Three steps to smarter business negotiations

When a negotiation fails, it is natural to second-guess your abilities. But in their new book, Built to Win: Creating a World-Class Negotiating Organisation, Hallam Movius and Lawrence Susskind argue that the problem could very well lie with your organisation. If your leaders and colleagues fail to give you the support you need, even the most carefully crafted agreements will never get off the ground – or, even worse, will fail during the implementation stage.

Often, when negotiators return from negotiation training, they do not receive the necessary backing to follow through on their new skills. These days, organisations need to do whatever they can to maximise negotiation results. In Built to Win, Movius and Susskind present a three-phase process that you can use to help your organisation get more bang for its negotiation bucks.

Assess challenges and opportunities

The first phase in Movius and Susskind's process involves assessing the organisation's current performance.

Choose a good theory. Begin by choosing a sound, practical theory of negotiation as a baseline standard. For example, the collaborative approach stresses thorough preparation, value creation in addition to value claiming and relationship building.

Assess performance and make diagnoses. Employees may have received excellent offsite training in negotiation concepts, but that does not mean they are using these skills on the job. Confidential interviews within the organisation are a good way to assess employees' past negotiation performance, say the authors.

Negotiators typically fail to prepare thoroughly for their talks, and their bosses lack benchmarks to review their results. Once such shortcomings have been diagnosed and analysed, an organisation is well positioned to seize opportunities to improve.

Identify sponsors and champions. To bring about broad changes in the way your organisation negotiates, two key roles must be filled, according to Movius and Susskind. First, one or more "champions" should begin spearheading change. Champions need not come from the ranks of top management; virtually anyone who is enthusiastic about helping the organisation develop a more unified approach to negotiation could volunteer or be appointed to lead the on-the-ground effort. Second, at least one "sponsor" from upper management must step forward to approve the investments of time and money that are needed to put new processes, tools and strategies into place.

Create a culture of learning

Armed with an assessment of the organisation's negotiation shortcomings, champions and sponsors are well positioned to create a culture of continual learning and feedback within their organisation, write the authors.

Provide a common language. For broad change to occur, employees at all levels of the organisation need to share a common theory of negotiation. Leaders should identify "negotiation coaches" from within the ranks – typically managers who are willing to meet regularly with negotiators before, during and after talks begin – to offer guidance and negotiation training and support systems can be stymied by organisational obstacles. In particular, accounting rules and concerns about legal risks can stall innovative solutions or block them altogether. For an organisation to overcome such barriers, senior management should require negotiators to devote more time to preparation. Not only do individuals need to think about their own priorities and those of the other side prior to talks, they should also meet with all internal parties who have an interest in the deal to discuss the strategy and process.

Commit to organisational learning. Once a more efficient, unified approach to negotiation is in place in your organisation, negotiators and leaders alike must closely track results, documenting both successes and failures. Then they should work to make adjustments that support ongoing learning and improvement. To help others absorb lessons learned, organisations could set up online newsletters that analyse recent negotiations within the company (with names changed to protect anonymity), suggest Movius and Susskind.

Sustain your competitive advantage

So your organisation has made a serious commitment to support its negotiators. At this stage, do not assume that the initiative will thrive on its own. Because people often fall back on old ways of doing business, champions, sponsors, HR employees and other leaders need to continue to reinforce the new processes.

Evaluate impact. To evaluate the impact of an organisational intervention in negotiation, leaders might ask negotiators to take part in surveys and confidential interviews about their practices and results. Are negotiators taking time to consider their alternatives to the current negotiation? Have they learned to think more about the other side's interests?

Such feedback can help identify the degree to which the change effort is generating results. Negotiators might volunteer information such as this, for instance: "By identifying a better negotiating partner, I managed to save the company at least $300,000 (Dh214,020) on this deal."

Negotiation champions can compile such "good news" data for organisational leaders, including direct comparisons to past agreements, assessments of exposure to legal risk and information about the strength of various business relationships. Champions should also offer a frank analysis of shortcomings that need to be confronted.

Address persistent barriers. What is the best way to confront lingering problems in an organisation's negotiation practices? First, avoid the temptation to blame individuals for the problem. Instead, interview (confidentially) those who seem to be having trouble putting new skills to use. They might need further support and coaching, or they might be skeptical about aspects of the
new approach.

Misaligned incentives, such as old bonus structures that reward short-term rather than long-term results, might also be keeping them from getting on board. Most people will be open to changing their behaviour as long as changes to incentives will not worsen their financial rewards or workload.

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