6 Tips for Female Entrepreneurs
Running your own business involves endless negotiations, from investor pitches to employee salaries. While research shows that women in the workplace tend to negotiate far less often than their male counterparts, a new study found that women face more dishonesty in business negotiations than men. So it’s important to be on top of your game.
In a mock real estate exercise, women were lied to 22 percent of the time, whereas men were deceived only five percent of the time — by both men and women on the other side of the negotiating table. “We found some evidence that women face more deceit because people hold preconceived ideas of women as easier to mislead,” says study co-author Jessica Kennedy, assistant professor of management at Vanderbilt University’s Owen Graduate School of Management. “People expect women to be less competent negotiators and they then act opportunistically by lying more to women.”
Obviously, this assumption is incorrect. “I think this idea that women are less competent at negotiation is absolutely not true,” says Carol Frohlinger, co-founder of Negotiating Women, Inc., and co-author of Her Place at the Table and Nice Girls Just Don’t Get It. In fact, women often have strong negotiation skills, especially if they tap into strengths like listening, building relationships, and considering the other side’s perspective.
Want to level the playing field? Here are six tips for becoming a more powerful negotiator.
Consider the Type of Negotiation
The type of negotiation may affect how likely it is that the other party will try to deceive you. The single-issue negotiation exercise in Kennedy’s study is an example of distributive bargaining (meaning, says Frohlinger, “if you get a bigger piece of the pie, I get a smaller piece of the pie”).
“This is important because single-issue negotiations usually take on a more competitive aspect than do mutual gains — a.k.a ‘win-win’ — negotiations because there's less room to craft solutions that meet the needs of each party,” Frohlinger says. “In that context of distributive bargaining, the desire to win — even if the price to be paid is to deceive the other party — is tempting indeed, particularly if you don't think you'll get caught!”
“Preparation is critical to performing your best,” Kennedy says. “Many people enter negotiations under-prepared, get anxious, and agree to less-than-ideal terms simply to get the negotiation over with. The anxiety especially plagues women because negotiations are often seen as a masculine domain.”
This anxiety, however, can actually work to a woman’s advantage. “When you’re less comfortable with something, you’re more likely to invest the time that it takes to become more comfortable,” Frohlinger says. “And preparation makes people more comfortable.” As a result, women tend to prepare more carefully than men prior to negotiations, says Frohlinger. “[It’s] a strength, because ‘winging it’ rarely results in good negotiating performance.”
Figure Out Exactly What You Want
Before entering negotiations, understand what you really want. Ask yourself: “What are my goals out of the negotiation?” Frohlinger says. “That sounds a lot simpler than it is, but in many cases, people aren’t really clear what they want, and if they’re not clear what they want, they certainly aren’t going to be able to get it.”
For example, the goal of an entrepreneur approaching investors may be to convince investors to infuse money into her business while she retains a certain amount of control over the company. “You have to think about all of the things that are important to you,” Frohlinger says. “And that’s the first place to begin.”
Consider the Other Side
“Think the negotiation through from the other person's perspective,” says Kennedy. “What do they care about most and least? How does this compare to what you care about most and least? This can lead to some creative solutions.”
For example, Kennedy says, think about negotiating with a landlord for a rent reduction. “Even if the landlord doesn't agree to much of a straight rent reduction, thinking through the negotiation in advance can help you identify other ways to meet your goal, such as getting permission to rent out your unused parking space or storage closet. Business negotiations are of course more complex, but the basic idea is similar. Entering the interaction with some ideas for how to address what both people find important is likely to lead to a more productive discussion than simply haggling over fixed resources, such as a price.”
In addition to researching the issues, Frohlinger recommends doing a little bit of homework about the people you’ll be dealing with. “At a minimum, you Google them,” Frohlinger says. “Preparation should be focused not only on the substantive issues but on the personalities as well.”
Ask the Right Questions — and Listen to the Answers
For those who feel negotiation anxiety, Kennedy suggests “thinking of negotiations as ‘opportunities to ask,’ rather than as negotiations.”
However, Frohlinger says that people often ask questions during negotiations to buy themselves time as they figure out what they’re going to say next without listening to the response. “Generally speaking, women are more likely to ask questions and listen to the answers they get — that is a major strength because information is power in negotiation,” she says. “With more information, the negotiator can offer more creative solutions.”
Kennedy recommends questioning vague statements and clarifying inconsistencies if you suspect dishonesty. “These acts signal that lies are being detected,” she says. “Women may shy away from doing this because it feels uncomfortable or rude, and our paper strongly suggests they should not do so. They should explore fishy statements.”
Reframe Your Thinking When Necessary
When it comes to negotiations, research has shown that women are more successful at negotiating on behalf of others — for example, asking for a raise for employees — rather than negotiating to benefit themselves. Use this to your advantage.
“Think about how others will benefit when you are successful at negotiating,” Frohlinger recommends. “When you’re negotiating with suppliers, for example, and you are trying to keep the costs reasonable, if you’re feeling less than strong about doing that, think about how your business will benefit, and how all the people who work for you will benefit.”