How to Improve Your Business Negotiation Skills
Being a strong negotiator is all about mixing strategy with soft skills. In this article, we discuss four steps to mastering business negotiation and securing a win-win agreement.
What's the biggest difference between someone who stagnates in middle management and someone who rises to the top of finance leadership? What differentiates a finance leader who's their CEO's right-hand, trusted advisor from one who finds themselves frequently overruled? The truth is that the answer to both of these questions is unlikely to have much to do with their skills in analytics or forecasting. Instead, it's almost definitely determined by their business negotiation skills.
Learning how to be a great negotiator may seem intimidating, but in reality it's similar to the strategy games many of us love, with a few upgrades to our social skills mixed in. Whether you're negotiating with employees, new or existing vendors or other members of the leadership team, learning how to have productive conversations that balance opposing goals is key.
Before we get into how to master this skill, let's start by dispelling a pernicious misconception: If you think negotiating is always about "winning," think again. Negotiating is actually about finding a way for all parties to be satisfied with the result.
Plan Ahead
If financial leadership is all about using your current data to forecast the future and predict risks and rewards, then the first step toward being a great negotiator is to call on skills you already have. The difference is that negotiation involves applying these skills to researching the potential risks and rewards of what you and your opponent each wants.
Look at their platform from their perspective, with their priorities in mind. This empowers you to enter the discussion with a much stronger understanding of how you can win them over. You'll be better equipped to either offer a compelling explanation for why your proposal is superior or else come to a compromise that satisfies everyone involved.
Pick a Strategy
Negotiating is just a form of conversation, right? While that's technically true, this "soft skill" is closer to a chess match than a heart-to-heart. There are many documented strategies, but the best are those designed to lead to win-win results. Here are five popular choices recommended by Harvard Business School:
- Offer multiple options at once, both to increase the likelihood of an agreement and to suss out what's really important to your "opponent."
- Allow the other party to match competing offers in the future that could jeopardize the deal.
- Collaborate on a contingency plan in a situation where there's a disagreement about the forecasted results of either plan.
- Discuss what happens in the case of damage to either party's interests before any actions are taken, making sure that both of you feel protected.
- Set a date or trigger for when you'll review the agreement to make sure that it remains optimal for both parties and continues delivering the most value for both of you.
Don't be afraid to use more than one strategy, mixing and matching as appropriate. Staying flexible is the surest way to come to the best possible agreement. When you get to the negotiation itself, there are no rules Ñ it's all about listening carefully and optimizing your reactions and escalations based on your opponent's behavior.
Pay Attention to Body Language
Now that you have your information and strategy, it's time to walk into the meeting room. Throughout the conversation, make sure to pay attention to body language and tone. Your goal is to keep your interaction jovial, calm and nonaggressive. If either party starts feeling personally attacked, the conversation is likely to go from a productive discussion to a petty argument tied to ego.
That said, there are some body language habits to be mindful of. While many people do these without realizing it, consciously knowing how your body language may be affecting your interlocutors allows you to control it according to the situation. Here are a few powerful nonverbal signals.
- Taking up space at the table will make you seem higher status and more powerful. You can do this by resting your arm on the chair next to you, and it's often the reason why people stand when speaking passionately.
- Leaning in will make the other person feel that you're truly listening, while leading out shows without interrupting that you're unsure about or in disagreement with what they're saying.
- Maintaining eye contact demonstrates confidence. Have your opponent be the one to break eye contact when you're asserting a point to give it extra clout.
Being mindful of your opponent's body language, too, can give you critical insight into how they're feeling. If they ask for something but keep their body compact and avoid eye contact, for example, you might infer that they're doubting themselves or your willingness to compromise. In this situation, it may be a good idea to shrink back a little or smile and offer to accommodate some of their request to build rapport and feelings of trust and collaboration.
Be an Advocate, Not a Battering Ram
Yes, business negotiation skills are about strategy and quick analysis of the situation Ñ but it's critical to remember that they're also about having a compassionate human interaction.
Remember, this is likely a collaboration between you and someone you're either working with or wish to work with, so don't be a battering ram of demands. Remain open to compromise, even if just on a few points, to show that you understand that your counterpart's priorities are important, too.
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