Managers in today's complex business environment require negotiation skills for business success. They need to develop a tool kit of negotiation strategies and understand how these influence and are influenced by their surroundings. Being successful in leading groups and shaping group decision making is vital, both internally and with key customers and suppliers.
In your tool kit you need tools to manage:
- Relationships: managing self and other relationships within the negotiation
- Substantive Issues: being able to identify and manage the substantive issues that are critical to success
- Value: how to create and then leverage value
The best negotiators are successful because they foster genuine and authentic relationships with others. Fisher, Ury and Patton in Getting to Yes: Negotiating Agreement without Giving In, argue persuasively that negotiators don't have to choose between either waging a strictly competitive win-lose negotiation battle or cave in to avoid conflict. In fact, their message is clear, negotiators can and should look for negotiation strategies that can help both sides get more of what they want.
What does a successful negotiator look like? They are not solely male of female; I have worked with some of the best from both sexes. They are not young or old, they are both, and I have had the pleasure of working with people in their early 20's to mid 70's. They are not all highly educated; education is not a determinant. They are not from one culture; they are global citizens.
Their ability to focus under pressure is a key part of their success. Daniel Goleman in his latest book Focus states full focus gives us a potential doorway into flow. I would suggest the greater flow means a greater connection with the other person. They sense authenticity, and they open up and share their real interests.
The best global negotiators are respectful - regardless of behaviour - they ask more questions than the average negotiator and are always looking for a better outcome and view value as the lever for strong creative agreements. They have a great capacity to use time out as a way to move forward and not as a tactic to manipulate the other side.
What happens when you do the right thing in the negotiations, have a solid case, and the other side refuses to negotiate or becomes indifferent toward you? You will need to adjust your style and manage the relationship differently.
How you identify the real issues in any negotiation is based on your ability to agree on the substantive issues that will form a key part of the negotiation.
Substantive issues have three key elements; they are tangible, measurable and tradeable at the negotiation. If they do not possess these three ingredients then they are not substantive issues. Quality, quantity price and value are substantive issues, however, trust, respect and openness are not.
From experience and direct observation in live deals, the negotiator who has more substantive issues is perceived to be better prepared and gets a much better outcome at the negotiation table. Your ability to execute a 'yes' decision is down to your preparation.
Your ability to obtain a better outcome through your preparation allows you to make a decisio based on the gut (intuition) and reason (logic) to ensure that the agreement will be executed by all involved. You can become more agile by looking at each substantive issue and developing three possible outcomes: realistic, acceptable and worst possible outcome.
The ability to use all of the above is the hallmark of a creative negotiator, who is always planning the next step. Planning based on substantive issues means you can create and enhance your value; you can leverage under pressure.
Often the focus in negotiation is on price and not value. Change the focus to value in all your B2B negotiations.
Value in a negotiation will require you to prove - not assert - something is so. You will need to demonstrate how something will increase revenue, reduce costs or powerfully do both for the other party.
As negotiators, there are times that we need to back off, reframe our value and then be more assertive, for example, when the other side thumps the table, yells and spits the dummy. I often see negotiators who are unprepared and lack a strong value proposition, capitulate in the force of a bully at the negotiation table.
As defined by Malhotra and Bazerman, in their Negotiation Genius book:
Value creation: The act of increasing the total amount of value that is up for grabs in the negotiation.
Value is created when negotiators identify each other's priorities and engage in value enhancing and trading. An example of value enhancing could be offering to deliver to five warehouses instead of three, so customers can get their products to market faster. An example of trading is when items have a different value to each party.
Ask yourself these questions:
- Can you articulate your value to a major account and then prove it?
- How can you identify what value means for your accounts, department, team, trade minister?
I have seen the power of value in negotiations and developed practical ways to use value in negotiations. As the world gets more complex and changes rapidly, being able to create value and capture value becomes more critical. In the B2B world, your negotiation skills must be better than global best-practice level. How are your organisational capabilities? And what framework do you use for complex negotiations?