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The Secrets Of The Top Negotiators

June 30, 2010

Today I was asked to present on negotiation excellence to the sales force at a leading technology company. When I showed the results of IACCM‘s 2009 study of ‘the companies most admired for negotiation’, someone asked “Why is the top 5 so biased onto the IT industry?”

It is an interesting question and I realized that the answer may well be connected to the issues of complexity and intelligence that I have discussed in recent blogs.

First, the top ranked companies are not really IT companies any longer. They have largely escaped the trap of commodity supply and they are primarily solutions and services companies, often project-driven. This has caused them to focus on the outcomes of their contracts, to move away from the old world where they protected themselves with ‘selection and use’ criteria that denied responsibility for results. It has also forced them to think about their commitment capabilities and to communicate these to the front line negotiators; if you want to avoid price-based competition, then you must learn to sell on value – and that value must be relevant and quantifiable. Negotiation in these companies is not seen primarily as an individual talent, but much more as a corporate capability.

But I think their transformation and leadership is also the result of another factor – and that is globalization. These companies were at the forefront of global business need and trends. Their customers depended on technology to enable their global aspirations. The traditional, multi-national business model of companies like IBM, HP, Accenture and Microsoft frustrated customers’ goals and ambitions. Negotiators were forced to spend their time excusing incapability, rather than promoting positive competitive difference. When this challenge was understood, it drove a fundamental change to the business model and structure, which in turn generated an environment that was far more receptive to new ideas. Essentially, these companies opened themselves to the creativity that comes from inclusive, borderless communities. It may have been accidental, but the benefits are evident in their achievements today.

The dual demand of dealing with the complexity of a switch to selling value, rather than price, and offering global, rather than national or product-based capability, has placed these companies at the forefront. Their experiences have made them more agile, more flexible and more intelligent in dealing with the complexity of today’s volatile global markets.

Are they perfect? Far from it – all of our winners would acknowledge they have a long way to go. But when I look at their propensity to drive research or benchmarking projects, their eagerness to discuss new ideas and to innovate in their contract and negotiation practices, I see a common theme. And interestingly, these are also companies that are seen by many as among the most rigid when they negotiate – they are perhaps among the least likely to bend to customer-specific exceptions. That’s because they understand the costs associated with ‘deviation’ from the standard. They prefer to spend their time reviewing, challenging and changing the standard, to deliver consistent value, rather than managing the consequences of situational exceptions.

So global thinking really does pay dividends, so long as that thinking combines the development of worldwide standards with the readiness to listen and learn from worldwide feedback and ideas. We should all be thinking hard about the barriers we can remove and, in so doing, equip our negotiators with differentiated sources of value.

As a footnote, it is interesting to note that all but two of the top ten ‘most admired companies’ are active Corporate Members of IACCM. Of course, that may simply be a coincidence ….!

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