Managers in business today face complex challenges requiring diverse skill sets to overcome. Whether you’re a current or aspiring manager, one critical competency you should develop is negotiation.
Negotiation skills are vital to managerial success because they help you establish stakeholder relationships, achieve business objectives, and resolve workplace conflicts. If you’re not confident in those areas, it can be difficult to advance your career past mid-level management.
Here’s why negotiation skills are important to your professional development and how you can improve your proficiency.
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DOWNLOAD NOWWhy Managers Need Negotiation Skills
Knowing how to negotiate is essential because it plays a critical role in understanding and observing your team and organization’s needs.
“Negotiation is, among other things, a process of exploration and discovery,” says Harvard Business School Professor Michael Wheeler in the online course Negotiation Mastery. “As you observe what the other parties say and do, you'll get a better sense of their attitudes and their tendencies.”
Here are six reasons why you should improve your negotiation skills as a manager.
1. Manage Interpersonal Conflicts
Negotiation skills help you manage interpersonal conflicts by finding mutually agreeable solutions and not damaging workplace relationships.
Using negotiation skills, you can:
- Identify underlying issues
- Boost internal communication
- Facilitate relationship management
In addition to creating positive workplace relationships, these benefits can result in cost savings. According to a Pollack Peacebuilding study, the average employee spends nearly three hours per week dealing with conflict, amounting to approximately $359 billion in paid hours per year.
“Enhancing your negotiation skills has an enormous payoff,” Wheeler says in Negotiation Mastery. “It allows you to reach agreements that might otherwise slip through your fingers. It also, in some cases, allows you to resolve small differences before they escalate into big conflicts.”
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2. Negotiate for Your Company
Negotiation skills are vital if you deal with external stakeholders, such as suppliers. Effective communication and active listening play pivotal roles—especially when conveying your company’s needs and objectives—because they help establish trust and create mutually beneficial outcomes.
One example of how negotiation skills factor into important business relationships is Apple and LG Display’s strategic partnership. While Apple wanted to secure a reliable organic light-emitting diode (OLED) screen supplier for its upcoming iPhones, LG Display hoped to expand its business with a high-profile customer.
Negotiations lasted over a year and involved discussions about pricing, production capacity, and quality control. The partnership proved to be beneficial for both companies. According to Counterpoint Research, the iPhone X—with LG’s OLED displays—was the best-selling smartphone globally in the first quarter of 2018.
3. Advance Your Career
Negotiation skills can help further your career and earn you a higher salary.
With strong negotiation skills, you can build lasting relationships with clients and suppliers that lead to increased profits and revenue—in turn, creating career advancement opportunities.
You can also be better equipped to negotiate components of your salary and benefits package, such as:
- Higher pay: A pay raise is a common benefit that employees, including managers, negotiate.
- Flexible work schedule: From remote to hybrid work, you can negotiate a more flexible schedule to improve your work-life balance.
- More professional responsibilities: Advancing your career as a manager often means taking on increased responsibilities or overseeing a larger, more complex team.
No matter the means, it’s crucial to know how to ask for what you want to ensure you receive your desired compensation.
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4. Maximize Value
One of your main objectives as a manager is to ensure your team’s work creates value for your organization. Negotiation plays an important role in that process.
“Value creation occurs when solutions are found that benefit both parties—or at least benefit one of them without making the other worse off,” Wheeler says in Negotiation Mastery. “Value creation is a key part of the negotiation process. If it's done well, it can turn stalemates into deals and transform good deals into great ones.”
You can create value in negotiations by:
- Building trust: Creating a connection based on trust can ensure your deal-making conversations are more engaging and productive, leading to mutual gains.
- Finding uncommon ground: Capitalizing on uncommon ground can help you secure maximum value by bolstering cooperation.
- Increasing agility: Taking a creative approach to negotiation can enable you to uncover new avenues for trade and achieve better outcomes.
Successful negotiations may not always look the same, but they require value creation to ensure they don’t result in financial losses.
5. Prepare for the Unexpected
Organizational change is inevitable, and negotiation skills are useful for preparing for the unexpected.
Changes you may need to negotiate around include:
- Market fluctuations: Finding new opportunities or re-negotiating contracts with suppliers can help you adapt to market changes.
- Stakeholder disputes: Resolving disputes with stakeholders can eliminate lengthy legal battles or damaged relationships.
- Supply chain disruptions: Sourcing alternative suppliers or negotiating new delivery schedules can minimize supply chain disruptions’ operational impacts.
- Regulation and legal changes: Negotiating with regulatory authorities, suppliers, and customers can ensure your organization complies with new regulations while minimizing costs.
- Staffing issues: Negotiating with team members to take on additional responsibilities can help fill unexpected staffing gaps.
In all of these instances, you must effectively communicate change and your proposed solution.
6. Work with International Business Partners
In today's globalized economy, organizations operate in diverse cultural and legal environments, making it imperative to have strong negotiation skills to succeed in international business.
Several challenges in international business negotiations you should be mindful of include:
- Language barriers: Communicating with stakeholders in international acquisitions and managing dispersed team members is a new reality in global business.
- Cultural differences: Learning about the cultures of countries where you do business is essential to demonstrating respect and emotional intelligence.
- Managing global teams: Overseeing global teams can be challenging with varying cultural differences and time zones.
- Nuances of foreign politics, policy, and relations: Following news related to regions where your organization operates is essential to making better business decisions.
These challenges can also arise within your workplace. For example, misinterpretation—both international and domestic—has become commonplace, especially with increased reliance on email communication.
“You always need to be ultra careful about what you put into writing during a negotiation,” Wheeler says in Negotiation Mastery. “Especially when emails and digital documents have such long lives.”
Improve Your Negotiation Skills
You can improve your negotiation skills in several ways as a manager.
Many advanced degree programs, like a master of business administration, offer courses and concentrations that provide the negotiation skills you need to succeed.
If you want a more focused approach, consider taking an online course, such as Negotiation Mastery. This flexible option offers networking and skills development opportunities that can take your negotiation skills to the next level.
Ready to improve your negotiation skills and advance your career? Explore Negotiation Mastery—one of our online leadership and management courses—and download our free leadership e-book.
