“Sometimes we get so caught up in trying to win a negotiation that we lose sight of what we really want to achieve.
”
Subscribe on: iTunes | iOS Podcasts | Stitcher | Google Play Enjoy the episode? Review us on iTunes!
Why Listen:
Context: in 275+ interviews with military Veterans about their civilian career, one of the biggest challenges I hear about from guests is around interviewing, salary negotiation, and sales in general. Two reasons often cited for this are (1) little to no practice with this while in the military, (2) a culture of advocating for one’s subordinates but not ones self (eg. I will use “we” not “I”, I will speak of what my team accomplished, but not what I accomplished), and (3) a culture of service and putting others before self (ie. everyone’s needs matter except my own). Maggie, while not a veteran herself, is a world renowned authority on negotiations. She has taught negotiations for over 24 years at the Stanford Graduate School of Business, has authored over 70 articles in top publications about negotiation, and is the author of multiple books. This interview is a must-listen-to episode for Veterans in any career path.
About Maggie:
Margaret Neale is the Adams Distinguished Professor of Management, Emerita. She has been a Professor at Stanford University for nearly 24 years, where her research includes bargaining and negotiation, distributed work groups, and team composition, learning, and performance. She is the author of over 70 articles on these topics and is the author of multiple books, including Getting (More of) What you Want. Previous to Stanford, Maggie was a Professor at the Kellogg Graduate School of Management for 8 years. She holds a PhD, 2 Master of Science degrees, and a Bachelor of Science.
Our Sponsor:
StoryBox- People trust each other more than advertising. StoryBox provides the tools and supports businesses need to take the best things customers say about them, and use them to drive more sales and referrals. StoryBox offers a 10% discount to companies employing veterans of the US Armed Forces.
Audible is offering one FREE audio book to Beyond the Uniform listeners. You can claim this offer here, and see a list of books recommended by my guests at BeyondTheUniform.io/books
Selected Resources:
About Maggie
GettingMoreofWhatYouWant.com - podcast, articles, videos *
Related Episodes
Transcript & Time Stamps:
2:50
Joining me from Palo Alto is Maggie Neale. Margaret Neale is the Adams Distinguished Professor of Management, Emerita. She has been a Professor at Stanford University for nearly 24 years, where her research includes bargaining and negotiation, distributed work groups, and team composition, learning, and performance. She is the author of over 70 articles on these topics and is the author of multiple books, including Getting (More of) What You Want. Previous to Stanford, Maggie was a Professor at the Kellogg Graduate School of Management for eight years. She holds a PhD, two Master of Science degrees, and a Bachelor of Science.
3:55
Can you talk about the importance of negotiation?
Most people walk into negotiation with the wrong mindset. People think that it’s a battle - that you need to get something from the other party that they don’t want you to have. If you think about it that way, you’re already at an uphill climb. When you characterize a negotiation as a battle, two things happen. One is that the battle mindset is the filter though which you evaluate all the actions of the other party. Through this filter, you will view these actions in the most combative way possible. And secondly, what also happens is that you are very focused on “winning”. Frequently we get so caught up on winning that we lose sight of what we are actually trying to achieve.
There are negotiations that actually are battles. But those are relatively rare. The most common negotiations we have are with people that we could potentially have a relationship with. So when you view these negotiations through a battle mindset, it becomes problematic.
7:20
How can veterans become better at negotiation?
Typically women negotiate very well for others but not for themselves. They are uncomfortable talking about themselves. I think veterans have a similar problem.
The first criteria for effective negotiation is that at the end of the negotiation, you are better off than at the beginning of the negotiation. The second criteria is that you understand what will make your counterpart say “yes” to your asks. Finally, the third criteria is that you need to understand what problems the other side has and how the negotiations could solve some of their issues as well.
14:12
Specifically in the case of salary negotiations, what is the company getting out of that negotiation?
I recently had the opportunity to work with a women in business group here at Stanford. I was giving them a talk about negotiating salary. I told them that salary negotiations really aren’t a negotiation. What we know from research is that negotiating a single issue such as salary can be damaging.
I would advise people to negotiate not their salary but rather the entire compensation package. You want to think about different resources that could be included in that package that will allow you to succeed in that position. In the trajectory of your career, there are times when access to resources can be more valuable than the actual salary you’re earning.
Your goal is to negotiate a compensation package that recognizes your unique contributions to the company. Think about more than just the salary number. Are their opportunities to include money for continued education in the package? Can you negotiate working from home a couple days a week into the package?
When I was an Associate Dean at Stanford’s School of Business, there were limitations in the salary I could offer employees. But beyond that, I had a great deal of authority to include various support into the compensation package. So think not just about the salary number but the compensation package as a whole. Going into the negotiation, think about what kind of different benefits would be easy or difficult to be included in the compensation package.
22:55
What can people do to better prepare themselves going into a salary negotiation?
As a starting point, there are three parameters that you must understand before the negotiation. First, you have to understand what happens if the negotiation ends at an impasse. What are the alternatives? Studies have shown that people with the best alternatives end up with the best results in negotiation. When you have a solid alternative, you will walk into a negotiation with more confidence. Imagine yourself as a trapeze artist. In the middle of a performance, you fall and end up in the safety net. It might not be the way you had hoped the performance would go, but you’re certainly happy the safety net is there. That’s how you should think about alternatives in a negotiation.
The second parameter you need to think about is your reserve number or the lowest you will go in a negotiation. It’s a number that you absolutely will not violate during the negotiation. You have to be comfortable walking away in order to avoid a bad deal. Your mission is not to get to “yes” but to get to a good outcome both for yourself and for the other party.
And lastly, the third parameter is to set an aspiration. An aspiration is an optimistic assessment of what you could achieve during the negotiation. You’ll rarely achieve your aspirational outcome but it will push you to better results to have it in mind.
In human performance in general, if you have low expectations of yourself, your performance will be low. But if your expectation for yourself is high, you will rise to that expectation. So in negotiation, set high expectations for the possible outcomes of that negotiation.
33:30
How can people practice their negotiating skills?
Have your partner or your spouse play the role of the other party in a negotiation. This practice will make it easier when you actually go into the negotiation. When you’re prepared, you will feel much more in control during the negotiation.
Also look for everyday opportunities to negotiate. When you try to get your kids do something they don’t want to do, that is a negotiation. Engage in small everyday situations that will allow you to practice your negotiation skills. You always want to think, ‘What is stopping my counterpart from saying ‘Yes’? That’s the same whether it’s your adolescent child or a company during a salary negotiation.
38:00
During the interview process, how should a candidate respond to the question ‘What do you expect to make in this role’?
You should have an answer to that question ready.
If you get asked about your previous salary, they are trying to gauge your reservation price. That question is illegal in many states but in others it is completely legal. Try to avoid this question if you can. Your reserve price is your single most strategic piece of information in your negotiation. But also don’t lie. Don’t exaggerate. Be strategic about when you will share that information and when you will not. You’re probably not applying to a job that’s exactly like the job you had previously. So I suggest reframing the question. You can say something like, ‘That’s interesting that you’re asking about the compensation in my last job but what I’m really interested in discussing is the value of this position.’
44:35
Are there any resources you would recommend to listeners to learn more about effective negotiation?
I recommend my book Getting More of What You Want. We also have an accompanying website with additional information.
46:25
Is there anything else you’d like to share?
Try to reframe negotiation as group problem solving. When you change your mindset to want to problem solve instead of battle, better results can often come about. You can’t force an outcome. All you can do is propose different options. Once you do that, so many new doors become available to you.