Negotiation Skills: Essential for a Career in Business

If you are thinking of a career in business, being a skilled negotiator is essential. TopMBA.com explores why this is true, and how to improve your skills.

As anyone who watches the TV news or has ever read a history book will know, bad news generally makes for a better story; therefore, throughout history, tales of failed negotiations outnumber stories of success.

In business, negotiation skills are, albeit often on a micro level, constantly tested. But the key to short- and long-term success is an acceptance by both parties that both parties need to emerge from the negotiation as a winner.

Bad negotiation skills lead to one or both parties being at least disgruntled, causing a simmering resentment which, in time, can flare up into arguments, accusations, and, taking it to the extreme, into violence and even war.

MBA graduates are going to have to make negotiation a constant part of their lives until they reach that coveted Chair of the Board position.

From salaries to sales contracts and strategy to team building, negotiation skills are a daily event for business leaders and the advice is to get the basics right as early as possible.

Successful negotiations: developing 'soft' skills

Negotiation is generally considered a 'soft' skill, meaning it is something that individuals will all possess to a certain extent and which can, with learning and practise, be developed. And the message from recruiters is becoming clearer that these skills should be developed.

In the 2007 QS Recruiter Survey, which surveyed 500 of the world's major international MBA recruiters, communication and negotiation skills regularly ranked higher in importance than the traditional skillsets such as finance and marketing.

"We tend to focus less on academic or technical skills", says Phillip Cho of Lehman Brothers Singapore, "and place emphasis more on communication, interpersonal skills and leadership traits."

For Jeff Weiss, Director of Vantage Partners, a consultancy in Boston, negotiation is, in its simplest terms: “an act of persuasion to meet one's objectives. It's an ongoing process of influencing people with regard to contracts, or salaries, essentially of getting people to talk to you."

Trixie Rawlinson, a partner at Impact Factory, a soft skills communication company based in London, agrees.

For her, the essential point in the art of any negotiation is informing yourself completely about, "the position from where you start. You have to define what you can't give away and what you can?"

Rawlinson adds that business negotiations rarely come down to cost; there are other aspects the businessperson can introduce in order to maintain well thought-out costings and retain a healthy profit.

"If you're selling golf balls, know in advance how many a customer needs to buy before you can offer a discount? Often, negotiation is conducted less on the peripherals to cost such as timing or delivery.

"If you could deliver the golf balls tomorrow, for example, and gift-wrapped than that could work for the buyer, at that cost." Rawlinson's point is that it is essential that both parties emerge from the negotiations as winners.

Successful negotiations: creativity is key

The skill of knowing how you can help the other party to win while not losing yourself is core to the art, Rawlinson says. "Both sides have to walk away having won and feel like they have given and been given something in return.

"Are you looking for a win/win or a win/lose situation? Especially if what you want is an ongoing relationship, if you screw the other party, they won't want to talk to you again. That is not negotiation, it is bullying."

Creativity in negotiation is important; while remembering what your aim is and what position you can afford to negotiate from, it means not having an intransigent and illogical position prior to the all-important meeting.

Jeff Weiss says: "Some people have an arbitrary bottom line.  They'll say "I'm not going to give any more than X", without having any logic behind it or any planning if they don't get it. Others view negotiations as a game of pre-planned concessions - "gives and gets" - that removes their ability to be creative in finding solutions.

Some aren't open to persuasion, which typically indicates that they themselves are not able to persuade." Craig Coltrane adds that finding the right balance is a testing but important quality in most industries.

"As a general rule, people will want to deal with people that they like. It's important to be likeable, of course, but it's just as important to know what your limits are and not to get taken for a ride. If the position you are coming from is firm but flexible, this is a good recipe for success."

Business schools are sitting up and taking notice of what recruiters say. It could be that, when students find the top business school of their choice, that their time is taken up with marketing, finance and operations modules.

The wise MBA student, it seems, takes time to look into negotiation and pays very close attention.