7 Steps to Compromising Effectively as a Business Leader

You can't always get your way, and you can't always give in to the other side. So, what are your options?


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.

Related: 10 Tips to Negotiate Like a Boss

You can't always get your way in these situations, and you can't always give in to the other side. Instead, you'll need to compromise; but how can you do that 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? And why? What points of disagreement does that party have with your side, and what makes him or her feel that way? In some cases, this level of understanding may be all you need to defuse the situation. For example, you may be able to present an entirely new argument or disprove an assumption the opposing party previously held. Other times, your new argument may give you a good starting point 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 instead this is a part-time employee unhappy with his or her 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 you end up compromising by siding with your opponent? In some cases, you'll find that a complete surrender has minimal consequences; if this is the case, it may be worth your while to avoid the compromise process altogether and take the small hit. Alternately, you may gain information that helps you learn how far you can extend yourself before a deal is no longer 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 arrive at 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 to hire someone who demands 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.

Related: How to Expertly Negotiate a 6-Figure Sales Contract

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 the number of 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 what 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" on. These are people you may need to negotiate with in the future; so 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.

Related: Fixing the Pay Gap Starts With Your Salary Negotiation Skills

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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