It is a fact worldwide that if an individual or an organisation wants to get the best deal from a negotiation process, time must be spent on preparing for the negotiation! It is proven that preparations enable a negotiating team to effectively and confidently control the flow of interchanges toward a possible win-win agreement; and as rightly pointed out by Patrick Collins, “minimise the possibility of failure”.
Deepak Malhotra in 2019 fittingly wrote in the Harvard Business Review’s 10 Must Reads that: “Some of the costliest mistakes in negotiations take place before the negotiation even commence. It is therefore important that there is a focus on selecting the right team, setting clear objectives and having a plan for the process to be followed from the outset”.
A purposive study subtitled ‘Director Level Perceptivities on Aspects of Negotiations’, drew on a sample of approximately 64 international organisations – including Fortune 1000, FSTE 250 and JSE 100 companies, as well as state-owned enterprises and government departments. The focused research involved various CEOs, CFOs, COOs, directors and officers from engineering, marketing, logistics, supply chain management, project management, procurement and related industries. Examining an array of issues relating to negotiations, bargaining, agreements and contracts, the focused study established the following. Approximately:
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78 percent of respondents agreed that initial preparations had an impact on the outcome of the negotiations process.
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82 percent of respondents agreed that composition of the negotiation team had an impact on the interactions between the negotiating parties.
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88 percent of respondents agreed that having clear objectives influenced the outcome of the negotiation process.
The thing every c-suite executive and policymaker wants to know is whether the relative lack of preparations is a major factor for some of the relative lose-win outcomes of negotiations in developing economies!
Christopher Copper-Ind justifiably pointed out that negotiations must be thought of as a “carefully planned process geared towards a specific outcome…..” To Tony Rossiter, “the better prepared a team is for negotiation, the greater the chances of a win-win agreement”. In order to ensure that negotiations steer clear of creating win-lose interactions and move toward the creation of long-term positive relationships which can contribute to long-term competitiveness and development, professionals involved in negotiation processes need to take some key practices into account.
1. Pick a credible negotiating team – SELECTION MUST BE BASED ON VALUE ADD AND EXPERIENCE AND NOT ON POSITION WITHIN ORGANISATION
Before negotiations begin, a negotiation team and a lead and experienced negotiator need to be selected and appointed. Selecting a capable cross-functional negotiation team involves grouping together people that have various leadership, negotiations, functional and process-specific experience and decision-making capabilities. As aptly pointed out by Simon Horton, Peter Fleming and Patrick Collins, it is important to note that the people selected to take part in the negotiation process have a basic understanding of the issues and opportunity to be discussed. In addition to this, conflicts of interests which may tilt a team-member in the direction of the ‘team on the other side; should be avoided.
According to Cornell University’s Elizabeth Mannix: “Bringing a team to the table offers several benefits”. Firstly, she notes that “a negotiating team can create new opportunities for integrative solutions”. Furthermore, she insists that “the team stimulates more discussions and more information sharing than individuals do, particularly concerning issues, interests and priorities”.
She further asserts that: “Teams are able to learn more about the other party’s priorities than one person can. Having a lead negotiator who does most of the talking and a lead strategist who does most of the listening and is responsible for strategy adjustment makes maximum use of team resources”.
2. Set clear objectives – HAVE A WELL-DEFINED GOAL
Following the team’s selection, the lead negotiator – in collaboration with the negotiation’s team members – need to set clear objects for the upcoming negotiations. According to Jason Gordan, some key negotiation objectives can include: “Claiming value, improving team’s interests and positions, free flow of information, commonalities and options for mutual gain”.
Tony Rossiter succinctly provides guidelines for setting negotiation objectives through the S.M.A.R.T guidelines. To him, objectives must be:
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SPECIFIC,
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MEASURABLE,
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ACHIEVABLE,
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RELEVANT and
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TIME
He further emphasises the need for setting the objective in such a way that:
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There are things which the team must have,
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The things the team would like to have and
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The icing on the cake.
“Avoidance of ambiguities, prioritisation of objectives, having a base-line are equally critical to negotiation success,” Posited Rossiter. He further encourages the team to consider incorporating the above suppositions into the potential:
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Ideal outcome,
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Fall-back position,
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Bottom-line,
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BATNO – Best alternative to a negotiated outcome.
3. Find out who you are negotiating with – KNOW THE TEAM ON THE OTHER SIDE AND THEIR CAPABILITIES
Once the objectives and organisational requirements of the negotiations have been determined, the negotiation team needs to spend some time investigating the team on the other side – who they are; their capabilities and requirements; where their strengths lie; and what weaknesses could possibly effect the outcome of the negotiation.
Anthony Tjan notes that undertaking thorough homework is an essential part of the negotiation’s preparation process. He explains that: “Before any negotiation begins, understand the interests and positions of the other side relative to the team’s own interests and positions……. put these points down and spend time in advance seeing things from the other side”.
4. Stay genuine – BE YOURSELF
Once the negotiations commence, one of the most important principles to remember is to remain genuine. When negotiating to come to a mutually beneficial agreement, honesty and authenticity speak volumes. While omitting certain information or purposively deceiving the team on the other side may gain the organisation a competitive advantage in the short-term, a lack of genuine constructive engagement will diminish any opportunities for future long-term business relationships to develop. Entering into negotiations with open cards will thus help to prevent unnecessary bargaining and facilitate the negotiation success.
5. Collaborate where you can – IT IS ABOUT A WIN-WIN OUTCOME
Negotiations should be about collaboration, not competition. Nor is it about confrontation. Since both parties are looking for a favourable outcome, negotiators should enter into negotiations with both their own and their counterparts’ intended outcomes in mind. This may seem counterproductive, but encouraging a positive outcome for both parties to the negotiations will not only increase the team’s chances but also help to lay a strong foundation for future win-win business relations.
According to negotiation expert Calum Corburn, collaborative negotiation styles are “all about making sure both parties have their needs met, and as much mutual value as possible can be created. He adds that: “All collaborative negotiators are willing to invest more time and energy in finding innovative solutions, feeling secure in the fact that there will be more value to share out later on”.
To recap, initial preparations for negotiations have an impact on outcomes of the negotiation process. In some cases, as rightly pointed out by Christopher Copper-Ind, it may be worth the team brainstorming on the objectives, referring to the previous negotiations, what could been done better, and potential objections that may arise from the other side. Through such deliberations, the team will most likely come up with alternate solutions for the engagement.
Tony Rossiter correctly points out that the output of a negotiation is a product that parties to the process have agreed to. “With this understanding, it is important that time is spent on preparing for the negotiation as inadequate preparations could have unintended consequences,” he affirmed.
To sum up, the preparations stage of negotiations which is most often overlooked, if followed through, will arm a negotiation team with the knowledge and confidence to engage and come out with a desired outcome.
A carefully thought-out team composition and objectives helps to (i) set clear goals; (ii) protect the team from making unnecessary concessions; plus (iii) more importantly, confidently opt for a NO AGREEMENT and not settle for a bad agreement.
In conclusion, business leaders, government officials and policymakers must be aware of the following:
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The better prepared the negotiation team is, the greater the chances of a win-win outcome to the negotiation process;
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A key part to any successful negotiations is knowing the details of the goal of negotiations,
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If the negotiation team is to be respected, they have to be credible and be able to defend their corner with the right updates to facts, data and information, and
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Never rush or be forced into a negotiation process if the team is not ready!
