The art of making concessions

Concession-making can foster healthy relationships and encourage a collaborative working environment. Here’s why it works – and when not to do it.

Why it works

Creates reciprocity. This is central to concession-making as it is the unspoken rule of giving and taking – if I give you something, there is a natural human inclination to give something back.

Sets an example. On an individual level, leaders who make concessions set an example of humility and adaptability.

Fosters collaboration. At the organizational level, concessions pave the way for positive collaboration by helping parties focus on shared interests over individual grievances.

Prioritizes group well-being. Being open to compromise means overcoming individual tensions and prioritizing the team’s or the organization’s overall best interests.

Three guiding principles

Despite its transformative potential, concession-making can be problematic. Ego, pride, competitiveness, short-termism, and entrenched positions can all wreck attempts to find common ground. So, always keep the following principles in mind when considering how and when to make concessions.

Don’t lose sight of the long-term goal

Sometimes you may need to sacrifice a short-term aim in favor of a more important objective, so always keep the big picture in mind when negotiating concessions – there’s no point winning the battle and losing the war!

Adopt a flexible mindset

Making concessions often involves letting go of rigid attachments to personal positions in favor of achieving mutual goals. This can be challenging, as people are inherently tribal, which acts as an impediment to open-minded collaboration. Even when confronted by others’ stubbornness, stay flexible – it’s infectious.

Know your red lines

There are certain situations when it’s ill-advised to make concessions. For example, never make any that compromise your core principles or values. And, if the other party has a history of dishonesty or untrustworthiness, be wary. Trust is critical in negotiations and your concessions may not be reciprocated. Equally, be cautious about making hasty concessions where you aren’t given the time to think through the consequences of your decisions.

Key learning

Making concessions does not signify defeat but is a sign of strength and a bridge to understanding. Successful leaders recognize the strategic strength in making concessions, understanding that achieving common goals is more important than winning ego battles.

George Kohlrieser

Distinguished Professor of Leadership and Organizational Behavior

Professor of Leadership and Organizational Behavior at IMD and Director of the High Performance Leadership program, the Advanced High Performance Leadership program, and the Inspirational Leadership program. He serves as a consultant to several global companies including Accenture, Amer Sports, Borealis, Cisco, Coca-Cola, HP, Hitachi, IBM, IFC, Jaeger-LeCoultre, Morgan Stanley, Motorola, NASA, Navis, Nestlé, Nokia, Pictet, Rio Tinto, Roche, Santander, Swarovski, Sara Lee, Tetra Pak, Toyota, and UBS.