Organizational leaders, from middle managers to heads of state, often face the difficult task of overseeing mission-critical negotiations and managing individual negotiators and negotiating teams. Collaborative leadership—a focus on giving employees autonomy and a voice in key decisions—is often key to managing negotiators effectively.
We often overlook the important role of leadership in negotiation. But as we’ll see, significant errors can crop up when leaders fail to adequately communicate expectations, delegate responsibility, and anticipate ethical pitfalls.
Mistake #1: Giving Inadequate Guidance
Leaders don’t always give negotiators the tools they need to excel. Lacking clear guidance about negotiation best practices, team members bring different beliefs about what works to the table and try out strategies haphazardly. Internal clashes, confusion, and subpar results are likely.
Solution: Provide a negotiation framework. To disseminate best negotiating practices, leaders should begin by choosing a negotiation framework, such as the “Seven Elements” approach popularized by Getting to Yes: Negotiating Agreements Without Giving In (Penguin Books, 2011) coauthors Roger Fisher, William Ury, and Bruce Patton and detailed in Fisher’s and Danny Ertel’s workbook Getting Ready to Negotiate (Penguin Books, 1995). A negotiation framework teaches team members essential skills needed for negotiation and gets them on the same page, according to Harvard Business School and Harvard Law School professor Guhan Subramanian.
As part of collaborative leadership, managers should review negotiators’ plans and encourage them to role-play negotiations in advance, Subramanian recommends. Leaders might also hold post-negotiation reviews to debrief recent experiences. To provide valuable learning opportunities, encourage team members to speak candidly about their mistakes, writes Subramanian.
Mistake #2: Micromanaging Negotiations
You’ve heard of “helicopter parents,” but leaders can be just as guilty of failing to give sufficient autonomy to those they supervise. Sometimes leaders fear their team members will give away too much at the bargaining table or make other critical errors. This lack of collaborative leadership may be rooted in leaders’ overconfidence in their own negotiating skills.
Because the powerful are susceptible to extreme overconfidence, negotiators in a position of power often underestimate their counterparts, overlook their perspectives, and devalue their concerns, research by Columbia Business School professor Adam Galinsky shows. Succumbing to autocratic leadership, top leaders may choose to take a hands-on approach to negotiations. In doing so, they risk conveying that their team members lack the authority to get things done or that they’re desperate to do a deal, according to Subramanian.
Solution: Negotiate their mandate. For all these reasons, it’s generally wise for top leaders to stay out of the room. Using collaborative leadership skills and avoiding an autocratic leadership style, open up a conversation about your negotiating mandate—that is, the types of deals that negotiators may explore and perhaps tentatively agree to, writes Tufts University professor Jeswald W. Salacuse in his book Leading Leaders: How to Manage Smart, Talented, Rich, and Powerful People (AMACOM, 2006). When team members feel free to invent solutions, they’ll reach more creative deals, writes Salacuse.
Mistake #3: Judging Performance Based on Results
To motivate stellar performance, managers often set high performance goals and reward employees who meet them with bonuses and other incentives. Although setting specific, challenging performance goals can inspire employees and improve organizational results, such goals also prompt problematic behavior, according to a 2009 study by Lisa D. Ordóñez (University of Arizona), Maurice E. Schweitzer (University of Pennsylvania), Galinsky, and Max H. Bazerman (Harvard Business School).
Specifically, performance goals can lead negotiators to focus so closely on a task—typically, getting a great price—that they compromise their ethics. In the years before its collapse, for example, Enron offered its salespeople large bonuses for meeting challenging revenue goals. This focus motivated fraudulent behavior and contributed to the company’s demise. Performance goals tend to cause problems because they reward short-term thinking at the expense of long-term planning.
Solution: Assess the negotiation process. Leaders should discuss negotiators’ decisions with them before, during, and after the negotiation using collaborative-leadership principles. Adopting a negotiation framework will allow managers to examine how well negotiators prepare for a negotiation and to monitor their progress.
In addition to encouraging negotiators to pursue ambitious price goals, remind them to strive for less tangible goals, such as building a strong working relationship and exploring alternatives to the current deal. To show moral leadership and further promote long-term thinking, executives can link financial bonuses to progress during the early years of a deal’s implementation, recommend Danny Ertel and Mark Gordon in their book The Point of the Deal: How to Negotiate When Yes Is Not Enough (Harvard Business Review Press, 2007).
What other collaborative leadership skills can help promote effective negotiations?