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Deploying Negotiation Skills To Ensure Complex IT Agreements Do Not Fail To Deliver Maximum Value
Formal research into business negotiations found that the biggest challenges faced by businesses and individuals are (a) the price/value trade off and (b) developing alternatives/generating options, respectively. A recent Fortune Magazine review in affiliation with Miller Heiman (the complex selling methodology gurus) found that sales people quoted price as the number one reason why they lost deals.
There has been much talk in the IT industry on both the buy- & sell side about 'partnering' to produce solutions. The supporting data shows, it is doubtful whether this talk has translated into action.
Whilst most businesses would like to think that they are engaging both clients & suppliers in a 'solution based' format, the role of price still dominates the process. This is due in large part to the failure of individuals to see the 'big picture' or to get involved in creative thinking. Our research & experience tells us that one of the main features of successful business negotiators is the skill to be creative & flexible.
Whilst many IT businesses have built their standing on the back of their innovative and creative technologies, it would seem that creativity is often limited to the design & engineering departments. One of the strongest drivers of human conduct is the tendency to avoid potential losses. When assessing information about the future, managers are more interested in avoiding potential losses than realising the exact same gains. This means that during negotiations that support difficult and high value IT agreements, the focus is more often on managing risk to avoid potential losses, rather than on finding innovative and creative ways to create additional value for all stakeholders.
The more complex the agreement, the more vital it becomes to manage risk. Rather than just trying to avoid losses, we should concentrate on methods to create options for common benefit during negotiations.
To avoid falling into the price trap, ask yourself the following questions ahead of each negotiation and make this part of your negotiation strategy:
1. Vision
a. What are the main motivators of all the stakeholders to the deal that will be satisfied by reaching an agreement?
b. How important will it be for each party to the transaction to perform in a mutually beneficial mode?
2. Value
a. What are the specific purposes of all the parties to the transaction?
b. What are the limits associated with each of the objectives for all stakeholders?
3. Process
a. What suppositions have you made that you could confirm through questioning during disucssions?
b. How can you frame the negotiation so as to contribute to a collaborative, partnership based approach rather than a price centred negotiation?
4. Relationships
a. Do all parties have the same desire for a long term relationship?
b. How can you influence the 'climate' of the negotiation so as to support a collaborative approach? ('Climate' pertains to non-verbal, physical and cultural aspects.)
Once you have covered these simple elements of preparation you will have time left to be creative. Being creative is not something that comes easily to most of us but it is an essential negotiation skill. Use one of the recognised creativity methodologies such as De Bono's Six Thinking Hats, or the Disney Creativity Model to help you create alternatives.
If you want to truly embrace a partnership method that delivers optimal value, you should waste no time in getting the creative juices flowing.
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