3 October 2022 - Viola Jardon, Senior Programme Manager for CISL’s Accelerator, shares how female founders can enhance their negotiation skills, harnessing their unique strengths to get what they want and create their own power.
Negotiation is a critical skill for all founders. Whether it’s to secure financing, attract new hires or close deals with customers, knowing how to negotiate well is directly linked to positive growth and success. Yet research shows that women in business are both less likely to ask for what they want and are often penalized when they do.
Our Women in Sustainability Innovation Accelerator equips female founders with the skills, confidence and networks to advance their startups and navigate some of the most challenging industries. In week five, we hosted a workshop with expert negotiation consultant Devon Smiley. With over 15 years of experience, and $5 billion of commercial contracts closed as a lead negotiator, Devon helped our female founders to rethink negotiation and learn how to secure strong results without sacrificing relationships.
A new definition
When asked what negotiation is, people usually respond that it’s about “finding a win-win situation” or “optimising outcomes”. A definition that isn’t necessarily wrong, but is certainly very cold and academic. Devon believes that, more often than not, this masks how we truly feel about the process. We think it’s “scary”, “competitive”, “aggressive”, “sleazy” – that it involves having to be “someone we’re not”.
Despite all these negative connotations, trying to influence people and situations is something we do all of the time. Our days are filled with a series of negotiations, so why not redefine our relationship with the process?
For Devon, negotiation is about transformation. It’s “taking a situation that isn't working for you and turning it into one that does”. This requires communication, collaboration, creativity and warmth; essentially, we’re building connections with people to move things forward.
Big wins start as small asks
For female founders especially, it’s important to practice asking for different things. Start by using everyday encounters to build confidence and competence. It could be as simple as asking for support from your close social circles, freeing you up to be more present in your work.
By getting comfortable with smaller asks, you’re building the confidence and experience for bigger ones. Devon asked our female founders to remember that:
- there’s power to gaining even one percent, it all adds up and leads to greater wins;
- it’s very unlikely that you’re the first person to ask! Other people are asking for incredible things to make their business work, all the time. So make sure you do the same.
Overcoming common challenges
Devon outlined three common issues for female founders that can get in the way of a good deal:
1. Power imbalances
In a negotiation situation, we often assume the other person has more power than us. Believing you’re at a disadvantage means you immediately give away your power. But no one is accepting meetings just for the sake of it! You have something the other person wants or needs, whether that’s your ideas, your technology or your subject matter expertise.
Rather than letting yourself get pushed into a corner, create your own power. One way to do this is by avoiding arbitrary deadlines. Small business owners have the benefit of being agile, but this doesn’t mean having to agree to something on the spot. The more we can play with time and flexibility, the more likely it is we can come to a solution for both parties.
Also, embrace being underestimated. If you find someone explaining, or mansplaining, something to you, let them. Ask for more details. Then use that information in your negotiation – that person has just given you more to work with.
2. Co-founder or leadership team dynamics
Unfortunately, personalities can create problems. If you’re working with a co-founder, or you’re part of a leadership team, align on your business goals as early on as you can in the journey. Then all of your future decisions can be made based on that core alignment.
Then, make sure you have a founder agreement in place, with clear directions for what happens if someone leaves or the business needs to break up in the future. When money and emotion are involved, these kinds of negotiations can become very difficult. A little pre-planning will result in the best possible outcome in case the worst happens later down the line.
3. Seeking investment
Give yourself options by starting this process early. Investors can be great convincers, so be clear on what you and your business actually need. Don’t be afraid to lead: have a mocked up term sheet of what you want from an investment deal and measure what’s being offered to you against this. Stressful situations and heightened emotions can interfere with decision-making, but if you’re clear on what you want from the beginning, you’ll know when to say no or walk away.
Keep in mind that relationships with investors can last longer than an average marriage. So avoid red flags: like late night texts or tricky deadlines. Honesty and transparency is always the best response. Ask that you create development targets together, based on existing goals, or alter the language used in contracts to mitigate the risk. Always get them to go through each clause in their term sheet, to ensure you understand what they mean and don’t misinterpret anything. This is also a good indicator of how willing they’ll be to help you later on.
Making the ask:
Research
Ahead of an upcoming negotiation, Devon suggests reflecting not only on what you want, but also on what the other person needs. Surprise-proof yourself ahead of the negotiation by predicting what’s important to them. If you can, seek out advice from someone who has done a negotiation like this before. Get a sense of their past experience, and add this to the bigger picture, so you can go into the situation fully informed.
Strategize
Then, it’s time to strategize. Create what Devon calls a negotiation sandbox: set the best and worst case scenarios for closing a deal and come up with places you can move in the middle. Then, as long as you’re playing in your sandbox, you can rest assured that you’re in a comfortable situation. As soon as you step out of the sandbox, it’s likely a sign to walk away.
Negotiate
At this point, you’re ready to make the ask. Devon’s number one piece of advice? Always try to go first – what’s known as anchoring. We are most heavily influenced by the first piece of information we hear when we’re making a decision. No matter how prepared we are, if we don’t go first it’s easier for us to be emotionally influenced by the other party’s proposal and potentially negotiate against ourselves.
Be aware of your communication quirks – whether that’s in what you say or what you do. Avoid giving away unintentional information through an unconscious habit or repetitive catchphrase.Training yourself to be comfortable with silence is also key. Devon recommends counting to ten after making your proposal, leaving the other person space to think and reflect.
Lastly, if you need to, take a break! Devon believes that, frankly, this is a power play. It shows that you are comfortable and confident as a founder and gives you the time to work through a well thought response or collect your thoughts. Besides, even if a negotiation goes well, it doesn’t mean you have to close the deal there and then. “Thank you for your proposal. I’ll review and get back to you next week” is a great way to end. This means you can give each other space and go through the finer details later on.
Challenge your story
Above all, Devon’s session was a lesson for our cohort in challenging yourself on who you think you are. All female founders are capable of being commercially successful, of landing deals, of negotiating what they want and need. We simply need to embrace our individual voices and find what works best for us, as we move away from merely transactional deals to those built on trust and understanding.
CISL's Canopy empowers founders, entrepreneurs and innovators to grow and scale their businesses. An inspiring space to work, network and innovate, where meaningful encounters lead to positive change and radical collaboration.
We are extremely excited to bring more innovative women together this year to support them as leaders, founders and trailblazing change-makers.
