Walk out a winner: negotiation tips for women
We've certainly watched this stuff on "The Apprentice." Separate professional women and men into groups, then task each team with nailing a deal. You seem to get noticeably different tactics.
For the past 25 years, Deborah Kolb has been looking at just such differences.
A professor at the Graduate School of Management at Simmons College in Boston, one of the country's best-known centers for women's business leadership, Kolb uses a "gender lens" to research and teach negotiating skills. She has published hundreds of research papers and a number of books on the subject, including, most recently, "Her Place at the Table: A Woman's Guide to Negotiating Five Key Challenges to Leadership Success" (with co-authors Judith Williams and Carol Frohlinger). Kolb also is a partner in Negotiating Women, a corporate training consultancy.
In an interview with Kolb that follows, you'll discover how men and women alike should prepare for negotiating sessions. You'll learn about behavior that can sabotage women's efforts. And you'll find practical tips for managing a small company's critical negotiations.
A: Striving to get what you want. Simple as that. But many people go into negotiations without knowing what they want. So they never get it. Instead of having a goal, people often want control.
Before you start, think about what you want. Be specific. "A fair return" is too generic. A goal of "$100,000" is too limiting. Set a goal that has a variety of options for the situation.
A: There's research to show that when men and women have the same access to data, they are equally adept at negotiating. In other words, it's not a sex-based trait. But when information is ambiguous or it's a new situation, women tend to [experience] "aspirational collapse." That is, in the face of no, women are more likely to say OK. They give in more readily.
Women are relatively new to owning businesses and may not be so sure how to run things. Men tend to have better networks and access to mentors, which gives them more comparative information. That allows men to hold out for what they know are appropriate positions, say, about compensation.
That's why it's important for women entrepreneurs to join coaching groups or peer associations. They need to talk to people like themselves.
A: First, get out of your own way. Recognize tendencies you may have for making immediate concessions. "Smallness" shouldn't equal weakness in your mind. Don't mistake size for clout.
Deborah Kolb
Approach the negotiation by asking: What's the value you bring to the deal and how can you make that visible? Work on how you will communicate your value.
Assess your bargaining position by drafting a "BATNA" strategy — that is, your Best Alternative to a Negotiated Agreement. Think about what would happen if the big vendor doesn't make a deal with you. How else could they get the business? Even though they're large, maybe you have a special offering or a market niche.
By thinking through your BATNA, you'll know what to do if the terms start looking unfavorable.
A: Very often, small-business owners fall into the trap of making concessions to parties they perceive as powerful. Let's say you're a consulting firm that offers services to big companies. When they push hard on rate, you figure they have lots of choices. So you say, "I'll do it this one time for the good of the relationship." But they're not thinking about the relationship. They've just trained you to take a lower rate.
There are lots of ways to frame the deal without losing your credibility. You might set up a rate going in and get increases if the work is a success. You can build contingencies into any agreement. Don't low-ball your services.
It helps to plan what I call "moves and turns" — that is, scenarios to keep the process going forward. For example, in trying to get you to lower your rate, the big company may say they have lots of cheaper choices. You can say, "Let's talk about how you might do that." It gets you out of a defensive posture. If they back off, you know it was an idle threat.
A: You can use power moves. When big-deal clients keep delaying meetings or asking for yet more time or presentations, you need to create incentives to push the other side to talk about substance. These may include adding value to the deal, raising the stakes or costs of inaction or finding allies who can persuade the supplier or vendor to act.
There are process moves. In this case, you don't wait for a response. You take over setting the agenda for time, place, dates or discussion. You can also send early-warning signals of changes or solutions to problems when negotiations do not move.
And there are appreciative moves. These allow opponents to save face if there are difficult moments. They keep the lines of communication open.
A: The advice here is similar to handling big companies. Let's say you need a chief financial or operations officer. But experienced managers seem to have many choices. You worry they'll try to extort special perks or a high salary.
This is another reason for women owners to join coaching groups. By talking with other employers, you can make comparisons about the going rate. Information allows you to stop a potential hire from trying to roll over you.
A: This is different because here you're managing allies. Board members and investors are already in your corner. That can have good and bad points. You want to gain support and feedback, but you don't want anyone saying, "Look, dear, let me show you how it's done." Again, that's where moves and turns are handy.
Let's say you ask a venture capitalist on your board for $5 million. And the VC says, "That's out of line with what you can realistically deliver." Instead of arguing, your turn should be to describe how the $5 million would allow you to deliver what you promise. Or, if the VC says, "You're a marvelous bootstrapper. You really don't need more money." You need to explain in detail why bootstrapping won't work.
A: Yes, depending on how you do it. A board member may say, "Don't get upset." Then you can respond: "These are important issues that I care about. I want to succeed and I'm committed to the company."
But getting emotional still has a gender divide. When men get angry during a negotiation, it's seen as strategic — not out of control. When women do, they're often seen as "hysterical," which of course is a gender term. Men are told to "calm down." Women are told, "Don't get so upset."
The point is the degree to which you lose it. When that happens, you need to say something that quickly normalizes the discussion.
If you think you might become emotional, have some turns in mind to get back on track.