Understanding the Crucial Importance of Negotiation Skills in Personal and Professional Life

Would you ever think that the glamorous cast of the TV show Friends faced difficulty negotiating their salaries? It is true, and in fact, all 6 actors and actresses banded together to negotiate their salaries for the last two seasons so that they could succeed.

And they did – they closed the negotiations at a $1 million salary per actor per episode for two seasons. This is a glimpse of how negotiation is an essential skill.

Let’s briefly understand what negotiation is. A process where two or more parties come together, present proposals and discuss them to resolve disputes between them or to reach agreements is negotiation.

Negotiation may include a conversation between HR and employees on salary, a discussion on the sale price of a house or how to negotiate the terms of a merger of two companies.

In this blog, we will look at the best skills of a negotiation process and the importance of negotiation skills to become an effective negotiator.

What Skills Are Important In Negotiation?

There are various skills essential to the process of negotiation. By combining these negotiation skills correctly, you can be a successful negotiator.

To be proficient in negotiation requires a blend of skills ranging from the ability to effectively communicate to understanding persuasion.

Let’s look at what these skills are.

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1. Communication

Communication is the first of several negotiation skills. It involves effectively expressing ideas and actively listening to the other party’s perspectives.

It is a two-way process that goes beyond mere expression, fostering mutual understanding and collaboration. For example, when negotiating your salary with HR, active listening is crucial if you want to comprehend budgetary concerns, contributing to a more productive discussion.

Effective communication not only helps in expressing your ideas but can also assist you in grasping the underlying needs and concerns of the other party

2. Emotional Intelligence

Emotional intelligence is an essential skill in a negotiation. It refers to get the ability to understand and manage emotions, both one’s own and those of the other party. It involves empathy, acknowledging emotions, and building positive connections for more cooperative negotiations.

Such as, empathising with a team member’s aspirations builds a positive connection and facilitates collaboration.

Understanding what you and the other party feel during negotiations is important.

3. Problem-Solving

Problem-solving is essential for all negotiations. It is to make obstacles go away and finding solutions to negotiate that satisfy all parties involved. It often involves collaborative approaches, such as brainstorming, to generate innovative ideas.

For example, when the negotiation comes to a deadlock where both parties are unable to find common ground, a problem-solving approach can help break this deadlock.

4. Adaptability

Another negotiation skill that is essential to nurture is adaptability. Adaptability in negotiation is the ability to adjust seamlessly to changing circumstances, ensuring that both parties involved can navigate the process effectively.

It involves being flexible, open to alternative solutions, and adjusting one’s approach based on new information. A simple example is shopkeepers allowing multiple payment options to buyers to adapt to the changing environment.

5. Persuasion

Persuasion in negotiation is the skill of guiding others to accept a proposal. It includes framing arguments that align with the other party’s interests and creating a narrative that emphasises mutual benefits for both sides.

For example, to negotiate your salary with HR, you can be persuasive by first informing HR how you will be an asset to the company and the values you will add.

As mentioned above, these negotiation skills are extremely important in different scenarios and for different reasons. In the next section, we will discuss why negotiation skills are important.

What Is The Importance Of Negotiation Skills?

Whether it is a professional negotiation like a lawyer drafting contracts and in business, an entrepreneur seeking investment deals, or a personal setup like dividing household chores and where to go for vacation, possessing negotiation skills can make the decision efficient.

Let’s explore in detail why negotiation skills are important.

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1. Resolving Disputes

Conflicts are unavoidable, both in personal life and in business. Negotiation skills play a vital role in resolving disputes amicably. By grasping the root causes of conflicts and working towards common ground, negotiators can turn conflicts into opportunities for collaboration and personal growth.

One example of a negotiation that resolved a dispute is the Apple – Qualcomm negotiations in 2019. Apple had accused Qualcomm of charging unfair and excessive royalties for its patented technologies, while Qualcomm argued that Apple was using its technology without proper compensation. The dispute led to legal battles in various jurisdictions. In April 2019, the two tech giants reached a surprise settlement through negotiations just as a trial was set to begin.

As part of the settlement, Apple agreed to pay an undisclosed amount to Qualcomm for the use of its technology. Additionally, the companies entered into a six-year licensing agreement and agreed to dismiss all litigation worldwide.

2. Securing Deals

Entrepreneurs are constantly engaged in negotiations with clients, suppliers, and investors to secure advantageous deals. Entrepreneurs need to have a solid understanding of negotiation skills and dynamics to reach favourable agreements, establish valuable partnerships, and navigate challenges in the business world.

One notable example of a successful deal is the Apple – LG strategic partnership. Apple was looking for a supplier of OLED displays for their iPhones and iPads, while LG was looking for a high-profile customer. The two companies negotiated terms for almost a year and concluded negotiations with a successful deal.

3. Career Advancement

Effective negotiation isn’t only about getting the best possible deal but also advancing your career. Whether negotiating a salary, seeking promotions, or determining project assignments, honing negotiation skills and advocating for yourself and your ideas can distinguish you from your peers and contribute to your overall career growth.

Satya Nadella’s appointment as Microsoft’s CEO is an excellent example of career development through negotiations. In 2014, when Microsoft was searching for a new CEO to succeed Steve Ballmer, Satya Nadella, who was then heading Microsoft’s cloud and enterprise division, was one of the prospective candidates.

He outlined his strategic vision for Microsoft’s future, emphasising a shift towards cloud computing and mobile technologies, and closed the discussion by assuming the position of CEO.

4. Building Relationships

Negotiation serves as a cornerstone in building and sustaining meaningful relationships, fostering collaboration, understanding, and mutual respect. Through negotiation, parties can establish trust by being transparent, consistent, and reliable in communication and actions. Trust, in turn, can help you in building long-term relationships.

McDonald’s has been a successful example of developing and maintaining long-term relationships with its franchises through a careful and strategic process of negotiation. The company negotiates bulk purchasing agreements, and these negotiated deals benefit franchisees by providing access to standardised, high-quality ingredients at competitive prices.


Investing time and effort in honing negotiation skills can be a professional necessity; it’s a life skill that can transform how we approach challenges and opportunities. It provides us with the ability to navigate complex situations and build strong relationships.

Negotiation can help us achieve mutually beneficial outcomes. Whether figuring out where to grab dinner with friends, juggling multiple job offers, or navigating through the intricacies of your personal relationships, negotiation is a powerful tool that can reshape your approach to challenges and opportunities.

In personal space, negotiation is more about understanding and compromise, while in the business world, it is more about trust, relationships and deals. So, embrace the negotiation skill, start applying it in your regular conversations and observe the difference it brings.

Ashish Agarwal

Ashish is a content writer at Kapable. A dynamic lawyer, experienced educator and content writer, he blends his legal expertise with a flair for storytelling. He has a passion for writing compelling articles and strives to simplify complex concepts, making them accessible to diverse audiences. He is dedicated to writing on contemporary topics and topics related to soft skills development. His articles showcase a deep understanding of the topic and reflect his commitment to fostering intellectual curiosity.

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