The ability to negotiate is an essential soft skill for leaders. Most leaders’ workdays consist of one negotiation after another. Negotiations can be anything from lobbying for additional staff to finalizing a sales contract with a client. Effective negotiators’ goal should always be to find mutually agreeable solutions.
Compromise is a daily reality in business. The ability to find a middle ground is key to success for the leader, team, and business. Lack of compromise can halt business growth as either progress on the initiative stops or poor decisions are made. An effective leader knows how to maintain integrity within the business through the art of negotiation.
The good news is learning the art of negotiation is possible with proper training.
“The most important trip you may take in life is meeting people halfway.” – Henry Boye, author
Types of Negotiations
Negotiations happen when there are two or more best possible outcomes, but the parties involved have not yet come to an agreement that meets the needs of all involved. There is no way to guarantee success in every negotiation, but there are ways to have a better chance of reaching the ideal outcome, even if that outcome was not the original goal.
The two major types of negotiations are distributive and integrative.
- Distributive negotiations occur when each party focuses solely on securing the best outcome for themselves rather than seeking compromise or fostering a relationship. Haggling over the price of a car is a typical scenario of a distributive negotiation.
- Integrative negotiations occur when both parties are interested in reaching an agreement that benefits everyone. An integrative negotiation scenario is a hiring manager negotiating salary and benefits with a potential new hire. Both want a mutually agreeable outcome that satisfies both parties. Through integrative negotiation, the parties discuss everyone’s needs. For instance, the potential new hire may request a flexible schedule so they can care for an elderly parent. Therefore, they forgo negotiating a higher salary in return. As it happens, the hiring manager is unable to offer a higher salary than proposed. Thus, both parties achieve their desired outcomes. Because of the relationship-building nature, integrative negotiations are the best option for the success of future negotiations.
Styles of Negotiators
The best negotiators can resolve disagreements more quickly and typically avoid arguments. There are many different styles of effective negotiation. Each negotiation style has its strengths and weaknesses but having a blended style or being able to switch styles is an art. A successful negotiator knows how to apply the most appropriate style to the situation at hand.
- Factual negotiators ensure no facts are overlooked. They have all the required information on hand but do not always take emotional issues into account.
- Relational negotiators establish strong relationships and build trust, but sometimes do not keep track of the reason for the negotiation.
- Intuitive negotiators focus on the key issues and can overlook irrelevant details. They also come up with unexpected solutions but can be regarded with suspicion because of their unconventional approach.
- Logical negotiators make an agenda, set rules, and argue in an unemotional, rational way. These negotiators sometimes see the process as more important than the result.
“A negotiator should observe everything. You must be part Sherlock Holmes, part Sigmund Freud.” – Victor Kiam, American entrepreneur and TV spokesman
Negotiation Tips
So many important factors go into strong negotiation skills. Let’s look at a few excellent ways to conduct business negotiations like a champ.
- Plan. Few leaders can wing it during negotiations and have successful outcomes. Winging it is not a wise strategy. Effective negotiating takes planning.
- Conduct research. Make it a daily practice to network. Learn a little about the team on the other side of the negotiation table. Read LinkedIn profiles. Look at their website and read recent news articles about them. The idea is to learn about their philosophy and culture. This understanding gives the negotiators a better chance of getting their desired outcome.
- Set clear goals. What is the best-case scenario? What is the least acceptable offer? The more defined and understood the goals are, the easier the negotiating.
- Develop a best alternative to a negotiated agreement (BATNA): Forming a BATNA helps formulate the appropriate walk-away point. The steps to creating a BATNA are:
- List the acceptable alternatives if the negotiation process ends without an agreement
- Determine the value of each alternative
- Choose the alternative with the best-estimated value (this is the BATNA)
- Decide on the lowest acceptable value (or reservation value)
- Practice body language exercises. Power poses can greatly reduce confidence-shattering cortisol levels before important negotiations. A great idea is to do a Wonder Woman pose in front of a mirror for a few minutes before a business meeting. Arms stretched up in a victory formation can also be very empowering.
- Listen, don’t talk too much. Some believe that talking more than not during negotiations is the best way to get the upper hand, while the opposite is true. Talking too much can make the other side feel disrespected or ignored, making it harder to get them to cooperate. Letting the other team members talk will make them trust “the listener” more, leading to a more positive and beneficial negotiation all around. It could also lead to the other side giving away more information than they intended, giving “the listener” the upper hand.
- Actively listen. Not only listen to their ideas, goals, and suggestions but as the book Actively Listening states, “we must convey to the speaker that we are seeing things from his point of view.”
- Pay attention to body language. This gives the team an idea of how the other side is feeling toward the negotiation. During negotiations, a successful leader will not panic at the first sign of distress on the other person’s face. And they’ll have a poker face, not a nervous smile that’s a dead giveaway of desperation. Leaders should always have themselves in check. If not, their body language may give them away.
- Embrace common ground. The basic rule of almost any negotiation, whether sales-related or anything else, is to stay on the path of agreement. Spending too much time picking apart everything wrong with something will fuel negative vibes overall. Embrace the common ground and think about how to add more leverage without breaking away from the positives.
- Be empathetic. Ensure the other party feels acknowledged, heard, and understood. Effective conversation involves being open-minded and nonjudgmental. Saying such things as “you seem frustrated” or “you’re passionate about this” shows empathy and that you want to resolve this situation.
- Ask questions. Thoughtful probing shows invested interest. Rapport and trust will continue to build over time. Critical details may surface to help with the negotiation process.
“Place a higher priority on discovering what a win looks like for the other person.” – Harvey Robbins, world-class speaker, author, and educator
- Make the first offer. When reaching the end of discussions, most negotiators are unsure whether to make the first offer. Some feel that waiting for the other party grants them an advantage because it will give them valuable insight into the other party’s bargaining position. Not making the first offer could be ok in some situations, but this philosophy doesn’t consider the influence the first offer has on the way people think.
Harvard Business School cites a study that found that making the first offer gives the negotiator a better chance to come out on top because they control the starting point of the bargaining range, giving themselves the advantage. It’s not always the best idea to accept the first offer. The other party second-guesses if they should have made a more aggressive offer, which might make them back out. Typically, people expect a counteroffer, so some back and forth will likely lead to both parties being satisfied and committed to the outcome. - Always give and ask in return. A good negotiator understands the process is about give and take, meaning the negotiator should not always back down without asking for something in return. Always giving in to the other party’s lower-priority requests can make the other party feel like they are winning but can lead the other party to not want to agree on a compromise.
- Keep emotions under control. Passion is great, but compromise requires calm and cool mannerisms, regardless of where the outcome may be headed. Successful negotiators are not taken aback by an employee’s counteroffer or constant indecision. Don’t show frustration in body language, facial expressions, or tone of voice.
- Picture the outcome in their mind. The art of powerful negotiation is about powerful persuasion. Successful leaders want to satisfy their end of the negotiation just as much as they want to give their “opponent” the warm fuzzies. Good negotiators explain the benefits of how well this agreement will work out in a way that isn’t a “You’ll love this product because other people do!” or “It’s helped give us our best Q3 yet!” The conversation should be something more in line with “This resolution helps your company for “X” reason.”
HSI Can Help
Professional business negotiation training strengthens leaders, builds a strong workforce, and instills a culture of professionalism. As mentioned earlier, effective negotiation is a soft skill – an art that can be learned through training. Negotiation skills are one of the most important skills not only in leadership roles but in all employee roles.
HSI’s courses teach learners how to negotiate skillfully in difficult situations. Employees can learn how to conduct a successful negotiation without damaging business relationships. Knowing how to become a negotiator who responds effectively to the reactions and positions of others is critical to success. They’ll also learn how to position views and disagreements appropriately to win support. Just as important, they’ll discover ways to convince others to take action.
Contact us to learn more about ensuring employees have access to soft skills training and the necessary tools that will allow them to negotiate more effectively. Here are some of our multimodal video- and article-based courses around this critical topic:
- Negotiating:
- Styles
- Tactics
- Framing
- BATNA and ZOPA
- Power and Leverage
- Preparation & Planning
- The Negotiation Process
- Negotiation Do’s and Don’ts
- Offering and Accepting Concessions
- Negotiation Deal Dynamics
- Negotiation: Do You Know Your BATNA?
- Negotiation Techniques: How to Baseline Behavior
Working with HSI gives organizations access to a full library of business skills. HR departments can easily curate a curriculum for leaders who need to improve their negotiation skills. As an alternative, many of HSI’s clients open their HSI training library to their employees for self-directed learning. Employees can choose off-the-shelf training multimodal video- and article-based courses best suited to their unique needs.
HSI offers ground-breaking microlearning solutions to help companies of all sizes deliver award-winning content through flexible integration options to build high-performing learning cultures. Contact us for a consultation.
