Negotiation: Definition and skills
The meaning of negotiation skills, styles and strategies
Negotiation consists in navigating towards a mutually beneficial outcome among parties with vested interests. Whether it involves safeguarding personal interests or advancing business objectives, negotiation tactics are essential to reach an agreement that caters to the needs of all negotiating parties.
In the business context, negotiation can take on various forms, including salary discussions between job seekers and employers, bargaining with buyers over terms, or resolving conflicts within the workplace. Typically, negotiations unfold with each party presenting their stance, followed by a series of discussions until a consensus is reached. Success relies on cooperation and the establishment of mutual trust to ensure the negotiated solutions are effectively put into action.
Moving on to a terminological standpoint, negotiations skills, negotiation styles and negotiation strategies are to be distinguished :
- Negotiation skills are all the soft skills you will need to train and possess in order to be a good negotiator.
- Negotiation style has more to do with the underlying philosophy of your approach.
- Negotiation strategies, techniques or tactics refer to the action you can take to conduct successful negotiations. Being able to effectively use negotiation tactics is also one of the afore-mentioned negotiation skills.
All three aspects are tackled and developed in this article.
Why are negotiation strategies important?
Negotiation itself is a skill that holds relevance in various aspects of life. It serves as:
- a powerful tool for resolving conflicts;
- an opportunity for executives and managers to hone the communication skills of their team members;
- a waypoint to growth opportunities by securing favorable deal terms;
- crisis management aid by promoting rational resolutions among stakeholders during challenging times rather than chaotic decision-making.
Moreover, negotiation strategies enable all parties to maximize value by leveraging new revenue sources and aiming for optimal outcomes, even if full agreement isn’t achieved.
Besides, seasoned negotiators tend to quickly identify and address operational inefficiencies which mechanically enhances overall operations.
On an individual scale, improving negotiation skills fosters confidence, fairness, and strategic acumen, benefiting both personal growth and organizational success.
What are the different negotiation skills?
Mastering negotiation requires a very particular set of skills, encompassing effective communication, strategic planning, and emotional intelligence. Here’s a synthesis of key negotiation skills and strategies.
Clear communication
If you want to have productive negotiations, you need to be able to articulate your intentions and set your boundaries. Effective negotiators adapt their communication to generate engagement from their counterparts therefore paving the way for an understanding and collaborative atmosphere. In order to set clear goals and manage them, you may want to learn more about OKRs or the V2MOM framework.
Active listening
What’s the point of communicating with the other party if you won’t let them do the same with you? By practicing active listening, you make sure to understand their perspectives fully and establish positive conditions for a mutually favorable outcome.
Emotional intelligence
Emotional intelligence is what is measured by EQ. It refers to your capacity to assess, understand, manage and express feelings. It’s also your ability to identify the emotions of others and adjust accordingly. Knowing all of this, we easily understand how emotional intelligence is a valuable negotiation skill.
Expectation management
Emotions are not the only thing you will need to manage. Expectations are part of the package too, both yours and your counterpart’s. To reach a satisfactory agreement, you will indeed be required to factor in what everyone wants. You have to balance firmness with flexibility, to know when to take and when to give.
Patience and adaptability
Negotiators who can adjust quickly to changing circumstances surely have an advantage over those who are set in their ways. The same can be said about persistent and patient people as impatience can be leveraged against you.
Integrity
Showing integrity goes a long way in building trust. It simply means that when you try to persuade someone, you should advocate for your interests while respecting others‘. If your intentions are not genuinely positive towards the others, it will prove nigh impossible to find common ground. On the contrary, when you show integrity and accountability, trust comes easy.
Rapport building
This is the ability to connect with others, to establish a relationship. This is helped by active listening, empathy and many other negotiation skills but this is a whole skill to itself. Rapport building doesn’t have to be immediate because it can’t ‘click’ right away with everyone, but you need to be able to at least set a collaborative environment.
Problem-solving and decision-making
Finding creative solutions and making informed decisions are essential because problem-solving skills help overcome obstacles, while effective decision-making leads to favorable outcomes.
Assertiveness
Confidently expressing needs while respecting others’ viewpoints is key. Indeed, by being assertive, you promote constructive dialogue and mutual respect and this way you make it easier to reach a compromise.
What are the different negotiation styles?
Competitive negotiation
This is also referred to as distributive negotiation or win-lose negotiation.
Competitive negotiation revolves around maximizing gains for oneself while inevitably causing losses for the other party. It’s characterized by an aggressive or assertive stance aimed at securing victory.
In this approach, each side aims to optimize its position on a single issue, often exemplified by scenarios like a buyer seeking the lowest price while the seller aims to extract the highest price for the fewest resources. Key negotiation techniques for distributive negotiation include:
- persistence;
- initiating the first offer;
- withholding information about minimum acceptable outcomes.
Adversarial negotiation, a subset of distributive negotiation, involves tactics like hard bargaining, promising future benefits for present concessions, or feigning disinterest to secure advantageous terms.
Ultimately, distributive negotiation entails a battle of wills where gains for one party directly correspond to losses for the other, typically starting with extreme positions and gradually conceding to reach an agreement. These negotiations commonly occur between parties lacking prior relationships, such as the classic example of haggling over car prices at a dealership.
Accommodating negotiation
Accommodating negotiation or lose-win negotiation is a style where one party willingly makes concessions to accommodate the needs of the other. In this approach, maintaining a positive relationship and harmony is prioritized over maximizing individual outcomes. Negotiators using this style are flexible, open to alternatives, and often seek to avoid conflict. They focus on long-term benefits, even if it means making short-term sacrifices.
This approach can help preserve relationships, but may also carry the risk of being taken advantage of if not balanced carefully. This is not really a sustainable style, it’s better to use it as a one-off, when you just cannot risk jeopardizing a relationship.
Collaborative negotiation
The terms integrative negotiation or win-win negotiation are also quite commonly used. Here, the idea is to seek the mutually beneficial solutions we already talked a lot about. Moreover, during integrative negotiations parties have the opportunity to address multiple issues.
Unlike distributive negotiation, a collaborative approach involves finding common ground to create value.
For instance, consider a scenario where a tech startup specializing in software development and a cybersecurity firm engage in collaborative negotiation. The tech startup requires enhanced security measures for its software products, while the cybersecurity firm seeks opportunities to expand its client base. Through collaborative negotiation, they formulate a partnership agreement where the tech startup gains access to cutting-edge cybersecurity solutions, bolstering its product security, while the cybersecurity firm secures a lucrative contract and exposure to the tech industry.
Principled negotiation is a subtype of collaborative negotiation. It focuses on resolving conflicts by generating alignment between parties regarding interests and goals. Principled negotiation is all about mutual gain and objectivity by separating emotions from issues. For example, two department leaders within a company use principled negotiation to allocate resources based on revenue generation percentages, leading to a compromise that benefits them both.
Collaborative negotiation also involves techniques like quid pro quo, where negotiators trade favors to achieve mutual gains. Parties approach the negotiation as a shared problem, aiming to understand each other’s underlying interests.
Another subtype of this negotiation style is integrated negotiation, as identified by Peter Johnson in his book Negotiating with Giants. Integrated negotiation maximizes value by linking negotiations to other related decisions and activities. It emphasizes relationship-building and considers broader connections and conflicts to optimize outcomes.
Negotiation strategies: our tips
The importance of preparation
Thorough preparation is foundational for negotiation success:
- research the other party’s interests;
- understand your own priorities;
- anticipate potential hurdles.
Always come prepared and you will run through the negotiation with confidence and agility. From gathering relevant data to strategizing alternative scenarios, preparation ensures you’re equipped to make informed decisions and effectively advocate for your objectives.
Define your ground rules
If you want to set the stage for constructive negotiation, establish clear ground rules. Unambiguously defining parameters, expectations, and boundaries from the outset fosters mutual understanding and respect. By outlining the framework for discussion, you enable the negotiation process to be navigated with clarity and confidence by both your counterpart and you. This way, misunderstandings and conflicts are a lot less likely to occur.
Know the value of what you bring to the table
Recognizing and communicating the value you bring to the negotiation strengthens your position and enhances your credibility. Whether it’s specialized expertise, unique resources, or innovative solutions, articulating your strengths demonstrates confidence and justifies why you are here. Understanding your worth enables you to negotiate within your comfort zone.
Don’t forget: it’s a conversation!
Approach negotiation as a collaborative dialogue rather than a combative exchange. Actively listening, asking probing questions, and seeking to uncover underlying interests are a few of the many ways you can create an atmosphere conducive to finding creative compromises. View negotiation as a conversation, value openness and flexibility, and seek mutually beneficial outcomes.
Tailor your negotiation style to the situation
Throughout your career, you are confronted with a diversity of negotiation contexts and personalities. If you want to address them effectively, you need to be flexible with your negotiation style.
It doesn’t mean you need to switch every time from competitive to collaborative negotiations, nonetheless, you need to adjust at least a little bit to the specific circumstances you’re dealing with. You have to know when to advocate for your interests and when to prioritize a relationship. This helps a lot in rapport building as well as in conflict management.
Be likable
Speaking of which, building rapport and establishing a positive relationship with the other party can significantly influence negotiation outcomes. Indeed, demonstrate empathy, respect, and genuine interest in the other party’s perspective and you will get a lot of trust and goodwill in return.
And because people are more inclined to cooperate and compromise with those they like and trust, likability is a valuable asset in negotiation.
Remember that you can walk away
Understanding your BATNA (Best Alternative to a Negotiated Agreement) is crucial. Your BATNA empowers you to negotiate from a position of strength and clarity. When you know when to walk away from a negotiation that doesn’t align with your objectives, you preserve your integrity and allow yourself to redirect your focus toward more promising opportunities.
Give
Embracing the principle of reciprocity makes everyone more prone to goodwill and it also facilitates satisfactory outcomes. But you have to take the first step, so be ready to offer concessions, compromises, or value-added benefits. By doing this, you demonstrate that you are willing to collaborate and find common ground.
Moreover, you create opportunities for the other party to reciprocate, which, as we said, contributes to building trust and enhances the likelihood of fruitful negotiations.
Don’t take the first offer
Resisting the urge to accept the initial offer allows room for negotiation and potential improvement of terms. Indeed, is this really a negotiation all parties agree from the get-go?
Counterproposing, seeking clarification, or exploring alternatives signal your readiness to engage in meaningful dialogue and advocate for your interests. By not accepting the first offer at face value, you demonstrate diligence, assertiveness, and a commitment to reaching for the best mutually beneficial outcome.
Whether in business transactions, conflict resolution, or everyday interactions, these negotiation strategies enable you to advocate for your interests while establishing a collaborative and understanding relationship with your counterparts. These strategies are the tools you and other negotiators from your company need to unlock opportunities for success in any situation.
At CoachYZ, we firmly believe that every business leader, every manager has indeed an untapped potential they can access to be the best version of themselves. If you want to be this kind of proactive and positive professional, start your coaching journey!
