Why Leaders Need Negotiation Skills

The art of negotiation is one of the most valued skills in the market. Negotiation skills separate those who become great leaders from those who don’t. In fact, a lot of companies offer their most promising employees negotiation training to increase their chances of closing successful deals. Let’s have a look at the reasons why you need to have strong negotiation skills as a leader.

1. The likelihood of winning increases

Negotiation Expert Calum Coburn said “You wouldn’t give a speech without knowing what you wanted from your audience. So why would you enter a negotiation without first knowing your ideal outcome? Yet this is exactly what most business people do” Therefore, to increase your chances of winning, you need to do the following:

Identify your outcome

If you are selling products or services that can be priced, identify the value you want to get out of them. If you want people to rally behind a vision, a cause, or a new way of doing things, what exactly will you go for?   In very specific terms, create a wish list of everything you want to get out of a deal and then figure out how best to acquire these negotiation skills through training.

Identify the lowest point below which you cannot compromise

In any negotiation, there’s a point below which you can not go. Identify that point and go further to figure out what consequences going below that threshold will bring.

Come up with an alternative plan

Negotiations don’t always go as planned. For this reason, it is important to be armed with a plan ‘B’ even a plan ‘C’.  Roger Fisher and William Ury call this the “Best Alternative to a Negotiated Agreement” or “BATNA”. Their argument for employing this approach is that it empowers rather than weakens your bargaining power.    Author Michael Wheeler also agrees on the importance of having a plan ‘B’. He notes in an interview that “Good negotiators think about a plan, A, B, and C, and they even have an exit strategy if things don’t work out.”

2. Building better and lasting business relationships

Principles and Tactics of Negotiation, an article that appeared in the Journal of Oncology Practice, gives some ground rules for leaders when in negotiations. The article reminds leaders that, “in most circumstances, you are negotiating a relationship, not a transaction”.

If you forget this training tip when going into a negotiation, you will become rigid about your position and end up antagonizing the client you are negotiating with.

Most leaders tend towards this authoritative attitude especially if the other party is a subordinate. In his article, Jeswald W. Salacuse, cautions against people management strategies that involve the use of authority. He points out that a negotiation is a suitable alternative for getting what you want while avoiding unnecessary friction and implementation of antiquated hierarchies.

While being direct with your goals and requirements from your team might come as a basic principle to you, it is not the best disposition to assume if you want high productivity levels. This is why it is imperative for managers to attend negotiation skills training as often as possible and afterward implement what they learn into practice.

3. Effectively manage and avoid conflict

Relationships can be sustained and strengthened through the use of effective conflict management negotiation strategies. When a conflict arises between two or more team members, or a leader and their subordinate, a conflict management strategy must be pursued to avoid future tension. Some examples of negotiation strategies that can be used in managing conflict are as follows:

Looking for integrative negotiation solutions, as opposed to distributive

In an integrative negotiation, all parties seek to create value and come out with a favorable outcome for everyone, rather than fighting over pieces of a fixed pie. This is known as win-win for a reason – if everyone leaves happy with what they got, then no one harbors any resentment towards the other party.

Preparation of adequate data to back-up any argument

This tactic keeps the conversation analytical rather than emotional. Just as any trained negotiator would do before a negotiation session, a good leader will take the time to research the problem and prepares himself with data points that will assist all parties in dissolving the conflict.

Active listening skills

Conflicts can easily arise when team members feel they are not being listened to or understood. By leveraging the sort of keen active listening skills that a trained negotiator uses, a leader will demonstrate to their team that they care about the points team members are making. To listen actively, a leader should let employees speak until they are finished, and then summarize what they said to ensure the point was understood. Leaders should also avoid trying to plan responses or work off a premeditated script in their mind.

4. Others will be convinced to follow you

People will only follow you if they are convinced that your interests and theirs are aligned. It’s common for leaders to see their employees as one homogenous decision-making block, united under a company’s vision and mission.

While there is nothing wrong with this approach, looking at people as a decision-making block will cause you to make erroneous assumptions about them.

You have to put in some work to learn what drives those around you. This means looking beyond the organization to understand the individuals who make a group. It could also mean polishing up on your people skills or even enrolling for training on how to negotiate with large groups of people.

 Understanding people individually will build trust and consequently prevent unnecessary surprises during negotiations.

5. Divide Resources More Effectively

Some of the most important negotiations that happen within the walls of an organization are focused on a reallocation of limited resources. Whether it can be time, money, supplies, manpower, or training, leaders will have to make decisions to give or to take resources from certain business functions to others. In order to do this efficaciously, a leader needs to negotiate with various stakeholders in the organization.

For example, if a department head approaches an executive looking for an increase in manpower scope, the executive will need to make the department head explain why their department needs the manpower more than others. Even though members within the same organization are working towards the same goal, in terms of success for the organization, there will always be a conflict of opinion about how to achieve that goal.

A leader with sharp negotiation skills will be able to synthesize the best points coming out of these various perspectives and make offers that satisfy each party without making other parties feeling less valuable than others.


It is clear that the importance of negotiation skills cannot be understated if you want to achieve effective leadership and successful business outcomes. To be a successful manager and leader you have to distinguish yourself as a master negotiator, for that purpose you must enroll in a negotiation class or get together with other leaders who have graduated from negotiation seminars to compare successes, challenges, and best practices.

Lilou Hoffman

Lilou Hoffman

Lilou works at The Negotiation Experts which are specialists in the B2B market. They deliver bespoke negotiation training to their global clients. For more insightful posts and resources, visit their site at https://www.negotiations.com/
Lilou Hoffman

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