7 Steps to Compromising Effectively as a Business Leader

Photo by Amy Hirschi on Unsplash

As an entrepreneur, you’ll likely be involved in multiple types of negotiations and discussions. You’ll argue with your partners about upcoming business decisions, you’ll negotiate salaries with your newest employees, you’ll create mutually agreeable contracts with your clients, and you’ll attempt to resolve complaints both within and outside your organization, especially as you gain more exposure.

You can’t always get your way in these situations, and you can’t always give in to the other side. Instead, you need to be able to find compromise; but how can you compromise effectively without sabotaging your image or getting the raw end of the deal?

No matter what you’re negotiating or discussing, you can compromise effectively with these steps:

1. Truly listen to the other side. As with so many things in business, successful compromises are dependent on successful listening. Before you can find out where the “middle ground” is, you need to know where the opposing side is. What is it that the other party wants? Why do they want it? What points of disagreement do they have with your side, and what makes them feel that way? In some cases, this level of understanding may be all you need to defuse the situation entirely; for example, you may be able to present an entirely new argument or disprove an assumption they’ve previously held. Other times, this will just give you a good starting point that you can use to construct a compromise.

2. Understand how important the issue is to you. Next, figure out how important this issue is to you. For example, if this is a client deal that could either bring your company a million dollars in new revenue or tarnish your reputation, the stakes are high. If a part-time employee is unhappy with their work schedule, you probably don’t care nearly as much. This should help you decide how much time and effort to invest in the deal.

3. Learn the consequences of a broken deal. What happens if the deal falls through entirely, or if you end up compromising by siding with your opponent? In some cases, you’ll find a complete surrender has minimal consequences; if this is the case, it may be worth avoiding the compromise process altogether and taking the brief hit. Otherwise, you may gain information that helps you learn how far you can reach before a deal no longer becomes worth recovering.

4. Come up with alternatives. Up until this point, you’ve probably thought of a prospective compromise as existing on a linear continuum, such as a contract fluctuating in price (either higher or lower). However, at this point, you should start thinking of alternative solutions and offers — even if they sound ridiculous at first. For example, you may include different terms, or different bonuses in a contract rather than simply raising or lowering a price. In this way, you may find a middle point that both of you find wholly beneficial.

5. Prepare to make sacrifices, and draw a mental line. Next, understand what you’re willing to give up. You should have a good idea, at this point, how far you can bend without breaking, so draw that mental line in your head. For example, you may opt to refuse hiring someone if they demand more than a specific threshold of income and benefits. Having this firm line will give you a good reference point when it comes to actual negotiations.

6. Gradually shift closer to the middle (and know when to walk). When you start discussing a possible compromise, start as close to “your” side as possible, with variance based on the emotional volatility of the situation and how many conversations you’ve had up until this point. Then, gradually walk closer to the “middle” ground, tossing in alternatives as necessary to make each side more appealing to the other. You’ll also need to bear in mind your “walk” point — the point at which you’re unwilling to negotiate further.

7. Remain professional, no matter the results. Sometimes, you’re going to “win” the deal and walk out with more favorable results than you expected. Sometimes, you’re going to lose, approaching or meeting your “walk” point, and sometimes surrendering to your opponent entirely. In either case, remain as professional as possible — keeping your poker face. These are people you may need to negotiate with in the future, and preserving your image of confident professionalism will help you secure more favorable results in deals to come.

If you follow these steps every time you encounter an argument, debate, or discussion, you’ll end up with far more favorable compromises than you’d have either by bending on every issue or adamantly insisting on your way every time.

At times, you may favor your instincts over this painstaking sequence of steps, and there are certainly issues that aren’t worth compromising on, but the more reasonable and thorough you are as a leader, the more respect you’re going to win. Because of that, every respectful deal you make is going to make it easier to strike compromises in the future.

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