Thought Leaders
Larry King’s Best Mistake: Negotiating for Career Success

Who says nice guys finish last? In his best-selling book, Bargaining for Advantage: Negotiation Strategies for Reasonable People, Wharton Professor Richard Shell tells the story of a time in 1987 when an agent for CNN talk show host Larry King had negotiated a much better contract with a rival network. The agent took this offer to CNN owner Ted Turner, hoping to push for a multimillion dollar raise for King. Turner refused to budge.

Turner knew that while King could be a hard-nosed interviewer, he was not a hardball negotiator. King was a person who preferred the warmth and loyalty of a long-term relationship over a fatter paycheck. With the agent in his office, Turner picked up the phone and spoke directly to King. The two men talked about old times, and Turner told the host how much he valued his work. Then Turner said, "Stay with me." King agreed, much to the shock and dismay of his agent. King liked working for Turner and the network. More money was not that important.

"Successful career negotiations start with a clear idea of your goals," said Shell, who just completed a new book on law and strategy titled Make the Rules or Your Rivals Will. "Larry King has had a goal of being a lifetime figure at CNN, and he has a lot of autonomy and prestige there. His agent wasn’t getting compensated for that. You see this all the time with franchise baseball players who are offered millions of dollars to change cities, but they decide to stick with their home team and don’t take the money."

The story illustrates two key principles of negotiations that Shell stresses in his book and in Wharton’s Executive Negotiation Workshop: Bargaining for Advantage® — be clear about your goals going into the negotiations, and be yourself. Larry King doesn’t necessarily do better by pretending to be a hard-nosed negotiator. Instead, he benefits by understanding his own negotiation approach (a more accommodating style) and using it to his best advantage. This was a strategy that made King a very successful person in the long run, even if he did give up a few dollars along the way.

It is not just entertainers and athletes who face tradeoffs among more money, prestige, and job satisfaction in their careers. "This can happen to ordinary people too," Shell said. " The whole Peter Principle is based on the notion that you are promoted beyond your area of competence. Sometimes the best goal is to expand within the role you have."

The Most Complex Negotiations

In the weeklong Wharton negotiation program, Shell saves the discussion of negotiations within the organization for last. "It is the most complex," he said. "It mixes bargaining, politics, and emotions. There are often conflicts between organizational and individual goals. It’s a pretty tough negotiating environment to be successful in."

Because of the importance of relationships inside the organization, managers often succeed with a stance that is less tough than they might use in external bargaining. "My anecdotal sense is that people who are very successful in their promotion track inside organizations are often people who are very skilled at things like diplomacy, teamwork, and compromise as opposed to the more traditional bargaining skills of assertiveness and competitiveness," Shell said. "Overall, the kind of people you see as CEOs and presidents of large organizations are not necessarily the most hardball negotiators."

It doesn’t mean that these people are not assertive. "They are good at getting credit for things and have a skills set in the diplomatic arts that help them avoid getting in trouble when other people might," Shell said.

The Right Fit

While any negotiating style can be used successfully in your career, certain styles fit best with certain environments or industries. For example, Shell recalled an MBA student who recently was negotiating for a job at a hedge fund. The company offered most of its compensation in options. The student, however, with educational loans to pay, was reluctant to put so much of his salary at risk. When he pushed the employer for more cash and fewer options, the hedge fund withdrew its offer completely.

"They were seeing from his bargaining style that he would make a terrible hedge fund negotiator," Shell said. "He talked himself out of the job by being too conservative." On the other hand, an aggressive negotiator might be a poor fit with a company such as Procter & Gamble. "It all depends on fit," Shell said.

Once you understand your own style, you also can surround yourself with people to complement your strengths and weaknesses. "You can construct a team to support you with complementary skills," he said. "You can also set up a social situation so the person you are negotiating with is constrained a bit because there is an audience."

Ben Franklin’s Diet for Success

Negotiators within companies, particularly early in their careers, also need to look for ways to apply creative problem solving. For example, a promising applicant joining a company with a strict salary policy will have little chance of convincing the company to change its policy to pay a higher salary. But employees have been able to shift the focus to other perks, such as moving or travel expenses. "There are company policies that are barriers, and you have to accept those policies; but you can shift the focus to a different set of issues, some of which have money attached to them," Shell said.

Skillful negotiators can sometimes find creative solutions that allow everyone to benefit. In his book, Shell tells the story of a solution developed by the young Benjamin Franklin when he was apprenticed as a printer to his half-brother James. Since James was not married, he and his apprentices took their meals at a local boarding house. When the 16-year-old Ben decided to become a vegetarian, his special demands caused havoc with the boarding house cook.

Ben proposed a solution. He would cook his own meals. In return, his brother would give him half the money saved from the boarding house fee. James pocketed half the meal expense while Ben found he could purchase and cook his vegetarian meals with money left over. Taking his meals alone also allowed the young apprentice more time for reading before the others returned to work. It solved the immediate problem, improved relationships, and allowed everyone to come out ahead.

Growing Importance of Negotiating Skill

Good career negotiations start with strong leverage. "If you are in an industry where the job category you are in is disappearing, you need to get out of that terrible leverage situation," Shell said. "To negotiate, you need to have something the other guy wants. Once you have identified the skills you have that are valuable, then your negotiation skills come into play."

While only a few people are officially dubbed "negotiators" in their job descriptions — such as labor, contract, or hostage negotiators — almost everyone needs to negotiate, and these skills appear to be becoming more important as managers are given broader control. "As employers give employees more autonomy, negotiating skills become more important," Shell said. "It is important for people to get things done on their own and under deadline. Many of the people coming to the Executive Negotiation Workshop are in organizations where they find they are in charge. They can no longer rely on someone else to set up the problem for them to execute. When you have to juggle more responsibility and you have three different things you need to get done, you have to be able to negotiate."

What are your best career negotiation successes or "learning experiences"? Share your short story for publication in a future newsletter and, if we use your story, you’ll receive a free copy of Richard Shell’s book Make the Rule or Your Rivals Will (upon publication in April 2004). The book discusses how business leaders use litigation, lobbying, and regulatory systems to help gain and protect competitive advantage. Read a recent article on the book in the Wharton Alumni Magazine.

    

This month's articles:

  • Thought Leaders
    What can Larry King and Ben Franklin teach us about successful career negotiations?

  • In the Classroom
    What are the challenges facing women in leadership?

  • Career Profile
    Unisys Vice President Curt Girod credits good mentors and continuous education with advancing his career.

  • The Last Word
    Vice Dean Robert Mittelstaedt on how negotiations have become central to work.

  • Education à la Carte
    Strengthen your career bargaining position by developing new skills and knowledge.