Women in Negotiation Part 2

“Mr. Gitou, the last time we spoke you said one of the problems women have in negotiating is they focus too much on the relationship,” said Janice Lumere. “But when I joined the sales group I read some of your Deal Whisperer articles and it seems to me that you focus a great deal on relationship building. Isn’t that inconsistent?”

(See "Women in Negotiation Part 1" at http://dealwhisperers.blogspot.com/2011/10/women-in-negotiation.html)

Tyler Gitou leaned back in his chair and smiled. “That’s an excellent observation,” he said. “The difference is in the balancing.”

“Balancing of what?”

“Here’s an example. Imagine you are trying to close your first deal as a new sales rep for an existing client. It’s a big deal. You get down to the day of signing and the client says, ‘You know Janice, we looked over the pricing and we feel you guys still have room to move. We do a lot of business with your company and we think we’re entitled to a two percent cut.’ What do you say?”

Janice straightened up in her seat. “Well, that’s a tough one. I mean, if I say no to a long-term client, what will that do to…” Janice couldn’t bring herself to finish the sentence.

“The relationship?” Tyler said. “Suppose you say, ‘We really don’t have any room to move. That’s the price.’ Then the client replies, ‘Wow, you’re a lot less friendly than the last rep we had. We were able to work with Mike. I didn’t know the company was sending in a hardliner.’ What do you think of that comment?”

Janice thought for a moment. “Like I did something wrong and maybe I should soften my approach.”

“Why?”

“To preserve the…” Again, Janice was stuck on the last word.

“Relationship,” Tyler said. “How did the comment make you feel?”

“It felt unfair.”

“Unfair how?” Tyler asked.

“Like I was being played.”

“Exactly,” Tyler said. “It was a tactic and what you were feeling was the tension of ‘legitimacy.’ His last-minute request for a price cut lacked legitimacy and triggered your ‘fairness’ antenna. In order to maintain a disciplined and balanced approach in negotiations, each party needs to test the legitimacy of the other party’s requests. When a negotiator lacks legitimacy, he will use tactics to leverage two other elements: relationship and BATNA. Either you’re hurting the relationship by not saying ‘yes’ or if you don’t say ‘yes’ he will go to the competition.”

“So how do I respond to that?”

“Ask him to explain the need for the ask. I would say, ‘My first concern is your perception of our price. We have been working over these numbers for the last three months and I have provided complete transparency into what’s required to do this project well. What has created a perception that we have room to move’?”

“That’s good,” Janice said.

“Keep going. You play the client. What does he say back?”

“He says, ‘Come on, Janice. You guys are always holding something back. I know how this game is played. We’re just looking to get the lowest price possible.”

“The lowest price?” Tyler asked. “Or the best price? Because we can provide a lower price but it will mean putting more risk back into the deal. My goal was to balance your interests around price, risk and quality. We can move those levers around to reduce price if you want to take more risk or reduce scope.”

“Just take it out of your margin,” Janice said. “Do it for the relationship.” She smiled.

“Believe it or not, I am doing this because I am focused on the relationship,” Tyler said. “I want the kind of business relationship that is built on mutual trust to drive mutual success. You have been a great client for many years and you deserve the type of relationship where we provide our best price and then the transparency to show you how we got there. If you want us to quote a price with ‘room to move’ so we can do some positional back and forth, I can do that too. But that adds transactional friction and inefficiency into the negotiations.”

“Wow,” Janice said. “That was like negotiation judo. Now I feel like I’ve hurt the relationship by asking for the price cut!”

“That’s the power of understanding a party’s perceptions and testing legitimacy,” Tyler said. “When a Deal Whisperer feels the tingle of the fairness antenna, the question to ask is ‘Why? Why this? Why now?’ Seek to understand the legitimacy of the other party’s ask in an unconditionally constructive way and you may end up helping them see the unfairness of the ask and the impact on the relationship with that type of behavior.”

Janice stood up. “Thanks, this has been very helpful. Can I come see you again?”

Tyler shook her hand. “Please do. This is to be continued. There are many more nuances and hurdles women have to deal with in negotiation and I’d enjoy exploring those with you.”

Women in Negotiation

“Ty Gitou?”

A young woman stood in the doorway of Tyler’s office. Tyler came out from behind his desk to greet her.

“Yes, hello. I am Tyler Gitou. How can I help you?”

“My name is Janice Lumere. My friend Kevin Delclinchy is in sales with the company. He said you were the Deal Whisperer and you might be able to give me some advice on how to become a better negotiator.”

“I’d be delighted to speak with you,” Tyler said. “Please sit down. What are the issues you are dealing with?”

Janice sat in one of two chairs in front of Tyler’s desk. Tyler sat in the one next to her.

“Well, nothing just yet. I just got a job in the sales group and wondered if you had any advice on how to talk with potential clients. Most of the people I am working with are older and usually they are…”

“Male.” Tyler said. He smiled. “Let me compliment you on two points. First, your ability to recognize the fact that there is a difference between men and women in how they sell and negotiate. As much as we try to convince ourselves that we are all equal, women truly do have more hurdles to overcome when negotiating with men and other women. Second, your desire to address and overcome the problem. For someone so early in her career you are showing great maturity in taking action to resolve issues that might limit your success. Many young professionals believe that when they ask for help it is a sign of weakness. In fact, it is a sign of strength when you leverage others’ skills and knowledge to make an organization more successful.”

“Thank you,” Janice said. “Kevin spoke highly of you and I can already see why. So what are the differences and what can I do to address them?”

“There are many and we can’t cover them all in one conversation. But let me give you a start. First, when I say the word ‘negotiation’ what adjectives pop into your head?”

Janice thought a moment. “Difficult; confrontational; demanding…”

“And why do you have that perception when you think about negotiation?”

“Because I need to win and the other side wants to win and I have to overcome some overly aggressive male in order to succeed.”

“And what if you can’t overcome this challenging man?”

“I guess I have to hold my ground as long as I can and then in the end give in for the relationship.”

Tyler laughed. “That’s perfect. You have articulated a universal perception many young women and men have about negotiation. The difference is in what women and men typically view as the ideal outcome of that ‘competition’. The studies I have read on this topic say that women are challenged by a cultural barrier that causes them to believe that negotiation is confrontational. Because women generally focus more on relationship they often won’t counter an offer or ask for more because it might create a negative perception of them as ‘difficult” or ‘pushy’ thereby hurting the relationship. Their negotiation style then often runs from ‘compete’ to ‘accommodate’. Make a demand to get some movement but stop and concede before it might hurt the relationship.”

“That all resonates with me. I feel like I have been through that scenario. So what do I do about it?”

“Come see me next week and we will discuss two elements a Deal Whisperer uses to build a collaborative sales and negotiation environment: legitimacy and perceptions. If we focus on those two first, you will soon find yourself a more confident salesperson and negotiator.”

(See "Women in Negotiation Part 2.")
 http://dealwhisperers.blogspot.com/2011/11/women-in-negotiation-part-2.html

But Do They Trust You?

Tyler Gitou stood at the front of the conference room pointing to a list of the client’s executives.

“Does this list accurately reflect all of the people within the client that you work with daily?” he asked.

Verdi and Virginia, the two executives sitting at the conference table, nodded.

“Yes, and most of the time we are working with Carol, the chief procurement officer,” said Verdi. “She negotiates most of the deals for the client. We have tried to be more collaborative and less positional with her, but so far it has not worked.”

“How good is your relationship with Carol?” Tyler asked.

Virginia answered first. “It’s very good. We do a lot of work for their company and have been a materials supplier for about 10 years,” she said. “Carol always calls me when there is a bid open for more work.”

“That’s good,” Tyler said. “But the fact that you have had a lot of business transactions with a client does not define the relationship. It simply means they have found your services satisfactory. Separate the transactions from the relationship. How would you describe the relationship?”

“Very positive,” said Verdi. “We talk a lot about our families and how things are going. I feel we’re on the same page with her.”

“Being able to have a friendly conversation is always a good thing,” Tyler said. “But I can have those types of conversations with the guy at the coffee shop. Let me put it a different way: do you trust her?”

“Trust?” Virginia asked. “Well, I don’t know if I’d use that strong a word. She has integrity but she has to look out for her company’s interests first.”

“Fair enough.” Tyler said. “Does she trust you?”

Virginia and Verdi paused. “I think she does…” Verdi started.

“What have you done to earn her trust?” Tyler asked.

Another pause. “What do you mean?” Virginia asked.

“A Deal Whisperer builds a collaborative relationship with another party by first building a foundation of trust.” Tyler said. “Collaboration requires the parties to open up and provide transparency into their businesses so the other party can see what options might improve the value of the deal. Without trust, the parties will never get to the level of candid and open discussion required to maximize the value of a deal.”

“So how do we build trust?” Verdi asked.

“Develop a trust action plan,” Tyler said. “Bring your team together and coach them on behavior that focuses on mutual success, not just success for you. When you make commitments, keep them. When you make mistakes, acknowledge them. Build a track record that demonstrates you are striving to be a trusted business partner, not just another supplier. The higher the level of trust you have with those with whom you negotiate, the higher the level of collaboration and return you will both get from the deal.”