Groundbreaking ideas and research for engaged leaders
Rotman Insights Hub | University of Toronto - Rotman School of Management Groundbreaking ideas and research for engaged leaders
Rotman Insights Hub | University of Toronto - Rotman School of Management

Tips and tricks for better handling complex negotiations

Read time:

Geoffrey Leonardelli

At any given moment, there are countless negotiations going on around the world — some as simple as couples discussing who will do the dishes, and others as sophisticated as countries debating who will foot the bill for the climate crisis.

In business, complex negotiations are generally characterized by uncertainty, conflict, and a lack of control, says Geoffrey Leonardelli, a professor of organizational behavior and human resource management at the Rotman School of Management.

When people go to the bargaining table not knowing what outcomes are available to them and are met with opposing interests and no clear path forward, it can be difficult to see the potential for a resolution.

“That’s the negotiator's dilemma: How do you assert your interests, while also creating a cooperative settlement?” he says.

Whether you're entering salary negotiations or trying to close a multi-million dollar business deal,  Leonardelli recommends a shift in mindset: If you can embrace uncertainty as an opportunity rather than a threat, it’s more likely you’ll be able to harness it for success.

Often, he says, people tend to think in limiting terms when entering a negotiation — assuming what they want, the other party must not want, and vice versa. While this can be useful, he continues, “our objective in negotiations is to help people recognize that limitation and see what they can explore.”

Before the negotiation: reflect and research

It may sound simple, but Leonardelli says people often neglect to invest the time upfront to consider what they hope to gain from a negotiation and what their alternatives may be if they choose to walk away. 

“In the context of a job, is it going to make you happy? In an acquisition of a company, is this where you see the greatest potential for your company to grow?” he says.

Coming up with a plan B in case talks break down — what’s known as a “best alternative to the negotiated agreement” (BATNA) — also helps you come from a position of strength, he continues. 

When assessing the other party or parties involved in the negotiation, Leonardelli recommends evaluating not only their interests and motivations, but also their values and cultural norms. What do they care about in general? Do they respond to hierarchy and status, or do they treat everyone as equals? Understanding their perspective — and recognizing that you are coming in with a cultural lens as well — sets you up for more effective communication, says Leonardelli.

In today’s world of Zoom meetings and hybrid work, it’s also important to choose the most appropriate channel or channels for negotiations to take place. 

Every choice has its pros and cons, he says: When decisions are hashed out over asynchronous mediums such as email, people tend to feel like they have more time to reflect and build an understanding. On the other hand, as people diversify their communication channels — say, by speaking on the phone, via Zoom, and in-person — they have more opportunity to convey authenticity (or inauthenticity, as the case may be).

During the negotiation: offer choice and create an atmosphere of cooperation

Fostering a sense of mutual respect can help establish trust and ensure every party walks away feeling satisfied. Finding shared experiences to connect over can be beneficial — though Leonardelli suggests these should be uncommon rather than run-of-the-mill similarities.

Active listening — reflecting back on what the other party is saying and asking for confirmation on your interpretation — and ongoing communication also help maintain a sense of comfort.

“​​People feel like they're being treated respectfully when they're given an explanation for why, say, an offer is being rejected, or why there's been a revision in an offer,” he says.

When it comes time to put a proposal on the table, Leonardelli recommends preparing multiple offers of equal value to you.

“What's nice about this tactic is that while it takes a good deal of preparation, it allows you to create a choice for your counterpart, and that immediately creates greater responsiveness,” he says. The recipient tends to view this as a more sincere attempt at reaching an agreement, and as such they’re often more accommodating about the terms within, he adds.

A recruiter might, for example, give a candidate the choice of two offers: a higher salary with fewer vacation days and a less comprehensive health insurance package or a lower salary with more vacation days and a better insurance package. To the company, the two offers are of comparable value, but the prospective employee is more likely to be satisfied with the final outcome than if they been presented with a single offer.

After the negotiation: take stock and move forward

Whether you reach a deal or walk away, Leonardelli encourages reflecting on where the final outcome stands relative to its alternatives.

“An agreement is only successful in the event that it's better than your alternatives,” he says. Revisit your BATNA and consider how the deal measures up and use this learning to inform future negotiations.

Signing on the bottom line may signal the end of negotiations, but he notes the relationship is only beginning. Now comes time to turn your attention to implementation, compliance and accountability. 

“This is why it's worth investing in the relationship upfront,” he says. If both parties feel a sense of trust, “they’re more willing to depend on you and you're more willing to depend on them.”

Want to learn more tips and tricks for negotiations? Rotman's Negotiations program gives you proven strategies to navigate complex situations so you can create value and enhance key relationships. Register now.

Geoffrey Leonardelli is a professor of organizational behaviour and human resource management at the University of Toronto's Rotman School of Management, with a cross-appointment to the Department of Psychology.