Why Women Must Ask (The Right Way): Negotiation Advice From Stanford's Margaret A. Neale

Originally from Forbes

Few Stanford Graduate School of Business MBA students would argue that Professor Margaret A. Neale is a powerful woman. At over six feel tall, even my male classmates would be intimidated to negotiate with her. And it’s not just because she often calls out students’ “sub-optimal” negotiation strategies in front of the whole class—it’s because she’s clearly a master negotiator.

Maggie, as her students know her, starts her two-week, highly sought-after Negotiation seminar by introducing people to the cost of not negotiating—which could be years of additional work to make the same salary as colleagues who negotiate. Unfortunately, women suffer the most from this—which is why Maggie spends much of her time outside of the MBA program, co-directing the Stanford GSB Executive Program for Women Leaders.

Personally, my most interesting moment in the class came when I was assigned to negotiate on behalf of constituents and I was able to play the mediator. It was also my best negotiated outcome of the semester, and that’s no coincidence—as I learned, women often do best in representative negotiations.

I recently sat down with Maggie in her Stanford office, me on a low chair in front of her packed desk, her towering over me on a blue medicine ball. Read on for the scoop on why women don’t ask—and what we can do to change that.

Why should women negotiate?

Linda Babcock did a study for her book Women Don’t Ask where she found that there was a 7.6% difference between the salaries that women MBAs were getting and those that men were getting. A lot had been written on the comparable work issue already and much of the blame for the difference had been placed on organizations—basically institutional sexism.

Linda doesn’t say that doesn’t happen, but she does ask if there is something more. One of the questions she asked people is, “When you got your offer, did you attempt to negotiate?” She found that about 7% of women attempted to negotiate, while 57% of men did. Of those people who negotiated, they were able to increase their salary by over 7%. So, you can see that if women and men negotiated in similar proportions, that 7.6% difference would be cut dramatically.

One of the things I ask my students is: If you think of a $100,000 salary, and one person negotiates and gets $107,000, and the other doesn’t—what’s the cost of that? In a simple-minded way, some people say, “Is $7,000 really worth risking my reputation over?” And I agree, $7,000 may not be worth your reputation.

But that’s not the correct analysis, because that $7,000 is compounded. If you and your counterpart who negotiated are treated identically by the company—you are given the same raises and promotions—35 years later, you will have to work eight more years to be as wealthy as your counterpart at retirement. Now, the question is: $7,000 may not be worth the risk, but how about eight years of your life?

When women do attempt to negotiate, what mistakes do they often make?

They don’t prepare. Oftentimes you’ll see that even when women say “I should negotiate,” they don’t do a good job preparing by knowing how much more they want and why. They don’t know how to tell their counterparty persuasively why they should get what they want.

The other problem is that women have systematically lower expectations. The problem with having systematically lower expectations is that you get systematically lower outcomes, because expectations drive behavior. So, they get less not because they are women, but because their expectations are lower.

There was a study done at Harvard Business School where they demonstrated, much like Linda Babcock’s work did, that male MBAs get more. But when they equated the knowledge that women had about the going salaries for these jobs with the men’s knowledge, the difference disappeared. So when you equate expectations, performance is equivalent.

How do women need to think about negotiating differently than men?

Women are concerned about the reputational risks of negotiating, and they have cause to be concerned. If I negotiate for an increase in my salary, and I have a male boss, the research suggests that I will be penalized in a way that my male counterparts will not be. If I have a female boss, she’s going to penalize both males and females, so it’s not like I get any benefit for working with a woman.

One thing I would encourage women to do is to have a communal motivation for asking for more. If I’m a man and I’m negotiating a salary, I can talk about my competencies. What women need to do is yoke their competencies with a communal concern.

When I interviewed at Stanford, I obviously knew this research, so I did a lot of research to frame how my package of resources could allow me to fulfill the needs that Stanford has. The whole theme was, “What can I do for Stanford and what can I do to help the Dean solve the problems that he has?” This communal orientation—it’s not about me, but it’s about what I can do for you—mitigates the negative reputational affects for women.

Does this communal focus also improve women’s expectations?

Women are not as good negotiating for themselves as men are, mostly because of different expectations. But women outperform men in representational negotiations—that is, negotiating for someone else. As a woman, it is unacceptable for me to be greedy on my own, but it’s completely acceptable for me to negotiate for someone else, because that is a caretaking thing, a communal thing. I’ve certainly had women CEOs of moderate-size to large organizations tell me they have no problem negotiating on behalf of their company. But asking the Board of Directors for a raise? That is hard.

So the question is: How can you, in your own mind, frame your negotiations as representative?

What are your top recommendations for negotiating a job offer?
Package, package, package: If you go issue by issue, you make it adversarial. And part of the frame you want to bring is: “Here are the recourses I need to be effective.”

Prepare: Use your network to get insights. Before I came to Stanford, I spent a lot of time talking to friends of friends to understand what kind of issues were easier to get at Stanford and which were harder in order to frame my argument.

You are as good as your other options: My first job as an academic, I didn’t negotiate because it was the only reasonable research position I was offered. But when I was coming to Stanford, I was happy to negotiate. I had a really great job at Kellogg, I was really happy living in Chicago, everything was great. California was expensive and weird, and I’d never lived on the West Coast. But it had this caché and there were some really interesting people doing research here, so I was intrigued. So I negotiated and—let me tell you—they were surprised!

The more options you have, the more in demand you are going to be. It’s just like dating: The more competition there is for your attention, the more valuable people think you are.

Do you have any other recommendations for The Daily Muse readers?

Yes—the intro to my Negotiation class: Got a problem? Try to negotiate.

People, especially women, need to broaden their definition of what it means to negotiate. Sellers don’t come to you to negotiate and say, “You’re paying too much”—it’s your job to think: “Is there a creative way for me to engage my counterparty in a way that I am better off and he or she is at least as well off?”

Think about four steps in negotiations:

Assess: Is this a situation where I can influence the outcome?
Plan: How might I influence it? What do I want to achieve? What is important to them? Why are they making this decision or creating this problem?

Ask: Here is what I need to help solve this problem that makes me better off and at least keeps my counterparty whole.

Package the proposal: Take the information you have and your counterparty has to find a better solution. No one has perfect information. For women, do that with a communal view.
And finally, don’t be afraid of asking!

Business Leaders Are Banding Together to Improve Conditions for Women Entrepreneurs

 

Originally posted on New York Magazine

By Dayna Evans

In a week, the election will be over, and while the world will (hopefully) take a collective sigh come Wednesday morning, the new president is going to have her work cut out for her. An open letter published to Dell’s corporate blog this morning aims to put one important task on the new president’s to-do list: encouraging women to start businesses.

“You can’t argue with job creation,” Elizabeth Gore, the entrepreneur-in-residence at Dell, told the Cut over the phone. “We really tried to suggest policies that were bipartisan. You can take these suggestions and bring $30 billion dollars into the economy, no matter which candidate wins.” The open letter was signed by over 80 CEOs — from MasterCard to GIPHY to GrubHub — and it suggests three potential areas for the new president to focus on.

“We write to you today on behalf of our nation’s leading innovators, entrepreneurs and influencers regarding one of the largest untapped economic and social opportunities in our country — women entrepreneurs,” the letter begins. “If women and men participated equally in the entrepreneurial ecosystem, the United States’ GDP could rise by $30 billion.”


“Definitely the biggest challenge women in business face is access to capital,” Gore explained. “It’s not just venture, it’s how women access loans, how they manage their own finances, how they take risks with money. It’s also payment. Women own the types of businesses that do a lot of sub-contracting. The 90-day payment windows are a big challenge.” The letter suggests, “working with innovators to create new sources of capital such as crowdfunding and impact investments.” To this point, Gore emphasized that the Obama administration was the first to use the word “crowdfunding” in policy. “There are new programs that focus on loans and grants to women and minority-owned companies. There have been a lot of great initiatives under Obama,” Gore said.

But the progress can’t stop there. The letter urges the new president to make broadband internet accessible to all, and to “streamline the process of registering businesses and applying for government resources.” As Gore explained, “There are two ways to think about change: there is policy and there is leadership. The power of the White House is not just to influence policy but to encourage others to be leaders of these opportunities.”

“Women are starting businesses twice as fast as men,” she added. “We have to keep setting up new programs to aid these women, and bolster the ones that are working.”

6 Smart Negotiation Strategies Every Woman Should Know

Originally posted on Brit.co

By Julie Malacoff

There are tons of career skills you can learn now that will be useful throughout all your years working, and negotiation is definitely one of them. Whether you’re negotiating your starting salary or a raise, or setting up a deal on behalf of your company or client at work, you should be able to advocate for yourself in a variety of settings like the badass that you are. We all know how important it is to be confident and prepared entering a negotiation, but beyond that, most advice for getting what you want out of professional discussions is pretty generic. We tapped some seriously smart career experts to get their tips on how to get to win-win ASAP.

1. Never apologize. Sometimes it’s hard to ask for what you want, especially if you know it’s not likely to go over well. Here’s the thing: The more confident you are when making your ask, the higher your chances of ultimately getting what you’re asking for. “I encourage women to say the words out loud a few times and to focus on not apologizing,” says Catherine Merritt, founder of MUMZY, a crowdfunding site for moms. After all, why should you say “sorry” for something you want or deserve? She also recommends practicing “not defaulting to ‘um,’ ‘you know’ or other fillers” in order to show that you’re sure of what you’re speaking about, regardless of what that is.

2. Make your presence known. Don’t shrink into the background, says executive coach Merideth Mehlberg. “Sit at the table. Don’t sit at the back of the room. Sidle right up to the table in a meeting, especially one where you feel you may be a bit intimidated or outnumbered,” she suggests. Jess Chua, a certified career coach, also notes that it’s important to “be aware of your body language and speech delivery. Many messages are conveyed through nonverbal cues like posture and gestures. Record a video of yourself in a mock negotiation session and make notes on areas for improvement. Being prepared will help you be more comfortable and confident in an actual negotiation scenario.”

3. Know your limits. A clear idea of what you need is not only crucial to getting what you want at work but also in other parts of your life. “Negotiation is all about setting boundaries and deciding what you will and will not accept,” says Angela Copeland, Career Coach at Copeland Coaching. “We don’t often think about it, but we are essentially negotiating throughout the day. It’s important to take time to reflect on what you want and will and won’t accept into your life.”

4. Gauge the response ahead of time. Obvi, you should go into any negotiation situation prepared with all your facts and talking points in order, but Copeland recommends taking your prep one step further if you can. “Don’t wait until you’re giving a big presentation to reveal your ideas for the first time. Talk with a few insiders in advance to get their feedback, and more importantly, their buy in. If you know you have supporters in the room, you’re more likely to move your agenda forward,” she says. It makes sense that knowing you have some people on your team will give you a boost when you’re making your case.

5. Don’t immediately go on the offensive. There’s definitely a time and place for being assertive, but you don’t have to start out with guns blazing in every negotiation situation. “Breathe and let there be space in the conversation. Put out your position, and then stop talking. Give the other person(s) time to think, process and respond,” says Mehlberg. Jessica Sweet, career coach at Wishing Well Coaching adds that “unfortunately, women who advocate too strongly for themselves can be seen in a negative light.” Annoying, but true. “If you want to be a master negotiator,” she says, “you must take this into account. Research has shown that women who create a ‘joining’ relationship at the negotiating table do better than those who create an adversarial one.”

6. Use networking to your advantage. “Even more than preparation inside the office, you should prepare outside the office,” says Copeland. “We’re often taught that if we work hard, we’ll be rewarded. But while we’re at work toiling away, our coworkers may be on the golf course or taking long lunches together. The relationships that are built outside of the office can greatly influence our interactions (and success) at work. Even though it may seem like a waste of time, plan for things that will solidify your relationships,” she suggests. It’s also helpful to understand what motivates your colleagues or other people you’re trying to reach a deal with. “Are they trying to meet a certain budget or certain sales goals? Are they trying to protect their team or grow technology? If you understand what motivates others, you are more likely to put together a pitch that will resonate with them.”

Julia Malacoff

Julia is a writer, editor and proud life-long vegetarian based in Brooklyn, NY. An avid traveler, meditation enthusiast and exercise junkie, she stays active in every new locale she visits.