Beyond the Deal: How Negotiation Builds Relationships
In business, many leaders still treat negotiation as the endgame: strike the deal, sign the contract, move on. But as CEO, finance and negotiation expert Katharina Dalka reminded us in her recent Learning Rewired conversation, this mindset is not only outdated – it’s dangerous.
The truth is clear: A negotiation isn’t the end point — it’s the very first step in building lasting relationships
Negotiation as a leadership capability
Research in organisational psychology and executive education increasingly positions negotiation alongside adaptability, empathy, and cultural intelligence as a core leadership competency. It is not about “winning” a deal; it is about shaping trust, reputation, and long-term collaboration.
Every negotiation sets a precedent. If conflict remains unresolved or cultural nuances are ignored, resentment takes root. That resentment rarely stays at the negotiation table – it resurfaces in board meetings, joint ventures, and future partnerships.
Culture and context: why leaders can’t afford to ignore it
Context shapes outcomes. As Katharina notes, approaches that work in one setting may fail in another: “I wouldn’t negotiate in the same way with a German as I would with somebody from Southeast Asia… timing is very important.” Differences in expectations can be small but decisive — for example, “A German would be there five minutes in advance… a French, when they come ten minutes late, it’s okay.” Communication styles also vary: “In the US communication is extremely direct… when you go to Western Africa… it’s very, very different.”
The practical point for leaders: treat cultural cues as data. Test assumptions in discovery, agree norms up front (timing, formality, decision rights), and adapt in real time.
The human dimension of negotiation
Numbers matter, but neuroscience tells us that 80–90% of negotiation outcomes depend on human factors — confidence, preparation, and emotional awareness. Katharina pointed out that unresolved disagreements lead to what behavioural economists call “resentment costs.” These costs don’t appear on financial models, but they damage cooperation, slow execution, and erode performance over time.
Leaders who succeed in high-stakes environments don’t just know their numbers – they know themselves, their teams, and the cultural frameworks they’re operating in.
Money mindsets: the quiet driver
Before price and terms, beliefs about money often set the tone. In Katharina’s words: “The first one is always the relationship with money…the entry point of any conversation we’re having about negotiation.”
This can be particularly charged for women: “They’re not taught to be deserving… they’re called greedy.” A practical way forward is to surface money beliefs before the meeting (e.g., short pre-work prompts), build awareness, and anchor the dialogue in value creation rather than just cost.
A provocation for senior leaders
For executives who have “seen it all,” perhaps the harder question is not: Did you win the negotiation?
The real question is: What relationship did your negotiation create?
When viewed this way, negotiation is no longer a tactical skill. It becomes a test of leadership character. The ability to balance firmness with empathy, to respect cultural differences, and to set boundaries without destroying trust is what defines the leaders who move beyond transactions and build enduring partnerships.
At Headspring (a joint venture between the Financial Times and IE Business School), we see negotiation as one of the most critical leadership capabilities of the next decade.
Why? Because negotiation shapes trust, cultural intelligence, and organisational resilience – three factors consistently highlighted in reports such as the World Economic Forum’s Future of Jobs (2025).
