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Chris Atkins from the Gap Partnership argues for a radical new way of looking at the role of negotiation in your business that he promises will deliver transformative, long-term results.
I’d like you to metaphorically close your eyes and join me on a journey. To use your imagination to visualize a startling alternative reality. A reality in which your professional and organizational goals are achieved consistently time after time after time, and you are utterly in command of all possible outcomes.
Imagine an organization in which teams are primarily commercial in outlook – recognizing the true value of relationships but not using relationship as a rationale for suboptimizing contracts and deals.
· Imagine that those teams are clear about their goals, escalation procedures and internal processes.
· Imagine they have confidence in knowing that the decisions they take are within a supportive framework in which their leadership "have their backs."
· Imagine that it’s easy and immediately possible to value the impact of organization decisions, risks and external factors.
· Imagine everyone who negotiates using similar language, whether it is with unions, customers, M&A partners, banks or suppliers.
· Imagine you could recruit to a profile and reward, using a system that encourages objective commerciality in the choices that our teams make.
Is this some sort of commercial utopia, imaginary and impractical? I don’t think so. Why? Well, day in and day out in my role as head of global consulting at The Gap Partnership, we are working with our clients to develop solutions that look far beyond the cut-and-thrust of the negotiation table to where the root cause of problems arise, in order to find pragmatic resolution. We call this amalgam of commercial solutions negotiation culture.
I want to start by picking apart this notion of culture. It may seem a little presumptuous, even bold. After all, it’s a big, strong, all-encompassing word suggesting scale and universality. And in contrast to that I understand that it’s not unreasonable to consider negotiation as a discrete activity, unrelated to the business planning or implementation processes. But when examined more closely, it becomes clear that negotiation should be viewed as a critical part of the business process – one that can influence the success or otherwise of all commercial strategy. So, I urge anyone who is in the camp of viewing negotiation as a standalone, distinct activity, to read on and rethink that perception.
Because the fact is that during mine and my team’s engagements, I have so often seen the planning of a negotiation omit elements which are crucial to optimal success. When they are considered, it can be too late to do anything about them. The consequent impact on time spent, money lost, and limitation of options can be huge.
THINGS THAT CAN HAPPEN AS A RESULT OF INADEQUATE NEGOTIATION PLANNING
· Lack of alignment among major stakeholders over the ideal outcome
· Inability to measure the success of the negotiated agreement during the implementation phase or contract
· Escalation of issues too early, too late and without adequate warning or information for the decision maker
· Inappropriate communication to counterparties which unduly influences the outcome of the negotiation
· Underprepared or inexperienced individuals entering the negotiation with no game plan
· Limited assessment or management of the possible risks, or worse, unwillingness to address real risks
· Incomplete understanding of the value and cost of the variables at play – leading to misvaluation of the deal on the table
Let’s consider another way. A world in which negotiation isn’t something that we have to endure at the end of a business planning process, but rather is an integral part of the planning and solution development. And instead of being viewed as a combative win-lose process involving negative tactics and brinkmanship, it’s seen as an opportunity to develop, build and sustain strategic partnerships through negotiation. Something we recognize and embrace with all the skill, strategy and tactics of a finely tuned and expertly conducted military operation.
Back to this emotive, powerful word – culture. As commercial people, we attribute a lot of importance to our business’s culture. We are familiar with it as a concept and we likely talk easily about it. For example, when we recruit we look for "fit" to our culture; likewise the talent that we talk to will ask us what the culture is like, to assess whether it will be the right one for them. We strive for a world of work in which the culture is definable, distinctive and augments our vision, values and purpose.
All well and good, but look for a common-or-garden definition of what a business’s culture is, and there are rather a lot to choose between, both conflicting and complementary. Allow me to offer my own pragmatic, workable definition – after all, as practitioners, we need to find a way to assimilate and then cut through conceptual and academic ways in to a concept, to get to a place that, well, we and our clients can understand. With that in mind, my definition for culture is how we do things round here.
Now we’ve established what it is, let’s look at what makes up a negotiation culture. My belief is that it is neither nebulous nor impossible to measure. What’s more, making a proactive choice to understand the negotiation culture inside your business allows you to look more systemically at the capacity your organization has to deliver value through everything it does. The alternative, of course, is to try to work continually on supporting this week’s/month’s/quarter’s (delete as appropriate) immediate initiatives. The risk of this approach is that your long-term outcome is merely the sum of a series of short-term actions.
At The Gap Partnership, we find it helpful to define negotiation through the lens of three main areas: people, process and organization. Each area overlaps with each other, to the extent that working on one area alone is close to impossible. And this combined, holistic approach which considers how the three support and enable a mature negotiation culture to exist in your organization can help leaders take an active step to work on improving their business, rather than being repeatedly drawn back into activities that their teams should be accomplishing.
People measures in negotiation culture encompass the subsets of skill, mindset, and experience. Many of our clients invest heavily in developing the skills of their team members; it’s a natural place to start and the payback is undoubted. However, without consideration of the mindset and attitude the individual will bring to these skills, it would be hard to be sure we are optimizing our negotiations. Similarly, avoiding considerations of the experience levels of the individual and team could result in failure to recognize opportunities to share and apply relevant experience to those who need it.
Our second area of focus is that of process. To what end are the tools and processes of your business enhancing the team members’ ability to do their jobs? If the tools provided to manage the day-to-day processes also support the efficient preparation and planning of negotiation, then it’s more credible that the opportunities to gain value will be grasped. If the tools of running and reporting your business are separate to those that support the negotiation, then it’s more likely that only the major, set-piece negotiations
will receive the planning attention they deserve. Likewise with data and systems: if information is accessible, accurate and easily used by your teams to process with the appropriate tools, so the greater the chance of spotting the enhanced value available through negotiation. With appropriate tools and data, a mature negotiation culture can more effectively understand and manage both its power state as well as providing more proactive ways to assess, mitigate or avoid risk.
The final area for consideration is that of the impact of the organization as a whole on our negotiation culture. To what extent do our leadership behaviors and decisions create engagement around the importance and impact of negotiation? Do we actively role-model a world where the opportunity to negotiate is embraced? Do we reward and recognize those that prepare and deliver excellence through their negotiation? How effectively do we communicate our plans, our successes and our learning from the negotiations we conduct?
Do we align so that the might of the organization gives strength to the individual negotiator? Or could we be piling pressure to perform onto individuals at the very moment we are most reliant on them? To what extent does the organization consider the alignment of the various teams’ objectives and the interactions between their various strategies?
Now, it’s possible you already have a view on where you think your business’s relative strengths might lie in this model of negotiation culture. I hope this may also start you thinking about what you might want to prioritize next as you seek to gain advantage through developing your negotiation culture. However, it’s also worth considering a learning all readers of this magazine will have heard before: negotiation happens not in your head, but in the head of your counterparty. Now here’s a question for you: how would you rate the negotiation culture of those you negotiate with? And what opportunities does that provide for you?
After you’ve mulled that one over – and I trust you will conclude that there could be some significant opportunities – I want to emphasize something really important: developing a negotiation culture requires many different elements to align. In fact, all of the aspects that we have explored in this article. A true negotiation culture recognizes negotiation not as an adversarial process to be endured at the tail end of a business process, but as an influential and collaborative process to be embraced throughout. My team need your help with negotiation – they don’t have the skill levels to succeed… a commonly heard phrase when we talk to clients. But this may be fixing the symptoms, not tackling the disease. First, ask the question, is the culture in place from top to bottom in the organization and is management/leadership behavior appropriately driving the culture of success?
I’ll make no bones about it: instilling negotiation culture is no small task. It requires an understanding from all major sponsors or stakeholders of what it means and commitment to the outcome. And on top of that, a thorough diagnosis of the critical areas of change, prioritizing by scale and urgency. It may be some or all of the topics I’ve mentioned in this article or it may uncover other areas of opportunity to improve. But once an action plan has been developed, then we can set off on this exciting journey, changing the way we approach negotiation from the center outwards.
I’ve laid out my vision: The Gap Partnership’s vision. A vision that is, though I say it myself, bold, radical and challenging. And I would suggest that there is almost certainly someone in your business shouting about the need to address these issues, either individually or holistically. So what is it to be? Where do you stand? Should negotiation remain a tactical activity at the periphery of commercial life? Or should it be a core, strategic organizational competence, driving thinking, planning, communication, efficiency and profit?
For you to decide.