I was intrigued to pick up some new research on the nitty-gritty of negotiation the other week.
A year-long study by Huthwaite International and the International Association for Contract and Commercial Management has uncovered just how relaxed – too relaxed – many companies are when it comes to honing and developing negotiation skills.
Perhaps these findings come as little surprise to SM
readers. Maybe many of you work for businesses that just believe in their gut that negotiators are born not made, that you are either good at it or bad at it, and that is that. There’s no point training anybody. Just get on with it and do your best.
This attitude may be in the best tradition of the English amateur spirit. But it is also nuts. Most of us can get better at things if we try. Negotiation is a skill too few of us understand well. We need to think harder about it.
For some people, negotiation just means saying no again and again and waiting for the other side to give up. But as the experts will tell you, just holding a line is not really negotiation at all. Negotiation implies movement. There has to be give and take.
So sure, you have all met suppliers who tell you that they cannot possibly move on price. Very occasionally that might almost be true. But there is nearly always a deal to be done.
The trick of it, apparently, is working out what is valuable to the person you are negotiating with. If it is a simple punch-up on price then that can be difficult. And if you are looking only for a one-off purchase then you may not feel the need to spare anybody’s feelings.
But not too many deals are really that simple. The chances are that some sort of relationship is being established or developed. And it will pay in every sense to get to know what it is the counterparty really wants and needs. If cash flow is the overriding short-term concern then a deal can usually be done.
The other unexpected (to me at least) detail to emerge was that negotiations actually go better when both sides are good at it. My naive assumption was that some tough negotiators would love to get stuck into a deal offered by a novice. But that is to misunderstand the process. Yes, you will get a one-off win that way. But that counterparty will soon wake up to the horror of what it agreed to, and will probably not be in much of a hurry to do business with you again.
Tony Hughes, chief executive of Huthwaite International, told me that the best managed businesses have brought in a staged negotiation process. Negotiators have a clear mandate to proceed to a certain level. There are none of those embarrassing moments when one side declares: “Go and get someone more senior who is actually allowed to do this deal.” In a more formal negotiating culture results are documented. And the aim is always to come up with a creative and valuable outcome.
The dreaded phrase I am building up to here is, of course, “win-win”. But just because it is a cliché does not mean it is a dodgy concept. But win-win, as the people at Huthwaite explained to me, does not mean a 50:50 split on a transaction. It just means that both sides walk away happy.
Sometimes you have to say no and give up on a deal. But as we try to drag ourselves into recovery, one resource we are going to need is imagination. We urgently need better, more creative negotiators throughout the UK economy.
Stefan Stern writes for the Financial Times (firstname.lastname@example.org)