The Importance of Negotiation in Business

Keep your career moving forward by capitalizing on the advantages of negotiation in business

By on / Business Negotiations

The Importance of Negotiation in Business

What are the essential ingredients to getting ahead in the workplace? Hard work, communication skills, and a generous dose of luck all play a role, of course. Another key ingredient—one that is often overlooked—is the ability to recognize and capitalize on opportunities to negotiate for your career success. Why is negotiation in business important? Because our role in our organization and industry is almost constantly up for negotiation. The advantages of negotiation in business can’t be underestimated, and often outweigh the negotiation costs, such as the time it takes to prepare. Here, we overview some of the key opportunities we have to negotiate for our advancement and success, as well as specific advice on how to make the most of them:


Discover step-by-step techniques for avoiding common business negotiation pitfalls when you download a copy of the FREE special report, Business Negotiation Strategies: How to Negotiate Better Business Deals, from the Program on Negotiation at Harvard Law School.


Negotiation in business tip #1. Negotiate for long-term career success

We all know the value of negotiating our starting salary and benefits. Wise job seekers recognize that these concerns are only a narrow component of a bigger picture. In addition to negotiating financial terms, we should also negotiate for the tools we need to become a fulfilled and well-compensated person over time, recommends David A. Lax, the coauthor (with James K. Sebenius) of 3-D Negotiation: Powerful Tools to Change the Game in Your Most Important Deals (Harvard Business School Publishing, 2006).

Instead of looking at the job you’re applying for as a final destination, think of it as setting you up for the next job and perhaps the one after that, Lax advises. This shift in mindset will allow you to notice the advantages of negotiation in helping you gain the tools you need to grow and thrive. These tools might include a strong support staff, training, or a job title that will set you up for a future career goal.

Generally, employers should be indifferent between spending their money on your salary or on benefits you value more. If added schooling would enhance your work skills, an employer may be willing to pay your tuition with pre-tax dollars at a lower cost than you would pay out of pocket, for instance.

Negotiation in business tip #2. Negotiate your role

Once we are on the job, we often neglect to negotiate assertively for our career success. To explain why, in their book Negotiating at Work: Turn Small Wins into Big Gains (Jossey-Bass, 2015), Deborah M. Kolb and Jessica L. Porter distinguish between “capital N” negotiations and “small n” negotiations. Capital N-negotiations are the formal exchanges of contracts and deals that we engage in with clients and customers on behalf of our organization.

By contrast, “small n” negotiations are the more personal and informal workplace situations in which we negotiate for ourselves. A small-n negotiation might include asking a boss for the additional resources you need for a project to succeed, or negotiating through a disagreement with a coworker.

We sometimes overlook the advantages of negotiation in such situations because we don’t know what’s possible for us to achieve. In addition, the other party (such as a boss who hasn’t given you a raise in two years) may appear to have no incentives to negotiate with you, leaving it up to you to start the conversation. You can educate ourselves about the parameters of a negotiation by gathering information, including from your network of contacts that you’ve accumulated both inside and outside the organization, write Kolb and Porter.

In addition, look for ways to motivate the other party to negotiate with you by making your value visible in a currency that matters to them, the authors recommend. For example, reminding your boss of the big contract your team brought in should motivate her to engage in a conversation about a possible raise.

Negotiation in business tip #3. Negotiate for your deal’s success

To close “big N” negotiations, we also have to convince stakeholders in our organization who must sign off on and/or implement the deal of its merit. Such stakeholders might include the finance division, the general counsel’s office, and the product development unit, notes Jeswald W. Salacuse, author of Negotiating Life: Secrets for Everyday Diplomacy and Deal Making (Palgrave Macmillan, 2013).

How can you juggle these small-n “deals behind the deal”? First, advises Salacuse, explore your organization’s complex interests by meeting with key personnel inside your organization prior to the start of your external negotiations. Find out how they view the potential deal and what interests of theirs you may need to accommodate to ensure successful implementation.

Second, secure a mandate to negotiate on behalf of these constituents, such as the authority to explore certain kinds of deals and perhaps to make tentative commitments on their behalf.

Third, work constantly to preserve and strengthen your negotiating mandate by keeping these key organizational members up to date on your progress, and involve them as appropriate.

Finally, educate these individuals about any special needs or challenges that arise, such as cultural issues or policies that put constraints on your external partner.


Discover step-by-step techniques for avoiding common business negotiation pitfalls when you download a copy of the FREE special report, Business Negotiation Strategies: How to Negotiate Better Business Deals, from the Program on Negotiation at Harvard Law School.


Comments

Leave a Reply