Career Negotiation, Negotiation Research February 3, 2010

The Numbers Game

How good are you at math? Bob Sullivan, author of Stop Getting Ripped Off (http://stopgettingrippedoff.net/), argues that many Americans are terrible at math, and that is one of the reasons they get raw deals. Sullivan examines the data, and writes in his book that “more than half of U.S. consumers were categorized as having basic or below basic quantitative skills.” Sullivan calls this lack of mathematical skills innumeracy (like illiteracy).

Sullivan finds that even people with college degree have problems with certain mathematical skills. He writes: “most college graduates (and in fact, most adults who held advanced degrees, too), were unable to answer a question asking test-takers to calculate interest payments on a home equity loan. Only 1 in 5 test-takers of any stripe could handle the question, which simulated the most basic task a home-buyer faces when trying to select a mortgage.”

Math skills are crucial in any business negotiation. We aren’t talking about advanced calculus, we are talking about good arithmetic and algebra skills that can help you to understand the numbers you are being asked to negotiate on.

Negotiators who are dealing with price/cost and value issues need to be extremely careful with the numbers. What if the packaging changed on a product, and it is being offered at a better price. Are you able to figure out if you are still getting the same deal as before?

Although most negotiators are not accountants, it is important to be able to make the numbers add up correctly. It is easy to mess up under pressure or because you weren’t paying enough attention. Dr. Chester Karrass advises us to go slow and double-check all numbers to avoid making dumb (and costly) mistakes. If possible, have someone else check the numbers too. The person you are negotiating with is not necessarily going to point out a mistake.

Have you ever made a math mistake during a negotiation that cost you? Please share your numbers gone wrong stories.