The Naked Negotiator: Demystifying Salary Negotiations with Michael W Phillips

Hey, I'm Kwame Christian and you are.

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Michael thanks for joining us today Kwame.

It's great to have an opportunity to talk with you. Really looking forward to it.

Likewise my friend. So how would you get us started? By telling us a little bit about yourself and what you do.

Well, I'm a self employed management consultant and I specialize in procurement. I'm based in the UK and I've been doing this for nearly 30 years now. So what I do, I work with mostly manufacturing companies helping their procurement team to negotiate their contracts and improve their costs. So I've been doing that for nearly 30 years now and I've worked obviously throughout the UK, but Europe, US as well and China. So it's all about negotiating my day to day job.

I love it and I'm excited to share this with the audience because you have incredible experience in the business world negotiating these big deals and now you came out with a book. Can you tell the listeners about that?

Yes, obviously over those 30 years it's a bit like Malcolm Gladwell's 10,000 hours principle. I've spent many hours negotiating and you develop a level of expertise. I've obviously enjoyed helping commercial organizations with that expertise, but I wanted to do something to help individuals and so that's why I've written a book. The book uses the book is about negotiating a salary increase, but it's like a case study. The principles in the book are really applied to any negotiation, but it's very much what I've done is taken those 30 years of expertise, boiled it down into a very readable non academic book and the way I've done that is by writing it as a short story. So the plot of the book follows the lead character. Ellen is a young manager and she needs a salary increase. She just doesn't know how to go about it. She loves her job, she loves her employer, but she needs more money in her life. And so she happens across a rather eccentric, aged negotiator, and he takes her on and takes her through a very exciting journey where she learns the basic, the principles that she needs to negotiate us near salary increase with her boss. So it's intended to be a very readable. You can sit down and read it in, you know, 90 minutes, couple of hours. But it's packed full of rigorous negotiating theory presented in a way that's accessible for, if you like, a layperson.

Yeah, okay. Michael, there's so much to explore here because I think a lot of folks would find it really interesting that you have all of this commercial experience, and yet you decided to make your book about the salary negotiation, which to, let's say, somebody who is constantly negotiating multimillion dollar deals like yourself, might seem almost a little bit less impressive. And so what is it that made you want to synthesize all of your years of negotiation experience into a case study on salary negotiations?

Well, I suppose it was partly because of, as I say, I've spent so many years helping big organizations, and I felt with this expertise, let's bring it down to a level that helps individuals. I was also influenced by the fact that I have three daughters, and I'm conscious of the fact that studies show that women are more reticent about asking for a salary increase than men. And when they do ask, they tend to get less. And so that's one of the reasons I made the lead character a woman. My three daughters and my wife are all still working age. And so I took a lot of advice from them about the character to make the character authentic and credible as a female. And so that was one of my influences that I really wanted to help women in particular to be able to get what they deserve. So that was important for me as a father of three daughters.

Michael, I love this because this is. It shows that you put a lot of thought into this and it blends your heart and your head because you're recognizing that societal challenge. Okay, I want to recognize that and address those gender dynamics and create something that will help women in general, but also for your daughters, I think that's beautiful. And then also the strategy of saying, all right, I am going to put this in a way that is readable, accessible, easy to understand, that everybody can get. I think that's smart because most of us have had that situation where we've been in a position where we had to negotiate salary. It's something that everybody, everybody can relate to. And so for you, you might do a half a billion dollar deal and it might be cool and sexy and everything. And then people close the book and say, I could never do that. I'll never be in that position. And those principles might completely go over their head.

Yeah, absolutely. And the most commonly cited reason why people feel that they don't ask for a salary increase is lack of confidence. Of course, that's the reason for making the book readable. And of course, the naked negotiator in the book, of course, explains. Why does he call himself the naked negotiator? And what he explains is, of course, that even though the character like me, of course, has spent many years negotiating multimillion dollar contracts, what he's found over those years is that every deal in some sense is the same base, the same basic principles apply to it. And the reason that's the case is because we're human. We interact. All the deals are done from human to human. And so he says, when you strip out the specifics of the negotiation that make your current negotiation unique. When you strip out the specifics, what's left is the negotiation framework, the naked negotiation. And so that's really that negotiating framework I'm taking out of the big high flying corporate world and bringing it into something which on the face of it is more mundane, but to the individual is really important.

Important, absolutely. It's so smart because that's something that I've recognized as well. First of all, the confidence issue. A lot of times we're giving recipes to people who are afraid to get in the kitchen. So what is the real challenge? It's a mindset issue. We're afraid of taking that step. So the negotiation that should happen never even happened. And then to your point about the principles being the same, it's so true. We're all humans. At the end of the day, we just might be in bigger corporations dealing with bigger numbers, but at the end of the day, it's human to human or we're in a network of humanity with. Within an organization.

Yeah, absolutely.

And so when we think about those core principles that apply in all of these circumstances, what were the ones that you highlighted in the book?

So start at the beginning. The most important thing about this and you'll know this, Kwame, being a negotiation expert yourself, is preparation. You've really got to do your homework. 90% of your success is going to be about what you do before you Even have the meeting. So preparation in the salary negotiation context, you've got to find out where you are in the marketplace. That's another thing it's important for people to understand. If you have a job, you're in a marketplace, you're selling your services to an employer, and your employer pays you on the basis of the market. So if you feel you're underpaid, you've got to do some homework, get on the Internet, go to websites like payscale.com or something like that. Try and find out where your current salary sits in the general outline of salaries. Try and be as specific as you can your level experience your specific job as you can your industry, but do your homework. It's preparation. And that's going to help with the confidence thing, because if you feel you've really done your homework, then you're going to be more confident when you come to have the discussion. You also might want to make sure that you've got information on your current role, how you're doing, even if your business, if your employer doesn't require you to, I would say as a matter of habit, make sure you've got KPIs, key performance indicators for your job. Make a note of the great things you do, the good deals you do, so that you've got information that. So when you go and have a discussion that you can say, this is why I deserve an increase. This is where I am in the marketplace. I'm being paid $30,000. The average is $50,000 or whatever the number is. So you've got. You've done your homework. So preparation is the most important thing.

Michael, as you were saying all of these things, it made me realize another element of brilliance with the way that you structured this book. Because using salary negotiations as the case study, it helps you to anybody to understand what preparation is in a holistic type of way. But if you think about it from the procurement perspective, not only are the numbers astronomically high, but it's also the fact that preparation and procurement might be something like, let's do research on the steel indices. What does the market look like in that regard? And now people are asking themselves, what is a steel index? Like, what does. Where do I find something like that? And it serves as a distraction. But by focusing on the salary negotiation, we can say, all right, yeah, preparation is not just doing a quick Google search. No, there's a lot more to it. And so people could see the nuance that goes into really strategic preparation. I think that's really smart. And then not only addressing the fact that preparation addresses the strategic component of the negotiation, but it also helps on the mental side too. Just going through the process and preparing helps you to feel more confident, which helps people to overcome that first and sometimes most important barrier, which is stepping up and asking for what you deserve.

Absolutely. So the key thing is preparation. You've also got to think about who you're talking to. So obviously ordinarily you'll be talking to your boss, but think about it as well. What type of person is he or she? Are they more the empathetic sort of person? Are they the more business like sort of person? And so really think about what type of person is your boss, because you need to speak their language, you need to reflect back to them the way they are and they will understand what you're saying more. So you may be, for example, the sort of more emotional empathetic sort of type. But if your boss is businesslike and is all about the numbers, all about the justification, then you need to be able to speak his or her language. Because if you speak the wrong language, then they're gonna not gonna connect with you. And of course that applies as in the commercial context as well. Gotta speak the same language as the other party.

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And that takes a lot of humility too. Because we think the way that we think and talk is the right way to talk. We're very biased to ourselves. And so we have to switch from egocentric persuasion to empathetic persuasion. Taking the time to understand how the other person is seeing the situation, feeling about the situation, situation, and their personality style. Because let's say you are somebody who is naturally more empathetic. You like to have deep connections with people and go into the conversation. So you're like, this is empathy, this is how we should communicate.

Yeah.

And then you talk to somebody else who is just very business oriented like you said. And that same empathetic approach can come off as almost disrespectful because you're not respecting their boundaries. So you have to understand the other party and adjust as necessary while still being authentic to yourself. But just not catching those cues and adjusting, that could be the difference between success and failure in these conversations.

Yeah, absolutely. And I think in that context, I'm really talking about the sort of kind of language that we're using, because ultimately, when you're talking about a salary increase, it is going to be about demonstrating to your boss that you have this value to the business. So it is going to be about the numbers. It's no good. If you feel you need an increase or you deserve an increase, you have to demonstrate it. I listened to your great discussion you had with the vice brat Bee, and I like. Like what? She said she wanted data, not drama. She's dead right on that. You've got to have the data. Just because you feel you deserve an increase, that's not it. You've got to demonstrate it. So although, yes, you need to understand the other person and try and reflect their personality or the way more I feel, the kind of language they use, ultimately it is about the data and you've got to do your homework. So that's going to be the critical thing.

It's so important. And sometimes we have to reflect that language, but first we have to listen first to see where they're coming from, what angle are they taking about this. And you're right. When I think about data, not drama, that was a. It was a great line.

Yeah, I like that.

And I think it requires a lot of restraint, too, because there might be some things that are very meaningful to you and very persuasive to you that could have at best, no impact, but at worst a negative impact in the conversation. So let's give the example. Let's say you feel as though you've been passed over for promotions. Let's say you feel as though it's unfair the amount that you're getting paid. And so those might feel very real to you, but they might come off as very insulting or aggressive to the other side. And so you have to think about it from their perspective. Are those terms that I'm going to use? No, that doesn't sound like data. That certainly sounds like drama.

Absolutely. Kwame, when I'm thinking about negotiation, I don't like the word fair. I prefer the word reasonable. What's reasonable? Because fairness is a pretty subjective thing. And in the book, one of the bylines the negotiator quotes is that you can wish life were fair or you can negotiate. And what he's really saying there is, life isn't fair, let's be honest. And it doesn't all get shared out fairly. It's about what you ask for and what you go for. If you rely on your boss to be fair, that's a very risky strategy. If you're very lucky, he or she might be, but you're not going to get very far just relying on people being fair. You've got to negotiate. That's the key thing.

Bingo. And I'm really glad you said that. I honestly, Michael, this is the first time I'm coming out and saying this publicly, but I am against the word fair. It's so mushy. Because the thing is, I'm going to. As I'm interacting with everybody, I have the concept of fairness in my head, but I don't use that word because I know I'm going to filter it through my own lens and my own biases. And I remember that I was doing some research and I found this really interesting study where they found that fairness is all about perception. And if you are in a very good position, you are very unlikely to say something's unfair. But if you feel like you're in a disadvantaged position, you're more likely to say something's unfair and identify that unfairness. So think about if we're watching sports, nobody after they win the championship says, you know what? Those refs were awful, by the way. They were terrible. The reps work when it works for us.

Right.

And so we have to remember that what might feel fair to us and feel very real to other people to us, might not feel the same way to other people. And I like that shift from fair to reasonable, because that has a little bit more objectivity and it doesn't come off as an indictment on the other side, too.

Yeah, absolutely. And when you put it into the commercial context, often when I'm coaching people in negotiation, in a commercial context, they have this idea of what's fair, but in a commercial context, it's. The benefits aren't necessarily shared 50, 50. At the end of the day, they might be shared 60, 40, 70, 30. But the key thing is that the other party goes away feeling that was a reasonable deal. I always say to myself, if I'm having a prolonged negotiation and it goes on a long time and it's quite complex, and I get to the end of it and I shake hands with the other side, and they say to me, thank you, Mike, for all Your help, I think. Yeah, I've done that. Right. Because I've got everything I wanted and they still feel it's reasonable. They still feel I've been reasonable. So, yeah, I prefer the word reasonable more than fair. Fair is, for me, I agree with. Is a bit mushy, a bit too subjective.

Absolutely. And let's dig into that word, reasonable, too. When you are conveying that message to the other side that what you're asking for is reasonable, or your goal is to come to a reasonable outcome for both parties, how are you communicating that to the other side?

Well, I think the key thing here is that we're coming back to Vice's data, not drama. And so I'm using that if I'm in a commercial context, that the market information I've got, actually, it's the same with the salary context. We've gone to the market and we've said, what is reasonable? Where do I sit? What is the reasonable price within this marketplace? And so what we're trying to do there is we're depersonalizing it. We're not making a competition between me and you. We're just saying what we're trying to find out is what's a reasonable outcome for this discussion. I'm not trying to defeat you. Again, the naked negotiator says great negotiators are problem solvers. They're not warriors. This is not a battle. We're trying to find a solution. Trying to find a solution that works for you and works for me.

Oh, this is so good, Michael. I could keep going. I can keep going with you. This is brilliant. I really appreciate you not only taking the time with us today, but also taking the time to write this book. Because writing a book is a labor of love and it takes a lot of time. And no matter how much time you think it's going to take longer. So kudos to you on the accomplishment. And before you go, I want to make sure that you get an opportunity to let the listeners know again, about the book, about your consulting firm, and how they can get in touch with you.

So in terms of the book, if you Google the Naked Negotiator, you'll find it. And it's obviously for sale in all the major stores. If you want to connect with me, I'm on LinkedIn. MichaelFillips. And again, if you put Michael Phillips, the Naked Negotiator, you'll probably find me on there on Twitter. I'm negotiationguru there. And every day on Twitter, I share a negotiating tip that's there. Why not connect with me on there and get a little spice of negotiation wisdom every day.

I love it. Michael, thank you so much. Really appreciate it.

Kwame, it's been great talking with you.

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