Art of Negotiation: The Secret Behind Successful Companies and Careers

by Pranav Ramesh
January 27, 2021

Negotiation can be difficult and often uncomfortable. But it’s often the difference between success and failure, especially when it comes to running a company or landing a job.

You can be the best at what you do, but meritocracy is never going to be as powerful as a strategy. To ensure that your work and involvement is acknowledged and valued, you must be able to communicate clearly, project your strengths convincingly, and most importantly, negotiate for the best deal on the table.

Whether it is regarding salary, sales, purchases, new pitches, no business or individual can grow without negotiation. Similarly, whether you are an amateur or a subject matter expert, a candidate or a recruiter, an employee or a leader, the art of negotiation plays a vital role in steering your career journey.

Topics Covered:

  • What is Negotiation?
  • 3 Main Types of Power in Negotiation
  • 3 Reasons Why Powerful Negotiators are Successful
  • 5 Steps to Devise an Effective Negotiation Strategy
  • 6 Stages of Negotiation
  • Negotiators are Not Born, But Made

What is Negotiation?

Simply defined, negotiation is the process or an exercise where two parties engage in a dialogue to settle differences and reach a consensus. It is considered the civil way to get the best possible outcome of a situation where the said parties may have a stark difference of opinion. You could consider it a sophisticated version of bargaining.

We all negotiate in our lives on a daily basis:

  • With our alarm clocks: “I’ll sleep for 30 minutes more and skip the morning shower”
  • With our spouses: “Since I cooked dinner, you can do the dishes”
  • With our children: “If you brush your teeth, I’ll let you watch Frozen 2 for the 170th time”
  • With our dogs: “If you don’t bark during my morning meeting, I’ll give you an extra treat”
  • With our cats: Who are we kidding, no one can negotiate with cats.

But you get the gist.

A negotiation is considered successful when its outcome is based on the principles of fairness and is beneficial to both sides. It is used in various situations, across domains, including international affairs, industrial disputes, legal procedures, and personal relationships. The world runs on successful negotiation.

3 Main Types of Power in Negotiation

According to social psychologists, there are three main types of power that exist in society. Knowing what they are will help you leverage them successfully during negotiations.

  • Independence: When your arguments or decisions are not dependent on the opposite party in any way. This power corresponds to your ‘Best Alternative to a Negotiated Argument’ (BATNA), where you have a strong alternative to opt for, in case the negotiation is not in your favor.
  • Role of Power: Here, you feel like the powerful party simply because you are more experienced or hold a higher position. This type of power that is granted by authority or seniority is common in negotiations within organizational hierarchies.
  • Psychological Power: Though you may lack BATNA or the power that comes from your role, you may have the confidence to come off as the stronger party.

As negotiations predominantly require the participants to be confident and collected, power plays a major role in the outcome, be it from having the best alternative, holding a certain position, or simply feeling like you can win this.

3 Reasons Why Powerful Negotiators are Successful

Let’s take a look at why powerful negotiators never leave money on the table:

  • They Take Action: Their sense of power and confidence equip them to be proactive. A negotiation research conducted by the Harvard Law School states that powerful negotiators are more likely to make the first offer, which gives them a substantial bargaining advantage.
  • They are Risk Takers: When they are powerful negotiators psychologically, they tend to think more creatively and come up with better alternatives, which allows them to stay optimistic and take risks.
  • They are More Secure: With power comes protection. As they have the armor of strong negotiation skills, it becomes difficult for their opponents to trick them or stick them with a bad bargain.

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5 Steps to Devise an Effective Negotiation Strategy

As bruised businesses are slowly becoming whole after the economic crisis in 2020, more and more leaders are realizing that the art of negotiation can help them create and claim value. The same goes for the employees who are in pursuit of new or better opportunities in these uncertain times—strong interpersonal skills, coupled with talent and confidence can help them “talk their way through” what they want. Here are 5 tips that will help leaders and employees refine their negotiation skills and come up with an impactful strategy:

  • Identify and sharpen your BATNA: Before taking part in the negotiation, identify the best alternative to a negotiated agreement, so you can always walk away without settling.
  • Build a Connection: Though you are on the opposing sides, there is nothing wrong in building a rapport with the other party. It might also give you some insight into the best ways to get them to agree to your terms.
  • Look for Smart Tradeoffs: Instead of focusing on a single issue, find out what each of you values the most and negotiate on exchanges that will get you more of what you want by trading them more of what they want.
  • Present Multiple Offers: Don’t just put forward a single offer. Present multiple equivalent offers with respective variables. This way, the opposite party will be more open to choosing one among the many.
  • Make the First Offer: The first offer that is made usually tends to stick—this is called the ‘anchoring bias’. The moment a number or idea is introduced into the discussion, the mind tends to latch onto it, channeling the whole discussion towards it.

6 Stages of Negotiation

Though the situations and the people with whom you negotiate may vary, there are few steps every leader and employee should follow when gearing up for a negotiation meeting.

  1. Preparation: Decide when and where (or on which online platform) the meeting will take place and who the participants involved would be. Sticking to a time frame is also recommended as this could prevent unnecessary digressions and arguments.
  2. Discussion: A key skill that can make a difference during this stage is active listening. Your ability to listen to what is not being said out loud or read the gestures that imply the other party is nervous or agitated may give you the edge to walk away with the better end of the deal.
  3. Clarification: During the discussion, the goals and interests of both sides should be communicated and clarified.
  4. Negotiation: Take each other’s interests into account so there can be an outcome that is beneficial to both sides.
  5. Agreement: Arrive at a decision that falls in line with both of your views.
  6. Implementation: Once a decision is arrived upon, follow through on executing it to completion.

Negotiators are Not Born, But Made

Though many people believe that great negotiators are born with a killer instinct, it’s not true. While some people tend to be more outgoing and intuitive than others, when it comes to negotiation, it doesn’t matter. This is a skill that can be developed with the right exposure, practice, and experience.

Do your homework, observe yourself and the other party, read the room, listen actively, react to the right cues, and learn from your previous mistakes. Once you have had enough practice, all that is left to do is conduct yourself with confidence and infuse your x-factor into the process. It also never hurts to have a surprise element down your sleeve, be it a counteroffer or BATNA.

Good luck with your next negotiation!

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About the Company:

Peterson Technology Partners (PTP) has been Chicago’s premier Information Technology (IT) staffing, consulting, and recruiting firm for over 22+ years. Named after Chicago’s historic Peterson Avenue, PTP has built its reputation by developing lasting relationships, leading digital transformation, and inspiring technical innovation throughout Chicagoland.

Based in Park Ridge, IL, PTP’s 250+ employees have a narrow focus on a single market (Chicago) and expertise in 4 innovative technical areas;

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