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- Does your organization have a transferable methodology and process for how to negotiate?
Why this is important: Many executives are good negotiators but are unable to explain and teach others what it is that they are doing so effectively. They do it intuitively and naturally. Others who do not possess these intuitive and natural skills are left behind in their negotiation capacity, thereby costing the organization enormously by not optimizing negotiated outcomes. To develop corporate negotiation strength, it is vital that there is a corporate-wide negotiation process, system and methodology in place that is transferable and can easily be taught to others.
- Are your customers focusing exclusively on price without exploring value?
Why this is important: When negotiations are focused exclusively on price without exploring value, the object of negotiation becomes commoditized and under priced resulting in sub-optimal agreements. An organization that has negotiation strength will consistently introduce, uncover, explore and leverage value as a key component in negotiations to ensure optimal outcomes.
- Are the collective results of individual negotiations within your organization leaving unclaimed value on the table?
Why this is important: Although the outcome of any single negotiation may not have much effect on a business' fortunes, the thousands of negotiations a typical company undertakes have, in combination, an enormous impact on its strategy and its bottom line. As partnerships, alliances and other agreements become more important in business, those organizations with negotiation strength tend to treat negotiation as an institutional capability, rather than as a series of discrete and isolated events.
- Do you have a corporate-wide method to evaluate the acceptability of a proposed negotiated agreement?
Why this is important: Many negotiators accept or reject proposals arbitrarily often on a hunch. In a corporate environment this can be costly. Companies with negotiation strength have a predetermined corporate-wide set of criteria (which do not limit creative and innovative ideas) that need to be met before agreement can be reached. This gives negotiators the confidence and tools to know when to accept or reject proposals based on true standards; they can explain and justify their decisions to others; and it provides a standardized protection for the companies' interests.
- Do you have a strong performance evaluation system to measure how effectively negotiators within your organization are negotiating?
Why this is important: Since negotiations in many companies are ad hoc, individual and isolated events as opposed to conforming to corporate-wide established negotiation processes, standards and methodologies, it is impossible to have a standardized system to evaluate negotiator performance. This makes it hard to track corporate loss due to ineffective negotiating and to improve performance. Companies with negotiation strength have established corporate-wide negotiation processes in place and link their performance evaluations to those processes.
- Do those with whom your organization negotiates experience consistency in your negotiation approach and process?
Why this is important: In the same way that customers value consistency in quality of goods and services, they also value consistency in their experience in doing business. Studies have indicated that customers will pay a premium for a business experience that they feel is fair, respectful and not stressful. Companies that have negotiation strength will establish a corporate-wide approach to negotiations that provide customers with a positive experience in which they consistently feel they are being treated fairly and respectfully. This consistent experience will contribute enormously to customer loyalty.
- Do your negotiations result in optimal outcomes AND strong working relationships, or is one often compromised to preserve the other?
Why this is important: Many negotiators find themselves faced with a dilemma. Should they be "soft" negotiators and concede on substance to preserve the relationship or should they be "hard" negotiators and forfeit the relationship to preserve substance. Neither outcome can be good. Companies with negotiation strength realize that the negotiation of substance and the negotiation of relationship are two distinct processes and they have the tools to manage the relationship component wholly independently of the substance component so that they are able to achieve good working relationships within the relationship component and optimal outcomes within the substance component.
- Are your negotiators in control of the negotiation process or are they reacting to their counterparts' negotiation tactics?
Why this is important: According to studies, 80% of negotiators react to their counterparts' negotiation tactics as opposed to guiding the process. Organizations with negotiation strength understand that dominance in a negotiation is not determined by where you sit at the table or in whose office the negotiations are taking place, but rather by who is guiding the process. They make sure to give their negotiators a process as well as the tools and skills to guide and manage that process. As a result, they are in total control of the negotiations at all times and are able to dominate the negotiations in a very subtle way.
- Are your negotiations stressful and adversarial or are they engaging and collaborative?
Why this is important: When entering into negotiations, people often feel intimidated, threatened, exploited and stressed. This commonly leads to an adversarial and confrontational environment that stifles creativity and effective problem solving, which are both important components in reaching optimal outcomes. Companies that enjoy negotiation strength have the tools, skill and technique to engage their counterparts and put them at ease. They are able to turn potential face-to-face confrontations to side-by-side collaborative problem solving. This encourages creative solutions and optimal outcomes in which all parties feel tha they have participated in crafting.
- Does the way you conduct your negotiations help to build trust or erode trust?
Why this is important: Customers do business with people they trust. Trust can be established or destroyed by the way we conduct negotiations. Companies with negotiation strength deploy a consistent negotiation approach and process that projects authenticity and integrity. They understand the value of trust in business relationships and know how to use their negotiations as trust building tools.