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The Seventh Commandment Of Highly Effective Leadership: Be A Thoughtful Negotiator

Jacob M. Engel

Author and CEO of The Prosperous Leader. I help CEOs and their organizations prosper.

One of my first lessons in negotiation happened when our company was informed by our local branch manager that they had decided to exit the banking business, and we would need to find another bank.

It came out of the blue, as we were a very profitable, growing business and couldn't understand why the bank was dumping us. When we asked the branch manager whom we could talk to, he said no one, as it was a done decision.

I was tasked with finding a new bank. I decided, however, to first ascertain what we could have done in the current banking relationship that we didn't do, so that in the next relationship, it would be more balanced, and we wouldn't be at the mercy of an obscure banker who wouldn't come talk to us.

The first mistake was that we didn't have any relationships with anyone else other than the branch manager.

The second mistake was we didn't have any other banking relationships.

I started speaking to different banks, and when we met with the new bankers, I explained that in order for us to build a win-win relationship, we would need to meet the senior banker who signs on the deal, and we would want a dual banking relationship.

We found two new bankers who were willing to work together, and they also gave us a much larger line of credit with much better rates.

We created excellent relationships with the senior bankers by having regular ongoing visits with them, and the dual relationship kept everyone honest.

As Stephen Covey famously quotes in The 7 Habits of Highly Effective People, creating a win-win requires two things: courage and consideration.

Courage to be upfront and clear about your needs and why it's important, and consideration for the other party's needs as well. If both can be met, it creates a true win-win. Otherwise, it's no deal. Be open and honest about what hasn't worked for you in the past and what you need to make it work.

Most companies struggle with creating a true win-win because they believe in the "Golden Rule": He who has the gold, rules. They use knifing tactics to win. But at the end of the day, this is never as strong as a true, open and honest relationship.

When it comes to creating a win-win negotiation, a great tactic is to create something Covey calls a DR GRAC agreement, which stands for:

• Desired Results

• Guidelines

• Resources

• Accountabilities

• Consequences

Creating this document creates two more very important components of a great working relationship: transparency and accountability.

Let's use your employees as an example. When negotiating with both current and future employees, here's what your DR GRAC would look like:

Desired Results

By spelling out the goals the company is trying to achieve and what the role is of each person in helping to achieve it, you allow everyone to be focused on the goal. Otherwise, it breeds uncertainty, and your employees' aim would simply be to suck up to management. When everyone is focused on the goal and aligned with the mission, it's powerful beyond belief.

Guidelines And Resources

An example of this would be an employee handbook. Who does your employee report to? Who answers questions? What is the structure? It's also a place to offer clarity on salary, benefits, vacation, sick days, PTO, etc.

Clear expectations are crucial. Otherwise, it leaves room for misunderstandings.


How will you know that your employee did a good job? What are the KPIs, and when will you review them? Hold feedback and review sessions often.


What happens if your employee reaches their goals, exceeds them, or falls short?

If employees meet their goals, have ways to both compliment and reward them. It could be an employee of the month award, a gift certificate, a dinner for two, etc. If the goals were substantial, the rewards should reflect that.

If they consistently don't meet their goals, you as the business owner must hold them accountable. Otherwise, nobody will feel accountable. This is part of being a thoughtful negotiator. If you have this discussion upfront with every new employee, it allows everyone to be on the same page and channel their energy forward to truly create a winning strategy.

Remember, a win-win strategy is effective not just for employees, but vendors, clients, etc. Vendors, especially, will appreciate and respect your fairness yet firmness in expressing and getting your needs met. Start the meeting by expressing your interest in making it a win-win for both parties (or no deal).

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