Podcast: Ace Your Next Negotiation with Sheila Heen

Sheila Heen headshotThis recording of one of our most popular teleclasses yet, “Ace Your Next Negotiation,” will prepare you for your next tough conversation—whether it’s about securing a business deal or talking salary and benefits with your boss.

Listen to the 30-minute teleclass or read the full transcript below.

Key Points:
– Without knowing the language of negotiation, we tend to operate instinctively rather than logically in tough conversations.
– Anytime you’re trying to influence someone else, you’re negotiating. But don’t assume that every negotiation is adversarial, like price haggling.
– Learn the four core elements of effective negotiation: Interests, Options, Criteria, and Alternatives.
– You can learn to negotiate with yourself to counter worries about being perceived as “greedy” or “a troublemaker.”

Sheila Heen is also the CEO of Triad Consulting Group. Her new book, Thanks for the Feedback: The Science and Art of Receiving Feedback Well (Even When Off-Base, Unfair, Poorly Delivered and Frankly, You’re Not in the Mood), came out this year.

View Transcript

Conferences for Women

“Ace Your Next Negotiation”

Guest: Sheila Heen

Interviewer: Karen Breslau

August 26, 2014

Karen: Welcome to the Conference for Women teleclass. Our subject today is acing your next negotiation, and we’re delighted to be joined by Sheila Heen. Sheila is a New York Times bestselling author, founder of The Triad Consulting Group, faculty member at Harvard Law School. She often works with executive teams, helping them work through conflict, repair working relationships, and make sound decisions together. Sheila has spent the last 20 years with the Harvard Negotiation Project, developing negotiation theory and practice. She specializes in particularly difficult negotiations, where emotions run high and relationships become strained.

Sheila Heen is co-author of Difficult Conversations: How to Discuss What Matters Most and a new book, Thanks for the Feedback: The Science and Art of Receiving Feedback Well, Even When It’s Off Base, Unfair, Poorly Delivered and, Frankly, You’re Not in the Mood. She’s been featured on Oprah, CNBC’s Power Lunch, and NPR. Sheila Heen, welcome.

Sheila: Thank you.

Karen: I want to ask you: aside from the wonderfully provocative title of your new book, why is it that experienced women professionals still need help learning to negotiate?

Sheila: Well, that is such a great question, and I would say that there are two core reasons. One is that we just don’t have the vocabulary or the skills to think about the negotiation process. It’s not something, typically, that many of us learned in school. And so we’re operating instinctively, rather than sort of analytically or systematically. So, in this teleclass, I’m gonna give you four concepts that are gonna help you navigate the territory.

The second reason is I think that we often don’t first negotiate with ourselves and, especially, when negotiating on our own behalf, so that we don’t use the skills and tools that we otherwise have to represent our own interests effectively. When you’re representing yourself, as opposed to when you’re representing your organization or your team, it’s often the case that people will be good negotiators on behalf of someone else, but then, when it comes to representing themselves, they actually don’t use all the skills that they otherwise have. This is something that has been dubbed “self agency.” And I see a lot of really effective advocates actually fall apart when it comes to talking to someone about their own interests – in their weekend, their compensation, inside their family.

So, we’re gonna talk about both of those causes today. Now, before we start, I should just define our terms a little bit, because I think that when people think about negotiating, it’s easy to picture just some of the formal nuances of haggling, like when you buy a car or a house, or you’re haggling over salary, or maybe when you’re in a marketplace in a foreign country where bargaining is more common than it is here.

But we would really define negotiation much more broadly. Any time you’re trying to influence someone else, you’re negotiating. Or you’re trying to influence getting some time on their calendar or their attention, or you’re negotiating for resources or credibility with a group in an audience, we actually think that all of us have been negotiating our entire lives. Since you first cried for milk, you learned how to get what you want.

So, all of us, actually, have more negotiation mojo than you probably think that you do. And you’ve got a lot of skills and thoughtfulness and creativity and listening skills and empathy. The trick is really recognizing when and how to use them in the negotiation process.

Now, let’s go back to that traditional picture of negotiation, which is a dance of position. Somebody puts out a demand, then there’s a counter-offer, the first person makes a concession, then there’s another counter-offer, maybe with a matching concession. And the concessions get smaller and smaller, and people say “No, no, this is my final offer and my final, final offer.” And eventually somebody gives in and you find agreement. And I think that, if you’re assuming that’s the way the negotiation process has to happen, then it can feel like you’ve got two choices: either I can be hard, you know, tough, aggressive, begrudging in my concessions, but then, the risk is that I actually risk either hurting the relationship or not getting a deal. And often, it doesn’t feel congruent with who I am.

The other possibility is “Well, I could be soft and just give in, which means that I then risk getting taken advantage of.” And so, neither of those choices feels very satisfying.

If we want to approach the negotiation process in a more satisfying way, and a more, I think, effective way, we have to scratch below the surface of that haggling dance to understand the underlying elements of negotiation.

So, I’m gonna talk briefly about four core elements of negotiation. And if you can master those elements, you actually can more successfully negotiate, both with yourself and with other people.

So, the first and most important element is interest. Now, a position is what I want…you know, “I want this amount of money. I want this many new people for my team. I want to pay this amount for the house or the car.” An interest is actually why I want that. So, if my position is, you know, this is the starting salary that I want in this new position, in this new role, my interest might include the financial interest, so I can make enough to cover my expenses, let’s say. But I also have interest in being treated fairly, vis a vis other people in similar roles, I have an interest in understanding how compensation is understood in the future, how do I move up? What criteria do I need to hit?

So, I might have different interests, maybe, than another candidate in security or risk – like, I might be willing to take a little bit less in base salary because I have the confidence that I’m gonna make it up in whatever – commission, bonuses, etc. – or the opposite. I might actually desire more security and less up-side. All of those interests actually – understanding them for ourselves – is a key to negotiating well on your own behalf.

But the second piece of interest that often gets overlooked is that I have to really deeply understand my counterpart’s interest, and particularly the priority of their interests. And this is where listening skills and asking questions is really one of the most important negotiation skills you can develop or use because you probably already have it in another context.

To really understand, in this case, your employer’s interests: do they have precedent concerns for other players? Do they have budgetary constraints? Are there ways to get creative about compensation because their budget is tight for the first quarter, but actually opens up after that? Do they have concerns about how I’m gonna fit in with the team that I can actually meet or alleviate? If I can understand their interests, the other side’s interests, it actually opens up possibilities for options that will satisfy both of us that might even go beyond simply talking about compensation.

That brings us to that second element which is options. So, options are really the different ways that we can meet our interests. And if we can together brainstorm – look, I think there are a few different ways we could structure this – I can move us in that discussion of options from adversarial haggling to much more of a joint problem-solving. You know, “look, we have a challenge together – we’ve got to find a salary that feels fair to me and that you feel like you can do. And I can imagine a bunch of different scenarios.” If I can get that conversation started, I turn it into a discussion and a joint problem-solving session, rather than feeling like it’s a game, and I don’t really like playing games with my life. Or feeling like it’s a win-lose situation.

Now, we’re gonna…I’m gonna pull up into the third element, which is sometimes called criteria or standards of legitimacy. And this is a critical element, particularly for those of us who tend to undersell ourselves. Because criteria are objective standards for what something is worth or how we should do things. They’re independent of what I want or what you want; they’re what other third parties might say is fair or expected. So, these might include, you know, what’s the market value, what are other people in my role, with my responsibilities, earning? Do I have to negotiate resources on my team, given the objectives that you’ve given me, how many resources – whether that’s budget or head count or timeline – would I expect to have? Would other people have to meet those objectives?

So, it’s not just being greedy. It’s saying, “look, to do that, here’s how other people go about it and here’s what I would need to do so.” Now, a friend of mine is actually building a small business, and she’s at the point where she needs to hire a sales force. So, she’s been interviewing candidates for a sales director, and she told me yesterday that she offered the candidate she was talking to a 50 percent commission on all sales, and he immediately snapped it up. Well, that’s great, she got an agreement, but it surprised me because that number was so high. So, I asked her, “Is 50 percent kind of the going rate? What do sales people expect to make? What’s the range out there? And she actually had no idea. So, she just offered him a number off the top of her head that she thought he would say “yes” to, rather than doing her homework ahead of time to say, “Well, what should a salesperson expect to make in this market?”

Now, criteria can really be powerful, not only because it’s often very persuasive to the other side, but because it also protects you from being taken. You know, if you’re buying a used car, the Kelly Blue Book is gonna tell you what that car is worth, so that you don’t overpay. You know, if you’re negotiating for your compensation, well, what would you be paid elsewhere? You’re just asking your organization to match what you are worth, and what they would expect to pay in the market. You’re just asking to be treated fairly.

So, this brings us to number four, the last element, which is called alternatives. Now, the word “alternatives” and the word “options” are synonyms in the English language. But in the negotiation field, they’re actually used as terms of art. So, options are different ways we can structure the agreement between us. Options – on the table. They’re things that we’re talking about doing together.

Alternatives – a) are things away from the table. If you don’t say “yes” to me, what am I gonna do instead? And what I’m particularly wanting to think about is what’s my best alternative to a negotiated agreement? What’s the best thing I can do if I can’t find agreement with you? And that’s sometimes called your “BATNA,” best alternative to a negotiated agreement. It’s a term that you’ll hear thrown around in negotiation circles.

Now, sometimes your BATNA is actually to wait or do nothing. If you don’t say yes to me today, well, I’ll wait and in our next meeting, I’m gonna bring it up again. Other times, it might be to go make a deal with someone else, it might be suing you or filing a complaint, or trying to work around you to talk to someone else who might say yes to me. But taking some time to think about if I can’t work this out with this person, what am I gonna do instead? Not only increases your confidence, ‘cause the better your BATNA, the less worried you are about this negotiation not going well, but it also helps you make sure that you don’t say yes to something that’s actually worse than what you could get elsewhere.

I have another friend who is leaving her organization, and they are begging her to stay, and she has said yes to staying, even though her alternative is actually much better for her, both in terms of her short-term interests and her long-term interests. And so, she’s just not thinking very clearly yet – we were having this discussion the other day – about, well, gosh, your BATNA to your own organization is pretty good. either you should be walking to that, or you should use it to come back to say “Look, my BATNA’s also criteria for what I’m worth. This is what they’re offering me; can you guys match it?”

Now, all of these elements – understanding my own interests and the other side’s interests – being able to create options that’ll meet those interests, and thinking creatively about multiple ways we could meet them, keeping in mind the criteria for what something is worth, and also developing my alternatives or my BATNA. Help us not just in negotiating across the table, but it also helps us in the negotiation with ourselves. I think sometimes the reason we don’t negotiate well on our own behalf is that, for identity reasons. We’re worried about looking greedy or being a trouble-maker, but each of these four elements can help me negotiate with myself to reassure me, “Look, I’m just looking to be treated fairly, or it’s in their interest, actually, to give me the resources I need to accomplish the objectives they put in front of me.”

And there are probably creative interests that are gonna meet both my interests – creative options, excuse me – both my interests and theirs, so I’m not asking for something that they shouldn’t want to go along with. And, for me, just knowing I have a BATNA, even if it’s bad, that there are other things to do – for me to do – if this doesn’t go well, is actually just reassuring. It makes me feel less trapped, so that that actually enables me to think carefully about how am I gonna tap all of the skills I have in lots of other contexts, and use them in this context, where I might be more anxious because I have more at stake. So, it can help me relax and actually tap the experience and skills that I normally have.

So, let me pause there and maybe take a few questions.

Karen: Sheila, thank you so much. The first question we have is negotiating with ourselves, but it seems like that is a key sticking point for many women. And I was wondering if you could talk more about the negotiations that women in particular undergo with themselves before they dare take something to another party.

Sheila: Yeah, it’s a great question. And what’s interesting to me is that I hear different women giving different reasons why they’re not speaking up for themselves. So, here are some common ones. One has to do maybe with social norms. So, social norms about how we’re supposed to act and maybe particularly as women how we’re supposed to act. Sometimes our criteria that persuade us that it’s not okay to speak up, to either ask for something or to advocate for something. And so, I think, part of the reason that some people don’t speak up is that they are worried about that question – will I look greedy or like a trouble-maker? And I don’t want to hurt my relationship with this person by doing that.

A second reason that people sometimes don’t speak up, and women maybe in particular, is that we just, we don’t actually know what we want. And we feel like, I have to figure out what I want and what the right solution is, before I’m allowed to raise the topic to discuss it. And I actually think, in some ways, you’re better off raising a topic earlier to open the channels of communication before you’re ready and have a solution. So that saying, “Look, I’m struggling with this, I don’t know the answers yet. I’d love your input, and I have some questions for you, and let me share with you what some of my concerns…” That’s actually an easier discussion for both parties to have than one where I come in, I’ve got everything figured out except, of course, that I don’t have any input from the other person on their perspective.

So, I think…I walk in overconfident that I have a solution and realize partway-through that, you know, that their interests are different than I assumed that they were, or that they have information that I didn’t previously have. So, earlier rather than later and knowing you don’t have to have it all figured out before you start the conversation, I think, is key.

Karen: Now, there are exercises in business schools all across the country about negotiation. What are some exercises, if one of our listeners wanted to be a better negotiator with herself? Is there anything you can suggest that she practice or try with a friend?

Sheila: That’s a great question. First of all, just go home and talk to your friends, your spouse, and particularly your teenagers. And notice the negotiation you’re doing with yourself in that process, whether that’s, you know, negotiating with yourself to manage your impatience or your frustration or your disappointment…But I think that, actually, the negotiations that we have in our personal life are not only a great training ground, for sort of noticing and honing our skills for our professional lives, but often, it’s our personal life negotiations that are even more challenging…

Karen: Sure.

Sheila: …simply because we have more history with those people and we have more at stake emotionally in those relationships.

Karen: But let me try flipping it. What can we take from the workplace that could be used effectively with a teenager who wants to stay out late or borrow the car, or a spouse who has a different idea about where to vacation, or whether or not to see the in-laws…what are some skills from the workplace that might be helpful in the personal life?

Sheila: Oh, that’s a great question. So, let me actually offer one exercise that you can do with a friend first, and then come back around because the question of “is there a way to practice” was a really interesting question, and a thought just came to mind. One of the things that we talk about in the new Feedback book, is that when we go to friends for help thinking something through, whether that’s in our professional life or our personal life, we often cast them, unintentionally, in the role of being what we would call a “supportive” mirror. We go to vent to them about something that happened with our spouse, or our teenager, or our boss, and what we really tacitly want from them is for them to tell us that we’re right, the other person’s impossible, and that we’re not the problem, of course. And so, that’s what they do. They reassure us, they tell us, “well gosh, that feedback that you got from them, or the way they’re being is totally unreasonable,” and that’s very comforting. The problem is that it doesn’t actually necessarily help us to understand the situation more clearly, and to then come at it from a different direction.

So, feedback, in particular, is sometimes called “holding up a mirror.” And we would say that there are two kinds of mirrors. One is this idea of a supportive mirror – a supportive mirror reflects you back, you know, under flattering light, on your best day with good hair. It reassures you, “no, no, no, the way your teenager’s treating you, that’s not, of course, who you are as a mother, it’s the way your boss is so upset about this particular mistake you made. Remember this is a tiny thing in the scope of everything you’re doing well.” That…we need that.

But the second kind of mirror is an honest mirror. And an honest mirror shows us what we look like right now, when we’re really not at our best, and there’s something we could work on. And so, inviting explicitly, our friends, people that we trust to say “Ok, thank you for the reassurance. I’m now, maybe, ready for an honest mirror. So, what do you see me doing, or maybe I’m failing to do it, that’s actually making the situation worse? Are there opportunities I’m missing in my interactions with my teenager over this chronic curfew issue? Or with my spouse over these vacations/arguments? Or do you see things I’m not understanding? Do you see things that I could try that might be helpful?” And so, you actually enlist your friends as coaches to you, because they’ll be able to see things as an outsider that we just can’t see when we’re in it.

Now, I teach negotiation, I’ve been teaching it for more than 20 years. I do it day in and day out. There are things that my friends can see in my negotiations that I can’t see, simply because I’m too absorbed on the inside of it to be able to step out and see it from the outside.

So, we have incredible resources at our disposal; we just don’t invite them to step into that role of being honest with us to help push our understanding, rather than just reconfirming our understanding.

Karen: And so, as a good friend, it seems like one of the things you can really do is be an honest mirror, in addition to reassuring your friend that to really point out what it is you’re seeing.

Sheila: I think that’s right, but I do think that if you’re on the friend side, we have to be careful, because it can really be jarring if someone that we rely on as a good friend suddenly turns to be an honest mirror…like, whose side are you on? Wait a minute. So, I think having that conversation, explicitly, either if we’re the friend saying, “you know, look, they’re being impossible, they’re not understanding your perspective, they’re totally underappreciating you, all of that is true.” I also see a couple of things that you can try if you wanted to, but do you want to talk about that? And wait and ask for their permission, because they may or may not be ready.

And if we’re the one coming to the friend, actually being explicit about what would be helpful to me right now. Like right now, I just need to vent, and I actually could use some support. Okay, now, actually I’m ready…what do you see me doing to making it worse? And I think that, too often, we leave all of that unsaid, and so we miss the opportunity.

Karen: Right. And here’s an interesting question, given the books – your books – Difficult Conversations and Thanks for the Feedback, what is the workplace conversation that women most dread?

Sheila: Oh, that is such a good question. I think there are two, or maybe three, candidates that I hear about a lot, and it just depends on who you are. So, #1 is money – talking about money – particularly money for me. For many people, particularly if money was not a discussable subject in your family…so, if it feels rude to talk about or uncomfortable to talk about, that’s something that I hear a lot. Other people, in their families, it’s talked about all the time, so it’s just not uncomfortable at all. A second is addressing problematic behavior, particularly behavior that you might describe as “inappropriate.” So, whether it’s sexism or somebody is telling offensive jokes, or they smell, that all of those things feel so personal and also so loaded, that I think we feel anxious, so we don’t actually address them with the same comfort or clarity that we do other topics where, actually, you need to do your report differently, that format doesn’t work. That, we have less trouble talking about than some of those more sensitive topics.

And the last is that performance feedback comes up 100 percent of the time when we ask men and women about their most difficult conversations. Giving honest feedback and getting feedback that feels unfair or off-base is on that list 100 percent of the time. It doesn’t matter who we’re working with or what continent we’re on. And that’s really what led us, then, to write Thanks for the Feedback, which is what we’ll be talking about at the conference itself.

Karen: Ok. And even when it’s off-base, unfair, poorly delivered, and frankly, you’re not in the mood…

Sheila: And perhaps especially when it’s all those things [laughs].

Karen: Well, let’s talk about feedback for a moment. What is a good way to offer feedback, particularly when it’s not positive? How do you set up that conversation so that the employee or the coworker hears what you’re saying without being offended or becoming defensive? What are some good entrees for a difficult conversation about performance feedback?

Sheila: So, the first, I think, is to understand that there are actually three different kinds of feedback, and to be clear yourself on what it is you’re offering. So we use the word “feedback” to mean three different things: the first is appreciation, which is just like “I see you, I…you matter.” And sometimes when people say “I wish I got more feedback around here,” what they actually mean is, “I wish that somebody noticed that I work here. I’m not sure that all the sweat and tears I put into this job actually get noticed.” Appreciation is what keeps people motivated, and it’s often neglected. And the more you can offer appreciation, and the more room you will have on occasion to offer the second kind, which is coaching.

So, coaching is really aimed at helping someone get better at something, to improve their knowledge or their skill, and that’s the kind of feedback that I think we’re talking about most often when we say “I need to give this person some sort of feedback.” The problem is that that second kind – coaching – gets mixed up with the third kind, which is evaluation.

Evaluation rates or ranks you, it judges you against some set of criteria that was appropriate or inappropriate. You know, here’s your year-end rating in your performance evaluation, and it’s the loudest emotionally, so people react to it, sort of, most strongly. And it drowns out, often, our efforts at coaching. So, sometimes we mean to be coaching, but what we offer is either expressed as, or heard as, evaluation. So, instead of saying, “Hey, here’s an idea for how to make your presentation clearer,” we say, “Well, that didn’t go so well.” And, so, the person is reacting to the judgment, and it’s gonna be really hard for them to hear the coaching.

Karen: Right. The focus on appreciation first, and then coaching.

Sheila: Yeah. I think if you do show appreciation sort of regularly, day in and day out, you’ve got a really good relationship foundation because people feel noticed and they feel like, “this person actually cares about me, they care about how I’m doing.” If you look at the research on working relationships, that foundation of appreciation is key to people being receptive to coaching. So, if you’re doing that day in and day out, then you can pull them aside to have a coaching conversation much more clearly and just being clear with them…”Look, I’ve got some ideas on how you could do this a little bit better.” As long as they feel like, on the evaluation front, they’re doing okay, then they’ll be open to the coaching.

Sometimes, you’re offering so much coaching, that they’re wondering, “Does this mean I’m not doing okay?,” like, “are you having to coach me this much because I’m actually falling behind, or I’m not meeting expectations?” And so, it may be that you need to dip into reassuring them, if appropriate, “Look, I want to be clear, you’re doing great, you’re right on track, this will take you to the next level, which is why I’m offering it to you.” the evaluation is the one we need least often, but that often gets mixed up in the coaching and drowns it out.

Karen: Right, right. Well, Sheila, we have time for one more question, and then that is probably the most commonly asked question. And that is how to initiate a conversation about money, particularly given that this is a subject that is so uncomfortable for many women.

Sheila: So, I would say that the worst way to ask for a raise is to go in and ask, “Can I have a raise?” And partly because it’s a yes or no question. And partly because you’re putting your boss or whoever is in charge of compensation on the spot. And the easiest thing, way for them to react, is in that moment, “No, you cannot have a raise.” Instead, what we would recommend is that you go in and say, “Look, I want to talk about my compensation. It feels to me like, given my role and responsibilities as they’ve evolved, that it may be time to revisit it, and it may need to be updated. But help me understand how you’re thinking about it and what it would take to update it.” So that you’re actually initiating a conversation. They can’t end that by saying yes or no, they need to sit down with you, or at least, schedule time to sit down with you, to talk about “ok, here’s how we think about compensation.” And you’ll learn a huge amount about whether they think there’s a mismatch about what the constraints or barriers might be to getting more money. And I think it’s a more comfortable way for us to ask because you’re really asking about “help me understand the criteria and let me share with you my interests, and then we can explore some options. So for those of us uncomfortable talking about money, that’s often a more comfortable way to come at the topic and the conversation.

Karen: Well, that is great advice. Sheila Heen will be appearing December 4th at the Massachusetts Conference for Women. You can learn more at maconferenceforwomen.org. That concludes today’s teleclass. Sheila Heen, thank you so much for being our guest today and thank you all for listening.