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I don’t think I can afford that

Dear Reader,

Recently I was listening to “Ready, Fire, Aim“, a fantastic marketing and business book.

In it, the author, Michael Masterson, wrote about a lesson in negotiating that he learned from a business partner he once had that he calls BB.

Masterson writes:

“…I have discovered a much simpler, more elegant, and immensely more effective negotiating tactic that anyone, even a timid person like me can quickly master. I learned how to do it by watching BB. …It goes like this:”

Business colleague: “So what do you think it is worth?”

BB: ” I don’t know, what do you think it’s worth?”

Business colleague: “I was thinking maybe $500,000”

At this point, BB responds in one of two ways. Either he says “That seems fair to me,” or he says “Gee, I don’t think I can afford that.”

This struck home with me because I’ve sat on both sides of the hiring table; that’s the toughest negotiation most people will face. I’ve been the timid one, hat in hand, asking for what I thought was a “fair wage”, and I’ve been on the other side, the person with the job to fill, but also the budget to stay within.

Some of the best hires I’ve made have had zero negotiation over salary because for a long time, I’ve adopted a method similar to BB.

I ask the person “What do you want for a salary?” Not “What do you expect?” or “What do you think you deserve?”, specifically, “What do you want?” This not not a trap. There is no “Ah-HA! GOTCHA!” moment here. It’s a simple and honest question to which I expect a simple and honest answer. I expect the person to tell me what they want. Not the current market for their position, not a low-ball to get the job and then “figure out how to get a raise”, I expect them to tell me what they want. What it will take for them to be happy and satisfied in the job?

Then I have to make a similar choice to the one BB had to make.  “Can I afford this person?”

I know what they want, I know what my budget is. If the numbers line up, we have a deal. If not, I let them know that I simply can’t afford them, sincerely thank them for their time, and see them out. Back-peddling here on their number is a sign that they weren’t honest with me in the first place so it doesn’t help their case.

I do not negotiate salary. I expect people to be honest with me and if they are honest with me then they aren’t going to be happy with a salary below what they have asked me for. Yes, if we are close, we can discuss it and see if we can come to something that we are both happy with, but it’s got to be close for me to do that.

I want every developer who works for me to be happy at work. You can’t be happy if you are worried about your finances, so I don’t want any developers working for me that are worried about finances.

Until next time,
I <3 |<