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The Dance of Negotiation

Tina Seelig, Stanford University March 29, 2019

Although we negotiate all day long, most of us don’t realize it, nor do we have a clue how to do it well.

On the LEAP! podcast episode, It’s All Negotiable, I had a chance to discuss how to negotiate successfully with Andrew Scheuermann, CEO and cofounder of Arch Systems, and Jessica Verrilli, general partner at GV, both of whom have lots of experience in challenging negotiations. Some of their key insights are:

  • Treat negotiations as though you are building a relationship.
  • Begin by fully understanding your precise objectives.
  • Figure out what others want by directly asking and listen carefully.
  • Build trust by being candid about your circumstances and constraints.
  • Go slowly, gathering data, so that you can go fast when the time is right.
  • Learn what is fair, and ask for a fair deal.
  • Practice negotiating to polish your skills.

Inspired by Maggie Neale, who teaches negotiation at the Stanford Graduate School of Business, I run an exercise in my classes that appears to be a simple negotiation between a job candidate and an employer. There are eight terms — including salary, vacation time, and job assignment — to nail down, and each person has point values associated with each of the terms. Their individual goal is to maximize their own points.

Figure out how you can solve other people’s problems while also solving your own.

Usually, the pairs of negotiators go down the list in order, trying to agree on each item. They quickly realize, however, that this strategy isn’t going to work. At the end of the thirty-minute negotiation, some of the negotiators have come to a resolution and others have decided to walk away without a deal.

Those who have reached an agreement fall into one of two categories: those who are eager to work together, and those who feel uncomfortable with the outcome. Some pairs end up with similar point totals, while others have wildly different values. So what happened?

The most common mistake is the assumption that the recruiter and the candidate have polar opposite objectives. In fact, based on point values for each term, they have two objectives in common, two that are opposites, two items that are much more important to the candidate, and two items that are much more important for the recruiter.

Though contrived, this case mirrors most situations in life. Parties often share interests, even when they believe they’re on opposite sides of an issue, and some terms are usually more important to one person relative to the other. The key to a successful negotiation is to ferret out everyone’s interests so you can maximize the outcome for everyone.

Practice: Pick something you want to negotiate, such as a job offer, a discount on a product, or where you want to go on vacation. Next, make a list of everything that is important to you. Then, ask the person with whom you are negotiating to make a list of all the things that are important to them. Compare lists to learn where you are aligned and where you are not.

Let’s take my experience purchasing a car several years ago as an example. I assumed the salesperson wanted me to spend as much as possible, since I wanted to spend as little as possible. But I decided to test this assumption. While test-driving the car, I asked a lot of questions about the automobile industry, including about how salespeople are compensated. I learned that the salesperson’s commission had nothing to do with the price I paid. His bonus was based upon getting an excellent evaluation from each customer regardless of the price of the car.

I told him that wasn’t a problem for me, and that I’d be delighted to give him a fabulous review in return for a great price. We found a win-win situation. I would never have known or imagined that our interests were aligned unless I took the time to explore them.

Families offer endless opportunities to hone your negotiating skills. For example, several years ago, my son Josh wanted to purchase a new bicycle. He was competing as a road cyclist and “needed” a fancy new bike. He came to me and said, “I’ve done all my research and have found the perfect bike.”

My response was, “That’s nice… There’s no way we’re going to spend that much money on a bike… But, perhaps you can you can find a way to make it attractive to us to purchase the bike for you?”

I urged Josh to think of things he could do for me that would be worth the price of the bike. He thought for a few days and came back with a proposal. He offered to do all of his own laundry, and to cook dinner for the family three nights a week for the rest of his time at home before college — that was two years.

The most common mistake is the assumption that the recruiter and the candidate have polar opposite objectives.

I determined that this was a great deal for me. By doing his laundry and making dinner, he was saving me a lot of time, and he would be learning some important skills. We agreed to the deal — Josh got the bike, and he prepared a lovely family dinner three nights a week.

Practice: When negotiating, turn the tables to look at the situation from the other person’s point of view. Figure out how you can solve their problems while also solving your own.

Remember, negotiation is a dance… It is important to know when to lead and when to follow.

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Parts of this blog post are taken from “What I Wish I Knew When I Was 20” by Tina Seelig.