Negotiation as a Corporate Capability (Part I of II)

This article discusses how to increase the negotiations and skills capability and knowledge base in the organisational sales process with all your clients.

The vast majority of negotiation books begin by referring to negotiation as an activity we all employ whether we are aware of it or not. It is universally believed that we cannot choose whether we want to negotiate or not, but rather that we can only choose how well we would like to negotiate. Regrettably, most of the focus in the past has centered on the development of negotiation skills competency, and has concentrated on the interpersonal aspects of negotiations. Although this is positively a vital component of negotiation success, it is unfortunately just that - a crucial component but not representative of the full negotiation picture.

Interpersonal negotiation skills include many facets such as the ability to use tactics, handle conflict and disagreement, recognise and counter tactics & dirty tricks etc.,. They are all an integral part of any professional negotiators' armoury. The majority of the negotiation training that is available today focuses on learning and developing these skills. There is little regard given to understand negotiations at a process level.

If we consider the arena of sales for a moment, you've likely heard heard the expression that a person is a born salesperson. If your salespeople all possessed the gift of the gab, or the inherent ability to sell, then why would organisations of all sizes implement best practice sales processes? The answer to this question is because research and experience has clearly shown that there are two dimensions to sales, an interpersonal and personal ability dimension, and then an organisational and process dimension.

In considering the interpersonal and personal dimension of sales, we see that it concentrates on the individual's ability to interact with prospective clients and existing clients in a persuasive manner to obtain business. On the other hand, the organisational dimension concentrates on embedding a culture within the organisation to provide the ability to support and apply the best practices in the sales domain. By utilising an organisational sales methodology, it has become possible to

  1. Evaluate the effectiveness of sales interactions
  2. Examine the appropriateness of sales methods employed
  3. Develop a sales knowledge base
  4. Adapt individual knowledge to the organisational level, and lowering the risk associated with relying on "star" individuals who are susceptible to better offers from competitors

The organisational and process dimension of negotiations has seen very little research and attention until very recently. It is the writer's opinion that this dimension will be responsible for revolutionizing the negotiation discipline in its entirety. The gains that can be realized in adopting an enterprise or organisational approach to achieving negotiation excellence are listed below:

  1. Consistent market perception of the organisation
  2. Competitor behaviour can be affected
  3. Consistent customer experience
  4. Risks are lessened
  5. Negotiation knowledge and experience becomes entrenched in the organisation
  6. Negotiation strategy defines tactics and not conversely
  7. Margin consistency can be achieved
  8. Service Level Agreements can be standardised
  9. Pro-active stakeholder management
  10. Base level negotiation skills are established

What is a corporate negotiation capability?

The following definition is proposed: The ability to perform consistently in all negotiations throughout the organisation with the goal to acquire competitive advantage.

This competitive advantage is premised upon on solid relationships negotiated effectively with clients, shareholders, employees and other stakeholders (environmental stakeholders etc.) To obtain a solid corporate negotiation capability that will stand out from their competitors, organisations have to:

  1. Analyse their current environment
  2. Examine industry benchmarks and negotiation best practices for guidance.

It is crucial to understand that this is an ongoing process and not so much a destination. Several of the factors that comprise the analysis of the current environment within an enterprise would include:

  1. Auditing the agreement history
  2. Assessing the human resource capability
  3. Auditing the existing negotiation knowledge management facilities
  4. Investigating the negotiations enabling environment

In the next edition of The Negotiation Times, we will carry on with our examination into negotiations as a corporate capability by exploring some immediate measures that can be implemented to embed negotiation best practices within any organisation.


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