Negotiations are ubiquitous in everyday life and have long been important in business. But what is good negotiation, and how do you become better at it?
Several business schools are offering specialist executive courses focused on effective negotiation, whether negotiating a business contract or a sales agreement. A successful negotiation, schools say, is rooted in the ability to put yourself in someone else’s shoes, and reciprocity. A successful outcome will also require patience and clear communication.
“Effective negotiations involve thorough preparation, and in many instances, a joint problem-solving mindset rather than a win-lose mindset,” says Gillian Ku, a Professor of Organizational Behavior at London Business School. “[This] means seeking information to understand why someone is asking for what they’re asking for and giving in on these issues while, importantly, getting something [of] value back in return.”
The UK school’s Negotiation and Influencing Skills for Leaders course provides participants with the opportunity to role-play different negotiation scenarios and to walk away with a personalized, evidence-based toolkit of negotiation tactics.
Underlining the importance of such a skillset, Ku says: “We negotiate every day. We negotiate with potential employers, co-workers, clients, officials, and even our family and friends. Although people negotiate all the time, most know very little about the strategy and psychology behind effective negotiations.”
On the LBS course, participants receive feedback on what negotiation tactics work and do not work. The end result is that the executives gain confidence in negotiating in a variety of contexts, whether it is bargaining for a souvenir at a street market or structuring a win-win deal in a complex multi-party negotiation in business.
“Overall, participants walk away with the knowledge and confidence to negotiate in a variety of contexts, bringing immediate and long-term value to themselves and their organizations,” says Ku.
Negotiation courses are increasingly popular
Many other business schools are now running similar programs, and demand for such courses is rising fast. “Demand fell during Covid, when we were online, but the course remained very successful,” says Professor Max Bazerman at Harvard Business School, who runs the US school’s course, entitled “Changing the Game: Negotiation and Competitive Decision-Making”.
The program has been offered more than 50 times since 2001, with more than 4,000 participants having enrolled. Demand has never been as strong as it has been in 2022. “Demand is back to record highs,” says Bazerman.
Other schools report similar statistics. “This is a skill set that people in business need all the time — when they interact with external parties or want to come to agreements internally, say for their next budget or to determine transfer prices between business units,” says Lutz Kaufmann, Chair of Business Negotiations and Procurement at WHU – Otto Beisheim School of Management.
The German school runs the Negotiations Program, a course for executives who need to manage negotiations successfully. The program is receiving more applications year-over-year. “Firms need to demonstrate that they care about the development of their employees at all stages of their careers in order to attract and retain them – one [way] is to fund negotiation training for them,” says Kaufmann.
The employees themselves also highly appreciate such training. “Participants feel that while they negotiate frequently... they lack a solid framework to organize their experiences,” Kaufmann says.
A hands-on learning process
He believes the best way to teach negotiation skills is through experiential, or practical, learning. “We design dynamic learning journeys with briefings, simulations, reflections, and small team exercises.”
At LBS, Ku agrees that a practical approach is best. “Without a doubt, negotiation skills are best learned through a hands-on process of negotiation in role play simulations, followed by a debrief that integrates individual experiences and evidence-based knowledge,” she says.
It is also important to make these scenarios applicable to the real business world. “Many simulations on the market and used in training for experienced managers cover things like buying an apartment or selling a used car or an iPhone. We do not think that these reflect the complex realities of business negotiations,” says Kaufmann.
In contrast, WHU’s content is firmly rooted in business reality. “We also use participants’ own business negotiations, so they and we can tailor their learnings to their business situations,” he adds.
This means that participants can directly apply what they have learned on the course to their own jobs. “They take away a framework…one that they can use to systematically reflect on previous negotiations and organize their experiences and learnings,” the professor says.
“They get a well-balanced portfolio of useful approaches — we encourage them to neither become win-lose bullies nor naïve win-win protagonists, but to be able to navigate phases of value-creation and of value-claiming during their negotiations.”