ABOVE THE MEDIAN: How To Get What You Want -- Negotiation 101
February's newsletter is a breakdown of tips/tactics for ways to become a top tier negotiator in your personal and professional life
Hello all you love birds. I decided to publish this newsletter on Valentine’s Day. Why? Because I believe that by reading this newsletter, you are giving yourself a little gift. I hope you enjoy learning from the amazing women spotlighted this month and treat yourself to some tactical learnings, all focused on negotiating.
Introduction
If you meet a successful person, the chances are high that he or she is a great negotiator. To negotiate is defined as “to obtain or bring about by discussion” and “to find a way over or through.” Being able to deliberate and compromise with other people has professional and personal results. Everyone from the most successful global leaders to the most successful coffee shop owners leverage negotiation skills.
According to Jeswald Salacus, researcher, professor, and author of Real Leaders Negotiate!, “Leaders not only negotiate often but also have to negotiate to achieve their goals. And to do so, they must draw on leadership and communication skills not normally associated with a top-down style, such as listening closely, collaborating, and making concessions.”
Unfortunately, women are historically worse at negotiating relative to their male counterparts (scroll down to the end of the newsletter to read about two studies.) Professionally, this has significant monetary consequences. To quantify it, women lose out on approximately half a million dollars throughout their career by not negotiating (Women Don’t Ask, Sara Laschever). That’s a lot of Benjamin Franklins left on the table. It is also a contributing variable of why there is pay inequality between men and women. You can’t get paid if you don’t ask for it.
Luckily (as I hope you know by this point), this newsletter is not about problems, it’s about solutions! Our spotlighted women, Sara Wardell Smith, Amy Schioldager, and Sutian Dong have tangible and systematic ways to improve your negotiation skills. I have personally utilized all three of their recommendations throughout different facets of my life.
Let’s dive in:
ABOVE THE MEDIAN SPOTLIGHT:
Sara's self-description as "a mother, wife, friend, and executive" highlights her strong emphasis on personal connections and her values. With her blend of humility, intelligence, and charisma, it's no wonder that she has held senior leadership positions at some of America’s most successful companies. At Wells Fargo, she ran the Global Foreign Exchange & Treasury Management division for two decades, and was one of the youngest Executive Vice Presidents in the history of the bank, as well as one of the youngest ever members of the company’s management committee. At Visa, Sara led the Business Solutions division across North America, and helped modernize the business beyond cards into real-time payments, cross-border products, and new payment flows. Both of these divisions were billion dollar businesses, as well as top-ranking in their space. Now, Sara enjoys spending time as an advisor and board member for a number of interesting and ambitious companies - for example, she recently joined the board of the Provenance Blockchain Foundation as the broad mission of decentralization and democratization across financial services really resonates with her.
In terms of her background, Sara had a challenging childhood. Finding herself abandoned and homeless at age 15, she had to drop out of high school and in order to support herself she ended up working on construction sites, at horse barns, and greyhound racing arenas. One of her “aha” moments came when she realized that she had a hole in her work boots and couldn’t afford to buy herself a new pair. After seeing many of her equestrian clients arrive at the stables in new clothes, and driving Range Rovers and Mercedes Benz, she knew she needed to work smarter not harder, and be deliberate and strategic about changing the trajectory of her life. She concluded that the only person she could truly count on back then was herself and she didn’t want to be a victim of circumstance. Plus she wanted to be able to buy herself new boots! Sara took multiple initiatives to change the course of her life. She worked full-time while earning her GED through night classes, earned her college degree (as valedictorian) and landed an unpaid banking internship, a stepping stone to bigger opportunities that initially rejected her for lacking experience. Over the next 20 years, Sara's hard work and impressive results paved the way for her to become a top executive at Wells Fargo, a company valued at $181 billion.
Hard work, hustle and perseverance are the attributes that helped Sara get to where she is today. With that said, she considers her street smarts and relationship skills, born at a young age out of necessity, as truly key to her success. When I asked one of Sara’s prior bosses what Sara’s most unique skill set was, her boss responded unequivocally, “she’s an excellent negotiator.”
“I love negotiations. I’m in the middle of one right now in my life, and I’m having fun,” says Sara, “Negotiating is a bit of a learned art and requires strategy.” Here are Sara’s tactics for how to get the outcome that you want:
Tactic 1: The Acronym “W.O.R.D.S.(S)”
Walk - Be prepared to walk away.
Understand what your minimum acceptable objective is before you enter a negotiation, as well as your optimum objective.
Objectives from the other side?
Do you know what the negotiating objectives are for the other party? If you don’t, then ask - don’t assume. What matters to your counter party and the criteria for their decision making process may well differ from yours. This is important and often overlooked.
Run the show
Use extreme price anchors and extend the first offer - this will help get you in the ballpark of the # you want right away. It may seem counterintuitive but it anchors the potential outcome much closer to what you want.
Decision maker
Make sure you are in conversations with the ultimate decision maker. Otherwise you are wasting your time, as well as the opportunity.
Slow down
Negotiating is inherently anxiety-inducing…for all parties. So take your time. Do not rush. Slow down your nervous system. It will allow everyone to think clearly and be less emotional, and more focused on the outcome.
Silence. Embrace it
People are often uncomfortable with “golden silence.” Lean into it. Quite often, the other party will fill the gap by talking, and they will reveal additional information. Be an active listener.
Tactic 2: Understand Your Value
Sara received some important career advice from one of her early mentors, a treasurer at a large company, who told her, "Always position yourself at the market value." This means taking the time throughout your career to understand your worth and confidently asking for a raise or promotion, armed with data and a well-reasoned rationale to support your case. Sara also noted that as a hiring manager, she would frequently ask potential recruits about their top three job criteria. She found that men typically prioritized compensation, and had no issues bringing it up, while women often did not. According to Sara, this is a problem that needs to be addressed. To that end, she encourages readers to develop a plan and feel comfortable asking for fair compensation, using facts to support their argument. When in doubt, use an extreme price anchor!
ABOVE THE MEDIAN SPOTLIGHT:
Amy Schioldager grew up on a farm in rural Indiana, where she knew more animal names than stock tickers. At 17, with divorced parents, she moved to California with just $300 and a one-way ticket. She worked and went to school at night to support herself. Fast forward 40 years, Amy is now a successful finance professional and sits on the Board of Directors of Corebridge and has spent over 27 years at BlackRock in their asset management group, including as Global Head of Beta Strategies. She attributes her success to building relationships and being assertive in pursuing her goals. “Stick your neck out for what you want,” says Amy. Amy has created a three-step approach for how to get either a promotion or a pay raise.
Tactic: Identify, pitch, approach
Amy has a strategic process for getting a promotion. She developed it after being passed over for a role when she felt that she was the obvious candidate. As Amy writes, “They put a guy that had only been there for two years in the Interim Head role… I had far more experience and qualifications.” Instead of leaving, Amy created a tactical system to increase her chances for a promotion. And her strategy worked. Here is her step-by-step approach to get the promotion that you want.
Step 1: Identify the Decision-Makers
The first step in getting a promotion is to understand who will be making the decision. This may involve multiple people, as decisions are often made with input from advisors and confidants. To identify these individuals, Amy suggests asking questions like, “Who are their confidants? Who do they go to lunch with? Who do they call? Who is going in and out of their office?” By researching and talking to people, Amy was able to put together a list of 4-5 key individuals who would be involved in the promotion decision.
Step 2: Develop a Strong Personal Sales Pitch and Share it with the Decision-Makers
The next step is to effectively communicate your qualifications and goals for the role. Amy created a three-page deck that included her achievements, plans for her first 90 days in the role, and longer-term objectives for the position and company. Instead of solely presenting this to the person in charge of the decision, she shared it with their advisors and confidants, and sought feedback and suggestions to make revisions.
Step 3: Approach the Decision-Maker with Confidence
By the time Amy approached the person making the decision with her proposal, the decision maker already had multiple copies of her deck and offered her the role. By targeting the decision maker's advisors and gaining their support, she built the buy-in she needed before speaking directly with her supervisor. Amy believes it's important to understand what motivates others and to approach the conversation with a focus on how the promotion will benefit them, rather than just highlighting personal achievements. She suggests highlighting how the promotion can help lighten the workload for the decision-maker or how it supports their own career goals.
ABOVE THE MEDIAN SPOTLIGHT:
Sutian Dong is a Texas native who believes her “say yes” nature fundamentally helped her career wise. From starting in the fashion industry to pivoting into investing, Sutian navigated different industries to find alignment between her professional strengths and her passion. She inevitably landed on venture capital and helped build the firm Female Founders’ Fund (with $100M AUM), launched the now largest female venture community in the world, and just recently launched her own firm, Multitudes. With Multitudes, Sutian believes that the future will be “built different,” and that the founders best equipped are founders who come from unique backgrounds and perspectives.
Sutian’s track record proves that she knows how to start and build something from the ground up. Throughout the journey of building a venture firm, you have to convince LP (limited partner)s’ trust that you are deserving of their capital, convince founders to take your capital over other venture capitalists, and do a deal on terms that work well for your fund. If any profession was emblematic of being a successful negotiator, it would be a venture capitalist. Sutian negotiated endlessly over her career and proved she could raise and allocate over $100 million dollars.
Here is a tactic that Sutian uses to approach negotiations:
Tactic 1: Negotiate for Your Friend
When it comes to negotiating, Sutian suggests practicing with friends – but have your friend negotiate as though they are you. When you negotiate for yourself there is ego involved. Bringing in a third party takes your ego out the equation. As she explains:
I am much better at negotiating on behalf of somebody else versus myself – on behalf of a company, on behalf of a project, on behalf of ‘fill in the blank’. And I can be much more confident in those views because I have taken the personal out of it. Whereas when it’s about yourself there is a bunch of identity tied into it and you get in your own way. When I practice negotiating with friends - I practice reversing the script. I practice negotiating for them. And when you hear someone else pitch your story, you’re like, “wow, I am really awesome!” It’s like having a third person in the room that helps you devolve away from the self.
Hearing someone explain why YOU are deserving is just as powerful as helping your friends here why THEY are deserving as well. Call or text a friend and practice negotiating for one another. You might be surprised to hear how great you sound 🙂.
Conclusion:
We are all subconsciously negotiating when we interact with people on a day to day basis. The larger life milestones feel daunting when we may feel that we do not have the same “power” or authority as the other person sitting across the table. Remember your value and your own worth. Additionally, remember that most people in our lives want us to be successful and its about meeting someone in the middle. Sara, Amy, and Sutian all show us tactics on how we can rethink our own psychology of how to approach negotiates and how to consider the other person’s perspectives and incentives.
Books To Read:
Sara’s recommendation: The Alchemist, by Paulo Coelho
Erin’s recommendation: All the Light We Cannot See, by Anthony Doerr
Sutian’s recommendation: Deep Work, by Cal Newport
What’s been inspiring me lately…
Paul Graham’s Essay: How To Think For Yourself
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Special thanks to…
Kendall Warson for all of her design advice that helps breathe life into visions
Jocelyn Teece for deep diving and contributing to the project (all while simultaneously attending Tuck Business School and navigating the pandemic)
All the amazing women who were interviewed and who opened up to share their stories
Everyone who participated in a focus group that inspired the questions for the interviews
Two studies that are referenced at the beginning of the newsletter were published by Linda Babcok and Deborah Small in Women Don’t Ask:
Babcock and Small revealed that women are less inclined to negotiate and make fewer and smaller negotiation requests compared to men. Babcok and Small recruited students at Carnegie Mellon for an experiment and told them they would be paid between three and ten dollars for playing Boggle, a game by Milton Bradley. To play Boggle, players have to shake a cube with letters until all the letters fall into a grid. The player is then asked to play four rounds of a game. At the conclusion of the game, an experimenter hands the player three dollars and says, “Here’s three dollars. Is three dollars okay?” If a subject asked for more money, the experimenter would pay that participant ten dollars but they would not give anyone any more money post that. The results were powerful and insightful. Nine times as many male as female subjects asked for more money. Both male and female participants reported rating themselves equally on performance. The significant factor was that males asked significantly more times than females for the same exact performance.
A second study done by Linda, Michele Gelfand, Deborah Small, and Heidi Stayn was to conduct a survey of several hundred people with access to the internet. The survey asked respondents about the most recent negotiations they had initiated or tried. Men responded that they had initiated on average a negotiation within two weeks, whereas for women it was a full month prior. The results suggest that men ask for things they want much more often than women.