The Leadership Insiders network is an online community where the most thoughtful and influential people in business contribute answers to timely questions about careers and leadership. Today’s answer to the question: How can you be a good negotiator? is written by Rod Drury, CEO at Xero.
Good negotiation doesn’t necessarily mean that to win, the other party has to lose. A good negotiator will work toward a win-win scenario, always considering the deal from the other side’s perspective.
This requires a detailed understanding of what the other team wants, what will make them happy, and what scenario or outcome they’re hoping for. In other words, what will make them feel they’ve done well? Making the other team look good and giving them a win can also be conducive to building stronger professional relationships and closing better deals.
Being clear on what you want is key to landing a deal you’ll be happy with
Always work out your concessions and bottom lines before the negotiations.
Look to give away what costs you little and understand the difference between your hard and soft costs. Giving away a few extra hours of labor in return for equity in a company, for example, could be considered a soft cost, especially if the alternative is handing over cash for the shares.
See also: Here’s How to Be a Better Negotiator
Negotiation requires all of your communication skills
Those you’re negotiating with aren’t always predictive and linear. They can get sidelined or unexpectedly blocked. Being a good negotiator involves being able to fly up above the situation and see what is driving the other party so you can understand why they don’t agree with you. Do as much research on what makes them tick prior to the meeting.
Look for clues to understand why the other side is feeling a particular way
By being the bird in the sky and understanding the spectrum of human behavior, you can start to formulate strategies and offers to navigate negotiation blocks. You can easily demonstrate empathy and navigate through blind alleys by saying something like, “If I was in your position I’d be concerned about…”
Good negotiators will keep communication lines open
If you can’t solve a particular issue or want right away, avoid a hard no and agree to come back to it. It can be useful to take points away from the negotiation table to consider. If they’re unrealistic, be clear why that may be the case and counter-offer with a scenario that is closer to what you think will work for both parties—remembering your hard and soft costs.
Don’t overplay your hand
You have two ears and one mouth, so use them in that ratio. Practice not saying anything and get comfortable with an awkward silence. Value is often lost by speaking first. By missing the opportunity to listen to the other party, you can quickly overplay your hand, miss what they’re after, or give away too much, too soon.
Always be super polite
There’s rarely a case in business where you need to be rude. Avoid getting yourself into a situation where negotiations turn into a competition between rivals, attempting to one-up each other. Be a statesman, be diplomatic, and treat people with dignity. Self-deprecation and humor are powerful tools in negotiation. Never compromise your values. People will respect you more.
Know when to leave the table
If and when you win, get out of there. You can only lose value from that position. Hanging around after you’ve struck a deal is dangerous. You can start to over-negotiate, where you’re just debating for the sake of it. And that’s not good business. Lock in the deal and leave.