You negotiated hard and prevailed. The supplier gave in, the price is lower than planned, the terms are better than expected. A clear success. Six months later, the same supplier delivers unreliably, prioritises other clients and takes every opportunity to interpret the agreement in its favour. The win at the negotiating table has become a burden in day-to-day operations.
Most leaders negotiate to win. The best negotiate to achieve an outcome both sides can stand behind. That difference determines whether an agreement holds—or is merely signed.
A member of management I advised was proud of his toughness at the negotiating table. He regularly extracted the maximum—on suppliers, on salaries, on internal budget allocations. What he overlooked: the other side remembered. Suppliers built risk premiums into their pricing because they knew he forced concessions that threatened their margins. High performers who felt short-changed left. Other divisions withheld information to be better positioned next time. His negotiation successes were real, but they cost him more elsewhere than they delivered.
Negotiation is one of the most important—and yet one of the least systematically learned—leadership skills. Leaders negotiate constantly: with suppliers and clients, with the works council, with other divisions, with their own employees. Most improvise because they have never understood negotiation as a discipline in its own right. Three levers change that.
Roger Fisher and William Ury, the founders of the Harvard concept of negotiation, popularised a distinction that sounds simple yet is rarely applied: the distinction between positions and interests. A position is what someone demands. An interest is why they demand it. If you respond only to positions, you negotiate demand against demand and, at best, end up with a compromise that leaves both sides dissatisfied.
A practical example: A supplier demands a price increase of ten percent (position). The reason behind it could be that their own costs have risen, that they need planning certainty, that they feel treated unfairly, or that they need liquidity (interests). Depending on the interest, there are completely different solutions: a longer contract term, a different payment structure, a volume guarantee. If you argue only about the ten percent, you miss the solutions that would be better for both sides.
| Position-based negotiation | Interest-based negotiation |
|---|---|
| “I want X” versus “I want Y” | “Why do you want X? Why do I want Y?” |
| A compromise in the middle, both dissatisfied | A solution that serves both interests |
| The relationship suffers | The relationship is strengthened |
| The outcome is signed | The outcome is supported |
The most important preparation for a negotiation is therefore not to sharpen your own position, but to understand both sides’ interests. What does the other side really need? And what do I really need—beyond the number I have set myself? This question opens up space for solutions that remain invisible in a pure battle of positions.
A division head I supported in difficult supplier negotiations formulated a principle that made her negotiations successful: “I negotiate in a way that I can look the other side in the eye again the next day.” That is not softness. It is strategic calculation. In most business contexts, you do not negotiate once, but repeatedly with the same partners. If you win a negotiation but damage the relationship, you pay the price in the next round.
This is especially true for internal negotiations. If you negotiate resources with another division, the other side will be your collaboration partner in a joint project tomorrow. If you win hard internally, you sow mistrust that later returns in every cross-divisional collaboration. Short-term optimisation of a single negotiation can make long-term cooperation more expensive than the negotiation win was ever worth.
This does not mean you should give in. Firm on the issue, fair to the person is the principle. You can advocate uncompromisingly for your interests while still respecting the relationship. These two things are not contradictory; they are prerequisites for each other. If you attack the person instead of solving the problem, you get resistance. If you name the problem clearly and respect the person, you get a solution.
The greatest source of negotiating power is not toughness, but the strength of your alternative. Fisher and Ury called it BATNA, the Best Alternative to a Negotiated Agreement: what you will do if the negotiation fails. If you know your best alternative precisely, you negotiate calmly because you are not dependent on closing the deal. If you do not have one, you negotiate from weakness, no matter how tough you appear. Negotiating power does not come from being loud, but from the certainty that you can stand up and walk away at any time.
Before you go into an important negotiation, clarify three things. First: What is my best alternative if we do not reach agreement? A second supplier, an internal solution, doing without? The more concrete and viable this alternative is, the stronger your position. Second: What is likely to be the other side’s alternative? If you can assess that, you understand how much room for manoeuvre actually exists. Third: Where is my walk-away point—beyond which no deal is better than any deal? Defining this point in advance protects you from being pushed, in the heat of negotiation, into a decision you later regret.
This preparation is what separates good negotiators from bad ones. Bad negotiators prepare their arguments. Good negotiators prepare their alternatives. They know: The willingness to reject a bad offer is the single greatest lever of all. No deal is almost always better than a bad contract. This deliberate inaction is not weakness, but a position of strength.
First: Think about your last important negotiation. Did you understand the interests behind the other side’s positions, or did you only argue about demands? If it was the latter, next time start by asking why.
Second: In which negotiation did you last win in the short term and lose in the long term because the relationship was damaged? What could you have done differently without giving up your interests?
Third: Go into your next important negotiation with a clearly defined best alternative and a firm walk-away point. Write both down beforehand, before the conversation begins.
Negotiation is not a question of toughness or yielding. It is the ability to understand interests, preserve relationships, and represent your position from the strength of your alternative. Those who want to win at the negotiating table optimise the individual agreement. Those who want a sustainable outcome optimise the collaboration that follows.
The best negotiation is not the one you emerge from as the winner. It is the one after which both sides keep their commitment even when no one is watching.
Leading difficult conversations – Many negotiations are, at their core, difficult conversations: How to lead them in a structured and confident way.
Influence without power – If you negotiate without formal authority, you need levers other than hierarchy.
All Insights can be found in the overview.
Proven tools and models for self-application are available under Solutions.
If you want to take these thoughts further for your company, a no-obligation initial conversation is worthwhile.
