Business leaders deal with negotiations frequently, whether between clients, employees, coworkers, or other organizations. While each of these different types of negotiations requires a slightly different focus, the same skill set can inform how leaders approach them. Importantly, business leaders need to see negotiations as an opportunity for learning about a different point of view rather than getting their way. A negotiation is essentially a compromise, so leaders need to figure out how to assert their needs, recognize what other people want, and collaborate on a solution that represents the best possible outcome for everyone. Some tips on negotiating effectively include:
1. Listen carefully to the other side.
The success of negotiations largely depends on the extent to which each party listens to the other and in turn feels heard and understood. As business leaders listen to the other side, they may gather information that clarifies the conflict and points to effective solutions. Often, people make assumptions when it comes to negotiations and are surprised to find that something completely different is at stake. To that end, it is also important to ask about what assumptions the other party brings to the negotiation, so that each side understands each other.
2. Come to the discussion thoroughly prepared.
While most business leaders would recognize the importance of coming to negotiations fully prepared, not everyone carves out the time necessary to do research. However, coming to negotiations unprepared often means making avoidable concessions, missing out on beneficial agreements, or overlooking a source of value. Business leaders may want to make a preparation checklist prior to a negotiation to ensure that they do not forget anything. Furthermore, this list will help individuals figure out how much time they need to prepare adequately. Sometimes, preparation demands hours a day for several days to identify the arguments the other side might make and decide how to counter these points.
3. Recognize positive and negative value.
When it comes to negotiations, business leaders often focus primarily on positive value. In other words, what will the other party gain with the agreement that is currently on the table? However, there is also some benefit to thinking about negative value, or what the other party would lose without the agreement. Sometimes, negative value can be much more motivating then positive value. For example, will a potential partner miss out on being on the cutting edge of technology without the agreement?
4. Pay attention to emotion.
One of the biggest mistakes business leaders make when it comes to negotiations is the assumption that the process is always a rational, logical one. The fact of the matter is that emotion is almost always involved, and recognizing this can help relieve tension and open up communication. Fear, greed, pride, and many other emotions can guide actions and cause conflict during negotiations. Recognizing these emotions in a non-confrontational way can encourage more honest conversations. In addition, business leaders can use emotion to influence other parties in a negotiation. Often, painting a mental picture for the other party helps develop an emotional connection to the potential outcome much more than just enumerating figures and statistics.
5. Maintain professionalism throughout the encounter.
When it comes to negotiations, business leaders need to recognize that they will sometimes walk away feeling like a winner and other times like a loser. In either case, they need to keep their emotions in check, rather than gloating or striking back at the other party. Leaders may need to negotiate with these same people in the future, and maintaining professionalism can help improve communication in later encounters. Furthermore, people talk, and those who develop a reputation for being unprofessional may find it difficult to strike deals with others in the industry.
6. Do not be afraid to walk.
Part of the preparation for any negotiation is identifying the point past which you’re no longer willing to compromise. By determining this “line in the sand” prior to entering negotiations, leaders are less likely to make concessions they’ll later regret. Walking away from a negotiation is not something that leaders should be afraid of doing, as it can demonstrate how important a particular issue really is. Of course, they need to explain why the issue is so important and provide context for their decision to walk away. Ideally, the discussion will spur further negotiation. If this isn’t possible, sometimes the best decision is to simply let go.
7. View the other party as a partner.
Traditionally, negotiators would view the other party as the opponent, but this is an approach that does not do anyone any favors. With this overly combative mindset, everyone holds their cards close to their chest, no one gives any ground, and the best solution for everyone never becomes apparent. When business leaders demonstrate confidence in the other party and reveal more of their cards, the negotiations can proceed from a place of greater trust. In the end, mistrust only leads to more mistrust, and makes deals impossible.