Three Overlooked Negotiation Skills Entrepreneurs Need To Master

Much has been made as of late about the art of negotiation. From politics to popular business media, entrepreneurs and business leaders are bombarded with the message that hard-line, zero-sum negotiations are the only way to go.

It's sort of cathartic to watch someone in power, like President Trump, issue a "take it or leave it" ultimatum to the party with which he's negotiating. From the outside looking in, it comes across as a power move, and people want to emulate it.

I always cringe when I see thoughts like this take hold. It's a little like when "Shark Tank" made its U.S. television debut. Pretty soon, every small-time investor was a "shark," desperate to emulate the likes of Mark Cuban and Barbara Corcoran.

Another example is when Walter Isaacson's authoritative biography of Steve Jobs was published. Overnight, formerly even-keeled entrepreneurs and managers started demanding that products be "insanely great" and mimicking Jobs' uniquely idiosyncratic management style.

Of course, trends come and go, and it is only normal for people to jump on the bandwagon of the moment. Usually, behaviors revert back to normal after a few weeks and the repercussions are few and far between.

When it comes to negotiation, however, it's a very different story. Entrepreneurs who enter into negotiations with a simplistic, one-size-fits-all approach, the fallout can have long-lasting effects.

I've learned this firsthand. In my role as the CEO of BodeTree, it seems as though I'm always engaged in one kind of negotiation or another. I'll be the first to admit that I was a lousy negotiator at first.

However, after years of experience and more than a few bruises, I've learned that the most important negotiation skills are often the most overlooked. Mastering these skills can equip you with the tools and wisdom that you need in order to become a successful, long-term negotiator.

Understand what kind of negotiation you’re conducting

There are two types of negotiations that leaders encounter on a frequent basis. The first is what I describe as the asset negotiation, which is usually a one-time event resulting in clear winners and losers.

A good example of this type of negotiation is the sale of an asset like a piece of equipment. In this situation, one party wants to maximize outcomes at all costs and doesn’t really care about the long-term implications of the deal.

After all, once the deal is done you generally won’t have to work with the other party again. The negotiators are incentivized to view the situation as a zero-sum game where someone wins, and someone loses, which naturally leads to a more aggressive exchange.

The second type of negotiation—when both parties involved have to maintain a working relationship long after the negotiation ends—is more complex and thus, involves a more sophisticated approach.

Too many leaders fail to recognize the difference and go about the process all wrong. It’s important to remember that intangibles such as trust, respect, and admiration have tremendous value in business, politics, and life.

These intangibles must be factored into the negotiation strategy and defended at all costs.

Don’t be greedy

Greed is a trait that everyone demonstrates, but very few recognize in themselves. Unfortunately, nothing can destroy a relationship more quickly than a greed-driven negotiation.

If one party pushes for too much or is too aggressive, the relationships can be irreparably damaged.

When it comes to the second type of negotiating—in which both parties hope to maintain a working relationship well beyond the bargaining table—it’s important to remember that these situations are about future success, not short-term wins.

I’m a firm believer that there’s no such thing as “not personal, strictly business.” All business (and politics for that matter) is personal, and emotions run high.

It’s only natural for people to overestimate the value of their product, position, or contribution in a negotiation. It takes a special skill to recognize greedy behavior and stop it before it gets out of control.

This style of negotiation can be difficult to master, because no matter how hard you try emotions inevitably influence your actions.

The temptation to squeeze a partner for a better deal, or emerge “victorious” in the negotiation can be strong, and it takes a solid sense of self-awareness and humility to resist.

Don’t gamble with anything you can’t afford to lose

Perhaps the best advice for engaging in a strategic negotiation is “don’t gamble with anything you can’t afford to lose.”

When you play hardball with another party, you have to recognize that they can simply walk away. This can be tricky when it comes to strategic relationships because there’s often significant cost and pain associated with a potential dissolution.

However, there is a point in nearly every negotiation where the pain of dissolution is preferable to an inequitable situation.

If a relationship is truly central to your success as an organization, you must temper your desire to play hardball. If you don’t, you run the very real risk of losing everything.

By Chris Myers