Ethical Negotiating in Tough Times
Every now and then we get an insightful
call, comment or email from a client that illuminates and
reinforces important considerations for negotiators. I want to
share a good example here, from Terry Stephens, Principal at
leading financial services firm Mercer:
"The current
recessionary times are tailor made for those entities and
individuals who are able to demonstrate impeccable ethics and
maximum transparency in the manner in which they transact their
business. Trust is now at a premium and those who demonstrate these
values will now reap their just rewards."
It's hard to look for blue sky when
your job is under pressure, budgets are cut, hiring is frozen or
your team has been decimated (with no corresponding reduction in
your targets). But perhaps the current difficult trading conditions
also present a chance to think not just about the challenges, but
also the opportunities that present themselves both now and when
conditions improve.
Inspired by Terry's comment, we've
put together few negotiating ideas to get you thinking about some
positive negotiating steps you can take when times are tough.
Restructure expectations
Be open, be honest and share your
legitimate problems and constraints with your suppliers or clients.
Most people tend to disclose less information than they should,
particularly when they have bad news that the other party needs to
understand.Never miss an opportunity to structure (and
re-structure) expectations. In many industry sectors, the market
itself has fundamentally changed in the last few months - this
might represent a legitimate opportunity to invite renegotiation of
existing arrangements.
Avoid the temptation to guild the
lily. The current climate gives you the opportunity to revisit the
information game and be more, not less, open with your partners and
colleagues - more disclosure will help build and maintain
trust.
Play the ball...
When external factors disrupt an
existing relationship, there can be a tendency to want to blame the
messenger. Whether you are the party asking for change, or the
recipient of requests (or demands) for change, it's important to
separate the requirements and demands from the person making or
responding to them.
Skilful negotiators maintain
control, including through more summaries, more questions,
conscious management of the process of negotiation and the
professional use of adjournments.
Revisit objectives
Remember that your objectives
should be optimistic, but realistic in the current market, at the
current time. If you established objectives for a deal 3 months
ago, chances are that you need to revisit both the shape and the
size of the goals now. Be clear on your priorities - under pressure
you don't want to miss out on a Must Achieve in the pursuit of an
Intend to Get.
Develop a more creative concession
list to give you more flexibility, and consider where you can trade
concessions that might be worth a lot more to the other side than
their cost to you. Keep your skills sharp enough that you can
effectively explore cost and value in the trading terms - a lot of
value can be won or lost during execution, creative preparation is
essential.
Consider enlisting help from
outside your team to critique your preparation on major deals in a
structured way - sometimes a fresh, professional pair of eyes and
ears can provide unique insights prior to the engagement with the
other party.
Leave some money on the table
Fans of the TV series The West Wing
might recall a line from fictional U.S. President Jeb Bartlet,
after completing an agreement: "Real power means leaving something
on the table".
Smart managers and executives are
planning both for getting through this downturn intact, and being
well placed to take advantage of the upswing when it inevitably
comes. This requires that your long term partners have seen you
behave ethically and reasonably on even your (or their) darkest
days.
Occassionally in this climate, you
will find that a desperate negotiating counterparty presents you
with a lot of leverage. Explore and use leverage, but don't be
tempted to over-use it - remember that power ebbs and flows over
time. Be clear on mutual interests and dependencies, and wherever
appropriate, choose to negotiate rather than imposing your
will.
Make sure your proposals are
reasonable, and supportable with facts and data. And aim to leave
the other side at least comfortable enough that they will implement
the agreement without coercion.
Look after your team, and equip them to
succeed
Many teams are under intense
pressure at the moment. In these times, particularly where teams
are asked to do more with less, morale and efficiency can suffer,
which inevitably flows through to results.
In a tough budgetary climate, it's
even more important that you properly equip your team to execute
the deals they need to meet their targets. Crossing your fingers
and hoping is not sufficient.
Explore which targeted investments
in your people will pay for themselves within your budgetary
timeframe, and help give your team the confidence, positivity and
skills to save time, achieve more and hit the targets you've set
for them.
Next steps
What will you do to help yourself,
your team, your long term business partners and the bottom line
this year?
In this market, ethical and
effective negotiating skills are at a premium. You can't learn a
skill from a book - it takes regular practice and coaching.
Maintain the highest standards,
present a consistently professional, well prepared and ethical team
to the market, and actively take some positive steps to equip your
team for the challenges ahead and the upswing when it inevitably
comes around.
Simon Letchford
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