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Best of Summer Series: Asking For More ft. Professor Alex Carter

Episode Description:

Continuing the best of summer series, Bid host Oscar and producer Stevie take a look at the art of negotiation, featuring Professor Alex Carter, of Columbia Law School who examines, why negotiation skills are key to any career, and one thing you can do to start advocating for yourself.

Episode originally published March 10^th 2023

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This material is intended for information purposes only, and does not constitute investment advice, a recommendation or an offer or solicitation to purchase or sell any securities, funds or strategies to any person in any jurisdiction in which an offer, solicitation, purchase or sale would be unlawful under the securities laws of such jurisdiction. The opinions expressed are as of the date of publication and are subject to change without notice. Reliance upon information in this material is at the sole discretion of the reader. Investing involves risks. BlackRock does and may seek to do business with companies covered in this podcast. As a result, readers should be aware that the firm may have a conflict of interest that could affect the objectivity of this podcast.

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TRANSCRIPT

<<THEME MUSIC>>

Oscar Pulido: Welcome to The Bid, where we break down what's happening in the markets and explore the forces changing the economy and finance. I'm your host, Oscar Pulido. Today we continue our Best of Summer series, which means I'm joined by a guest, Stevie Manns, our producer of The Bid podcast.

Hi Stevie.

Stevie Manns: Hey, Oscar.

Oscar Pulido: So you and I have both picked one of our favorite episodes that we've done this year, and hopefully our audience has enjoyed re-listening to it or maybe listened to it for the first time. It's now your turn to pick one of your favorite episodes again. Which one is it?

Stevie Manns: It's the Art of Negotiation. How to ask for more with Professor Alex Carter. Norm Shah, was the host of this episode. you weren't here because it was women's history Month and sorry, Oscar, but that's not you.

Oscar Pulido: I understand.

Stevie Manns: So during the month of March we had senior leadership from around BlackRock interview women from the world of business and beyond, inspirational leaders that they look up to. And Alex Carter came in to talk about negotiation. She is a professor at Columbia Law School. She's written a book asking for more. It's and I love this episode. I think this is something that I will listen to at least once a year.

So many people think that negotiation is something that perhaps you do at work or it's always something where someone loses out on something and it's this idea that she talks about of steering, we are always negotiating to get to where we want to go, and it doesn't have to just be in a difficult conversation or situation.

Oscar Pulido: That's right. And I, recall as well from the episode that, there was a point in her life where she realized she needed to start putting into practice some of the things that she was telling people to do. So sort of following her own advice, and there was this moment of hesitancy, but she powered through and ultimately now following her own advice.

Stevie Manns: Absolutely. And there was something that Normandy said about the steering thing, and she, she said, um, she loved that metaphor you are steering and she said that she'll use it, going forward and every day.

And I checked in with her this morning. I said, “Hey, Nirmitee, do you remember talking about this and saying that you were going to use it? How is that working out for you? And she said, “Oh my God. It is so ingrained in everything that I do now, I almost forgot where it came from.” And I love that, and it's so fun when you listen to an episode or a podcast and there's something that you take away and you really implement that. This podcast has been something that I've taken away and implemented. I even read Alex's book, she was kind enough to give me a copy, I think it's such a fabulous episode to re-listen to. There aren't that many episodes that I would do that for.

Oscar Pulido: Great. Well let's re-listen to this one again.

<<MUSIC>>

Nirmitee: Alex, welcome.

Alex Carter: Thanks, Nirmitee I'm happy to be here.

Nirmitee: So, let's start with the first question. Who is Alex Carter?

Alex Carter: Big question. I was born in Brooklyn. I am a lifelong New Yorker who made a 17-year temporary pit stop in New Jersey for the sake of my marriage. I am somebody who loves to learn. and now I'm really fortunate to be a person who is in her dream job.

By day, I'm a professor at Columbia Law School. I teach conflict resolution. I help people work out their problems, and I help students to step into their futures. And then outside of that, I'm a published author and a keynote speaker, a mom of a 12-year-old girl and a wife.

Between your tenure at Columbia and the book and motherhood and other things, when did you realize it was your Ah-ha moment that this is what you were meant to do?

Nirmitee, I'm a lawyer, so when you ask me for one aha moment, I'm going to give you two.

Nirmitee: Okay. Buy one, get one free. Indeed. Yes.

Alex Carter: The first moment was this. You know, I think a lot of people look at my CV and they assume that I always knew where I was going in life, and that couldn't have been further from the case.

I went into law school. I had absolutely zero idea of what I could do after graduation, and it wasn't until my last year there that I took the course that would change my whole professional life. The reason I took it is a friend of mine pulled me aside and she said, Hey, I just took this class. It involves a lot of talking. I think you'd be great at it.

So, shade aside, I enrolled in the class and this was mediation. And mediation is the art or science. We'll get to it of helping people work out a dispute, helping people negotiate. And the first time I stepped into this dingy room in the New York City courthouse and helped these people work out a dispute, it was as though I heard Morgan Freeman's voice coming down saying, Alex, this is it. This is what you should do for the rest of your life.

But here was the second moment, because you see after that, I grew really comfortable helping other people negotiate. I was really good at it. Then came the moment where for the first time, I had to negotiate for myself.

Early on in my career, I was in these jobs that were all lockstep. You walked in, the comp was but then I had to finally put on my power suit and my tall heels. That was my thirties back when I was wearing heels, walk into the office, and I got a good offer, and inside I had a crisis. Why? Because I realized that I thought I had to just accept the first offer I was given.

I realized that I had absorbed this message, that negotiation was something I could do for other people. But if I did it for myself, I wasn't collaborative, I wasn't going to be liked or worse, I would leave less for other people. But I had just enough on the ball to call a senior woman in my field, and I asked her, What should I do?

And she said, I'm going to tell you what to do, Alex. You're going to get back in there and you're going to ask for more. And here's why. Because when you teach someone how to value you, you are teaching him how to value all of us, meaning all women. So, if you're not going to go in there and do it for yourself, I want you to do it for the next woman who's coming after you, do it for the sisterhood.

That was the moment I realized I don't just have to do this for other people. I am worthy of applying my own skills to myself, and in fact, it doesn't leave other people with less. It builds a bigger table for other people to sit.

Nirmitee: I just want to comment on the fact that you make the table bigger, I agree with you 100%. But let's go back to the first point you made which was around art or science. So, what is negotiation?

Alex Carter: Well, it's interesting art and science are actually much closer than we think. They're just two different ways of trying to understand humanity, who we are, and to make sense of our world.

And negotiation, therefore, is both. There are observable phenomena that have been documented in research, and that's part of the science. But then you sit down at the table and it's two human beings or maybe more human beings looking at each other and talking, and that's nothing but art. Because I may go in with all of the research, but then in the moment I'm relating to another human being.

So, it's interesting because there have been all sorts of technological advances even when we think of negotiation, programs that can simulate bargaining, but in the end, unless the negotiators themselves are replaced by machines, we have to have some creativity, some differentiation, some sense of, the art, the creativity, the imagination behind negotiation.

Nirmitee I agree with you. So ChatGPT, everyone's talking about it! So, what happened is someone from BlackRock went to ChatGPT And said okay, create a portfolio that will be the market for the next 10 years. And ChatGPT instead of creating a portfolio actually created a disclaimer saying that you cannot beat the markets with predictability. But I feel like that's the machine versus human, that humans transcend logic sometimes or fall apart in face of logic. And that's what might make a negotiation more interesting

Alex Carter: Oh, we are, predictably irrational. In fact, Nirmitee, I start a lot of my negotiation classes by setting up a simulation.

Here it is. I set people into teams of two. and I tell them, each team, one person needs to raise their hand and volunteer for something. The person who raises their hand, I say, I've just handed you $20 and here's what you're going to do. You have one chance to turn to your partner and make an offer for how much of the $20 you'd be willing to split with them.

Here's the catch one offer. Accept or reject if your partner accepts you keep the $20 in the proportion that you propose. If they reject the $20 comes back to me. Do you know what happens, a lot of times, especially in shared groups? People offer $10. They might offer eight. They might

Nirmitee: I was thinking I would offer 10

Alex Carter: Okay. And why would you offer 10?

Nirmitee: Because it seems fair, and the chances of them wanting to split are higher. Maybe I would offer nine. But not more than that. Like I wouldn't go to eight. I would feel like maybe 11 bucks for me, nine bucks for them. Maybe a good offer and then that way we both get to keep some money.

Alex Carter: Yeah, because you took the risk, you raised your hand. So maybe you apply a little premium Yes. To the $10 to get a little extra, right? Yes. Okay. But you're thinking about risk.

Here's the thing. The economically rational thing to do, is if you're offering me to offer me one penny, and the economically rational thing for me to do would be to accept that penny

Nirmitee: Because you're better off with that one penny than you were a minute ago when you didn't have the penny.

Alex Carter: Correct.

Nirmitee: This reminds me of, Daniel Kahneman's experiments in behavioral finance.

Alex Carter: Absolutely. And I love his work, I'm always thinking about whether my brain is in system one or system two. But here's the thing, human beings don't act rationally when it comes to economics. And you see this play out all the time. You get a monetary offer. Maybe it's a deal you're striking with a client. Maybe it's for salary. And yes, you're thinking about, I want to be better off financially. But the money also means something, doesn't it? It stands for something. It stands for fairness. It stands for achievement. It stands for recognition. And so, we have to be aware that even though at the table there could be a Pareto optimal outcome, we're almost never going to be there because of the human beings at the table, who value sometimes things more than rationality.

Nirmitee: So, coming back to the art versus science have you seen a change in the last 20 years in terms of how people approach some of these negotiations, has the general level of understanding of negotiations improved?

Alex Carter: So yes and no. I will say when I look now at popular media, movies, tv. You remember that Show Entourage, right? You would see these high stakes negotiations all the time, and so I think in general public awareness has been raised about negotiation but not always accurately.

And that's part of the reason I wanted to write a book, because I felt like I was seeing depictions of negotiation everywhere that didn't mirror what I knew negotiation to be. If you look at Succession, for example, or Entourage, you're going to see a negotiation that means the following, it cuts to us. And actually, then we would be two guys in suits.

If you look up negotiation on Google and you go to the image search, I've done it. It's a lot of white men in suits. So that's part of the depiction we get about negotiation. And it's part of the reason I think that I've read a lot of negotiation literature and I didn't see myself in any of that.

 It was tough for me to pick up a book and to find something that I thought, yes, I can actually use this with my friends and colleagues and family. So, there's definitely a representation element to it, but there's also a substantive element in which I felt popular portrayals were falling short. They show the last couple rounds of a heated monetary negotiation to get to an agreement. And most people, in fact are taught negotiation is a back and forth over money to get to some kind of compromise.

Nirmitee: Yeah, when everybody loses, I'm so everybody loses right? There is no win-win in negotiation.

Alex Carter: And I reject that on a number of fronts. First of all, negotiation is not just about money. I actually learned what negotiation was on my honeymoon. And it's not just because I married another lawyer, okay? But picture this, we're in Hawaii. The two of us are in a kayak on the Waialua River, and our guide up ahead turns back and says, all right folks, let's negotiate these things to the left because we're going to hit that beach up there.

And I gotta tell you, everybody else was enjoying the scenery and my brain, love of learning was immediately somewhere else because of all places in the world a kayak in Hawaii was where I learned what negotiation really means because I thought, that's right, if I'm negotiating my kayak toward a beach, what am I doing? I'm steering.

And what if negotiation wasn't haggling over money? What if it was just the process, like a kayak of steering my relationships in the direction I wanted to go? And with that in mind, I went back to the office the following week and I saw opportunities to negotiate everywhere because it wasn't just about asking for salary once a year. It wasn't just about the twice a year I would sit down with a client and say, let's hammer out this retainer agreement.

I could be proactively calling and saying, tell me What's happening in the company? What's keeping you up at night?

And all of a sudden, we were negotiating, and our relationship grew closer. And then when I do have to deliver difficult news, when we do have to have a monetary conversation, we are in such a better place than we would be if I was in a kayak, and I just took my hands off the paddle.

Nirmitee: Steering, there is a part of me, the bossy part of me, which feels like I'm going to now use this as a metaphor for pretty much everything I do in my personal and my professional life. That was very insightful, but you started off your conversation with the space you wanted to create, so a woman not being represented, and as a woman, you wanted to make the pie bigger. So, what's the purpose? What drives you and what do you want to accomplish?

Alex Carter: Do you know the reason I'm sitting here with you today, and the reason I have a book published at all is that six years ago, a student of mine who had graduated and was now in law practice asked me to go to coffee. And we went to coffee, and I thought we were there to discuss some career advice for her.

And instead, she said to me, you've had such a profound effect on my life. I want to help you achieve your legacy. What do you see as your legacy on this earth? Her name's Kristen Ferguson. I was floored. And in that moment, I answered instinctively, and I said, my mission on this earth is to hold up a mirror so that every single person who comes to me, whether it's as a student in my course, somebody I'm training in negotiation.

And when I go into large companies, it's just a bunch of individual relationships. I see each person in that room in this way. I want them to hold up a mirror and see their highest and best and then I want to help them open up a window between them and somebody else to be able to resolve conflict, see the other person better, and see situations more clearly.

Nirmitee: And then if somebody asked you, somebody told you, where do I start? Besides reading your book, how does one start down this journey of steering and or looking at the world in a way where you create these situations for everyone around you to be better?

Alex Carter: The place you start is where every negotiation starts, and that's with yourself. If negotiation is about steering relationships, the most important, the most central relationship of your entire life, will be the one you have with yourself. And so, it starts with self-knowledge.

People ask me all the time, what's the source of my power in negotiation? I think they think it's how much you can go in and physically fill up a room and I'm five two in sneakers.

Okay? I will never be the biggest person in any room. But the expert negotiators are the people with the most knowledge, they understand themselves extremely well. They understand the situation extremely well, and then from that stable base, they're able to get to the table, listen minutely to every word the other person says, and by doing so, crawl up inside that other person's brain space and get to know them better than they know themselves.

That's how you become an expert negotiator.

Nirmitee: So, Alex, in your Wall Street Journal bestseller, Ask For More 10 questions to Negotiate Anything, what are the two or three most important questions? What's the distillation there?

Alex Carter: Back when Ask For More came out, I spoke to the Wall Street Journal and they asked me, Alex, where should everybody start in negotiation? And I said, you should start here, what's the problem I want to solve?

Most of your negotiation success, and if you're at a company, most of your company's innovation success will rise or fall on whether you are solving the right problem. That's number one.

A question I love for people to ask is, What do I need? And making a complete list in a negotiation of the tangibles and the intangibles. The tangibles spring to mind immediately, right? It could be money, a particular role, headcount, resources, but the intangibles are really important.

People might say, I need autonomy in this role. recognition. respect, and then I want you to ask, what does that look like for me? Because Recognition, respect, autonomy, can look totally different for you than for somebody else. So that's really important.

And then when you're talking to somebody else, I can't tell you how many teams I train, where people come into a business development meeting, and they start with a pitch. Hi, I'm Alex. Here's what we do. Here's what we can offer.

I tell people to walk in and ask what I call my magic question. Two words. Tell me about your business. Tell me what success would look like for you. here Tell me what's keeping you up at night? Tell me, if we were to work together and we had a phenomenal result, what would that look like in your business a year from now?

But it doesn't matter, whether you're asking that question in a business development meeting or you're asking it of your 16-year-old when they come home from school instead of how was your day? tell me about your day. It is the broadest possible prompt. It gives you the most information, it creates the most trust, it is the number one question that you should ask in any scenario.

Nirmitee: Nice. I'm going to go and ask my 16-year-old “tell me how your day was” instead of how was your day? Where I get meh and her staring into her phone, as most 16-year-olds do these days.

Alex Carter: Do you know why your 16-year-old doesn't respond when you say, how was your day?

Nirmitee: No, I wish I did

Alex Carter: It's because how was your day is not a real question. It's a social script. It's what we do when we are sitting down together. How are you today, Nirmitee? I'm great. How are you? How was your weekend? Wonderful. How was yours? It means let's get through this so that then we can discuss the real thing we're here to talk about. And nobody recognizes a fake question more than children. They smell it and they will not answer it.

And so, I started pivoting and I would ask my daughter, tell me about art class today. Tell me who got in trouble. Tell me the silliest thing somebody did today. And then I allowed for lots of silence and all of a sudden, we start rolling.

Nirmitee: Nice. So, I have homework. This is awesome. Alex, thank you for your time today.

Alex Carter: Thanks for having me.

<< MUSIC>>

Stevie Manns: So Oscar, I know you weren't part of that conversation, but listening back, How has that made you reflect on some of the conversations or negotiations that perhaps you may have in your everyday life?

Oscar Pulido: I think it goes back to something you said at the intro, which is that negotiation isn't just something that takes place in the workplace, that it's ongoing in our lives. And I actually like the part where Alex says, her job and her mission and her passion is resolving conflicts and helping people resolve their conflicts.

And, that has applicability in so many parts of your life. And frankly, if we did a little bit better job at that across the world, I think we'd be in a better place.

Stevie Manns: this was super fun. Thank you very much for going through this with me, and I look forward to your final pick next week.

Oscar Pulido: Sounds good. We'll keep you in suspense until then.

Stevie Manns: Okay.

Oscar Pulido: Thanks for listening to this episode of The Bid. We'll be back next week with our final best of Summer series episodes. Subscribe to The Bid wherever you get your podcasts.

<<THEME MUSIC>>

<<SPOKEN DISCLOSURES>>

This material is intended for information purposes only, and does not constitute investment advice, a recommendation or an offer or solicitation to purchase or sell any securities, funds or strategies to any person in any jurisdiction in which an offer, solicitation, purchase or sale would be unlawful under the securities laws of such jurisdiction. The opinions expressed are as of the date of publication and are subject to change without notice. Reliance upon information in this material is at the sole discretion of the listener. Investing involves risks. BlackRock does and may seek to do business with companies covered in this podcast. As a result, listeners should be aware that the firm may have a conflict of interest that could affect the objectivity of this podcast.

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