Negotiating a Bigger Pie: Wharton Recipe for Growing Your Business
AXA Financial Advisor Craig Silverman was about to lose a 401(k) client to a payroll company that was getting into the pension business. Before coming to Wharton, he would have seen the payroll company as the adversary and redoubled his efforts to hold on to his client. But Silverman had attended the Executive Negotiation Workshop: Bargaining for Advantage®, where he learned that you should always attempt to sit down and meet with the other side. Although he didn't imagine much would be gained by dealing with his "adversary," he scheduled a meeting with the payroll company.
In reality, the other company was interested in only the pension administration business and not the assets. They were happy to let Silverman continue to manage the investments. "It turned out that we didn't have competing interests," he says. "We had different interests. They wanted administration of the 401(k) plan and I wanted to manage the assets of the plan."
Instead of losing a client, Silverman has now gained a partner. The company called later with a new client — a 300-employee company that was purchasing another firm. The payroll company needed retirement planning expertise and brought in Silverman. "My former approach would have been to find ways to keep the client from going to my competition," he remarks. "This way, we ended up being partners instead of competitors."
In another case, an attorney consulted with Silverman about a compensation package at a potential new job. The attorney was looking for $400,000 while the company was offering $350,000. They had reached an impasse. Drawing on insights from Executive Negotiation Workshop: Bargaining for Advantage®, Silverman thought about a way to "expand the pie." Instead of the two sides bargaining over how to divvy up limited resources – in this case, the $50,000 gap in their positions – they looked for creative ways to make the overall pie bigger.
The attorney was close to retirement and would be bringing a substantial portfolio of clients to his new company. Silverman proposed that the attorney accept the lower salary and request a $75,000 annual fee for managing the relationships with his portfolio of clients. This fee would continue after he retired. The attorney got more than he originally asked for and the company that hired him recognized the value of his relationships. "What happened was that they expanded the pie – and he got more," Silverman notes. And, of course, the attorney will have more funds to be managed in his retirement planning.
Every Tool in the Store
Executive Negotiation Workshop: Bargaining for Advantage® was just one of the programs that Silverman has taken at Wharton to earn a Certificate of Professional Development (CPD). He also participated in Building Relationships That Work as well as the Wharton/AXA Equitable Retirement Planning Program, a custom executive education program designed and led by Wharton faculty for AXA Advisors' financial professionals.
"Before I came to Wharton, it was like trying to build a house with a toolbox in the garage," he says. "After participating in these programs, it was like having a truck from Home Depot back up to your house with every tool in the store. Before you get to Wharton, you don't know what you don't know."
The Wharton/AXA Equitable Retirement Planning Program gave Silverman specific information that he can use in discussing retirement planning with clients. "It was an extraordinary program, with detailed information on such topics as the retirement marketplace, mitigating retirement risk with insurance, Medicare, and Social Security. Dr. Olivia Mitchell was on a committee that made a presentation to President Bush on this topic, and much of what she presented to the president was used in the program. And I am sitting in this class."
One of the key insights for Silverman was learning that many clients planning for retirement discount the fact that they will live into their 80s and 90s. Yet for a couple at 65 years old, there is a 25 percent chance that one of them will live past his or her 80s. They can't rely on Social Security, which is expected to run out in 2042. "When clients discount this, I pull out the materials from class and show them the research from Wharton. It adds a lot of credibility."
Such expertise helps Silverman stand out from competitors. "In my business, it is advice and expertise that separate you from the pack. Having a Wharton certificate in retirement planning helps distinguish you from your competition."
Idea Man
It may not be surprising that he is so interested in taking executive education programs and thinking creatively about his own professional development. Silverman learned during the Building Relationships That Work program that he is a "yellow" – a creative or idea person – as opposed to more analytical blues, more process-orient greens, or emotional reds. These insights about different personality types help in framing advice. "Now that I know what characteristics to look for in people, I can position my ideas to people to help solve their issues, problems, or concerns," he says. "When I meet someone, I can quickly figure out what 'type' of person they are, and design my advice to them in a way that they can process."
While his background is in finance, these soft skills are critical to his success. "Mine is a relationship business," he says. "You can buy 100 shares of IBM from anyone. Having a relationship of trust and confidence is the only thing I have to sell. Negotiations and building relationships should be 101 classes for our industry."
Silverman also found another creative way to apply one of his lessons from the Executive Negotiation Workshop: Bargaining for Advantage® program. When he discovered that negotiators can win more by "expanding the pie," and that Professor Richard Shell has a soft spot for chocolate chip cookies, Silverman and his wife baked a giant cookie and sent it off to Shell in a pizza box. "One of the big lessons is that you have to make the pie so much bigger," he says. "So I made Professor Shell a chocolate chip cookie the size of a pizza. I had gotten way more than my money's worth from the program. I couldn't put a price tag on this."
