When the other party says no to your offer your most powerful response is simply to ask Why or Why Not. – with sincere curiosity.
By Thomas Wood
There is almost always a time and a place to talk about your other options if this agreement can’t be reached on mutually beneficial terms. Sometimes disclosure of your options pushes the parties to find agreement. But when and how to disclose your other options?
“It depends” is the most comprehensive response, but not a very helpful one. To make this posting easier to read, let’s refer to your Plan B, or other options, as BATNAs – best alternative to a negotiated agreement. Here are a few thoughts:
Never do this: Never reveal a weak BATNA
Timing: Pick a good time; don’t worry about the best time.
How to reveal a BATNA in Negotiations
By Marianne Eby
Satya Nadella, Microsoft CEO, recently suggested that women should have faith in the “system” that will give them the right raise, rather than ask for a raise. He went further to call women superheroes for not asking. Nadella has since admitted that he was “completely wrong”. But in his mea culpa statement to Microsoft employees, Nadella got a few more things wrong, and that's where this blog begins.
In his original statement at the Grace Hopper Celebration of Women in Computing conference (GHC), Microsoft’s CEO, Satya Nadella, said that women shouldn’t ask for a raise; they should have “faith that the system will actually give you the right raise as you go along.” He went on to say that women who don’t ask for a raise have a “super power” in that they know how to use this “good karma” of not asking in order to get what they want.
Every good negotiator knows that you have to ask for what you want, and certainly there’s been a lot said (Bloomberg, CBC, Salon, et al.) about Nadella's live interview comments. We can take some comfort in the fact that Nadella's other stories, and his post fumble tweet, give us some indication that he too can have his eyes opened and learn from mistakes -- the mark of a good leader, and a good negotiator.
Nadella was being interviewed by Maria Klawe, a Microsoft Board Director and President of Harvey Mudd College, who was very professional and passionate in disagreeing with this man she respects so much:
"This is one of the very few things that I disagree with you on."
She gave some examples from her own career, and then said to the audience:
Here's my advice to all of you. First of all, do your homework. Make sure you actually know what a reasonable salary is."
Klawe also reminded women to role-play, or practice, the ask.
Klawe was right of course. And Nadella acknowledged that Klawe was right when he issued his written mea culpa to Microsoft employees:
“And when it comes to career advice on getting a raise when you think it’s deserved, Maria’s advice was the right advice. If you think you deserve a raise, you should just ask.”
I want to share a negotiator’s perspective regarding what Nadella said in this more prepared written mea culpa. I want to talk about whether "deserving" is sufficient, and if the best way to go is to "just ask."
Deserve v Worth
Should you ask for a raise because you think it’s “deserved?”
Not exactly. You should ask for a raise because you are worth it.
You can accuse me of splicing words, but maybe the words we use to describe why we want something are critical to getting it.
You may deserve more money for lots of reasons, but are you worth it?
Also, if you think in terms of deserve, you may talk yourself out of asking for a raise if you think the system is not able to adjust based on unique talent or results. For example, if you are working in a system that is stepped, like a training program, law firm associate, government jobs, or someone who recently got this year’s compensation increase and is not due another one for a year, you might hesitate to discuss what you “deserve.”
But if you think in terms of worth, you are more likely to initiate the conversation anyway, because a “worth” conversation leads to ideas – like higher profile assignments, other positions, switching geographic or subject areas, meetings with key leaders, etc. When possibilities emerge, you and your boss can find ways to compensate you for your worth.
Master negotiators leverage the worth v. deserve distinction all the time. Don’t pay us more, or provide a higher quality product, or meet a shorter deadline because our company deserves it after we took a hit on the last deal; instead master negotiators say (and demonstrate with legitimacy sources) -- give us more in this negotiation because our product or service is worth it. Now the counterpart feels psychologically motivated to give more.
“Just ask” v. Plan your approach strategically
“Just ask” rubs me the wrong way too. If you are worth more to the organization, more than likely you will have to show it, not “just ask.” And to do that effectively, Klawe was spot on when she said you have to do your homework.
There are 3 main considerations that should be part of your homework – People, Data and Plan B:
What’s your plan B or BATNA -- Best Alternative To a Negotiated Agreement? If this raise doesn’t work out, what are your next steps? Don’t wait. Network, share access and influence, help others. Test the market. Begin working on your plan B, or BATNA, now.
Any “ask” is the beginning of a negotiation – a conversation about how to address your worth. To be a real superhero, don’t “Just Ask “– Plan strategically to ask for your worth! And all my fabulous male negotiator colleagues -- this applies to you too!
One absolute positive from Nadella’s comments is that the ensuing discussion is loud and hopefully has legs beyond the tech sector.
The tech industry has 30%/70% workforce split of women to men. And as reported in the New York Times, while female computer scientists are catching up and making 89 percent of what men in the same occupation make, other professions in the tech industry may not be so lucky. For finance professionals across professions, for example, women make only 66% of what men make. And across industries, another study showed that in 2013, women working full time earned only 78% of what similarly situated men earned.
Raising awareness about women lagging behind in salaries and leadership positions is always a good thing because it propels change. I always opt for controversy over silence; controversy sparks conversation, which can lead to solutions. Similarly in negotiation, controversy (you want x and I want y in exchange) drives conversation, and that conversation leads to solutions.
(Review information on Watershed's Advancing Women Negotiators workshop.)
By Leslie Mulligan
Courtship….not necessarily a word that springs to mind when describing a mega-deal taking place in America’s bastion of high tech – Silicon Valley – but that is exactly how Forbes described Mark Zuckerberg’s pursuit of WhatsApp in an article detailing the Facebook acquisition. This seismic, $19B deal closed in less than a week once the principals sat down at the negotiating table, but only after Mark Zuckerberg and WhatsApp co-founder Jan Koum built a true partnership during the previous 2 years.
Technologists typically don’t contemplate relationship building as a cornerstone of their negotiating strategy, but that profound relationship is precisely why the Facebook-WhatsApp acquisition closed so quickly, once $ were in play. Beginning in the spring of 2012, after Zuckerberg reached out to Koum for a casual lunch, they got together almost monthly- sometimes for dinner, sometimes to hike trails around Palo Alto. Not only did they share philosophies on business strategy and innovation, they built a trust that enabled rapid closure on terms, once Google stirred the pot and made overtures toward WhatsApp.
Inventors and technologists usually have an innate curiosity – they push the cutting edge of their domain, fostering innovating thinking and breakthroughs in technology. Turning this natural curiosity toward your potential counterpart at the negotiating table, you can gain significant leverage before talking terms. Find or create shared experiences and build rapport – and you are on your way to earning respect and ultimately trust. Cultivating this trust is essential to spur your counterpart to reveal their underlying motivations and deeper interests.
Once you know what is really driving them, rely on another natural skill of most technologists – creativity. Creativity – and flexibility – allows you to think through a set of alternatives that will meet some, or many, of the interests you have uncovered. If they reject one proposal, you have others ready to propose that might win the day. But this powerful give and take during bargaining is only possible if your partner trusts you. The $19B WhatsApp deal was done in a few short days because Koum fundamentally liked and trusted Mark Zuckerberg.
The Forbes article claims that once the deal was “done” - Zuckerberg and Koum had shaken hands on the basic terms - that Mark Zuckerberg broke out a bottle of Johnnie Walker Blue Label to celebrate, as he knew this was Koum’s favorite Scotch. Now that is indisputable evidence that the Facebook CEO had done the work to uncover the real interests of the WhatsApp Founder!
To learn more about how to Empower Technologists at the Negotiating Table, listen to the August 17, 2014 IMI Tech Talk radio program, hosted on KFNX News-Talk-Radio 1100, when host Tom D’Auria speaks with Leslie Mulligan of Watershed Associates about this topic.
By Marianne Eby
Another company founded in a garage, Amazon.com is the world's largest online retailer, responsible for sales of one third of the books sold in the United States alone. Being that big and powerful doesn't make Amazon.com's negotiations any easier. Looking at the state of negotiations with one of its suppliers, Hachette Book Group, a billion dollar publishing house, we can observe the use of leverage away from the bargaining table to influence negotiations.
Despite Amazon's stock tumbles this year, or because of them, the giant online retailer is flexing its negotiation muscle. There are a variety of book titles that consumers are having trouble getting their hands on while being notified of delayed ship dates and being offered alternative titles from other publishers that can ship quicker. Those titles on the slow boat are owned by Hatchette Book Group, one of the top 5 publishers in the world, and a behemoth in its own right.
For example, if you want Mariano Rivera's memoir, "The Closer" which was published last week, and you go to your Amazon account, you may have to wait 2 to 5 weeks to get the book written by the guy with a 90 mph fastball. Of course you can go to a local bookstore for instant gratification, or order from another online retailer and get it in about 24 hours. But Amazon knows that we want to get it from Amazon, because that's where we get most of our stuff. As reported in the New York Times, Amazon has been down this road before and it gets the deals done.
Hachette Book Group out of France is no small player, as the world's third largest trade and educational publisher. And Hachette isn't taking this sitting down, but is getting the press out, letting everyone know that it's top requested titles are being held up by Amazon, not by Hachette. Does that make you want to go elsewhere to get your favorite Hachette titles? On the surface Hachette is taking the high road, and publically emphasizing the relationship of good will that it has built with Amazon.com, while letting the press have a field day with this turn of events.
Amazon.com probably wants the same trades any online retailer wants from its suppliers -- bigger discounts and longer payment terms, and other favorable treatment as a preferred customer. It can only do so much at the bargaining table. The real leverage is in its business strategy and risk tolerance -- how much of our allegiance is Amazon willing to wager?
There's no silver bullet to negotiating with a customer you can't afford to lose, and Hachette probably can't afford to lose Amazon.com.
By Marianne Eby
I admit to not knowing much about football despite my son's love of the game. To me it looks more like a bunch of athletes who get paid a lot of money to ram into each other until one team trounces the other. Let's face it - I’m a negotiator who believes in win-win more than win-lose. So it’s no surprise that I was paying more attention to the NFL Super Bowl XLVIII advertisements on Sunday than to the game. And what did this super negotiator see? The deal of the century!
And I’m not talking about one of the many deals in the $10B enterprise that is the National Football League (NFL). I'm talking about the now famous Cheerios commercial. Sunday’s NFL Super Bowl XLVIII Cheerios commercial taught in 30 seconds (and paid $4M for the privilege of doing so) what every good negotiator knows - trades come in all breeds.
Here’s how Forbes describes that commercial, a father at the breakfast table with his little girl, Gracie, using the addition of one Cheerios at a time to demonstrate that there is going to be a new family member (and thus one more Cheerio added to the pile):
“The Epiphany: After the baby brother announcement, the subtle pregnant pause. Gracie’s actor qualities rise to impressive levels to tug at your heart at this point. The frown-pause moment is followed by the epiphany, “and a dog”. Translated: ‘If he’s sweet talking me like this, he must want my approval. That must mean I have some bargaining power – (and what do I have to lose, the little guy his coming anyway). I can use this event to broker and barter a deal. If I have to put up with a babbling infant that cuts into my time and resources, I can now use my unprecedented leverage get what I want in return.’ ”
Opportunities to trade come in all sizes and shapes and sometimes out of the blue, so seize them when you can and everybody wins! The little girl seizes the moment and in her own way (by adding a Cheerios to the family pile of course) makes it clear that family tranquility has a price – a puppy she can call her own. Caught off guard, the dad declares “Deal.”
And Cheerios gave a final negotiation lesson before its 30 seconds of air time was up – the camera turns to the pregnant mom, whose priceless facial expression makes it clear that dad forgot to check with his stakeholders before closing the deal.
The NFL is full of high stakes deal-making in the mega-millions, but this deal has lessons for players, owners and viewers alike. Think about what the other side will ask for before you start negotiating, seize opportunities to get what you want, and always know your stakeholders’ interests before you close the deal.
By Marianne Eby
There are many places in the world where consumers haggle and would never pay asking price – like the souks of Marrakech and the Beijing Silk Street Market. But nowadays even the US retail stores are fertile haggling territory. Know how to extend your holiday haggling into the January 2014 retail sales bonanza.
Haggling is a cousin to serious negotiations. Haggling is the back and forth that is used to get a quick deal from someone you aren't likely to deal with again, like in the souks and flea markets. A 2009 Consumer Reports survey found that only 28% of Americans say they haggle often. But by 2011, talk of negotiating price tags at retail stores became a common sport of savvy consumers who read Kiplinger advice columns. And now it’s so common that one click on wikihow teaches us how to do it.
As reported in the New York Times, what’s more interesting in this last holiday season is that retailers are both training their floor sales managers to haggle, and inviting the public to do so. This may be an attempt to turn the tide from consumers who use brick and mortar stores for looking, only to return home and search the Web for the best price on the same item. The retail stores are fighting back. One has trained its managers not only to meet competitors’ prices, but given them authority to beat them. And they’re not just focused on price, but are creative in offering you add ons (that may or may not meet your needs).
As consumers, our job is to answer this call to action. You don’t need to be someone who negotiates deals at your day job; you just need to follow a few simple guidelines -- the fundamentals all master negotiators hone:
Want more advice? Here's 10 Tricks for Haggling Over Price at Any Store.
One more reason to haggle in this January's retail sales?
Negotiation takes practice. The more you practice, the better you become at building rapport, asking for what you want, seeing possibilities, asking questions, and leveraging your willingness to walk away. The more you do it, the better negotiator you will become.
Have fun haggling in and out of your vacation paradise!
By Thomas Wood
The 2013 Dubai Air Show was the most lucrative in the history of the event, with more than $200 billion in transactions in only five days. We can only imagine the intense preparations for negotiations, and the trades and sparring that followed suit. What we can say for sure, however, is that a strategic approach used by a few of the airlines resulted in a win-win deal.
On my recent trip to Kuwait to work with management and their teams at a multi-national client on their negotiations, there was much talk about the 2013 Dubai Air Show, where Boeing alone received roughly $100 billion in orders for its new 777X “mini-jumbo.” This was a truly astounding accomplishment, lauded by its CEO as the “largest product launch in commercial jetliner history.” This was definitely NOT "business as usual." But it wasn’t just the pure volume of business that made this feat "NOT business as usual."
Qatar Airways and Emirates Airline, long-time fierce competitors, joined forces to buy hundreds of Boeing’s new models – a groundbreaking development that has been heralded as a transformative moment for the industry. As the two largest airlines in the Middle East, the two companies have had a long history of suspicion, competition, and rivalry. Executives realized, however, that although alone they each lacked sufficient negotiating leverage to demand discounts from Boeing, together they could secure better terms.
This joint effort – the first time the two regional giants had worked together in such a manner – shocked many analysts. The Wall Street Journal reported that Mr. Akbar Al Baker, CEO of Qatar Airways, explained his thinking to reporters. “Don’t you think it is good to align with one of the neighboring airlines and order airplanes? It is good for the industry and also to show to the world that we are competitors, but we also work together.” Gulf News reported that Al Baker noted, "When you negotiate with a supplier, you get the benefit of economies of scale,” and those large purchases allowed Boeing to offer discounts without sacrificing its own margins. Negotiating teams on both sides seized the opportunity to think creatively and create value for all parties.
The negotiators also created strong working relationships that are likely to pay dividends in future deals. Gulf News also reported that Al Baker proudly informed reporters that “when we do a similar program in the future, yes I hope that we will be able to do it together.”
But alliances aren't built in a day, so let’s give Boeing some credit as well. As reported by the BBC, Boeing’s negotiators identified that lucrative opportunities existed in the Middle East market and invested the necessary time and effort to understand that market’s unique characteristics. While budget gridlocks are jeopardizing opportunities in Western capitals, for example, Boeing saw that business leaders in the oil-rich nations of Qatar and the United Arab Emirates (UAE) are racing to become a global hub for air travel. To take advantage of this, Boeing’s negotiating team members no doubt did their cultural homework before engaging with their Arab counterparts in Dubai. The UAE government published cultural advice for Western negotiators, stressing the importance of face-to-face meetings when building relationships, and properly conveying respect when greeting your local counterparts. Boeing’s negotiators apparently took this advice to heart and earned the respect, trust, and admiration of their Qatari and Emirati partners.
Strategically building alliances and creative trades resulted in Boeing walking away from the Dubai Air Show with more than $100 billion in orders, more than twice the value of orders it’s European rival, Airbus, received. The impact of that is far reaching. As reported on NPR, Boeing is now in a stronger position to head off competition from its main competitors in the highly contested mini-jumbo market throughout the next decade.
Boeing executives may also benefit in future negotiations with its labor unions. The International Association of Machinists (IAM) in Puget Sound voted down a recent contract proposal because it had too many give backs (frozen pensions, lower wages for new hires, etc). Boeing had been on the defensive in those discussions, partly due to the success of Airbus. Now Boeing may be able to leverage its triumphs in Dubai -- the guarantee of future work -- as a solid BATNA: sending that work away from Puget Sound if a deal with the IAM isn't reached.
I always counsel my clients to think more strategically about their negotiations. Leverage can come from many sources.
By Marianne Eby
Negotiations are serious business, which is why it is important to understand, and build trust with, the other party. Great negotiators know that no matter how serious the interaction, laughter is often one of the quickest paths to trust; it can relieve tension, create a bond, improve everyone's moods, and foster the creativity you want for mutually beneficial agreements to emerge.
Researchers in many fields, from medicine to psychology to communications, are increasingly interested in the social power of humor and the physical and emotional benefits of laughter. Public speakers are trained to open presentations with jokes or funny anecdotes. Political candidates are now expected to demonstrate their sense of humor on the talk show circuit to improve their likeability. In 2010 Comedian John Stewart was voted the "most trusted man in America." His social power derives from the fact that he is knowledgeable and funny, which makes him seem more trustworthy.
A sense of humor is useful during all phases of negotiation as well -- to signal confidence or shift power, to change the environment, to soften bad news, to avoid answering a question, to respond to a ridiculous offer, or to save face.
Telling a funny story or acceptable joke can also help you gauge whether the other party is on the same page with you. If the other side is not laughing, or even engaging in a joking conversation, pay attention: they are not where you hope they are. Not laughing in response to a humorous gesture is a sign of discomfort or disconnection.
So prepare with ice-breakers -- anecdotes or jokes that get a group to laugh before you begin bargaining.
Try these tips for opening an interaction with humor:
Tell a story on yourself: People love to laugh at absurd but real events. Carol Burnett famously said "comedy is tragedy plus time." A story you tell about yourself makes you more human.
Don't take yourself too seriously. Keep the humor light, and your expectations for laughter down. Nothing kills an attempt to develop rapport more than someone who can't laugh at him or herself. Mildly self-deprecating jokes imply trust.
Collect a few jokes that work for you. They're easy to find or to collect. Good storytellers and comedians prepare material in advance, to avoid hitting the wrong note, and to be ready to hit the right one.
What to avoid:
Sometimes puns (ambiguous play on words with multiple meanings) can be fun – just make sure your humor is understood. Let’s say you’re in a tense negotiation and everyone is frustrated. You might say:
“Does any one feel the way I do? Trying to figure out a solution that satisfies us all is like getting ready for a root canal – it’s unnerving!”
Keep these guidelines in mind for successful humorous stories and jokes:
Be real. Leverage your own style and personality. Be willing to laugh. See how it changes your negotiation results!
By Thomas Wood
Mattie has almost no power in this negotiation, but she leverages something much more potent – her skill as a negotiator – her true grit.
By Thomas Wood
Did you ever have a negotiation where you felt well prepared going in, but during the discussions you became frustrated? For most of us, frustration brings out our worst instincts and behaviors, ultimately leading to a poor outcome.
Here’s a quick quiz to help you see if you were held back by any of the common negotiator blind spots.
If you answered ‘Yes’ to any of the questions above, you may be suffering from one of the common negotiator blind spots. While teaching our negotiation workshops, we have found that participants often fall prey to these blind spots:
Battle Alert: He believes that it is important to pick his battles because negotiations are battles. He does not believe that a win-win outcome is actually possible, and thus approaches every interaction as a competition.
Give nothing/get nothing: She figured out what was fair long before the two parties started talking. She wants to achieve her goal, and show that she is a strong negotiator by giving nothing away.
There’s only one way to skin a cat: He has an idea of what will satisfy his counterpart, and has listened carefully to his counterpart’s idea. Both ideas were part of the opening offers. One of these ideas will win the day, or perhaps parts of each idea. Let’s decide and move on.
Can you hear me listening?: She has listened so much that she tires of the other side talking. Her counterpart feels that he hasn’t been heard. Was she listening loudly enough?
Just the facts, ma’am: He prides himself on his objectivity. The numbers tell it all. We just have to stick to the facts and the negotiation will progress.
Never let ‘em see you sweat: She feels intimidated by her counterpart’s experience or reputation. He’s known to get what he wants. She intends to show him from the start that she’s no pushover and is tough as nails.
These natural inclinations and defenses can blind us from success in our negotiations. See clearly now.