#397 Do Leaders need Negotiation skills?
Do Leaders need Negotiation skills?
A skill between theory and practice
Do managers need to be able to negotiate?
Managers and employees often have different views. This moment is not unusual in everyday working life. The question, however, is how to deal with it. It can be negotiated, but the manager can wait and do nothing. They can postpone the issue or delegate the negotiation. Sitting it out or bluntly agreeing without negotiation is theoretically possible. Finally, the manager can issue instructions to enforce their own point of view. However, the question always remains the same.
Do managers and executives themselves need to have the skill to negotiate?
Basics
Knowing three aspects of negotiation is important to understand leadership aspects and negotiation skills.
The first aspect of a negotiation strategy is the public position. This includes all aspects that can be negotiated and openly discussed, such as technical options or project paths. The public position must be known to everyone; otherwise, the next aspect cannot be addressed.
The second aspect is the non-public position. You certainly do not want to discuss profit margins, the list of suppliers, or the competitive situation with your suppliers. Therefore, it is all the more critical that everyone involved in the negotiation knows which aspects are in the public position and which are in the non-public position. Even small comments can negatively impact the negotiation result if this is not precisely clarified.
Then there are the non-negotiables. These aspects cannot be changed, even if you want to do so. Whether it is internal regulation or compliance, national rules or trading block requirements, company strategy also plays a role here as certain aspects are not negotiable. These non-negotiable aspects must be clearly defined for everyone.
Preparation
One principle must always be adhered to: Preparation plus team equals agreement - the PTA principle. The best preparation, together with the best team, always produces the best negotiation result. If there is a lack of preparation, participants on the same side of the negotiation will unintentionally interfere with each other or prevent the negotiation from being successful. If the team is not well-chosen, you cannot convince others professionally in critical situations. Therefore, the best negotiation result is always the result of optimal preparation in very well-selected teams. It is often the case that negotiating parties only meet a few minutes or a few hours before the start of negotiations, a concept doomed to failure. The spontaneous arrival of managers, who often allow themselves to be present unannounced, is also not expedient and must be prohibited. Most negotiations are not lost in the middle of the negotiation but during preparation.
Implementation
Ensure that everyone involved is professionally trained concerning negotiations. Negotiation techniques are learnt. Learning to negotiate simply by trial and error is an expensive and unprofessional decision. Also, ensure that there is always a time slot for proper and timely preparation. Stating that you have no time to do so will cost you significant amounts of money, especially as you will need more time to deal with the poor negotiation results and their consequences — clear structure, clear process and, most importantly, no tricks. Of course, you need to know negotiating tricks and learn how to protect yourself against them. Unfortunately, many people then use these tricks themselves and are surprised that this practice is not sustainable. Tricks never ensure a good negotiation outcome when considering the medium and long-term results. Tricks only ever help in the short term. In the end, negotiations are not about winning. Whoever wins produces losers, and losers later want compensation or, at worst, revenge. The aim of negotiations is to reach an agreement that both sides can work with. This result is not always possible but must be achieved as often as possible.
Conclusion: Negotiations are always involved. Whether it's a classic negotiation situation, salary discussions, or discussions about project approaches, negotiation is involved in all aspects. Managers and Executives, therefore, need to master this skill. Those who always want to win and believe that they can win by giving instructions always lose in the end. We win together.
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More on this topic in this week's podcast: Apple Podcasts / Spotify
For the podcast transcript, read below.
Is excellent leadership important to you?
Let's have a chat: NB@NB-Networks.com
Contact: Niels Brabandt on LinkedIn
Website: www.NB-Networks.biz
Niels Brabandt is an expert in sustainable leadership with more than 20 years of experience in practice and science.
Niels Brabandt: Professional Training, Speaking, Coaching, Consulting, Mentoring, Project & Interim Management. Event host, MC, moderator.
Podcast Transcript
Niels Brabandt
Negotiations . And the question, does your leader need to be able to negotiate ? Do leaders need to be able to negotiate ? And, of course, you can now say, no . They don't . They can delegate that . Can they ? Let's look at the facts of this is a skill where there's often a huge gap between theory and practice . When do leaders need to negotiate by themselves ? When they when can they actually delegate that ? And often, leaders and employees have different points of view and that's where the negotiation begins . Of course, you can always say there are different ways how to deal with that . You could negotiate . You can simply say I'm not gonna talk about this . You can simply sit it out . Don't do anything . You can simply say I give you the point here . You can have it . Or you can simply say I give you a direction or instruction . That's how we're gonna do it . End of negotiation in high commerce negotiation here . The question is, do leaders really need to negotiate ? Do really do do really need a do sorry . Do leaders really need the skill to negotiate by themselves ? Let's look at the fundamentals first . The first thing you have when you have a negotiation is the so called public position . The public position is anything you like to discuss and that you are willing to discuss . So, for example, when you discuss with the client and you say, hey . We have a certain mechanic that we would actually like to deploy at your side, and then they start to negotiate their rate and the rate goes up and down, then you are willing to discuss that and you say, hey, we have this mechanic and that one here are the CVs . And by the way, these are our approaches, our ideas, that's our project manager . And then you are able to negotiate that public position means it can be shared . However, very important . It goes without saying when you have a public position, you also have a non public position . So for example, you probably don't want to put on display your profit margins . When you sit with a client and say, hey, we need to raise our prices by 4.9% And, you know, well, two and a half percent is also okay . It's still covering the cost then . Then you will not tell the client that you have 2.4% margin that you put on top of that . That's the non public position . And when you do not prepare well, someone will mess it up . I give you a very simple example . That's a real world example, by the way . With one of my clients, one of the leaders of the business joins spontaneously for a negotiation, sits there, immediately takes the lead because it's a very high ranked professional and says, hey . Let's talk about our engine . And then the then the client says, oh, we'd like to do x y z . And then the leader says, yeah . Technically, that's not a problem at all, but let's talk about the price and delivery times . And the engineers drop there with their tables, smack it with with their hands smacking on the table out of despair or anger . I don't know . Because it was not technically easy . However, when one of your highest executive says, it's not a problem at all . It is a very hard bridge to go over that you say, well, it actually is really hard, and it looks like you're starting an internal fight . And also it looks like you're not prepared at all . The public and non public position need to be defined very, very well . And the third option as well the third option third thing you have here in a negotiation, it are the so called non negotiables . I give you very simple example . If someone, for example, says, yeah . We have, a couple of locations, and, we probably want to buy your your technology . It's a surveillance technology which uses facial recognition . We have a couple of locations . Please deliver to New York City, to London, to Havana and Cuba, to Riyadh and Saudi Arabia, to picking in China, and to, North Korea as well . There there's at least one country on that list where you say probably we won't we won't deliver that . And most likely, we're not even allowed to deliver that . So there are nonnegotiables, but these also need to be clearly defined . I give you a very simple example . In one negotiation where I was sitting there as a coach, they were negotiating and someone says, well, we usually don't deliver into that market because we only sell within the EMEA area . And then one of the executives says, but, yeah, but, you know, we can make things happen, compliance back and forth . Compliance isn't the one leading the business . You are now openly saying that you're violating compliance to get in a bit of cash, and that will stick with the client . And by the way, it didn't go down well with the client . The the the client was very hesitant and said, so you you don't follow your compliance guidelines just when we say you shouldn't . That's, of course, not the partner I want to have . By the way, they didn't get the business . So you need to have the public position, the non public position, and the nonnegotiables . All of that needs to be very clearly and well defined because essential and crucial for your negotiation success is the preparation . Spontaneous joining does not happen . No one enters the room and says, hey . Here I am . You sit together and then you need to talk about how how is the preparation, how is the team, and how do we want to get to a contract or an agreement, usually, we say . You have preparation, you have the team, and you have the agreement, PTA . Preparation team agreement, PTA . So when the when preparation is great and you have the right team on board, the agreement will be great . When the preparation is not so great, you will still have a team that gets some sign some sort of agreement out of that . It just will not be that great . And when I hear from senior executives from large corporations that they tell me, well, we have international teams from five or six different departments, and due to lack of time we have for preparation, we meet same day . The negotiation is 1PM and we meet 12:45 . And then you wonder you're not gonna do well . Most negotiations are not lost during the negotiation . Of course, you can lose a negotiation during the negotiation, but most negotiations are lost because you didn't prepare very well . Suddenly, someone says, oh, I think that our old price I think the new price is this one . And then suddenly so, of course, the other side then you don't even know your own prices . Or someone says, oh, yeah . I think we have to raise our price by 2.5% . And then then someone says, no . That's that's the minimum . You have to say four point it's actually 4.9 . And then you have to make something up how you want to get magically to 4.9 percent . Always sitting on a very weak position, all based on a lack of preparation . I can tell you from companies I work for . Is it GlaxoSmithKline or Microsoft's pharmaceutical or IT or my own business for years and years and years with my sales manager, my sales executive in my company ? When we had large negotiations, we sat down for hours preparing that . And in the tech field, we sometimes sat down for two days with massive massive deals and projects lasting years because we needed to have the perfect negotiation strategy . When you want to say, hey . We're gonna set something up where I say this is not possible and then you say it is possible, so we do a bit of bad good cop bad cop thing . This is great and it works, but you need to prepare this . So how can you implement all these all these aspects ? So first, professional training . You get people professionally trained . Usually, you have a level one, level two, maybe level three in negotiations, but this needs to happen . It's extremely important . You have a most likely an experienced negotiation coach . If not, feel free to chat with me . I can help you there, but that's not the point here right now . But feel free to contact me if you like any help here . You need to have a very professional preparation, and you need to train your people professionally . If they never learned negotiation, I just give you a very simple hint of how this goes . If you, for example, are in construction, you build houses, and I knock on your door and say, hey . Yes, Neil . Houses . I know houses . I've been in one . I've been in multiple houses . I even lived in one . So, can I start here ? I mean, I didn't do the whole study and do anything . All these engineering stuff stuff is just too stressful for me . I just like houses . You know ? I like to be in houses . So because houses are, you know, just nice houses . So can I get a job here ? You would say never in a million years because you're not qualified . And you're right with that . So why is it that suddenly with negotiation, people say something, oh, training on the job, which means nothing like which means often nothing else . And we're not gonna spend a single penny on professional training . We just let you fail and blame you afterwards and hope you will learn from that, which is the worst way of learning . It's part of learning, but not the best approach . Train your people professional professionally . They need a very clear structure . They need a very clear process how to negotiate, and very important, no tricks . Very often I see a trainer saying, oh, do you know this trick and this works ? When you interrupt people, for example, you can actually mess up the yeah . Yeah . I know this works . It works . However, it only works short term . When you, for example, say, hey . I'm Walmart . And when you wanna sell paper on on on my racks, in my in my shelves in Walmart locations, I have a billion supplies for paper . If you don't like it, someone else will take it . And, of course, then you can be rude and nasty and use any kind of tricks, but that is not the common case . Often, you have a limited number of, suppliers . Prices go up, and when you use tricks, you might win once, but they will realize you used the trick . And then they will say, look . We just took a note that you used this trick . You won for now, but see you back again next year . And I don't think it's 4.9% then . It's 14.9% then . And that's our trick here . And then the whole relationship you have goes downhill . No tricks . Tricks work, but that's not how to professionally lead a negotiation . It's very important . The goal is not to win a negotiation as strong as this may sound for many of you . When you say I want to win the negotiation, it means the other side loses the negotiation . And when people lose the negotiation, they realize that . And when people lose negotiations frequently, they will sooner or later walk away . One of my clients, they work in a very specialized technical field, and they look for very specialized tables . And one of their suppliers now said, look . We walked away from a couple of negotiations, and, it's not really fun for us . You have very high demands . You don't pay very well, and you always delay your payments . You don't agree to our payment terms . And when we have special payment terms, you don't stick to them . So we decided to to walk away from special cable production . We only do standard cables . That's a good product . Anyone needs it . It's built into absolutely any device in the world, and we just deliver that and have good project margins and good profit margins as well . So good luck finding a new supplier, especially when these suppliers need certifications . It can take up to two years to find a new supplier . So very important is when you when you want to win negotiations, you will lose in the long run . Negotiation means we find a solution where both sides are happy to agree at the end or at least both sides find it acceptable to agree . That is the goal . We don't want to win . When you sometimes win call, sometimes you win, sometimes you lose but the vast majority of negotiations are a win win situation or at least a situation which ends acceptably for both sides . We want to have a solution which with which both sides can live . So wrapping all this together, negotiation always happens . No matter if it's classic negotiation situation with an Outlook invite, if it's a chat about salaries, for example, salary negotiation, or just trying to get your project budget up or down depending on what you want to do . That's also negotiation . Negotiations happen all day long, and that means leaders must be able to negotiate . They need to do it by themselves . They cannot just delegate it . And when any leader thinks because I'm an executive, I can simply decide . And when I decide that is the law and you think that's a when you think that's a negotiation one or when you think that is a common ground or a win win situation, it's not . When you think you can simply decide and that's your way of negotiating, then you will lose in the long run because as we all know, we can only win together in the long run, and I wish you all the best doing so . And when you now say, oh, that's tough . Yeah . Happy to chat with you if you have any kind of question or open aspects that I could chat about . Nb@nb--networks.com . You'll find the email address in the show notes of this podcast . Feel free to contact me . In the show notes of this podcast, you find my email address . Feel free to chat with me there . Send me an email . If you have any if you have something very specific, you need a seminar, a training, a coaching, we we can do that as well . If you just like to chat about questions you have, we we we can do so either . So feel free to contact me anytime, anywhere . Also, I will put my LinkedIn in the show notes of this podcast . Feel free to contact me there as well . And, of course, you also find my website there, nb-networks.biz . On this website, you also find the transcript of this podcast, so you can, of course, read everything you want there . What I'll also add is we have live sessions . So please step number two, join our leadership letter . When you go to expert.nb-networks.com, feel free to join the feel free to join the email list . As soon as you join the email list, you only get one email every Wednesday morning . It's a % content ad free guarantee . And what you get is full access to all the articles . In total, meanwhile, more than more than 400 over the years to all kinds of leadership aspects . And by the way, all of them with no paywall . Second thing, you get access to all the podcast, again, with no paywall, all free . And the third thing is you get free access to live sessions we have, and we only communicate the live sessions via these means . There's always the date and the link to join the live sessions straight in that email . So feel free to join here as well . The third aspect, however, is the most important one . Apply, apply, apply what you learn this podcast . Because only when you apply what you learned, you will see the positive change that you obviously want to see in your organization, in your life, and especially in your negotiations . If you need any kind of help, feel free to contact me . I'm available 20 4 7, and I'll answer any message I receive within twenty four hours or less . I'm looking forward to hearing from you . And at the at the end of this podcast, there's only one thing left for me to say . Thank you very much for your time .