Earlier this month, an essay by actress Jennifer Lawrence on the subject of pay in Hollywood generated numerous discussions on how – and how well – women negotiate. In her essay, written for the online publication Lenny, Lawrence recalled feeling angry at herself for not negotiating higher pay from studio executives after discovering the salaries of her male costars – a result of the Sony email leak in 2014. “I failed as a negotiator because I gave up early,” she wrote. “I would be lying if I didn’t say there was an element of wanting to be liked that influenced my decision to close the deal without a real fight.”
Lawrence’s essay raises a number of questions. Do women negotiate differently from men? Do they tend to lack the self-confidence to be good negotiators, as Lawrence and others have suggested? Is there more than one way to be successful at making deals? What is the best negotiation approach: finding consensus, or going for the jugular? At the recent Wharton Women in Business conference, a panel of high-powered women who are seasoned professionals in the areas of investing, private equity, insurance, consulting and law— some responsible for managing billions of dollars on behalf of their firms—tackled these issues.
A major theme was that today, “coming on strong” or openly dominating a negotiation has pretty much gone by the wayside. An emphasis on listening and building a collaborative atmosphere is a more accepted (and according to the panelists, a more productive) negotiating style for both women and men. Eileen Kisly, a vice president of planning and analysis at Prudential, said that years ago when she was first put in charge of a team, her attitude was: “I’m going to be number one, I’m going to win.” She added that women in the workforce who were not aggressive and did not “dig their heels in” risked being ignored professionally. “I think things have completely changed now,” she said. “Our company, and the business world, have evolved, thankfully.”
Jennifer Pereira, a principal in direct private equity at CPP Investment Board, also recalled starting out in professional negotiations with an attitude that reflected, “I have to win, I have to be right, I have to show that I’m right.” What you quickly learn, she said, is that there’s “more than one way to be right…. At the end of day it’s about being open and collaborating.”
What are the benefits of focusing on listening in a negotiation? Jennifer Potenta, a director in MetLife’s Corporate Private Placements group, said, “Listening is really important because sometimes you think you know what the other party wants, but when you listen, you really hear what they want. That’s where you get to a position, a resolution, that works for both sides.” Potenta suggested that women may have an innate advantage when it comes to listening skills. “It’s something that I do better than my male counterparts.”
“It makes me nuts when I hear someone like a female Wharton MBA say they are not good at negotiation…. Well, you don’t have to really be that good; you just have to do it.” –Beth Ann Day
Listening helps you understand your audience, agreed Kisly, and also recognize useful points others may make. “It’s kind of hard to take a step back and say, okay, let me hear other people’s ideas. But … the combination of the ideas is generally better than just your idea alone.”
Rachel Krol, a lecturer in Wharton’s legal studies and business ethics department and the panel’s moderator, noted that listening is essential to successful negotiations even though it can seem like a weak position. “Sometimes we feel like whoever is dominating the airwaves is controlling the negotiation and the space.” Yet research on the most effective salespeople, for example, reveals that when meeting with a client they only talk about 30% of the time. The rest of the time they are listening or asking questions. It’s counterintuitive, said Krol, but listening can be a position of strength.
Closely related to listening, openness and collaboration is building long-term relationships, according to some of the speakers. Pereira said that in her industry, one tends to work with the same advisors again and again, and someone on the other side of a negotiation could easily turn up on the same side of the table later on. “You don’t always know when someone’s going to pop back into your life. It really is so important to negotiate with integrity and build personal relationships as you go.”
“Long-term relationships are very important in my industry, too, very similar to Jen’s,” said Potenta. “We’re all about long-term investing … with companies and with bankers.” She noted that she tries to visit or at least call her contacts at the 60 companies she works with a couple of times a year, just to maintain the relationship. She agreed that in any business dealing, integrity is key. “Don’t ever compromise that; it’s not worth it. For me, my integrity, I think, is a differentiator.”
Returning a Pair of Jeans
Most of the panel agreed that women tend to have less confidence than men when negotiating, or to undermine themselves by thinking they’re “not good at it.” Beth Ann Day, a managing director and chief talent officer at AllianceBernstein, and Fatimah Gilliam, founder and CEO of The Azara Group, a leadership development and strategy consulting business, offered some advice for women to get past this roadblock.
Day commented, “It makes me nuts when I hear someone like a female Wharton MBA say they are not good at negotiation or public speaking. Well, you don’t have to really be that good; you just have to do it…. Think, ‘This is what I need to do. This is how I move forward.’”
She added that practice helps, too. Both Day and Gilliam said that practicing negotiation in small ways, in everyday life, builds both experience and confidence. They said this could be anything from returning a pair of jeans after the 30-day return period has expired, to trying to get a better hotel room when traveling. “Once I was on the phone with my door shut, having a very heated discussion,” said Day. “I opened the door and my assistant asked who I was talking to. I said, ‘I just convinced American Airlines to bump up my frequent flyer status … to compensate for a canceled flight…. ’ It was fun. I challenged myself and I won.”
“I really believe that to become a better negotiator, it takes practice, like playing tennis or becoming a great pianist.” –Fatima Gilliam
“I really believe that to become a better negotiator, it takes practice,” said Gilliam. “It’s just like any other thing, like playing tennis or becoming a great pianist.” She championed formal training as well—she herself has negotiation training from the Kennedy School and Columbia Law—but commented, “I also love traveling to developing countries so I can haggle in street markets.” Krol struck a similar note, saying that when visiting independent businesses, she makes a habit of asking what the discount is if she pays in cash. “Finding those little moments I think is a great way to develop confidence.”
How to Ask for a Raise
Negotiation in the context of asking for a raise, promotion or bonus can be challenging, but is critical to one’s career development. As a chief talent officer, Day said she has these conversations almost daily in her job from the company’s side, and described differences between how men and women approach the situation.
“The classic male Wharton MBA is negotiating with me on a constant basis,” she said. As for women: “Half of them will never negotiate with me about anything, and the other half [either gets] super, super intense, or apologetic: ‘Oh, I feel so terrible doing this; I hate to negotiate.’” Because the women don’t negotiate very often, she noted, it becomes “a big deal,” as opposed to the men, for whom it feels “normal” because they do it so often.
Day stated that women should push themselves to negotiate regularly and to get comfortable with a bigger ask, such as “20% more than you expect in compensation, or a promotion six to 12 months earlier.” Sometimes, the answer will be yes, sometimes no, she said, but the idea is to keep asking and not take it personally. A side benefit of this activity is that it signals to your manager that you’re “ambitious, hungry and ready to take on more.”
“Change your perspective … think beyond yourself. You’re negotiating for your family. You’re negotiating, if it’s compensation, so that you can have more money to take care of your parents when they’re old.”–Fatima Gilliam
Gilliam cited research showing that when women negotiate on behalf of someone else, they sometimes outperform men, whereas when negotiating for themselves, they don’t perform as well. She offered a mental trick for female negotiators: “Change your perspective … think beyond yourself. You’re negotiating for your family. You’re negotiating, if it’s compensation, so that you can have more money to take care of your parents when they’re old, right?” Realizing that it’s not “just about you,” she said, might make you a better advocate for yourself.
Gilliam also pointed out that young women can quickly fall behind if they don’t ask for greater compensation early on. The data shows that even a small, incremental difference in salary such as $5,000 can translate into a loss of hundreds of thousands of dollars over the course of a woman’s career. If you don’t ask, you don’t get, she pointed out.
Less Confidence?
Confidence is so important in the workplace that for some people it can even trump competence, said Gilliam. “You’ll encounter these people who honestly don’t seem like there’s much going on between the ears, and they’re very senior. And you think, how did they get in that role?” She advised women to work on their confidence skills, because “you don’t want to be junior to somebody who really doesn’t know the deal … [but] they exude more confidence than you do.”
Pereira tempered Gilliam’s point. “I would hate for everyone to leave this [discussion] thinking, ‘OK I need to go build this confidence, because I’m a woman and I don’t have it,’” she said. She noted that while women might be perceived as having less confidence than men in a business setting, studies on women’s and men’s brains suggest that it might be not a deficiency but a difference in how they show it. “For example, we stay much calmer in situations that are stressful: situations where you have to multi-task, or when things go wrong. Men are more likely to get upset, to ‘freak out,’ for lack of a better term.”
However, since business—and society at large—defines confidence as it is displayed by men, “you [do] need to work on the attributes that are more widely recognized,” said Pereira.