – Things you have done to create a cost savings for your employer such as negotiated better vendor contracts, developed a streamlined production process, or initiated employee social media marketing

Now count up your points and multiply that number by 10.  Estimate that you should be at that percentage in the salary range.  For example a college graduate (4 points) who had received awards (1 point) and developed a cost savings customer support process (1 point) should be earning a salary that is at the 60% mark of the salary range.

As I stated earlier, this isn’t scientific and it is not exhaustive.  I’m sure there are other categories that could be considered. Are there any that you can recommend?  I look forward to learning some other ways to consider this.


@ Copyright 2011, Katie Donovan. All rights reserved. Reproduction without explicit permission is prohibited