“I feel like I’m a pretty effective negotiator,” he said.
“Of course, there’s always room to improve, but I’m fairly sure I’m not leaving much on the table. Unfortunately, I don’t have the same confidence in my team. It’s a very good team, but it’s tough to know exactly what they’re doing in their negotiations.
“Sure, I evaluate them based on their results. But how can I get them earlier and help them do even better?”
I get this question fairly often, especially from managers of sales or purchasing teams and others whose bottom line directly depends on their teams’ negotiation ability and success.
1. Negotiate strategically.
The first key to increasing your teams’ negotiation effectiveness is to ensure they negotiate strategically and not just instinctively. While some individuals brilliantly negotiate based solely on their gut instincts, they are the exception — not the rule.
And frankly, those are your top performers already and don’t need much managing.
In most cases, negotiating purely instinctively leads to: a) Money left on the table, b) Bad habits and inefficiencies, and c) Failure to capture critical information that your company then can use in future negotiations.
Harvard Business School Professor Max Bazerman in Harvard’s October 2006 Negotiation Newsletter notes that “the past 30 years of behavioral-decision research and its application to negotiation have given us abundant reasons to question our instinctual responses. … (When) you have the luxury of time, and when a negotiation is important, research evidence overwhelmingly supports reasoned, logical thinking over a gut response.”
2. Establish negotiation best practices.
Negotiation research over the past 30 or so years also has tested the effectiveness of various negotiation strategies, and it’s now fairly clear in most common instances which techniques work and which don’t.
In other words, there often is a right way and a wrong way to negotiate. And a manager’s challenge is to establish and implement the right strategies — based on the negotiation research — as best practices within their organization.
Those best practices include, as my regular readers will recognize, my Five Golden Rules of Negotiation (1. Information is Power — So Get It! 2. Maximize Your Leverage. 3. Employ “Fair” Objective Criteria. 4. Design an Offer-Concession Strategy. 5. Control the Agenda.)
Right now, I suspect many managers are cringing, thinking that you just don’t have the time to implement yet one more thing for your team to do. And you’re thinking about your team’s likely resistance to doing more.
After all, there are just so many hours in the day.
Let me be clear here: Contrary to initial expectations, strategically planning and managing your negotiations will save your team time and increase its negotiation efficiency and effectiveness.
Time and energy-draining impasses will be less likely. Shortcuts to success will be more frequent. And your team efficiently will close more and better deals that might otherwise go down the tubes and be a complete waste of effort.
3. Manage to those best practices.
Of course, implementing negotiation best practices and managing to them will not be easy. It’s tough to change behavior, especially instinctive behavior developed over a lifetime of negotiating.
However, it will be worth it. As Jim Collins concludes in his heavily researched book “Good to Great — Why Some Companies Make the Leap and Others Don’t,” great companies include a “culture of discipline.”
This is about managers “getting disciplined people who engage in disciplined thought and who then take disciplined action.”
Applied to negotiations, this means you want your “disciplined people” to engage in “disciplined thought” by strategically planning for their negotiations and then take “disciplined action” by implementing your negotiation best practices.
Specifically, after establishing negotiation best practices, how should you manage your team’s negotiations and ensure they consistently implement these best practices?
First, provide your team with an easy-to-use planning template that summarizes your negotiation best practices, perhaps in a one-page document or in another technological form. (You can download my free Gain the Edge! Strategic Guide to Effective Negotiations template in the Help section of the ExpertAdvice Center.)
Second, give your team incentives to implement them.
Third, track your team’s use of the best practices with regular reports.
And fourth, evaluate your team based not only on their final results, but also on their effective implementation of these best practices.
While not easy, managing negotiations is a core element in many managers’ job descriptions. These are some tools to help you more effectively do your job. Now it’s up to you — to negotiate their implementation.
Published October 6, 2006 The Business Journal