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8 tips to negotiating in a recession (Pt 4)

Published: Jul 07 , 2020
Author: Mark Simpson

There is usually more than one solution to every problem. You may have come up with what you think is the best solution, but there is no guarantee that it will be acceptable to the other party.

When operating in a challenging economic climate, what you think is reasonable may have a considerably large impact on the other party you are negotiating with, an impact you may not have thought of or are not aware of.

Upskill your people, look for opportunity and think beyond the dollars.

 

Tip #7 of 8: Avoid single solutions

They say that it doesn’t matter how much happiness you have; it doesn’t buy you money!  Many regard money as the solution to all ills: slow growth - put the price up, cancelled flight – give them a credit; unprofitable – reduce the buying price. However, seeing everything in monetary terms can end up as an expensive fix when a cheaper solution is available.

Behind every proposal lies a need.  A negotiator’s job is to understand the need and to try to address it in the most effective way.  We also teach that you should try to devise at least two solutions to a problem. Soldiers are trained to prepare three ways to achieve their objectives. The benefits are that it forces people to think outside the usual solutions, it avoids roadblocks in the strategy, and it gives the other party a choice.

We were working with the IT department of a major US insurance company.  They provided a service for the sales staff by devising software solutions to client requests. They often presented just one solution, which clients did not like. We advised introducing a rule which made it mandatory that the IT team offer at least two solutions.  This eliminated the problem of having a choice of one, and that being unacceptable.

 Tip #8 of 8: Negotiating is a trading process; not one of slow surrender

Earthquake-proof buildings are flexible, it is the rigid ones that fall down.  The same applies to negotiators; Arthur Scargill, the British miners union boss once said, “The NUM (National Union of Miners) must never shirk its responsibilities by negotiating compromises.” How successfull was this inflexible approach? The British mining industry no longer exists!  Modern NZ unions like ETU understand this principle well and negotiate accordingly.

Flexibility does not mean giving in. A negotiator will always attach conditions and trade for the things they want in return for concessions.  If you attach a price to the other party’s demands you will soon educate them that you are a trader and not just someone who will give in. Consequently, you will earn, even if begrudgingly, their respect.

Recently, a large multi-national client was pressing Scotwork to reduce their fees, threatening to give their business to a competitor.  Scotwork do not discount our fees, but in return for a slightly longer contract term, we sweetened the proposal by offering to bill in Sterling rather than Euros.  The saving to the client was relatively small, but they accepted our proposal.  They told us afterwards that our competitor had halved their price when pressed.  They said, “They lost all credibility as negotiating consultants when they did that.  We don’t want them anywhere near our people.”

Shutting your eyes and holding on, may be sound tactical advice when you are riding the ups and downs of the fairground, not quite so helpful when working in the rough and tumble of commercial life. That what goes up must also come down is a truism we need to be mindful of during the good and bad times. Being well prepared is always the best way to be.

Sending your front line into battle without the skills and training they need, to do what needs to be done, is not only bad business, it’s bad strategy. We hope it is not something you would ever do!

If you want to ensure you and your people have the skills needed to ensure your organisation thrives in the current environment then contact Scotwork. P: 04 2979069, E: info@scotwork.co.nz

(Adapted from an article by John McMillan)

 


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About the author:

Mark Simpson
Born and raised in the UK, where he first became involved with Scotwork, Mark has lived in New Zealand since 1994. Mark has a passion for teaching, coaching and negotiating, not just in the classroom but working alongside clients helping them to achieve outstanding results in major commercial and industrial relations negotiations.

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A friend send me a short video clip at the weekend, which came at just the right time. We were in a dispute with colleagues. All parties felt aggrieved, everyone had different perspectives and nobody was going to yield. Long standing relationships were at risk of being compromised and escalation of the dispute, something that would hurt everyone, was coming ever nearer. The video made me smile, it reminded me of what's important in life. It didn't so much change my perspective (both sides still maintain the other was wrong) but helped me re-frame it.

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