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Negotiators At A Premium

August 5, 2008

Let’s start with a simple premise.

Most negotiation occurs because the parties have an intrinsic interest in reaching a mutually acceptable agreement. In other words, most negotiations are not simply a pretence or a cover for quite different intentions.

Based on that premise, ‘good negotiators’ are those who can reconcile the interests of the respective parties to develop the framework for a successful relationship.

Looking at the current state of the world economy, it is clear that skilled negotiators will be in high demand. Trust is in short supply and the forces that undermine opportunities for agreement are having a field day. Politicians and regulators are adding to the stockpile of ‘positional’ issues that interfere with negotiated agreements, As if their rules and posturing were not enough, many deal-makers are also battling thier own staff groups, where the forces of control are in the ascendancy.  And finally, many negotiators find themselves having a very one-sided negotiation – the other side offers not a negotiator, but a talking head.

More and more I hear complaints by IACCM Members that it is increasingly tough to establish ‘good faith’ negotiations, that they regularly face Procurement or Sales personnel who have no empowerment and simply recite the company rule book. And that rule book is frequently one-sided and unreasonable as a base for a successful relationship. This short-sighted behavior frustrates deals, but even in cases where a contract emerges, it offers no basis for trust or commitment. These are relationships that typically fail to deliver.

At a time of such uncertainty, when economic and political decisions have added to the supply chain and cultural issues that challenge negotiators, it is imperative that companies empower their representatives. Successful negotiated deals do not emerge from polarized positions. They take creativity and imagination, flexibility and vision.

Rules-based negotiators will increasingly find themselves marginalized .. as individuals and as companies. The time to train and develop a skilled core of professional negotiators is now – and the need is urgent, because most organizations show limited talent in this area, especially in their buy-side operations.

One Comment
  1. This goes beyond individuals into the fabric of organizations. While many companies talk about creating “win-win” scenarios for customers, partners, suppliers, and other members of the broader community, when push comes to shove, a lot of that talk goes out the window. The thinking goes: It’s me first. I need to make my numbers right now, or I may not be around to enjoy the fruits of a longer term, mutually beneficial relationship.

    It doesn’t take advanced game theory to show that this will lead to suboptimal outcomes for both parties, but without a framework and a mindset that encourages better outcomes, human nature takes over, especially in lean times.

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