Doing negotiation well is something I feel passionately about.
Recently I was discussing negotiation with a friend of mine, and he said he tries to avoid negotiation very purposefully. He always pays contractors more than they expect, and always gives companies a fair quote that really is all he can afford. If they aren't happy, the deal is off. Not everyone can do this, and this isn't a complete picture of the situation, but I found this extremely refreshing. I loved the idea behind this.
I really dislike advice that's a blanket "Always start high," or "Never name a number first." Although that's solid advice, it misses a key factor-- we need to understand why we're doing these things. It puts us at risk for treating others with disrespect, for instance, not understanding the human element involved.
To give some more background, I handle all the negotiation for our company. It's everything from software contract terms to hiring to office space to operations to product agreements.
There are a few reasons I started to care about negotiation:
There was a point in which I simply was not making a high enough wage to live. It was putting my job at risk to negotiate in this position, but I simply had to or else I had to try to find something else. I needed to eat.
More recently, when contracting it at first seemed strange to charge high rates per hour ("That's much more than I would charge working full time!") but when I took into account things like business overhead costs and potential dry spells, I realized this was a simple necessity. I needed to survive. Sorry, high rates are the way it has to be.
There was a point when I thought I was very happy with my salary. I had more than enough to live! It was great! I then realized that for the same job and the same work, a coworker was making twice as much as me. Twice as much. I suddenly felt a lot less enthusiasm toward my work-- why was I valued less? It's because I didn't negotiate. I could get better, and I should've. That was a huge motivator.
Moreover, when I negotiate I raise the bar for everyone. If I'm making a certain amount out of school, for instance, it becomes more normal for everyone to make that. Fighting a good fight to get paid well raises everyone's salaries.
Negotiation happens everywhere.
One thing I always remember is never to switch into another "mode" for negotiating. It's a conversation that happens all the time. About deadlines, plans, when you lend someone something-- whenever you are making a decision in which you need to take into account your needs as well as the other person's needs.
That's why advice like "Don't name a number early" exists, partially. It's often true that you don't fully understand the situation, so how could you know how much to charge right up front? You might be surprised to learn that the person has more budget than you expected, or needs more features sooner, or any number of factors that affect price.
Negotiation is also about a lot more than price or salary. What else is involved? Bonuses, stock, support deals, relocation? There is so much that goes into a partnership with someone. It's important to stay creative-- always think about several outcomes that would make you happy.
Empathy is also extremely crucial. How is the person feeling? How are you communicating?
How can you make them happy, while respecting yourself and your needs? Is there a path toward this neither of you see right now?
This is key. People tend to go too much toward one side or the other-- sometimes they don't meet any of their own needs, sometimes they're too aggressive and don't think about treating the other person well.
In negotiation, it's often true that there is privilege and a power dynamic at play. It's extremely important to realize how much power you actually have, and how much power the other person has.
Recently I was in a situation where my client was in a real bind. He needed an app done fast, and there was no one else to do it. I could feel him cringing as he asked how much money I needed. If I wanted to, I could've named a really high number that would've hurt him badly financially. I didn't, very purposefully. I thought-- how would I want to be treated if the tables were turned? And I also recognized that my behavior serves as an example to him of how to treat others. I want to start a cycle of treating people with respect.
In other words, he would have silently said yes to a high number, but that doesn't mean it was right for me to take that.
Negotiation is about a lot more than just making as much money as possible.
This is why I enjoy naming a high number for junior coders. I understand they don't have power to take a lot of negotiation risks, and understand that me paying them well encourages other companies to pay well.
There are lots of other observations about power dynamics to be made. For instance, recently I worked with a company in which I knew it'd be really easy for him to make contract changes early but really hard later on. By analyzing his company structure and his role in the company, I could determine that it was best to negotiate rates and terms right away.
Being honest (in a polite way) and having self respect are both extremely important, and sometimes counterintuitive.
Recently we got a contract offer we weren't so sure about. Instead of turning it down, though, we thought: What would it take for us to do this? In asking this, we realized that our real issue wasn't the work itself, it was the feeling that we were being underpaid-- and we had other work willing to pay us more for more fun work. It felt easier to just turn them down than ask for a rate we felt we deserved. Asking for a high rate felt liberating, and fair.
Another part of honesty is feeling the freedom to talk money and terms with people. Discuss salary with coworkers. Talk to other companies about how they do product deals. Be vulnerable, ask for help, see what others do.
When people want to help you and like you, negotiation becomes so much easier.
Besides, why are we doing this anyway? Do we really want to live life just looking to use people and make money? No. Life is about building relationships and treating people well.
So that's always on my mind, and brings us back to that original story of my friend who doesn't negotiate at all. To him, establishing relationships based on respect and treating people well is more important than landing every deal or getting work for cheap.
So don't just ingest negotiation advice. Think about it. Think about how negotiation really permeates all of your social interactions, and think about how the way you handle it impacts your own feeling of self worth and how respected you make others feel too.
I feel so passionately about this because I feel there is an ethical way to do business. It may involve some short-term losses, but I think that's so well worth it.