Creating Tomorrow's Corporate Architecture

There is more to negotiations than merely outsmarting our opponents. This article discusses how organisations can improve their negotiated results by implementing an enterprise wide approach to negotiations, thereby creating an organisational capability in negotiations.

The art and science of negotiations has evolved over time for as long as mankind has been in existence itself. In modern times, we have focused on the interpersonal dimension of negotiations as the key determinant of negotiations success.

It has become clear in recent years, however, that the interpersonal dimension of negotiations is only a component of overall negotiations competency. It is only within the context of a holistic approach to negotiations that we will derive the maximum benefit.

This means that there is more to negotiations than merely outsmarting our opponents because we are either natural born negotiators, or because we have less scruples regarding the use of all manner of tactics to advance our respective causes.

Organisations can vastly improve their negotiated results by implementing an enterprise wide approach to negotiations, thereby creating an organisational capability in negotiations.

When charting new territory, it is often useful to find some references along the way to assist in the process. Probably the most useful reference to the creation of a corporate negotiations capability is to look at the sales discipline.

Leading enterprises have formalised and entrenched best practices in the sales discipline over the past 10 to 20 years with amazing results. No longer are sales people seen as individuals with the "gift of the gab", but they are recognised in many enterprises as consummate professionals adhering to an arduous, flexible but very professional sales strategy and process.

These enterprises are no longer only dependent on the information resident in one or two individuals to achieve their sales targets. Instead, the implementation of a formal sales strategy and process has provided the structure required to build an enterprise wide sales capability. Sales resources are trained and equipped to support the organisation's' sales strategy and process.

In similar fashion, enterprises can establish a capability in negotiations by creating a formal structure and process within the organisation. Of course the importance of the interpersonal dimension of negotiations is still paramount, but this should be addressed within the context of an enterprise wide approach to achieve optimal results. An organisation's negotiation strategy should support it's sales and purchasing strategies, which in turn should be supporting the business strategy.

Once a negotiation strategy has been defined, a supporting process can be developed and all resources involved in negotiations can be accordingly empowered.

The effectiveness of enterprises' negotiation capability will now manifest itself in the gains achieved across the divisions - better deal margins in sales, savings in purchasing budgets, reductions in overall litigation costs etc.

Aside from the obvious gains to be had at an organisational level, consider the impact on the individual negotiators. No longer are negotiators only incentivised to close deals, they now have the discretion to walk away from bad deals for the company without incurring personal penalties.

Individuals are now able to employ tools to assist them in deriving optimal results from their negotiation interactions.

Valuable process based tools include a focus on preparation that ensures vital information is considered. A detailed environmental scan forms the basis of the toolset. This leads on to a detailed BATNA (Best Alternative To a Negotiated Agreement) analysis done from the perspective of all participants.

Once we have a view of all the respective BATNA's we turn to our Ideal Deal Analysis in an attempt to understand the best possible deal that could happen for all parties involved in the negotiation.

Once the individual is armed with all this information, tactics and slight of hand becomes weapons of mass misuse. they are rendered completely ineffective against the individual that applies a rigorous process to his/her negotiation endeavors.

Of course due attention still has to be paid to themes such as setting the appropriate climate for negotiations, establishing common ground and probing for interests-the only difference is that in the new paradigm the negotiator is not dependent on these "soft" tools only to achieve negotiation success.

The negotiation strategy and process within an organisation is given even more relevance when supported by a dedicated maintenance function. With a negotiation capability maintenance function such as the establishment of an enterprise wide negotiations knowledge base and perhaps even an enterprise negotiation centre of excellence added impetus is given to ensuring a best practice approach to negotiations. The maintenance environment will provide the organisation with the ability to constantly refine its approach to negotiations, whilst ensuring that all its negotiators are at the cutting edge of developments.

The road to establishing an organisational capability in negotiations is unfortunately one that has only recently been charted and there are still many obstacles to be overcome. The reward for early adopters should, however, be sweet indeed.

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More information on Organisaitonal negotiation - 2010 Nov 8
Commentator: Kasper (Denmark)

"I would like to know, the origin of this article - as i'am currently looking into joining the humanistic and systematic approach to negotiations. Who is the author, when it is from and where is it published?"

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