Why Do Negotiations Fail? – Part 2

This is the second in a two-part series on why negotiations fail and how to build an action plan for successful negotiations. Today, we’ll be discussing the last two of the four core areas of negotiation, relationship and vision.

3) Relationship

Agreements can only be completed between people or organizations that are represented by people. It goes without saying that the manner in how we interact with other people is the essential basis for a successful negotiation. Within a negotiation context, the importance of relationships is amplified when we find ourselves in an environment where ongoing partnerships and longstanding relationships result from our business interactions.

4) Vision

To achieve a collaborative or partnership agreement, it is necessary that all parties have a shared vision of the losses and benefits associated with the agreement. It is only when all parties have a shared vision of the agreement that we can understand their driving motivators or interests. A crucial part of negotiation competency entails the ability to create options that will serve the needs and interests of all parties.

Here are some points to consider when implementing lessons from these two core areas of negotiation: 

  • Aspiration base
  • Real base
  • Contracting zone
  • BATNA analysis (Best Alternative To a Negotiated Agreement)
  • Negotiation role definition and team composition
  • Deal specific negotiation strategy & tactics
  • Framing
  • Negotiating climate
  • Negotiation debriefing
  • Implement a negotiation training program (Once an organizational negotiation process has been defined, all participants in the negotiation process should be trained in its use and application.)

Create a negotiation support environment:

  • It is important for executives to create an environment that supports the development and application of an organizational negotiation capability. Some of the key enablers are:
  • Creating an environment for negotiators to simulate negotiations on a regular basis (on a quarterly or bi-‐annual basis
  • Creating a negotiation reference database -‐ in its simplest form a log of resources with specific reference to the types of negotiation and relevant experience of organizational negotiators
  • Automating the use of tools to support the negotiation process implementation
  • Providing an individual coaching environment where resources can be coached in leading negotiation practice by managers

The negotiation process should be designed in such a way as to support both the relevant purchasing and sales strategies. Training should be rolled out across the enterprise to instill a corporate negotiation capability with a specific focus on two things:

  1. Maximizing margins and savings on purchasing budgets
  2. Identifying and mitigating risks

A key requirement of the negotiation process is the ability to integrate with the company standard purchasing and sales processes, to ensure the most effective deployment of resources.

Studies show enhanced returns from agreements result from:

  1. An improvement in the skills level of all negotiators due to best practice based negotiation skills training
  2. The application of a uniform negotiation process which allows for the dissemination of relevant information on a uniform basis
  3. A common negotiation vocabulary and a best practice cross cultural negotiation approach across territories
  4. Individual negotiation competency, preference & style analysis
  5. Optimal negotiation team composition & role definition
  6. Best practice based negotiation debriefing & refinement

 

If you’d like to learn more about negotiating tactics and determine how negotiating process training will improve your company’s profitability please contact us to schedule time to talk. 

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