The Whiteboard: Fine-tuning the art of the real deal
A young woman I have mentored since she was an engineering student contacted me recently for advice about a salary negotiation.
The conversation reminded me that while so much of what we do in business and life requires negotiation, most people are poorly prepared.
Donald Trump is supposedly a great negotiator. At least that is what he says. But for my money the man whose techniques you want to study is Dr. Chester Karrass. His books — “Effective Negotiating,” “Give and Take,” and “The Negotiating Game” — are outstanding guides to successful negotiation.
About 20 years ago my boss at the time insisted that I attend the Chester Karrass Effective Negotiating seminar. Over two days the class learned the philosophy, the methods, and the tricks and traps of successful negotiation. Through role-play, for example as buyers and sellers, we experienced real-world situations where we could apply our learning.
I have used what I learned in that class to negotiate sales contracts, warranty claims, large purchases and professional fees. I cannot possibly calculate the return on investment that I have received from those two days of training.
“In Business as in Life–You Don’t Get What You Deserve, You Get What You Negotiate” is the title of another of Karrass’ books and the first thing I told my mentee. She is going to be promoted and will take on much greater responsibilities. She has proved her worth, but she can’t simply rely on her employer to give her a salary that would be competitive on the open market. He will probably offer as little as possible. She needs to learn what a completive salary is for the position she will be taking and negotiate for it.
One of Karrass’ tenets is that the most successful negotiators are the ones who spend the most time and effort preparing for the negotiation. In my mentee’s case, that means not only researching salaries, but also researching her employer. What is the business situation? What does her boss need from her and how does she demonstrate her value?
Doing your homework is key in any negotiation. Part of doing that homework is not only understanding what the other side wants and needs; it is framing your own limits on the outcome.
Before any negotiation, I try to define four outcomes, which will provide that framework, based on Karrass’ methods.
First is the outcome that I’m really aspiring to achieve. That might be a salary or a price or it might include some other aspects of a deal. I will feel good about it and will be disappointed if I don’t achieve it. Second, I define the best possible outcome, where I will feel I’ve hit a home run. It may be my opening bid.
I also try to define the outcome the other side aspires to and will be disappointed if it isn’t achieved. Last, and sometimes most difficult, is defining the outcome where I will walk away.
When negotiating, it has always surprised me how many people have clearly done little homework and enter the negotiation with minimal preparation. Being clear on those four outcomes and having done homework on the other side almost always provides an advantage.
Readers know I’m a believer in training and education. If your job entails negotiation I can’t recommend strongly enough that you make the investment to study it. Find a good class or get a good book. Karrass is my preference, but there are others out there.
Meanwhile, start doing more homework, and prepare for negotiations by defining those four outcomes. It will be worth it.
Richard Randall is founder and president of management-consulting firm New Level Advisors in Springettsbury Township, York County. Email him at email@example.com.