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Negotiation 101 for senior leaders: How to structure an effective argument

The most effective negotiators know that the experience is like effective leadership: it’s about co-operation, not coercion.

7 min read


Negotiation 101 illustration of a handshake


Do you know how most leaders sabotage themselves during a negotiation?

If you think it’s because they’re being “too soft,” you’re in for a surprise. Negotiation is a critical leadership skill and yet very few managers know how to do it effectively — and with flair. The main reason for failure at a negotiation table is this: We often think of negotiation as being binary, with you on this side, them on that side. One winner, one loser.

While a brash, bullish, power-play approach to negotiation might work sometimes, it’ll be much more luck than judgement.

The most effective negotiators approach it differently, as a collaborative activity. They know that effective negotiation is like effective leadership: it’s about co-operation, not coercion.

Here are six steps to help you put your best foot forward at the negotiation table, whether you’re leading a multimillion-dollar merger, managing a product launch or convincing your 5-year-old to eat his greens.

Credit: Pixabay

1. Know what you want

Maybe it sounds obvious, but you can’t hope to structure an effective argument if you don’t know what your argument is going to be.

You must walk into a negotiation knowing exactly what you want, and, crucially, why you want it.

If you’re negotiating for flexible work, for example, your negotiation will be much stronger if you can lucidly explain to the other party what your motivations are for asking.

Maybe you’re hoping to take a leadership course and need 10 hours a week for that. Maybe your partner works away and you’ve just had children. Maybe you’re pursuing a charitable side venture on Wednesday afternoons. Whatever your motivations, share them, because an effective argument is one based on credible reasoning.

2. Set a bottom line (and be willing to walk away)

Before you begin negotiating, you need to set clear, immovable limits and be willing to walk away if they’re not met.

This is important for two reasons.

Firstly, it shifts the power dynamic in the negotiation. If the other party senses any lack of resolve, they’ll be much less likely to give ground. Why would they? Secondly, you set a bottom limit to protect yourself. Your bottom limit is the line past which your needs aren’t met; any concession beyond that will likely be unworkable in the long run.

Say you’re negotiating for a big new client. They push you down and push you down, and eventually you concede to take a significantly smaller fee because you want to secure their business.

Excuses aside (“we can leverage the brand name,” “we’re building a long-term relationship”), nine times out of 10 that relationship will end badly. You’ll wind up overworked and underpaid, which will lead to resentment.

Neither you nor the client get a good deal because you didn’t walk away when you should have.

3. Listen first

Just as you need to understand your own motivations, you need to understand the other party’s if you’re going to reach a mutually beneficial conclusion.

And that’s what effective negotiation is about. You’re not aiming to push through your ideas, or manipulate the other side into giving you what you want. Rather, you’re trying to work with one another to find a solution that satisfies both your needs. In order to do that, you need to ask probing questions and listen in an empathetic way. Sure, they want 60-day payment terms, but why?

The more you uncover about their fundamental motivations, the better placed you are to deliver a creative, win-win solution. If they need 60-day terms because of cash flow problems, for example, maybe a staggered payment system would work instead. Maybe they’ve had problems with bad workmanship and want 60 days to ensure your product works, in which case a money-back guarantee could be an option. You get the picture.

4. Rationalize, don’t emotionalize

It’s normal for negotiating to give rise to a broad spectrum of emotions, from anxiety to anger, excitement to regret, but this can have a less-than-desirable impact on the outcome.

Alison Brooks at Harvard Business Review explored the impact the most common emotions have on our ability to negotiate effectively, and offered some coping strategies to help dissipate those emotions.

Anxiety is chief among these and can be defeated through repeat exposure:

As Brooks writes: “Train, practice, rehearse, and keep sharpening your negotiating skills. Anxiety is often a response to novel stimuli, so the more familiar the stimuli, the more comfortable and the less anxious you will feel.”

Anger is also a repeat offender and stems, Brooks writes, from “a tendency to view negotiations in competitive terms rather than collaborative ones.” The tendency to see negotiation as adversarial is, unfortunately, still all too prevalent. Anger is seen by many as a way of expressing one’s dominance over an opponent, but this mindset should be avoided, as it’s counterproductive.

Prepare an emotional strategy before negotiating, highlighting situations that could give rise to emotion and outlining ways to handle them rationally.

5. Don’t bluff

Bluffing undermines your credibility, which weakens your negotiating stance. It’s normally easy to spot, walking hand in hand with its partner, bluster.

It’s another symptom of viewing negotiation as adversarial, as something to win. Antagonistic and manipulative tactics aren’t the way to go, and effective negotiators are most often the ones who view negotiation as collaborative.

Avoid saying “that’s the best I can do” or “we simply can’t go beyond that” unless you mean it. It’s not the phrases themselves that are the problem, to clarify. Rather, it’s how you deliver them and what your intention is. Honestly communicating your needs is a good thing; playing games isn’t.

6. Focus on their pressures

While negotiating should be about collaboration, that’s not to say there aren’t times that you need to exert pressure.

Less experienced negotiators often focus on themselves: what happens if I don’t make a deal? This attitude escalates your emotional response, (“how will I pay my mortgage?” or “my boss will kill me”), making you less likely to seal the deal.

Instead, focus on the pressure the other party is under. What happens to them if you can’t reach a deal? If you’re negotiating for a salary rise, for example, you could think in terms of your mortgage bills, but that’s not productive. Alternatively, you could think in terms of the value you bring in your current role, and what your company stand to lose if you move elsewhere.

Put yourself in the other party’s shoes and consider the pressures they’re facing. Just appreciating those pressures will increase your confidence, which in itself helps you be a better negotiator.

Don’t use those pressures as a threat, though. You can discuss the implications of not making a deal without being confrontational. Aim for matter-of-fact discussion of consequences as a tool to remind the other party what they stand to lose without trying to force their hand.

Irene McConnell runs Arielle Careers, a full-service personal branding agency which specializes in resume writing, LinkedIn profile writing and headshot photography. Her ideas have been featured by the BBC, Business Insider, Australian Institute of Management and Australian Institute of Company Directors.

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