When we think of the skills necessary to be successful in business there are quite a few things that come to mind. Maintaining good business relations, the ability to make tough decisions quickly, maybe even organization all come to mind. Although all of these traits are extremely important to keeping a business in the green, many people tend to forget another critical business skill: negotiation.
The ability to negotiate effectively can be one of the most instrumental skills business leaders (and company employees in general) can have. Negotiations play a significant role in obtaining and keeping business relationships as well as in improving workflow and profits. Here are just a couple things your business could miss out on if your negotiation skills are lacking.
Beneficial Employee-Manager Relationships
Entering the negotiation room can be a stressful moment for both managers and their employees. Typically, emotions are running high and each individual may be mentally preparing themselves to fight for what they want. This may be normal negotiation behavior, but a study completed by Ohio University suggests that preparing to 'win a negotiating battle' might do more harm than good.
The study discusses how this mentality tends to make negotiations more damaging to relationships because the parties involved are not focused on mutual benefits or working together, but rather on doing what they have to do. For managers especially, this can create somewhat of a power relationship that harms relationships with employees. Ultimately, the study concludes that maintaining trust in each other and working together to reach mutually beneficial agreements is key to preserving relationships during negotiation.
Workplace productivity is something everyone is always attempting to improve through new management procedures, adjustments to office space, or even just more communication in general. Surprisingly, negotiation skills are also a factor in improving the productivity of an office space. We frequently disregard the time spent negotiating changes or discussing terms with new clients, but these hours add up.
Furthermore, these hours can be reduced significantly and time management boosted with the right negotiating skills. Being able to work through problems quickly (i.e. spend less time arguing over the bullet points) and move on to working together to find mutually helpful solutions is a much better use of company time. Working together to solve problems early on can improve relationships with clients, build trust quickly, and help communication between parties.
Arguably, the main point of negotiations at any level is to maintain or boost company profits. For example, negotiating successfully with the best employees can help retain them (even if it does result in giving them a raise). And negotiating with clients typically is centered around promoting a profitable arrangement.
The inability to successfully negotiate terms with any party can result in decreases in company profits. In the worst case scenario, poor negotiation strategy can cost the company enough money to force it to close its doors. It is important to evaluate how your company is doing with negotiations and make the necessary adjustments before things get that bad.
Negotiation skills can be tough to learn and even more difficult to master. It is important to remember to balance the need to 'win' with making sure everyone is experiencing some benefit. Avoiding power-relationships, working together, and evaluating costs of negotiating can also be ways to make significant improvements and garner more positive relationships.
About the author
Brittni Brown is a recent graduate of The College of Idaho; she currently works for a local marketing company. In her free time she enjoys a variety of outdoor activities including hiking, biking, and camping.
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