Wednesday, February 2, 2011

Negotiation Preparation - Establish the Team Rules

If you will be working with a team in a negotiation, it is essential to spend time focusing on team behavior, team roles and team interaction. If you don’t manage the team, they can either directly or inadvertently say something that can have a negative impact on the negotiation and your results.

When you decide the negotiation needs to have a team assembled, you need to decide who the team members will be based on their technical skills, negotiation expertise, and Interpersonal skills. Many times someone with the right technical skills may not be a perfect fit either because of their lack of experience in negotiations or their interpersonal skills. You need to identify the number of team members and their roles. Bigger is definitely not better as the potential problems and coordination issues increase the more team members you have.

Part of establishing the team is establishing the communication process and flows for the team (as you want no surprises).  It includes how information they uncover needs to be documented and shared within the team. You prepare for the negotiation as a team. You make it clear the roles of each of the team members. You make it clear how you intend to manage the negotiation and which of the potential negotiation strategies you will use.

Brainstorming and role playing as a team are two very useful techniques for planning a negotiation.
       Brainstorming allows the team to utilize the experiences to help you think through your position and develop creative solutions to negotiating problems. 
       Role playing can be extremely useful in establishing your position and avoid potential mistakes during the negotiation. As part of role playing you may script what you want certain team members to say.

For each member of the team, in addition to their role, you also need to establish what they are accountable to deliver as part of the team throughout the process.  During the actual negotiation you need to schedule frequent breaks to solicit feedback, especially if the negotiation breaks into separate meetings to understand what the team members may have discovered.

As there can frequently be conflicting interests between individual team members it’s important to instill the attitude that what’s most important is not individual positions or goals, what’s important is what in the best interest of your company. Sometimes that’s a tough pill for someone to swallow, but if they aren’t prepared to be a team player you simply don’t want or need that person on your team.  I’ve had to tell people that they were not welcome to attend a negotiation because they wanted to work their agenda that would have killed the deal. Frequently I would get a call from their Manager and would need to explain the significant difference between the value we would get if we were able to close the deal versus what we would lose if we held firm to the position their employee had been advocating. When its explained like that, it would usually end the discussion.


The one of best ways to insure that you have a successful negotiation is to make sure that you have control over the Negotiating Team and that the team is operating under one set of rules by which the Negotiation will be conducted. The following represents a set of basic rules that I generated over time after learning each of them the hard way. Most of these are straight common sense, but sometimes common sense does not exist in all individuals. Depending upon the team members, and the relationship with the Supplier, you may want to develop your own set of rules for the negotiation.

1.     Negotiations or meetings with a Supplier are not a forum for discussing internal disagreements, conflicts, etc., They are not the place to challenge what another team member has said. If something is said that you disagree with, make a note of it and discuss or resolve it off line. If the item is critical to the discussion at hand, pass a note to the lead negotiator asking that you take a break to caucus.

2.     References to the way you do business should only be mentioned when necessary and when they can be given in a positive manner. If you have nothing positive to say about it, don't comment on it.

3.     Never disclose an area where you can't measure the Supplier's performance. If you can't measure their performance we may be able to do so in the future. We may wish to make a concession in this area for another concession from them. If they know we can't measure them they will also know that it is really no concession and the concessions they offer will be comparable.

4.     Never agree to anything immediately. At first look a proposal may seem very enticing. However, when all the ramifications are considered it may not be such a deal or we may be able to do better.

5.     Don't accept "standards or policies" as final. Companies publish standards and quote policies for customers who are not wise enough to negotiate around them.

6.     Never re-enforce a Supplier's objection. If you agree with them keep it to yourself.

7.     Don't make any concessions until you know all the demands. A normal negotiating tactic is nibbling, a little here, a little there. Each of these seem harmless but the total effect will surprise you.

8.     Keep track of all the concessions that they are asking for and weigh them from both your and the Supplier's perspective. What may appear to be nothing for you to give away may be a substantial gain for the Supplier and as such you should use it to get a concession of equal value.

9.     If you are unsure of what you heard the Supplier say, seek to clarify it by re-phrasing it. A number of times your impression will not equal their impression and it's best to clarify it as early on as possible.

10.  When the team breaks off into sub-groups or in subsequent meetings or phone calls remember that the rules still apply. The old saying was "loose lips sink ships" applies here. Suppliers will try to probe individual team members to get information that will assist them in their dealings. Volunteer only that which is necessary.

11.  If the team breaks off into sub-groups use that time to do as much probing about the Supplier’s operation as possible. Just as they will try to get information from us we should try to get information from them.

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