Out Negotiated

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Out Negotiated

“Trust always affects two outcomes: speed and cost. When trust goes down, speed goes
down and cost goes up.” –Stephen M. R. Covey, The Speed of Trust

The Idea: : We now live in a world that focuses on short term results, not long-term partnerships. Disruptive technologies, global competition and profit pressures have birthed a transactional mindset that doesn’t focus on shared values and mutual gain. The top global retailers and manufacturers have been investing in higher-level negotiation training and the end results are more tension, frustration and relationship angst. Are you being out negotiated and are you embracing a “win/lose” mediation style?

The literature shows that the best (long term) relationships and engagements are rooted in “seeking to understand” another’s agenda with higher-level diplomacy, shared interests and co-creation. How do you think your organization is fairing? Recently, I conducted research with a group of senior sales leaders which focused on the health of their retail partnerships. The objective of this survey was to uncover the factors hindering their engagements and the profitability with their largest partners. I discovered that one third of the manufacturers surveyed are struggling with profitability, desire more access with their top customers,and are looking for more creativity from these customers.

Historically, most organizations have taught “technique” negotiation skills, emphasizing “winning” versus creating joint value together. My research shows that many of the top growth organizations do something very different. They uncover hidden challenges (or threats) that their business partners are too close to see. Moreover,they protect the relationship with their partners and offer invaluable insights, addressing the unstated needs of the customer.

I spoke with a group of manufacturers about the most valuable skills they are utilizing in their customer negotiations. Each skill is rooted in creating “win/win” outcomes, not “win/lose.” They operate this way or it is “no deal.” If both parties don’t feel they have achieved the outcome that benefits them both, they continue working on the deal until both are satisfied. This philosophy is unique in today’s transactional world.

Cambridge Negotiations Lab states there are three key tensions that exist within all negotiations:

  • the tension between creating and distributing value
  • the tension between the interests of principals and their agents
  • the tension between empathizing with another’s point of view while asserting your own

An effective negotiator creates mutual value for both parties and sets an atmosphere to navigate difficult discussions. They understand another person’s views, unstated needs, values, and preferences,creating a dynamic interpersonal relationship. Five skills differentiate the best negotiators from the rest:

  1. Unstated Needs – They have a deep understanding of their partner’s personal and professional goals, competitive threats, higher level corporate priorities and deeper unstated needs. They spend an enormous amount of time diagnosing the landscape and context of the customer. The best will take the time to understand all the reasons for the other’s behavior.
  2. What if Prior to all important customer meetings, they have already thought through the list of concessions they are willing to make during a face-to-face discussion. They are adept at prioritizing the highest value, low cost tradeable giveaways and the value they want in return.
  3. Hyper-Discipline They eliminate irrelevant topics and maintain a hyper-disciplined meeting outline, speaking less and listening more, and including awareness of nonverbal communication cues. Empathy is not a sales technique, it’s a relationship philosophy. It’s critical to get inside the head (and heart) of your partner and look for new ways to address their agenda.
  4. Uncomfortable One of the biggest mistakes of negotiation is the need to eliminate the feeling of discomfort due to competitive pressures, price demands, deadlines, and combativeness in a buyer/seller discussion. Negotiation pressures can cause us to concede too quickly and hinder our ability to stay present. Get comfortable being uncomfortable.
  5. Intangible Assets Too often, we tend to settle versus asking for more value and believing we deserve it. What valuable intangible assets does your partner possess that you value and would not be costly to your negotiation partner?We need to clearly understand the intangibles. Words to live by: “It’s not the minimum you need but the maximum you deserve.”

Negotiation is about understanding how we solve other’s problems and what pain we are taking away. It’s not about winning, it’s about creating mutual value.Remember we are all irrational and impulsive – practice staying in the moment.

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