Negotiation is a skill that almost everyone uses in their daily lives.
For leaders, negotiation is critical to move a business forward and achieve significant profit growth.
Negotiations are not only with vendors and customers but also occur internally with employees, regarding promotions, raises, time off, and project assignments.
What types of negotiators are there?
According to the book, Bargaining for Advantage by G. Richard Shell, there are negotiation styles/strategies.
- Avoidance – You do not like to negotiate so you just don’t.
- Compromise – This involves each side coming to an agreement where the gains are equal between them.
- Accommodating – This is where you are being nice and accommodating, but you are the one who has the most to lose.
- Competitive – This strategy will work well in situations where it is expected that the parties negotiate competitively, but are abrasive and/or unrealistic, i.e. buying a car.
- Collaborative – This approach can be viewed as the most creative, but also the most time consuming. This consists of brainstorming ideas and resolving tough issues to come to an amicable offer.
The negotiation process is further complicated because there is the issue of a real value and a perceived value.
When introducing a product or service to market, the perceived value could be drastically different than what the company had hoped to charge.
Extensive research needs to be conducted before the launch with the hopes that this intelligence will lead to better negotiations.
Unfortunately some leaders “shoot from the hip” and/or ego gets in the way so the negotiations falter.
The leader needs to have a clear understanding of the entire situation to be equipped to handle counter offers and pushback.
He/she also needs to be realistic in terms of future business dealings.
Even internally, if a staff member is denied a raise, then that person may start to look to change jobs.
This could lead to a higher cost to hire and train a new person, and could lower morale which has an even higher negative impact.
What type of negotiator are you?
Where can you fine tune your negotiation skills?
My father has an expression “talk is cheap” meaning you can always ask because the worst you will hear is “no.”
Leaders are more than capable of doing this, but they do need to think longer term on how this action can affect the business in near and long term.