6 Negotiation Skills All Great Leaders Have

By David Ellingsen

Updated Over a Week Ago

Minute Read

One non-negotiable thing is that anyone in a leadership position needs good negotiation skills. Whether it’s negotiating an employee’s salary or the terms of a critical business partnership, you must be confident in your negotiation strategies as a leader.

Having sound negotiation techniques in your skillset can help you navigate challenging business situations. Here are six negotiation skills all great leaders have, from before negotiations even start to after the deal is done.

1. Plan Ahead

Have you ever heard the saying, “failing to plan is planning to fail”? This saying applies to negotiations. Going into a negotiation with a comprehensive plan can go a long way in helping you get what you want as a leader.

At a minimum, there are two things you should get to know before going into the negotiation – yourself and the other negotiator.

Know Yourself

You’ll first want to know your negotiation goals. This means settling on your best outcome, what your bottom line is, and a backup plan if all else fails. While you won’t necessarily need strictly defined goals, you will need a general idea of what you want from the negotiation.

Beyond this, you’ll want to plan out your negotiation strategy and think through how you can spin your argument in a way that also benefits the other negotiator. This means you’ll also need to get to know the other negotiator.

Know the Other Negotiator

Your negotiation won’t go very far without knowing what the other negotiator wants. This requires a bit of research before the negotiation. Some things you might want to consider are:

  • Where they work/what company they represent
  • How can you provide them with value?
  • How can they provide you with value?
  • Who else have they worked with

Speaking with other businesses who have also worked with your negotiating partner can help identify their negotiation style, strengths, and weaknesses. Knowing what the other negotiator wants means you can phrase your argument in a way that highlights the benefits they will get out of the negotiation as well.

Listening to colleague

2. Actively Listen

Don’t underestimate the power of active listening in your arsenal of negotiation skills. We’re not talking about listening where you sit there, maintaining eye contact and nodding. There’s more to active listening than just when used as a negotiating skill.

Active listening means you’re paraphrasing the other negotiator’s points, asking questions so they elaborate on their arguments, and acknowledging their feelings and experiences. This is one of the most significant negotiation tactics and can help you fully understand their argument.  

Active listening is especially useful when your negotiating partner is being irrational. Paraphrasing their point back to them and asking questions can help them realize the flaws or impracticalities of what they are asking for. Alternatively, acknowledging their emotions can help you appeal to them more personally.

3. Be the Reluctant Negotiator

Generally speaking, there are two types of people in a negotiation – the excited and eager party and the reluctant one. More often than not, the reluctant one in the negotiation has more control over the negotiation’s pace and direction, so ideally, you are the reluctant negotiator.

There are a few ways you can go about ensuring you are the reluctant negotiator:

  • Don’t make the first offer
  • Communicate reluctance with your body language, e.g., sitting back in your chair, low body tension.
  • Speak slowly and calmly
  • Ask questions and challenge ideas

If you take on the reluctant role, you force your opponent to pick the eager alternative. This puts you in a position to direct the negotiation more. 

4. Ask for More, Expect Less

When it comes time to put forward your offer, setting the bar higher than what you would like to receive is a negotiation tactic that can give you surprising results. It also gives you some wriggle room to negotiate down and compromise with your opponent. This early into the negotiation, your opponent is unlikely to walk away just yet as well.

Having planned your ideal outcomes and your minimum takeaway ahead of time, you can better choose an opening offer.

5. Achieve Win-Win Outcomes

While you can go into the negotiation with an authoritative approach where you and only you are satisfied with the outcome, this isn’t usually considered a positive leadership quality. You will gain the most ground by aiming for win-win outcomes where both parties feel they have succeeded.

This is where all your negotiation skills come into play. These negotiation tactics can go a long way in helping develop creative solutions to satisfy both parties.

Stopping Negotiations

6. Know When to Stop

Whether it’s the end of the negotiation, or a close on a minor detail of the larger agreement, knowing when to stop is a critical negotiation skill all good leaders have. This allows your opponent to voice their concerns or counter, showing them that you care about their opinion too.

If you keep going back to arguments after moving on to another topic, you’ll appear flighty and unreliable. Neither of these traits is becoming a good leader. Knowing when to stop demonstrates your confidence and strong leadership qualities.

Why Negotiation is Important in Leadership

Negotiation is just like any other skill. It requires practice. You don’t need to start your leadership career as a great negotiator. Instead, you need to be willing to put the time into training.

Good negotiation skills will help your business, its employees, and more. Negotiation skills are critical whether you’re dealing with workplace conflicts or complaints or looking to create a new business relationship.

As the owner of Metropolitan Plumbing, Electrical, and Air Conditioning, I’ve found these negotiating strategies to have been the most effective. In my 25 years of experience in a leadership position, these negotiation skills have helped me achieve what is best for my business, my employees, and myself.

What Negotiation Skills Do You Use?

If you have ideas about negotiation skills that might be helpful to readers, share them in the comments section below. Thanks!

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David Ellingsen
David Ellingsen
David Ellingsen is the founder and owner of one of Australia’s largest trade service businesses, Metropolitan Plumbing, Electrical and Air Conditioning. He has been running Metropolitan for over 25 years and knows what it takes to be an effective leader. When he is not running the business, you will find David working on new marketing ideas and strategies.
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