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What a great question. And one I was asked recently by a client who was interested in figuring out a metric by which they could measure deals to figure out if they were good or not.
I am sure in the past we have all sat back as the ink begins to dry on the contract, and wondered if the deal was a good one, could we have pushed a bit harder, conceded a little less, got a bit more volume or a longer deal, did we really need to piss off the other side quite so much, or could we have pissed them off a bit more without damaging the long term.
Truth is we will never really know, unless as what once happened to me when I switched sides from client to agency and realised how valuable my account had been to the other side.
Having spent the last 10 years in the sphere of negotiation it seems to me that there are three core metrics we need to consider: outcomes, efficiency and relationship.
Possibly the most consistent guide to performance is the time and inventiveness you put into your preparation for an upcoming negotiation. What you have done or indeed not done will become blatantly obvious once the process starts. If we have spent time identifying what a good deal looks like in preparation and have thought creatively and flexibly as to how it could be attained, your outcomes will be better (and if not you will not have wasted too much time in chasing something that you simply should not be chasing anyway). Have I achieved my objectives is the priority measurement.
Have I been efficient in managing the negotiation process? Despite all the crystal ball gazing in the past telling us that mechanisation will create so much efficiency that we will have time aplenty on our hands, the truth, for now, is that time is a much scarcer commodity than ever. Not just at work either.
Managing the negotiation process effectively means that we have to recognise the process in the first place (what Scotwork call the 8 Steps) and use the appropriate skill at the appropriate time to navigate that process with proficiency. Have I used time appropriately or have I been rudderless, drifting without clarity and direction?
I recently received a call from a client who was delighted that since attending our training sessions not only had he managed to build more value into the deals he and his team had been doing, he also managed to do this whilst building relationships.
Driving a hard deal may create a short-term win, but in the long term may create problems. All sides need to see some skin in the game, if the objective is to find ways of creating value via the negotiation process.
So, did I get the best deal available, did I drive the other side to their walk away point?
Of course, in reality, you may never know, but if I’ve achieved my objectives, efficiently whilst maintaining a good relationship, I think I’ve done alright.