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Successful negotiation

November 18, 2014

“We have to move from an environment where success is measured on concessions won, to where it is gauged by goals achieved, benefits that are shared’.

This statement was made by the head of contracting for a major state agency during a conference I am currently attending. I like the way it is expressed. On one level, it appears simply to be a statement of win-win, but I think it injects an important additional ingredient to that win-win calculation.

The problem I have with books like Getting to Yes is that they tend to see the moment of gaining agreement as the point at which value is realized and divided. In a spot trade, perhaps even in a typical commodity contract, that may be true. But increasingly we are negotiating agreements for solutions, services and long-term projects where results are only evident over time – sometimes a very long time. In this environment, we have to evaluate negotiation success by different criteria – essentially, as the initial quote describes, by ‘goals achieved, benefits shared’.

This is why the subjects that lie at the heart of good negotiations today are changing. They focus far more on the principles of how the parties will work together, how they will identify risks or challenges, how they will handle the need for change. Negotiators are establishing a roadmap or a blueprint for future engagement, not just a set of rules for a short-term transaction.

If negotiators remain fixated on winning points and gaining concessions, it means they will fail to establish the on-going governance and performance principles necessary for success. It also creates an environment where cooperation is threatened, where the party which was forced into concessions is seeking to gain revenge, or to rebalance the relationship.

IACCM research points to high – and in some organizations increasing – percentages of agreements that fail to deliver business goals and where neither party achieves expected benefits. I suspect that an investigation of their negotiation strategies would point to a traditional approach where negotiations proceed issue by issue, where there is no discussion of impact on value or behaviors, and where the focus is often on compliance and a ‘battle of the forms’. If your organization is one of those, it is time to push for change.

2 Comments
  1. I like the point you make how too often, the point of gaining agreement in a negotiation is the point of value realization – without regard for value loss during execution. How can negotiations and contracts focus more on real-life outcomes?

  2. Ertel and Gordon’s book “The Point of the Deal” is a great read that takes ‘Getting to Yes’ beyond the deal mentality, and requires negotaitors to have an ‘implementation mind-set, from the out-set’

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