Why understanding self-worth can make any negotiation more successful

Leadership is likely to bring up the insecurities, self-doubt, and questions about your capability to reach the ambitious goals you’ve set for yourself. Therefore, it’s crucial to understand our fundamental human need to feel valued. Self-worth is foundational, not just for personal negotiations but also in fostering a culture where team members negotiate confidently and effectively.

Our need for validation impacts how we negotiate and experience life. This is closely tied to our understanding of the difference between our non-negotiable self-worth (intrinsic value) and the value others place on us based on external factors (extrinsic value).

Fear of self-devaluation is universal

Our need to be valued is so strong that the fear of self-devaluation holds many of us back from negotiating effectively. This fear can manifest in various ways—feeling inappropriate, being at a loss for words, lacking sufficient information, or entering into potential conflict. It also shows up as fear of facing the unknown, being rejected, appearing incompetent, losing a job or deal, not being acknowledged for our expertise, or being judged and failing.

These fears stem from concerns about diminishing our value. Recognising these fears as universal helps us understand that those we negotiate with are likely seeking the same reassurance of their value.

Intrinsic vs. extrinsic value

Value is complex in negotiations because there are two fundamental sources of value. Intrinsic is deeply rooted in your sense of self-worth. Extrinsic is shaped by external factors like market conditions and societal norms.

Intrinsic value is constant and non-negotiable. It’s your personal sense of worth—the inner compass guiding your understanding of what you deserve and can achieve. Acknowledgment of your intrinsic value is the driving force behind your actions, empowering you to seek opportunities that reflect your true worth. The stronger your sense of self-worth, the more confident you’ll be negotiating for the value you exchange.

Extrinsic value, on the other hand, is fluid and influenced by external circumstances, such as your role, industry, or the specific needs of the other party. It reflects how others perceive your worth in a given context, and it can fluctuate based on factors like supply and demand.

Your self-worth is nonnegotiable. The value you bring to the table is

In every negotiation, it’s crucial to remember that while your intrinsic value remains constant, the extrinsic value you negotiate for—determined by the benefit and usefulness of what you offer—is what’s truly at stake. Negotiations revolve around specific terms, and the extrinsic value you bring is measured by how useful and beneficial your offer is to the other party.

However, it’s vital to separate this extrinsic value from your intrinsic worth as a person. Circumstances might affect the extrinsic value you receive, but they do not diminish your intrinsic value, which remains constant and unaffected by external factors.

I’ve observed business leaders fail to price their services appropriately because they mistakenly doubt their intrinsic worth. They often don’t realize that the extrinsic value to their clients is based on perceived needs, not a reflection of their inner worth.

This distinction between intrinsic and extrinsic value is crucial for successful negotiation. Understanding the interplay between these two sources of value helps prevent confusion and allows us to negotiate from a position of strength and clarity, rather than from a place of fear. Whether negotiating pricing, your salary, or setting boundaries for your time, success begins with an unwavering belief in your intrinsic worth. As Eleanor Roosevelt said, “No one can make you feel inferior without your consent.”

Self-worth is the foundation on which achievements are built

If your sense of self-worth fluctuates, convincing others of your value becomes a challenge. We set our own limits on what we believe is possible. Our intrinsic belief in ourselves lays the foundation upon which our extrinsic achievements are built.

Believing in your intrinsic worth is the cornerstone of successful negotiation. As a leader, fostering a culture where self worth is recognized and valued empowers your team to negotiate confidently and effectively, driving better outcomes for your organisation. When you stand firm in your self-belief, you can negotiate extrinsic value with clarity and confidence, allowing your unshakeable sense of self to guide you in maximizing the value you negotiate.