A few weeks ago, I had the pleasure of presenting on the following topic before an audience of professionals from various industries. I was surprised to learn how common it was for them to avoid or forego negotiation altogether, particularly in the context of accepting a job offer. Below are 7 tips for the modern professional, whether an entrepreneur or climbing the corporate ladder, eager to master a technique essential to achieving wise, efficient and mutually beneficial agreements across cultures and in a myriad of contexts.
1. Prepare
Too often, we approach negotiation, whether in a private or professional setting, as an adversarial experience. As such, the title of this article may be a bit misleading Convinced that others are “in it to win it,” we overestimate the struggle we will encounter en route to a sound agreement and assume that for one party to "win," the other must lose. In reality, negotiation is merely a means to an end; an irreplaceable tool that enables us to understand what we’re getting ourselves into as it relates to personal or professional relationships while preserving those same relationships in the interest of future arrangements.
For this reason, preparing for a negotiation is crucial to protecting our interests and understanding others’. Regardless of the topic of your negotiation, strategic preparation should involve the following: 1) doing your research, 2) consulting your network and 3) imagining your ideal, reasonable outcome.
Doing Your Research
Research may sound daunting until you realize a simple Google search (or three) most certainly counts. In the context of negotiating your salary, the Bureau of Labor Statistics is a great resource to understand what a reasonable request would be for someone with your level of experience, stepping into a specific role. But if you’re like me, and interested in mastering the art of negotiating in general, books like Getting to Yes, which follow the Harvard Negotiation Method are must haves.
Consulting Your Network
Consulting your network is a bit more self explanatory, but still worth discussing. With social media platforms, such as Linkedin, making it so much easier for professionals across the globe to connect, there is no reason you should be applying to any position or venturing into a new industry without confirming whether you know someone in a similar position or running a particular type of business. Not on social media? Get on it, now. Spend a few minutes (or hours) to create an attractive and purposeful profile and enjoy the pay off. After all, while your resume may stand out, Linkedin is accessible at the tip of someone’s fingers and allows you to show more than one page worth of credentials and personality. Now that you’ve done your research, and spoken to some familiar experts, you’re ready to imagine an outcome that is both exciting and reasonable.
Imagining Your Ideal, Reasonable Outcome
When you walk into a conference room or begin exchanging offers via email you should know what you want and why you want it. Doing your research and consulting your network will ensure what you want want is both ideal and reasonable to all parties and that you are confident enough to communicate this when the opportunity presents itself.
2. Separate the People from the Problem
By adequately preparing, you have already taken a solution oriented approach to your negotiation; this should challenge you to commit to differentiating between your feelings about the person or organization you are negotiating with and a reasonable solution to the issue you are negotiating about. Far too often, particularly in an interpersonal context, we reach an impasse by jumping to conclusions about our counterpart's feelings and general willingness to compromise. Where cultural differences are involved, we misinterpret body language and communication styles as disrespect. However, by shifting our focus to the issue at hand, we can avoid anticipated push back by creating options that honor diverse perspectives, even those of a seemingly stubborn child, spouse or prospective employer.
3. Focus on Interests v. Positions
Separating the people from the problem depends upon a keen understanding of your interests, rather than an inflexible position you may otherwise be inclined to take. To clarify, interests are the underlying motives that inspire us to accept or reject certain offers in negotiation. Whereas, positions are the exact offer a person is willing to accept in exchange for what is being bargained for. While interests allow for creative flexibility, positions often lead to unnecessary, and often offensive grandstanding. As such, an expert negotiator avoids ego-driven positions at all costs.
Several months ago when offered an attractive position in terms of access and exposure, I was confronted with a salary less than half of what I had been earning at my previous position. Recognizing I would inevitably be accepting a pay cut, I still made a point to negotiate. In response to their offer I proposed a monthly rate that would amount to nearly $20k more a year. In the end, I was offered $250 more a month/$3k a year, a company phone and laptop. Having embraced a creative and flexible approach to the negotiation, I took this final offer as a nod to my self-advocacy and entered the position confident that I would make the most of the opportunity. Moreover, my experience would undoubtedly avail me to higher paying positions in the future. To my surprise, when the organization received more funding half way through my contract, I was given the raise I initially requested. In retrospect, I wonder if that would have happened had I not countered their initial offer. Thankfully, I’ll never know. I also believe that short term compromise in the interest of my long term goals allowed for me to approach my new role with assertive humility and ultimately achieve my desired outcome.
4. Invent Options for Mutual Gain
I’m sure you’re wondering how I justified making such an ambitious counter offer. I did so based on an understanding that in order to do my job effectively, I would need two things: to feel appreciated for the unique skillset I brought to the position and make it clear that, while conscious that I was moving from the private to public sector, I was not ecstatic about taking such a dramatic pay cut, considering the extensive experience I brought to the table. On the other hand, I also considered the hiring organization’s needs: to find a candidate with my unique skillset and stay within their hiring budget. In the end, our employment agreement achieved both goals; it was a win-win situation. Although I didn’t receive my desired salary right away, by negotiating with my counterparts' interests in mind, I ensured that my relationship with the organization began with sincere recognition of what we both valued, and were willing to accept from one another.
5. Insist on Using Objective Criteria
I also justified making my counter offer with research surrounding what professionals in similar positions, with experience levels similar to mine, were being paid. This was perhaps the most essential aspect of my negotiating strategy, because the key to a reasonable negotiation is objective criteria, or simply, facts. Too often, negotiating parties reach an impasse because they allow the people problem to prevent them from proposing solutions that take into account the reality of the situation at hand. However, facts alone aren’t the cure to disagreement.
6. Hire Representation
I advise my clients to consider whether the underlying issue they are negotiating will allow them to earn or avoid paying more than my estimated fees. If it does, they should hire me. I also challenge them to consider whether their counterpart has hired an attorney. While you may be confident enough to appear pro se (aka as your own representative), your pockets and/or freedom are worth more than the risk of being out-negotiated by a licensed attorney.
Lucky for you, most attorneys offer free discovery calls. This will allow you to assess whether they can provide the assistance you need, without spending an arm and a leg. Other attorneys, like yours truly, will credit the amount you pay for a discovery call toward any services you ultimately purchase. With this in mind, do yourself a favor, and play the long game. A few hundred now is certainly worth thousands, or even millions in attorneys fees down the line.
Everything I mentioned about separating the people from the problem and identifying objective criteria to use? Lawyers help with that too. Law school trains lawyers to distinguish between fact and opinion and to do so in pursuit of justice. Of course you have to find the right lawyer for you, who shares your definition of justice; but trust me, they’re out there. Keep looking if you haven’t found them; your business, bank account(s) and potentially your life and liberty are depending on it.
7. Reflect on Your Experience
Last, but certainly not least, make sure to reflect on your experience. So often, professionals and business owners jump from one transaction to the next, failing to evaluate which negotiating tactics have been successful, and which they could do without. An easy way to build this is into your negotiation process is to ask yourself the following questions once the ink is dry.
Did you reach a wise agreement?
The hallmark of a wise agreement is a sense of satisfaction, felt by all parties to the negotiation. Neither you nor your counterpart should feel taken advantage of when the dust settles. If you are unsure whether your counterpart is satisfied, ask them, or rather pay attention to how you communicate in the days and weeks that follow. If it’s clear either of you feel you got the short end of the stick, figure out if it’s because you failed to incorporate one of the tips above and make a point to do so in the future.
Did you do so efficiently?
So, you reached a wise agreement. Congrats! Now ask yourself, how long did it take you? My rule of thumb is to spend a tenth of the time it will take to fulfill the terms of the underlying agreement to negotiate a contract. For instance, a year long contract should take no more than a few weeks to negotiate; otherwise, you risk missing out on other, more lucrative opportunities while struggling over an agreement that is more than likely, not worth the trouble. Moreover, drawn out negotiation periods suggest the relationship will be generally difficult to manage even once you reach an initial agreement. Time is money, especially in the context of business related negotiations, and that is exactly how you should perceive it.
Did you improve or at least avoid damaging your relationship with the other party?
Finally, consider whether the negotiation process strengthened your relationship with the other party, most importantly, by adding clarity. If not, what was accomplished, or rather destroyed in the process? Failing to ask this question can cause you to burn unnecessary bridges by using tactics that yield desirable outcomes for you in the short term, but threaten your ability to build lasting business relationships.
Whether we like it or not, negotiation is a part of life; and if we embrace that reality, we can use it to our advantage. So much about getting what we want is about seeing the bigger picture and communicating that effectively. Hopefully the tips listed above will assist you in doing that. Need help identifying the bigger picture or conveying that to a business partner or prospective employer? Email info@ambursmithlaw.com to schedule a consultation today.