Negotiation and Influence for Finance Professionals: What You Need To Know
“The key to successful leadership is influence, not authority,” author and speaker Ken Blanchard has said. And it makes sense. Influence lets leaders lead. It empowers them by getting a person, a team or an entire organization behind them, ready to go whe......
“The key to successful leadership is influence, not authority,” author and speaker Ken Blanchard has said. And it makes sense. Influence lets leaders lead. It empowers them by getting a person, a team or an entire organization behind them, ready to go where they take them. That’s as true for finance leaders as it is for any other leader. As strategic partners to the rest of their business, finance leaders need to be able to influence in order to guide the way toward a shared set of goals, empowering organizational planning and business growth. Just as critical to leaders? Negotiation skills. Negotiation helps build consensus for those goals when influence alone isn’t enough. When consensus isn’t the starting point, negotiating skills help everyone get on the same page toward a common set of objectives. And while influence can happen during negotiations, the two aren’t the same. Influence is about someone having an effect on others. Negotiation, on the other hand, is about moving multiple parties toward a conclusion they can all agree on. Both skill sets are key to building a force for change and achieving organizational and stakeholder buy-in. But negotiation and influence don’t come naturally to everyone. So if you’re a finance leader—or you hope to become one in the future—you may have to start putting in the work to learn them now. Want some help? Improving your communication skills is a good place to start—but we’ve also got some other tips to offer. First, though, let’s dive a little deeper into both skill sets to see what makes them important to finance leaders today. 💡Key Takeaways: Influence and negotiation can help finance leaders gain consensus and rally all stakeholders around a common goal. That makes them key to helping finance leaders become effective business partners. Both influence and negotiation start from a place of understanding. That means listening to other parties’ points of view, developing strong relationships and coming in prepared, to fully comprehend all the people involved and the path you’re hoping they’ll follow. Negotiation and influence also benefit from a sense of knowing you're all in it together, and from not just trying to “win.” Don’t get lost in your emotions, follow through on your promises and know when to walk away. Why Influence Matters Influence is a part of business and part of being a good leader. It helps you get your team and the rest of the organization aligned toward your goals. And it can help build your authority in the workplace as people learn to go to you for direction. All of that is pivotal if you’re a finance leader and find yourself in a situation where you need to build support for your decision making. Which is why, if you’re on the leadership track, demonstrating influence in the workplace can help you move up the ranks even faster. But there are right ways and wrong ways to exert influence. We’ll get into those soon—but let’s look at negotiation first. The Value of Negotiation Sometimes influence isn’t enough—you need to negotiate in order to create consensus and figure out the best way forward for everyone. Yet negotiation is often overlooked as a key business skill. In fact, in our 2022 benchmark survey, only 5% of respondents prioritized it. But strong negotiation skills, just like strong influencing skills, can help you bring others to your point of view. More than that, though, through negotiation, you can take into consideration everyone’s point of view, coming to a consensus that has all parties’ needs in mind. Negotiation is used at all levels of business—whether you’re negotiating a raise or promotion with your boss, determining the terms of a business agreement or trying to gain consensus across the organization on your business planning goals. The last is particularly relevant in finance, where FP&A leaders—as the people most familiar with business performance data—try to gain consensus around their strategy and goals. Of course, the common denominator between all of those scenarios is that there is always more than one party involved, with different perspectives and goals, but an overall shared purpose. As with anything, developing your negotiation and influencing skills means putting in the effort to get better. We’ve got some tips to help. 7 Tips for Improving Your Influence and Negotiation Skills How do you begin to develop your influence and negotiation skills, to add to the arsenal of attributes that make you a better finance leader and strategic partner to the business? Here are a few guidelines: 1. Come Prepared Negotiation isn’t something you need to do on the fly. Even the most experienced negotiators know to go in prepared. And for good reason: one study found that in business negotiations, negotiators that come in prepared perform almost 27% better than those who don’t. Of course, the level of preparation you put in depends on the type of negotiation you’re dealing with, but whether you’re negotiating a new budget, looking to make changes to your product line based on revenue objectives or trying to get the rest of the organization aligned to your performance goals, it helps to understand the full scope of the situation before negotiations even begin. That means knowing the parties you’re negotiating with, what you’re looking to achieve, the market standards and what you’re willing to concede. In doing so, you’ll not only be better prepared—but more relaxed and confident going in as well. In fact, preparation can help settle your emotions and get you ready mentally, not just intellectually, for a negotiation. “Getting ready to engage in a process actually settles you down,” Chris Voss—former FBI Lead Hostage Negotiator and CEO and Founder of The Black Swan Group—explained in The Art of Negotiation, his keynote presentation at our Excelerate Summit 2022. 2. Know When To Listen “One of the best ways to influence people is to make them feel important,” former Zimbabwean politician and author Roy T. Bennett wrote in his book, The Light in the Heart. And one way to make people feel important is to listen to them. In fact, both negotiation and influence—like any form of communication—are just as much about listening as they are about talking. With negotiation, that’s probably obvious: if you’re trying to come to a consensus between multiple parties, actively listening to all sides is paramount. “Start the conversation with ‘Before I give my perspective, let me make sure I’ve got your perspective right. That's your opening phrase. Then you follow up with, ‘So far, you've told me’ and you lay out the facts of what they've said,’” Chris suggested in his 2022 keynote address. “Then the second part is, ‘As a result, you feel and you …’ and lay out your best guess, based on their demeanor, their actions or tone of voice.” But listening isn’t just key in negotiations. It’s a critical part of influencing as well. No matter who you’re trying to exert influence over, part of being a successful influencer is understanding where they stand. That starts with listening to and valuing their perspective before trying to persuade them to a particular point of view. Listening will also help them feel acknowledged—a great starting point if you want to have a lasting influence. 3. Build Strong Relationships Not surprisingly, getting people to agree with your point of view is easier if you’ve already built a good relationship with them. We can’t only negotiate with or influence our closest friends, though, so building relationships throughout the negotiation and influencing process can be a successful way to make sure everyone walks out happy. “Nobody would be surprised to know that we prefer to say yes to those individuals who we feel a liking, or a rapport, with,” psychologist Robert Cialdini, author of Influence: The Psychology of Persuasion, said in his Excelerate =SUM(it) keynote presentation, “The Science of Ethical Influence.” Another key ingredient in getting a “yes,” he added, is a feeling of unity—or a sense that you’re all part of the same group, working together toward a single cause. “If you can arrange for people to see you not just as like them, but as one of them, they will become significantly more likely to say yes to you as a result,” Robert said. In a negotiation, then, being empathetic is key. Empathy helps you understand the other person’s point of view and use that knowledge to develop the kind of relationship that makes everyone feel like they’re part of the same team, with the rapport to match. Good communication and a foundation of trust can also make it easier to keep the negotiation civil and work through any conflict that arises. 4. Don’t Focus on Winning Negotiation and influence aren’t about winning, and if you treat them like they are, you’re setting yourself up for failure. Rather, the most skilled negotiators understand the power of compromise and know that the best discussions will find new value for all parties, unveiling alternatives you might not have even known existed. “Negotiation is not an act of battle; it’s a process of discovery. The goal is to uncover as much information as possible,” Chris wrote in Never Split the Difference: Negotiating As If Your Life Depended On It. Chris’ advice is surprisingly relevant to corporate finance professionals, where you’re often negotiating with other departments within your own business, trying to allocate limited resources and budget. While everyone wants their piece of the pie, you all ultimately have the same objective—to see your business succeed. “You’re having to help facilitate that negotiation ultimately through your organization, to make sure you find that effective and appropriate balance,” Vena Vice President of FP&A Tom Seegmiller said in the Vena-hosted 2022 livestream, Driving Agile Business Outcomes With Finance at the Heart of Strategy. 5. Don’t Get Lost in Emotions Even when you’re empathetic to the other side of the negotiation, and try to be as good a listener as possible, negotiations can still become fraught with tension, as everyone tries to get what they want out of the process. But when emotions drive a negotiation, neither side is going to get far. “If they're frustrated with the situation, they're probably annoyed with you,” Chris said in his 2022 keynote. To get past any of those negative emotions, he suggests demonstrating “respectful awareness.” In other words, calling out the emotions in the room as a way of deactivating them. “[It’s about] calling out negatives, not denying them—but simply observing them, calling them out, recognizing them [and] verbally articulating the negatives,” Chris added. All of which, of course, means developing your own emotional intelligence so that you’re able to monitor and recognize the emotions in play—both positive and negative. Emotional intelligence will also help you see through the words being spoken so that you can better understand how everyone really feels. From there, you’ll be able to get to a place where you’re all content and ready to proceed. 6. Understand That You’re In It Together “Negotiation is not an act of battle; it’s a process of discovery. The goal is to uncover as much information as possible,” Chris wrote in Never Split the Difference. Rather than setting up sides with a line that can’t be crossed, the best way to influence others is to create a sense of togetherness or unity. By doing so, you show the other parties involved that you’re all similar—sharing common goals or interests. And that sense of similarity and togetherness will go a long way to getting you to your goals. “We like people who are similar to us. This fact seems to hold true whether the similarity is in the area of opinions, personality traits, background, or lifestyle,” psychologist Robert Cialdini wrote in Influence: The Psychology of Persuasion. Along with that sense of togetherness comes a certain amount of flexibility. If you go in with all points of view in mind and a healthy respect for the others you’re working with, you’ll be more willing to bend or compromise to those other perspectives—a critical component in both negotiations and influencing. 7. Don’t Forget To Follow Through (and Know When To Walk Away) Finally, good negotiators and successful influencers don’t forget the follow up. That means if you’ve made promises, you keep them. And you keep an eye on next steps to make sure everything’s going as planned. But great negotiators and influencers also know something else. That is, when it’s time to walk away. Because sometimes negotiations and influence just don’t pan out—and at some point, it’s time to cut the negotiation off because you know you’re not going to come to a consensus. At that point, it may be time to regroup—to see if you can find another way instead. Becoming a More Influential Business Partner If you’re a finance leader, it’s part of your job to be the best business partner you can be to your organization. And that takes negotiation and influence skills. Through influence and negotiation, you can start to build consensus and an organization that’s rallied around common goals. All of which is critical if you want your business to thrive. Looking to elevate your skills as a strategic business partner even further? Learn how effective storytelling and relationship building skills can help you excel as a finance leader and become an invaluable partner to your entire organization. Watch Excelerate Summit 2023 On Demand Improve your FP&A processes, grow your Excel skills and learn how to plan for anything by streaming all the best sessions from Excelerate Summit 2023.