In 2007, Billy Donovan was a national championship basketball coach for the University of Florida. He was a hot prospect, and attracted a lot of interest from National Basketball Association (NBA) teams. The Orlando Magic agreed to pay him $27.5 million over five years, and on June 1, 2007 he was named the Magic's new coach.
The very next morning, Donovan woke up saying that he didn't want to be the team's coach after all.
Donovan apologized to the Magic and everybody around him for the change of heart, and then went right back to Florida to continue coaching the Gators. So what was the story behind his switch?
"One of the main mistakes is not asking the tough questions," said Molly Fletcher, who was Donovan's agent at the time. "We did a great job on the contract, the terms of the deal were fabulous, but we didn't ask Billy if he was ready to look at those young men in the eyes and say, 'I am going to the NBA.'"
Fletcher is a former sports super-agent who has authored several books, and is now a popular motivational speaker. She can point out the three key mistakes people should avoid in their next job negotiation.
"It's about having the courage to ask the tough questions, because in that situation it's so easy to avoid them," said Fletcher.
People make this mistake all the time, especially when it comes to salary negotiations. According to data from salary.com, 20 percent of people never negotiate salary and 67 percent say they regret not having negotiated salaries in their career. Even more startling, an individual could lose more than $500,000 in career earnings by not negotiating their first salary, the site said.
In her career, she signed over $500 million worth of contracts, dealing with many sports team general managers. In her world, it was important to figure out what was happening from the GM's perspective: what free agents were they interested in, who did they like in their minor league system?
"People don't spend enough time getting into the head of the person they are negotiating with," said Fletcher.
"People need to spend a tremendous amount of time not focusing on their own case," said Fletcher, "but sitting in the other seat, asking what's going on in their world. The more clarity we have, the more it allows us to have a conversation rather then just 'negotiate'."
It turns out 26 percent of people don't know the industry standard for their position's salary, and a whopping 93 percent of negotiators fail to ask such diagnostic questions that would help them significantly improve the outcome of the negotiations.