John McMillan the Founder and Managing Partner of Scotwork the global market leader in negotiating skills consulting and training recently stunned two New Zealand audiences that comprised of CEO’s, Government Ministers and senior officials telling them that he believed over 80% of the money organisations invested in negotiating skills training was wasted and literally “poured down the drain”. Why? Because often the client is looking for a “quick fix” to a particular problem and they see training as a “Band Aid” when what they and their organisations really need is brain surgery! For this reason John believes that many organisations don’t achieve the returns they were looking for or if they do achieve them, they are short lived. Those clients working with Scotwork that have gone one step further than training and created the right business environment for improved skills to take root have been more than rewarded by the greater uptake and utilisation of improved skills leading to significant financial returns on investment, huge time savings and better business relationships – both internal and external. In those organisations negotiation has become part of the way they do business; essentially they have integrated negotiation into their corporate DNA.
To survive and prosper organisations need to adapt to changing markets, customer demands, environmental, political and technological change. The key business and indeed interpersonal skill that enables this is the ability to negotiate. Negotiation is the oil that lubricates the engine that is a business, organisation or indeed a society. Friction between components is inevitable, but the lubricant (negotiation) helps ease that friction and enables the components to work effectively as one.
How do leaders ensure their organisations integrate negotiation into their corporate DNA? John offered some interesting insight to those organisations that Scotwork has worked with to achieve this. He identified 9 key characteristics and we offer some questions for you to consider when benchmarking your own organisation against these:
So what makes a Negotiating Organisation?
1. Negotiating culture is at the heart of their business
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What evidence do you have that negotiation is part of your organisations DNA?
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Are all your internal meetings productive?
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Are the conversations at Executive, Senior and Mid-Management level, information rich with open dialogue and with each party working to understand each others positions?
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Are assumptions tested and opinions traded? Or are they unproductive (attack / defend, trying to win the argument, point scoring, persuasion)?
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Do people use their sources of power / leverage to encourage others to negotiate with them, or do they try to bully and persuade others to give in to them?
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Do people really listen to each other?
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Are signals of flexibility rewarded or punished?
2. They define success criteria; what is a “great” negotiation outcome?
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How many people could define a “great” negotiation outcome in your organisation?
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How many people accept a less than “great” deal just for a quiet life or because they lack the understanding of process and skills to achieve one?
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Do your people have a clearly defined IDEAL outcome for internal or external conflict situations (one that can be used to measure success after the event)?
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Do they have a clear LIMIT (or bottom line) – a point they do not go beyond and therefore do not do deals their organisation cannot live with?
3. They align the negotiators’ and implementers’ performance incentives with the definition of success
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How are your reward systems linked to success in negotiations?
4. They use an effective preparation process prior to major negotiations
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What framework is used is your organisation to prepare for negotiations?
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Does everyone use it?
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Is it used consistently?
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When working in teams, does each team member have a clearly defined set of negotiating tasks to manage?
5. They provide a common language and framework for negotiations
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What framework have you provided?
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Is it consistently used and applied? Is it “second nature” to your people in their everyday dealing with each other, clients, customer, suppliers and others they interact with?
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When internal parties are attending meetings where they will need to work through some sort of conflict situation, do they prepare using a common language and structure? (The same structure as they use to prepare for external negotiations.)
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Do key business issues get discussed at the meeting, or do the peripheral issues take the time up?
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Do people make reasonable, balanced, clear concise proposals (which move things along)?
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Are proposals developed and built upon or argued over or forgotten about?
6. They leverage information and expertise wisely from across the organisation
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What mechanisms do you have to share negotiating information and collateral within your organisation?
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Do you and your people correctly identify and utilise your sources of negotiating power and leverage to their full advantage?
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Do the various operating units, divisions and departments in your organisation all “sing off the same hymn sheet” or do they have competing objectives, goals and agendas?
7. They support a culture of long-term value creation and relationship building
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Do your people go for the short term gain when they are in a position of strength?
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Do they give the farm away when they perceive they are in a position of weakness or as an excuse to keep \ maintain a client, relationship or business?
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Do your people know how to value a relationship compared to all the other variables they have to negotiate with ie price, volume, terms etc?
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Are people open about their needs and their inhibitions?
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Do they say what they do and don’t like about another parties proposal?
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Do they seek to find ways to re-package the variables of a proposal to meet their needs?
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Do they seek to co-operatively trade with each other or do they make unreasonable demands, or make unconditional concessions (both of which ultimately breakdown working relationships)?
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Do they find ways to collaborate and cooperate?
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Do they view the negotiation process as an enabling process where all parties can ‘win’, or is success defined by who ‘wins’ and who ‘loses’?
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When internal, or external, agreements are made are they solid and long lasting?
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Do parties rarely renege or argue about, agreements made in the past because the deal done was clear, balanced and gave all parties what they needed?
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Are loose ends cleared up at the time a deal is done? Or are they left for future debate and argument?
8. They see increasing the negotiating performance of their people as central to attaining their business goals
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What investment, of any type, have you made in your organisation that has achieved a return of more than ten times the original investment within a three month period?
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Are there clear organisational goals, linked to departmental and individual goals?
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Does the achievement of these goals depend largely on people and departments adapting, changing and working together?
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What investment has been made to develop the skills of these people that has shown a measureable return in terms of goal achievement?
9. They value training by briefing participants effectively in advance, by debriefing afterwards, by setting action plans, by applying the processes and measuring the outcomes
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When is the last time you sat down to discuss objectives or measure success against action plans with your direct reports?
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How often do you think they then do it with their people?
Just like the negotiating process itself, none of this is rocket science or astrophysics; it’s simple, easy to apply behaviours that ultimately make a massive difference to an organisations people, capability and performance.
World-class negotiating organisations go beyond individual training; they work to implement effective preparation processes, to support negotiators with coaching and information, and to align goals with appropriate success metrics and rewards.
John praised Scotwork New Zealand for leading the way with many of its clients, working with them to ensure negotiation was embedded in their DNA.
If you’d like to know more or explore how Scotwork can help you ensure negotiation is part of your corporate DNA then please
contact us on 04 2979069 or
info@scotwork.co.nz
© 2011 Scotwork Negotiating Skills, www.scotwork.co.nz
