Nov 28th 2010
Negotiate your way in a changing business landscape
Effective negotiation is about discipline, confidence and creativity. It is a skill that can be learned and should be practised, says Keith Stacey, negotiations expert with Scotwork.
Negotiating is what we do when we need something from someone else to help us achieve our goals. It may be a simple request from a colleague, ‘Have you got five minutes?’ or the complex process by which we negotiate to buy the home that we’ll spend the next thirty years paying for.
It can involve governments and business interests agreeing on a comprehensive new tax for the mining industry or sovereign states agreeing to establish a new refugee processing centre in East Timor.
Negotiation is a refined communication process designed to resolve conflict over interests. It can be simple transactional exchanges or multi-party, multi-jurisdiction, multi-cultural and multi-interest negotiations, or the myriad of micro negotiations that fill our working lives. We negotiate in our business lives and our personal lives. We are often involved in negotiations with out even being aware that we are.
No matter the context, being able to negotiate effectively is a key personal and professional skill.
Negotiation has always mattered, now it matters more
Its not news that the environment in which we do business – and in which we negotiate our business goals – is changing.
Organisations are increasingly complex. Outsourcing is common, supplier and customer relationships are blurring as they evolve. The competitive landscape that we work in is shifting too; industry boundaries changing – a search engine business one day, is a mobile phone company the next, and inventing the driverless car the day after. Even the work day is up for grabs as flexibility and self management have become watchwords of employment contracts. Trade is as global; information is abundant and ubiquitous.
The opportunities and threats implicit in a world where competition and cooperation are global require high levels of integration and coordination between firms and between individuals to secure the benefits of trade. Managers need to manage the blurred boundaries between their firm and others in the market place.
Yet many managers are demonstrably poor negotiators. Why? I believe most people under perform in negotiations because of a combination of the following.
- the failure to develop skills;
- a lack of personal discipline;
- mind set of win/lose;
- irrational behaviour under pressure;
- an inability to distinguish between relationship and the commercial issues;
- a failure to prepare and use of short-term tactics rather than robust strategies.
Effective negotiation can be learned
Effective negotiation is a skill. And it is a skill that can be learned, and honed. It is about discipline, confidence and creativity.
A negotiator needs discipline:
- discipline to prepare thoroughly and research the issues before going into a negotiation.
- discipline to develop a robust strategy and stick to it, combined with the insight to be flexible around strategy when plan A doesn’t work.
- discipline to prepare options and the find solutions if conflict arises.
To achieve mutually successful outcomes a negotiator needs confidence:
- confidence to understand that information sharing is crucial to any gain sharing in a negotiation. Sharing of information builds trust and helps towards a collaborative outcome. Research suggests that people who share personal information before going into a negotiation are less likely to reach a deadlock. We like to know who we are dealing with. The increased use of social media both provides excellent research material into the background of a counterparty, but it is also important to establish relationship with the prior to negotiating.
- confidence to know that if the negotiation creates value then you have the skills to negotiate a fair share of that value.
The skilled negotiator needs creativity:
- negotiators need to be strong in asserting their rights and in pursuing their objectives, they also need to be creative in trying to achieve the other party’s legitimate objectives.
- a starting point for the creative process is to put yourself in the other party’s shoes for part of the preparation. This will provide both understanding of and empathy for the other party’s issues.
- single issue negotiations inevitably lead to either deadlock or compromise and negotiators need to be creative in bringing a range of issues to the negotiating table. Rather than negotiate an annual salary increment in isolation, open up the negotiation to career issues which include training, opportunity to work in different teams, overseas experience and temporary project assignments. Rather than negotiate the purchase price of an asset, look at its whole economic life which would include maintenance, upgrades, training and replacements.
A skilled negotiator will combine assertive behaviour in pursuit of their own legitimate objectives with a collaborative approach to achieving the counter party’s objectives.