Gender Balance and Its Importance in Negotiating Business Deals.
—Simon Haigh and Justin Caffrey
Reproduced with permission of Globelawandbusiness.com—2018
Introduction to Negotiation and Deal-Making
Deals are pivotal to business growth and are being struck all the time—2017 saw $3 trillion worth of merger and acquisition activity for the third year running, extending an unprecedented wave of deal making. The last few years have seen records set for global corporate deals. Record low interest rates in Western economies have helped to fuel a large part of this deal activity as companies have taken advantage of “cheap money” to buy, or merge with, competitors as a way to spur growth.
Negotiating skills are essential components of the successful deal-closer’s armoury. The Cambridge Dictionary Online defines negotiation as: “To have formal discussions with someone in order to reach an agreement with them,” and the Cambridge Business English Dictionary defines deal-making as: “The activity of making business agreements or arrangements.”
Negotiation and deal-making are as much, if not more, about human behavior as they are about the facts, processes and systems used, or engaged in, during a deal process. We are consciously and subconsciously influenced by what we see and hear on the other side of the deal table. An accomplished negotiator or deal-maker needs experience, intuition, good communication skills, empathy and a strategic, flexible mindset.
The ability to negotiate deals successfully requires honed interpersonal skills for maximum success. With these skills, an accomplished deal negotiator can confidently ask for the outcome he or she is looking for, provided of course it is within reasonably achievable parameters. Armed with the skills of an accomplished negotiator, and provided the deal-maker communicates in an effective, meaningful and authentic way, he or she should not be afraid to ask for what they want in a deal.
To varying degrees, and at different times, we all strike deals in business, both internally for ourselves or on behalf of others, and externally on behalf of the organization for which we work. Every person or organization engages in deal-making at some point. From as far back as our childhood, we possessed the innate ability to get what we want through selling and negotiating and other means—remember when you used to stamp your feet to make sure you got your own way! We are born with an instinct for deal-making. Some people retain that deal-making instinct and develop it as they age, while others lose it for many reasons, such as social conditioning or lack of practice. Therefore, many of us are poorer at deal-making and thus miss out on better outcomes (see Simon Haigh, Deal-making for Corporate Growth—The 7P Approach to Successful Business Deal Execution [Dublin: Oak Tree Press 2016]).
Why Are Women Under-Represented in Negotiating Business Deals?
Good communication and positioning are critical for accomplished negotiation and deal-making. Gender balance optimization, balancing “feminine” collaborative and emotion-led communication-based attributes with “masculine” forthright, hierarchical and outcome-based attributes, is essential for accomplished, more sustainable, business deal negotiation. However, notwithstanding that we are all born with an instinct for negotiating deals, there is a deficit in utilizing these more feminine attributes where business deals are being negotiated.
Women are of course involved in negotiating business deals at all levels but, generally speaking, particularly at the higher echelons in organizations, they tend to be significantly underrepresented, both in terms of numbers and in terms of comparatively successful negotiation outcomes. This is despite the fact that women are well equipped for effective deal negotiation. As Edinburgh-based Gill Carrie, who has 38 years’ experience in business and education with major organizations, companies and brands and has styled an empowering and inspirational “people experience” and won an Investors in People Award puts it: “Women are natural at deal-making, with a holistic approach whilst not necessarily seeing themselves as a ‘deal-maker’—which, after all, is only a ‘label’ for an everyday process.”
Historically, the key representatives of, and within, the state including law, politics, the military and the church have traditionally been masculine orientated. The women’s suffrage movement, which commenced in the late 19th century, of course accelerated the feminine voice in society. The MeToo movement is also going a significant way to highlighting the strength of the feminine voice and its importance in balancing the masculine and feminine. But, despite societal progress, the United Kingdom has just concluded the Gender Pay Gap Review and the unequal male to female pay results have attracted a media storm. Women are still underrepresented, particularly at higher levels, including at board level, in professions, and at the negotiation and deal-making table. Centuries of male dominance is, and will, it seems, continue to take time to truly balance out. Nowhere is this perhaps more so than in business and in the realm of negotiating internal and external business deals.
Second generation gender bias, whereby the patterns of behavior that are traditionally more associated with men, such as aggression and hierarchical thinking and which are usually looked upon unfavorably in women, still pervades in the business arena. This in turn often results in women being underrepresented in negotiating business deals. Second-generation bias obviously holds women back. The insidious nature of this bias manifests itself in women becoming criticized, explicitly or more usually indirectly, for unnecessarily contravening the social norms of traditional female behavior—women often feel that they should not “ask for too much.”
We tend to respond more positively toward successful men than successful women. Women often find it hard to succeed in this environment. Career-wise, women tend to negotiate less for themselves than women who negotiate on behalf of someone else regardless of who they are negotiating for. In anticipating prevailing biases, women tend to be bashful in fully seeking what they deserve from negotiations given their fear of being unduly criticized for being too “masculine” (aggressive, dominant, and arrogant) and insufficiently feminine (accommodating, protective, sensitive, communal, collaborative, and cooperative).
Other general biases pervade organizations and society as a whole about when, and on what basis, it is appropriate for women to exercise decision-making authority. Also, we have to face the fact that given the human tendency to gravitate to our own kind, senior men tend, on many occasions, to gravitate toward favoring other men when promotion and similar opportunities arise. Given that men have historically dominated the business world, it is perhaps not surprising that women generally have fewer, and less developed, support networks in place to overcome prevailing biases that, in turn, prevent them from being as dominant in negotiation business deals.
Why Is It Important to Increase the Representation of Women and the Feminine in Business Deal Negotiation?
Organizations exist through the combined sum total of the value of their people and the resultant power generates the fuel for the forward propulsion of the organization and its growth. Success is optimized when the whole company feels like it has a purpose. For an organization to really thrive, its entire people, provided they are the right people for the organization in question, need to feel empowered and effectively engaged—not ignored or under-utilized.
Both men and women are comprised, to varying degrees, of the masculine and feminine attributes. Women can be strong and aggressive and men can be gentle and compassionate. By operating through one predominant side of the gender equation, organizations are not optimizing their capabilities, thereby risking the success of the organization and the health, wellbeing and potential of employees. This authentic balance of both gender attributes promotes an environment of adaptability and growth while also being its own driver of diversity and equality. Such gender balance in turn is optimal for most effective business deal negotiation and therefore organizational growth. As Elaine Carroll, director and founder of the All-Ireland Business Summit and Business All-Stars Programme, observes:
Being able to look at the different perceptual positions in deal-making is like having secret ammunition. By having greater gender balance the ability to negotiate under the understanding of perceptual positions is the jewel in the crown and a real advantage.
There is a tendency to think that a deal-closer must win and the other side must lose. If the only thing being negotiated is money, then yes, in that circumstance, a deal can be that straightforward. But we have very rarely been part of a deal scenario where money is the only factor at play. However, the goal of creating a good deal for both parties through mutual value satisfaction is not only possible, but also the only really sustainable way to do business.
Accordingly, we would argue that we are missing the point in perpetuating the masculine dominance in business deal negotiation and that the prism of deal-making should, in any event, be pivoted away from the traditional predominantly masculine attributes toward a balanced, masculine–feminine approach for more optimal outcomes. We are advocating for a more balanced internal and external business deal negotiation landscape. We are also arguing for greater female inclusion and greater engagement by both men and women with greater emphasis on feminine negotiation skills of “emotional intelligence, collaboration and sharpened listening” and a step away from the old-world binary outcomes.
What Can We Do to Increase the Representation of Women and the Feminine in Business Deal Negotiation?
As we have seen, we all negotiate deals in business, both internally for ourselves or on behalf of others, and externally on behalf of the organization. For the feminine voice in us all to truly be given the space and tools to be as successfully represented in business deal negotiation, organizations need to create and maintain an environment that allows for balance of the masculine and feminine in an open, authentic, collaborative and inclusive way. As such, we would suggest that organizations, and indeed all of us within organizations, could do a number of things to increase the true and effective representation of women and the feminine in effective business deal negotiation.
Develop Suitable Organizational Policies with Objective Measures
Organizations should, of course, be vigilant for gender bias in their recruitment, development and promotions policies, procedures, and processes. They should also seek to reinforce the positive positioning of accomplished female deal negotiators by matching them with senior executive mentors/ sponsors. Without this structured support in place, the immense power of prevailing biases will usually prevent the feminine from advancing as far as it should. Organizations should play their part in correcting the current biases and gender stereotypes by developing and enforcing policies, procedures, and processes through objective performance measures. In so doing, it is really important to constantly examine the organization’s culture for hints of bias, gender stereotype nuances and ensuring gender-neutral practices are fully entrenched. Elaine Carroll makes the point that:
Supporting the role of females throughout their career paths through instituting meaningful organizational policies with reinforcing measurements is a more sustainable solution than quotas.
Educate on, and Self-Check, Biases
We all, men and women, need to reflect on our own biases in terms of viewing aggressive women, or indeed women as a whole, as being unsuitable for deal-negotiation success. Also, when women recognize the extensive nature of second-generation bias, they are usually better armed to navigate more permanent positive results in a more confident manner.
Create a Safe Place for Sharing and Communicating
The underrepresentation of women in senior business positions only serves to reinforce the second generation and other biases and, as a consequence, the unfortunate status quo. Given the numerous layers of “bias glass-ceilings” that women face in business and, as a result, given the relative lack of senior women in business and deal-negotiation roles, a safe place for sharing, communicating, challenging, learning and innovating is to be encouraged. As Gill Carrie observes:
It is so fundamentally important that we all develop the confidence to bring our personal style to any negotiation process to enhance the deal-making experience for all involved. We need to balance the deal-making process with our own personal style. To help facilitate this, we all need to take ownership and create a healthy space within environments where it is safe to express, irrespective of gender.
It is, in turn, really important to frame these rebalancing activities in terms of leadership development for all, rather than as a perception recalibration exercise. Organizations should build sharing and learning communities in which women can safely discuss their situations, compare experiences and support each other in their progress.
Provide Impactful Deal-Making Skills-Building and Mentoring Programmes
While we might all be born with an instinct for negotiating deals, providing impactful negotiation and deal-making training that provides the impetus for effective gender-neutral skills enhancement is essential. In addition, providing mentoring programmes to women to ensure that they are aware of promotion opportunities or chances to shine in the organization is very important.
Ensure that the Organization Audits and Seeks to Constantly Improve Its Full Deal and Negotiation Gender Representation Activities
Organizations can do this in a number of meaningful ways, from constantly reviewing their programmes to reflecting on who was engaged in which roles during the course of the review period. They can then reflect upon who was engaged, how male and female candidates were each communicated with and in return how they communicated back to the organization and to one another.
Focus on the Importance of Power in Deal Negotiation
A deal negotiator’s relative power directly impacts his or her ability to execute deals. In fact, relative power is one of the most important factors that can determine the outcome of a deal.
Deal power is a frame of mind and can be developed. There is no formula for what a deal negotiator should open a deal with. Instead, he or she must consider and balance many issues, such as relationships, where the organization in question stands business-wise, who is in the deal room, and so on. In our experience, it will soon become clear if the deal negotiator has not been ambitious enough—mainly from the speed at which the other side accepts his or her first proposal. Therefore, it is important to open as ambitiously as possible, though of course being mindful of cultural differences in the way the negotiation opening is framed. Encouraging women to feel more powerful in their relative power results in their making more aggressive initial offers and then in negotiating better deal outcomes than women who remain subdued by the prevailing societal biases.
Can Accessing Feminine Empathy and Emotional Intelligence Offer a Potential Edge in Any Business Deal Negotiation?
Pursuing a win-win value approach to deal-making requires emotional intelligence, listening skills and ultimately patience, while at the same time parking ego in reception. The to-and-fro of a successful deal is hinged upon both parties getting what they want from it. Letting the other side know what you want and, at the same time, letting the other side be under the impression they can also get what they want in return, is essential. Listening to counterproposals and being flexible during the entire process is also critically important. A good deal negotiator employs carefully selected words and uses smart gestures. He or she also actively listens to the words used by the other side, while being alert to their subtle signs, gestures and other clues. It is important that you concentrate as fully as you can on how you come across, what you are saying, what you are not saying and your body language.
To maximize our deal-negotiating potential, we can no longer allow brash male egos to control businesses, economies or countries. As Elaine Carroll puts it:
The heightened sense of emotional intelligence which females bring to the table offers a cutting edge when it comes to deal-making. Having said that, raising awareness and educating males more in the area of emotional intelligence would also offer great benefits and advantages.
All of the best outcomes in life come through negotiation and most of the best negotiation skills come from instinct. Many of these instincts of empathy and emotional intelligence lie within the feminine parts of us all. We all need to tap into the feminine within and certainly not deny women from celebrating their femininity while, like men, maximizing the balance through giving effect to the masculine in us all. We also need to create and maintain an environment that allows for this impeccable balance in natural energy, an environment of collaboration, openness, inclusiveness, and innovation.
Women are still largely underrepresented in the decision-making and therefore deal-making aspects of business, whether internally or externally. However, for an organization to really thrive and optimize its chances of having an optimal deal-making culture, all of its people need to be to be empowered. To encourage this, it is essential to create, and maintain, an environment that allows for balance of the masculine and feminine and one in which women can play their part as proficient deal-makers. Moreover, it is essential that such an environment is one where the feminine in all of us is allowed to flourish. As Gill Carrie puts it:
It is empowering to be in a deal-making environment where gender is—or becomes—irrelevant. It is so important for an effective deal-making environment when there is no divide between the process and the feelings of the people in the process.
Regardless of an organization’s strategy and planning, the success of any deal is reliant upon the people involved. An organization’s choice of deal team is critically important as the shape of your team has a dramatic impact on your power. The right deal team members can enhance the knowledge, credibility, authority and perception of your team. So, who to include, who to leave out, roles and reporting methods are extremely important. If you are not optimizing the gender balance in your deal team you are not moving in the right direction and are unlikely to maximise the opportunities that are presented to you as society evolves. You should do all you can to ensure gender balance to enable successfully negotiated business deals.