Entrepreneurs and business leaders need to be proficient at negotiating with multiple groups about a myriad of issues. Good negotiation skills are one of those soft skills that can quietly help improve your ultimate bottom line, albeit in a way that might be impossible to measure.
In this article we’ll explore the importance of good negotiation skills, and look at ways in which you can improve your own.
- Why improve negotiation skills? Your business will have several stakeholder groups – people and entities that directly impact, and are impacted by your own business. Business leaders will often need to communicate and negotiate with many of these groups. For example, you may well have a number of different suppliers – during difficult times, you may well be prompted to carve out a better deal for your company, and only good negotiation skills can help you deliver on this front. Similarly, you may well need to interact and negotiate with other groups – for instance with your bank manager to arrange a key bridging loan, or your staff to negotiate (another) pay freeze. Good negotiation skills will do more than get your own way – it will leave your opponent feeling respected too.
- Preparation is essential. When negotiating, you cannot just “wing it”. You’ll need to know the key aims that your negotiation sets out to achieve, and you need to know about the people you are negotiating with, including their own aims and expectations.
- LISTEN. God gave you two ears and one mouth for a reason, as no doubt your grandma used to say. The more you listen to the people you are negotiating with, the more you can understand them and tailor an appropriate response.
- Focus on the benefits that your audience will achieve from the negotiated outcome. When you do try and justify and explain your negotiated position, try and emphasize any advantages and positives that will be delivered. Everyone has a strong self interest, and the more you make it about them and how they will benefit, the stronger your own position becomes. For example, if you’re negotiating a reduced price with a supplier, the benefit to them might be in keeping you as a customer. If you’re talking to your staff about pay rises, or the lack thereof, emphasizing that the company is experiencing lean times is less effective than pointing out that wages and staff numbers are being maintained rather than hacked away at.
- Deliberate. There’s no harm if during tough negotiations you ask for some time out to reconsider your position, or think things through from another angle.
- Know in your own mind what maximum concessions you can make. Good negotiators often will leave a little wiggle room to back down from their stated position. This brings the perception that you are trying to be accommodating and trying to meet your opponent half way. In order to use this tactic, you must know in your own mind what maximum concessions you’re willing to give away. Similarly, try and gauge what maximum concessions your negotiating opponent may be willing to give.
- Keep things calm. Sometimes, negotiations can turn ugly when there is no need for it. Keep your tone and content level and professional.