In our coaching practice I often meet executives and
entrepreneurs who have made several of the following 10 mistakes when
negotiating international business deals, creating huge opportunity costs for
their organizations as a consequence.
Mistake #
1: Lack of effective scenario planning and preparation
Too many negotiators default to their personally
preferred standard procedure in negotiating deals, because this approach has enabled
them to succeed in the past.
If you find yourself getting involved in complex, international or intercultural
deals, your default home-country way of doing things may backfire. In such
situations, robust planning and
preparation is required, in which you take into account all of the
interdependencies and cultural factors influencing the deal, develop multiple
scenarios both at the strategic and the tactical level, and recalibrate or refine
your negotiation plan on an on-going basis during the actual negotiation, based
on the cultural and interpersonal
patterns you observe.
Experience shows that the best negotiators prepare
their interactions meticulously, which allows them to be more present, agile, powerful and effective
during the actual negotiations.
Mistake #
2: Not setting the scene properly
The best negotiators we have met over the years seem
to initially spend a lot of their negotiation time setting the scene, priming
their counterpart, framing their position, and anchoring the value their
product or solution offers.
If there is ONE
thing which seems to separate the experts from the amateurs in negotiation, it
must be the quality of the priming, framing and anchoring applied.
This is especially true for international,
intercultural negotiations, where framing provides a means of maintaining a
clear focus throughout the business conversations.
As the saying goes – frame or be framed!
Mistake #
3: Unclear team roles and responsibilities
Most negotiation teams we work with seem to fare
relatively well when it comes to appointing the lead negotiator and expert
roles.
However, we often find that despite all of the
power-mapping negotiation teams seem to go through during the preparation phase,
in order to better understand the power-distribution and interdependencies of
their opposing team, they relatively rarely map out who on their team will be
developing what type of relationship with which person on the other side. They
also rarely seem to consciously plan
who will be making which concession at what point in time to which person on
the opposing team.
In addition, experience shows that it is important to have
at least one person on your team charged with managing the agenda, timelines,
milestones and deliverables, as well as observing
and interpreting the potential changes in team-dynamics, roles,
body-language cues and priorities in the opposing team.
I am often amazed to see even highly experienced,
seasoned negotiators totally ignoring
the obvious body-language cues their counterparts share during the
negotiations. The danger here is that we get so involved in the conversation,
especially when the tension and complexity levels increase, that we no longer
consciously see what is really happening right before our eyes.
Mistake #
4: Lack of constructive conflict
Many business leaders and sales people seem to dislike
the conflict, tension and emotional stress, which are simply a natural
ingredient of most negotiations. Most professional purchasers and sourcing
specialists know this fact intuitively, leveraging tension as a strategic tool
during their negotiations, in order to destabilize the sales people.
The best sales negotiators we know have learned to
reframe such tension and use it as an opportunity to create innovative
solutions with their clients.
In the context of intercultural negotiations, it is
important to note that the amount, timing and the way in which trades are made
can differ significantly. Not using a culturally appropriate trading-style is
one of the main reasons why intercultural negotiations frequently stall or
become totally blocked.
By managing conflict, tension and concessions
strategies in a psychologically and culturally appropriate way, we can develop
stronger bonds with our counterpart and get them to invest in a solution we jointly own!
Mistake #
5: Ineffective management of complexity
When negotiations get too complex, the tension level
tends to increase fast, and the resulting sense of frustration can quickly lead
to dangerous black-or-white solutions, which usually don’t satisfy the
underlying needs of any of the parties involved.
Managing complexity usually requires us to limit the
number of negotiables we focus on at any one point in time. Experience shows us
that a range of 6 – 8 negotiables provides a manageable level of complexity which
most negotiators seem to be able to work with effectively.
However, experience also tells us that having too few negotiables is
just as bad as having too many. In both cases most negotiators tend to focus on
the obvious, quantitative negotiables more, which usually leads to a discussion
purely around price, rather than value.
Mistake #
6: Not preparing breakthrough strategies in advance
Handling tactics, power-play, and blocked situations on
the spur of the moment often doesn’t provide successful results, unless you
happen to have a long track-record and a wealth of relevant experience in business
negotiations, or if you are equipped with an unusually strong intuitive
guidance system.
We have seen even the most seasoned negotiators
getting into totally blocked situations, especially when tension levels
increase and their brain goes into fight-or-flight mode. A key breakthrough
strategy thus is to monitor and actively manage your personal emotional state, as well as leading your counterparts
towards a constructive process of creating common ground and co-creating a
mutually beneficial outcome. We suggest brainstorming potential breakthrough
strategies with your team in advance, as part of the scenario-planning, and
involving a seasoned negotiation coach where needed.
Mistake #
7: Selling and challenging instead of co-creating
Although there clearly are many exceptions to this
rule, we find that especially in Europe many business leaders do not like being
sold to. They also often don’t respond especially well to having their business
strategies, plans and activities challenged by sales-people (the Challenger
Sale approach often doesn’t work well in this part of the world). And
increasingly, we hear executives state that the win-win approach often
produces compromises which aren’t really satisfying.
One of our clients has even coined the term win-win
is for losers!
In today’s complex, multinational, multi-option, multi-polar world, we need to go beyond cleverly crafted compromises, and instead orchestrate the context for co-creating more holistic, sustainable, truly satisfying solutions with our counterparts in the business-negotiations we get involved in.
Mistake #
8: Not probing and checking assumptions deeply enough
We often find in our business negotiation coaching
assignments that our clients believe they have understood what their
counterparts really want – and they usually have already developed a whole host
of potential solutions for the perceived problem. It seems that many
negotiators enjoy the sense of satisfaction involved in the problem-solving
process. So as soon as they see a problem, they immediately start solving it.
This highly transactional problem-solving approach
often leads sales teams to present their clients with the perfect solution for the
wrong problem!
Even if you provide clients with exactly what they
asked you for, you may find that they are still not truly satisfied with what
you give them. Especially in complex business negotiations we need to take time
to check our assumptions and dig deeper, in order to understand the true
underlying personal and business motives, as well as the respective hierarchy of needs driving the dynamics
of the negotiation.
Mistake #
9: Not structuring the negotiation process effectively
Our negotiation coaches are often called to intervene
and provide support in negotiations that have become blocked – or totally
unstuck. One of the first things we do in such situations is to conduct a meta-negotiation
with all parties involved, to redefine or recalibrate the rules of engagement,
clarify the expectations, define the desired deliverables, develop a common
denominator, and agree on mutually acceptable ways to take the negotiation
forward.
Such meta-negotiations are especially
important and effective in the context of intercultural business negotiations,
as they help to create the common ground which is usually required, in order to
establish a sense of mutual trust and transparency. Creating such small but
significant incremental agreements, and linking them up logically, can provide
a quick and effective way to break
through blocked situations and to create solutions that satisfy the real
needs of all parties involved.
Mistake #
10: Ineffective deal closing and post-deal implementation
Many procurement professionals admit to experiencing
what they call purchaser’s remorse after closing a deal, especially if they
learn later that they could have got a better deal, if only they had fought
longer and harder.
The best sales negotiators seem to help their procurement partners by putting together a sound business case and coherent, relevant business story (that is why relevant storytelling is so important in the sales process), enabling the buyers to make a better case for their purchase within their own organization.
When I work with procurement specialists, they often
tell me that this is the most important
thing they would like to receive support with from the sales people they
meet. And at the same time it is the MAIN
thing they usually don’t get.
Learn more about how you
can improve the results of your international negotiations
at
http://www.elegant-success.com
http://www.elegant-success.com