Negotiation as a Leadership Skill

Negotiation as a leadership skill may sound unconventional because leading your employees is not the same as cutting deals with other department heads, partner firms, suppliers, or investors. Leaders have authority. Right? They don’t need to negotiate with employees. Right? This old-school thinking belongs in the command-and-control era of leadership and not in the proactive era of developing positive employee relations. Though your managers and supervisors will have to exert authority at times, leadership is no longer based on simply issuing orders. Good leaders are good negotiators, which means they need to learn negotiating skills as leadership communication.   

Persuading and Compelling as Leadership Styles

What makes a good leader? What is your leadership style? It’s not someone barking orders. It’s someone who can persuade people through holding discussions, making convincing arguments, sharing knowledge, and giving and providing feedback after active listening. In other words, a good leader is a negotiator, and negotiators can persuade employees who may have more or unique knowledge, talents in areas the leader doesn’t have, and informal influence with coworkers. A good leader also needs negotiation skills to influence people he/she doesn’t oversee, like community members, board members, other department managers, and even executive and senior-level managers. As a leader, you want to compel people through persuasion to adopt a particular perspective or behave in a certain way, and compelling is quite different than ordering.  

For example, you can’t order your employees to be unbiased. You can persuade them by making a compelling presentation about the advantages of being unbiased and how it benefits them, the workplace, and society. You might try to force your employees to accept a major change in policies or a major organizational change, but there’s a good chance a number of your staff members will join the Resignation Nation. You can’t march into a different department and order the manager to act a certain way. You make a persuasive presentation that presents why it’s in the department manager’s interest to do so while remaining open to compromise. When it comes to collective bargaining negotiations, good negotiating skills greatly increase the chances of a positive outcome and avoidance of a strike. 

That is the power of negotiation. It begins with the question: Why should people follow your leadership? 

Good negotiating skills are essential to business success. Why should people follow your #leadership?

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Negotiation as a Leadership Skill 

The Investopedia definition of negotiation is good because it uses the word “strategic.” Negotiation as a leadership skill is more than just talking something out. It is a “strategic discussion that involves two or more parties that resolve an issue in a way that each party finds acceptable.” It goes on to say:  

  • Parties try to avoid arguing 
  • Parties try to reach a goal through compromise 
  • Negotiating involves some give and take 

Negotiating is strategic because it recognizes goals or desired outcomes, and there must be a plan of action to achieve those goals through compromise. Focusing on the manager or supervisor as the negotiator of an employee team, the goal may be: 

  • Resolving a disagreement among employees by finding an acceptable solution through the presentation of evidence, expertise, and information  
  • Persuading employees to accept a major organizational change, like a restructuring  
  • Persuading employees to accept a senior management decision 
  • Compelling employees to share perspectives and ideas to generate innovation
  • Negotiating the responsibilities of team members to create a more cohesive team 
  • Negotiating with senior leaders concerning salary increases or promotions  

Through give-and-take discussion, solutions are found. Negotiation skills are soft leadership skills because you use persuasion and not coercion. Negotiation skills also include communication, planning, and active listening. You can only respond to other people productively by listening to what they are saying and understanding their perspectives.   


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How to Develop Negotiation as a Leadership Skill 

Developing negotiation as a leadership skill takes training and time. Following are some of the steps. 

  • Spend time understanding the other side because negotiation is not about winning; it is about persuasion and compromise. 
  • Define the strategic or shared goal or what you want from the negotiation process 
  • Define the value of your strategic goal as a critical persuasive element 
  • Identify the lowest point where compromise is not possible. 
  • Identify all the possible outcomes and your response. 
  • Identify the other side’s interests in order to find ways to satisfy them to some degree during the process of persuasion. 
  • Find the best communication medium to convey the importance of the message, often a face-to-face or Zoom meeting (especially in a hybrid workforce) while also using other communication forms, like an employee-facing website and digital communications
  • Use persuasion tactics which include sharing a problem and making small concessions. 
  • Develop active listening skills so you are hearing and understanding what the other person is saying to give and take feedback.  

The Four Leadership Roles

In the MIT Sloan Management Review article, The Future of Team Leadership is Multimodal, the argument is made that hybrid work models require a change in the type of skills that team leaders need. The four multimodel leadership roles are: 

  • Champion – advocates externally for their teams 
  • Catalyst – stimulates collaboration and innovation 
  • Conductor – ensures teams work together well and in harmony 
  • Coach – helps individual team members achieve peak performance 

The authors say that linking all four roles together is the ability of leaders to build and sustain connections and trust.  

Negotiation as a leadership skill is needed for all four leadership roles. A negotiating leadership style builds connections and trust because people share their knowledge, expertise, and perspective. It stimulates collaboration instead of confrontation, promotes teamwork by giving others a voice while working through issues, and can lead to strategic solutions that benefit people and the organization. During the process, negotiation can serve as a coaching approach because employees and colleagues participate in the negotiations and gain experience finding solutions through give and take.    

negotiation as a leadership skill

Negotiation as a Learning Machine 

Humans are neotenic. What the heck does that mean?! It means we are born with the instinct to emphasize learned behavior over inherited behavior, requiring the human brain to be receptive for a long time. Otherwise, we would grow up and remain static in our learning. 

The negotiation process is a learning process. Sure, you’re trying to come to a satisfactory agreement with another person or group of people, but think about the learning possibilities. An effective negotiator actively listens to other people in order to frame their perspectives, ideas, and needs in a way that gets the other (neotenic) person thinking about a satisfactory compromise. Each person learns as both look for ways to do things better. In this sense, negotiation is a learning machine with wheels constantly in motion, accelerating learning and lifting the organization as a whole. 

The leader learns, and so do the employees, or other leaders engaged in negotiations. No one walks away without learning something in a true negotiations process – even if negotiations fail! This is true whether negotiating a collective bargaining agreement, a new department policy, or a promotion. 

Preparing to Become a Negotiator 

Your leaders don’t suddenly become negotiators. They must complete leadership skills training to establish the groundwork for becoming an effective negotiator. 

  • Learn effective communication principles, like active listening  
  • Learn conflict management skills for those times when negotiations get off track 
  • Develop empathy which enables recognizing what other people are experiencing and why they are negotiating in their own way 
  • Become a coaching leader so you can demonstrate negotiating as a successful strategy for resolving differences 
  • Learn to utilize the resources that hone your preparation for negotiations and negotiation skills 
  • Practice negotiation as a leadership skill 

Mastering Effective Leadership Skills

You must put time and effort into learning how to negotiate as a leadership skill and time and effort into consistently utilizing the skill. Employees are empowered today and want a voice in decision-making and want to trust management. From this perspective, the negotiation leadership style is ideal because that is precisely what it accomplishes. Once the negotiation skills are mastered, it’s used internally and externally with a variety of organizational stakeholders. 

Employees are empowered today and want a voice in decision-making. Negotiation as a leadership skill is a critical piece in making this happen.

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Will you always get what you want? No. Will you always succeed in finding an agreeable middle ground? No. Will you sometimes have to issue orders? Yes. This is why you will identify the lowest point at which compromise is not possible. However, when negotiations don’t lead to an acceptable solution or even trigger undesirable actions, like an employee walkout or failure of employees to employ a new procedure, you have the knowledge base for returning to the negotiation process to find a different path to a different solution. 

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About the Author Jennifer Orechwa

With over 25 years in the industry, and now as IRI's Director of Business Development, Jennifer has gained a unique perspective on what it takes to build a culture of engagement. By blending a deep understanding of labor and employee relations with powerful digital marketing knowledge, Jennifer has helped thousands of companies achieve behavioral change at a cultural level.

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