Strategic Negotiation – What Do They Really Teach you
There are two negotiation approaches prevailing in the world today, but “unfortunately” only one that is more widely spread, especially in the negotiation training circles.
First is the basic negotiation tactics approach, that dominates the training industry especially in the Western world. It is also practiced widely and naturally in the developing nations of the world.
The second is the strategic negotiation approach that is more complex and less common or even understood in the training circles, among people or in practice.
Negotiation skills in general, are a prerequisite to success in any endeavor in life, from career progression, buying a car, resolving conflicts of any scale, growing a business to finding an attractive partner.
Being a vital skill to learn, I suggest that understanding the differences between the two approaches is a step in the right direction before you plunge into an expensive courses, books and seminars on the subject.
The basic negotiation skills training prevailing in the market place today is merely a teaching of some tactics that may help people to outsmart others and get what they want from them regardless of the consequences.
This training is basically about selling a bunch of negotiating tactics to people who are eager to learn the skills fast while being amused and entertained by the presenter at the same time.
In any of this training, you learn tactics and cliches like: be assertive, win win, be prepared, aim high, be patient, focus on satisfaction (I like this tactic myself!), don’t accept first offer, don’t make large concessions, always be willing to walk away and so on. While this “teaching granny to suck eggs” approach to negotiation may be entertaining and fun, it certainly doesn’t give the full story or help people develop any negotiation skill.
Let me assure you dear readers, having come originally from Egypt where bargaining attitude is a way of life and where every thing is negotiable, you will be eaten alive if you try to use any of these negotiating tactics you learned at a course when you negotiate with these people. Secondly if you want presenters and teachers to talk to you about negotiation tactics, I can provide them to you by the sack from these old and great developing nations.
This type of training makes a poor excuse for not teaching strategic negotiation and put people at risk of thinking that they have now acquired this vital skill.
Strategic negotiation on the other hand is a much more complex area of knowledge and yet, once learned and practiced yields greater outcome that is also long lasting.
The irony in both approaches:
The irony in both approaches is that in order to practice what you learned in the basic negotiation training, you really need to act like a “street wise” in your walk and talk or you will look like a ready and nice meal for lunch to your opponent.
Not only this, I actually believe that this basic negotiation approach is a culturally inborn trait and cannot be transmitted in training courses. It is more like you were either born with it or you were not.
The bigger irony and paradox about strategic negotiation is that while it is far more complex skill and require greater analytical mind, it is considerably easier to learn. It also lends itself more to studying and practicing and in some cases doesn’t require face to face “haggling” to achieve great outcome.
Strategic negotiation skill is not a culture driven inborn skill, it is universal in its application and methods.
Let me illustrate the two approaches by giving you a simplified negotiation case from the business world.
A Case for illustration:
A large company is buying important Data Base software to use as the underlying engine for all of its computer applications. Once this software is purchased and installed, replacing it would be near impossible because of technical and financial reasons. The price runs into millions of pounds with a huge yearly maintenance fees. The technical department satisfied itself while working with the supplier in “partnership” that the product is the best in the market and have recommended its purchase to the management.
The buying organisation is now asked to begin the negotiation to achieve best possible deal.
Basic Negotiation Approach:
Following the basic negotiation approach and applying all the tactics learned, the company will get good discount because of the large up front payment it is willing to pay and the basic negotiation skills applied to the situation.
But here is the problem: as soon as this software is purchased and installed the whole balance of power for all future purchases and upgrades changes in favor of the supplier. Maintenance fees will spiral out of control and the next time the buyer tries to negotiate another deal with the same supplier he/she will find that his/her negotiating world has completely changed.
The same nice yielding sales people he/she was used to dealing with have now turned into real sharks putting their conditions and demands on the company while possibly using their strategic negotiation skills that lead them to this powerful position in the first place.
Strategic Negotiation Approach:
The strategic negotiation approach to this situation is completely different. The strategic negotiator sees the bigger picture, uses the “whole brain” approach, doesn’t wait till the company tell him that it decided to buy this particular software. He/she is also working closely with the technical department, the planners and the people who will make the decision. He/she knows that such software will be needed and that he/she has to move now and mobilise the company for the acquisition long before the supplier gets a “sniff” of it.
The strategic negotiator agrees with the stakeholders on the deal brief and the wish list of the users before hand. He then adds to it the commercial wish list which must include a long term frame work agreement among many other wishes.
With this kind of preparation, information and mobilisation of the company resources and agreement with the stakeholders before hand, holding a strategizing session can inform the negotiator on the best course of action to take for this aquisition and best negotiation strategies to apply before the negotiation begin. Now as they say – the world is his/her “Oyster”, he/she is prepared for the “kill”.
What have been Achieved:
What have been achieved in this strategic negotiation is not only the best deal for the company now but also the strengthening of the company negotiating position for the next five years to come even when the company doesn’t have the financial leverage over the supplier.
Under the basic negotiation approach, the deal left the company in a weak negotiating position for the next five years and completely at the hands of the supplier.
Strategic Negotiation demands a set of preparation, analysis and strategies before going into any negotiation, to ensure a favorable long term outcome before the negotiation begins.
Let me leave you with this great quote:
“Strategy without tactics is the slowest route to victory. Tactics without strategy is the noise before defeat.”
Sun Tzu the Art of War
Osama El-Kadi is an International Strategic Negotiation Expert & Motivational Speaker Specializes in utilising Sun Tzu Art of War strategies in a unique and advanced strategic negotiation consulting, seminars, and training for sales and buying organisations worldwide.
Please visit us: Strategic Negotiation and the Art of War
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