Negotiating a path to commercial success
Tags: tutorial, discuss, productivity, career
Published: 2022-07-19 08:44:17

Chris Atkins explains why creating and implementing a high-performing [negotiation culture](https://businessmagazine24.com/vaccine-access-explained-in-a-pandemic-environment/) can help a business deliver its business strategy.
 
Mention the desire to change your company’s culture and you will swiftly and yourself facing some resistance. There will be many who have grown up, and grown successful, within the existing culture, and the forces for maintaining the status quo will be as strong, if not stronger, than those that see the benefit in change.
 
Add to that the suggestion that the new culture should be anchored in a skill that may be merely a commercial necessity and eyebrows will understandingly begin to rise.
 
Every day, every team in your company negotiates internally and externally to get their job done. Only through negotiations can they achieve their goals. Only through their negotiations can you realize your company’s goals. So, when we talk about implementing a [negotiation culture](https://digitaledge.org/why-effective-negotiation-is-critical-to-our-future/) we are talking about developing a culture that directly enables your team’s ability to implement your business strategy.
 
So, let’s examine each of the elements of negotiation culture and try to unpick the “Why?”
 
I’ll start by considering and correcting some common misconceptions.
 

## MISCONCEPTION #1: NEGOTIATION IS A WIN-LOSE GAME
 
One of the challenges of being a [negotiation consultant](https://www.thegappartnership.com/consulting/) is that people expect and assume that you specialize in being tough, argumentative, and insistent on driving a hard bargain. And when negotiation is an aggressive activity of last resort, then driving this into organizational culture could be considered a negative, even retrograde step, creating an unpleasant place to work for all but the toughest, most Machiavellian individuals.
 
But this is a narrow and misleading definition of negotiation. The much more interesting and complex truth is that in its most complete form, negotiation is a subtle, combined art of listening, understanding, and creative problem-solving. When we work with our clients in negotiation, regardless of the intervention, we consistently concentrate on supporting the desired behaviours of a successful negotiation team, who:
 
	1.	Know what they’re doing, their responsibilities, and their level of empowerment.
	2.	Plan efficiently and completely.
	3.	Objectively evaluate and mitigate risk.
	4.	Take control of their situation.
	5.	Understand and select options effectively. Know their counterparty.
	6.	Develop strategies and understand the “How?” as well as the “What?”.
	7.	Value elements and priorities from their point of view and their counterparty’s.
	8.	Ensure all parties are aligned throughout the process.
	9.	Ensure their plans and activities align with the overarching strategy.
	10.	Communicate effectively – internally and externally.
	11.	Have a replicable process and tools that maximize the chance of success.
 
Viewing these principles through a different lens, I suggest they are also the principles of sound commercial management which, when firmly embedded within a cultural framework that rewards these principles, will lead to better decisions being made, understood, and implemented effectively.
 
In our experience these principles, while appearing obvious when they are written down, are not commonly, consistently, or completely practised in many business environments. Sometimes it’s because we don’t have time to plan properly. Sometimes it’s because objective evaluation is not rewarded. And sometimes it just feels more heroic to fight fires than to stop them from igniting in the first place.
 
Whatever the reason, introducing and encouraging the habitual adoption of negotiation principles will start moving the needle toward a more commercially aware and astute approach. This will in turn start moving the profitability dial.
 

## MISCONCEPTION #2: NEGOTIATION IS LIMITED TO CERTAIN SPECIALIST TEAMS
 
The sales team – they do the negotiating, right? Oh, and Procurement, of course. And while we are thinking about it, Supply Chain negotiates all the time. Hang on, what about Employee Relations, and their negotiations with unions or prospective hires? And Legal, well of course they negotiate contracts too. Marketing – don’t they negotiate with agencies? IT have ongoing negotiations with contractors and service providers. As do Facilities. I could go on.
 
Every team negotiates with someone daily, be it internal or external because negotiation is the act of two or more parties coming together to reach an agreement. And in today’s world, multiple stakeholders have an impact on the trajectory of negotiations that would have previously been conducted in a one-department “bubble”.
 
Here’s an example. We recently supported a multibillion-dollar RFP process for a significant portfolio of raw material commodities. Because this raw material sat at the core of our client’s end product, the award decision needed to consider many dimensions: environmental sustainability, contractual requirements, supply chain resilience, innovation, technical support, customer service, productivity, quality and, of course, cost. In total, more than 30 different factors were assessed, and all stakeholders needed to be satisfied. It is this ecosystem of factors that needs to be considered in any negotiation, all of which require suitable planning, alignment, and communication if a negotiation is to be successful in today’s environment.
 

## MISCONCEPTION #3: NEGOTIATION HAPPENS AT THE END OF THE BUSINESS PLANNING PROCESS
 
No. Negotiation is the means by which an organization delivers its business strategy. At The Gap Partnership, we’ve built a reputation as negotiation specialists – and we’re proud of that. But increasingly it’s clear that we’re also specialists in the execution of business strategy, in realizing the goals set within that strategy and maximizing the chances of success.
 
We often encounter critical failure points in our negotiation support activities: 
 
	1.	Specific negotiation goals are mismatched to individual KPIs.
	2.	Individual KPIs are mismatched to departmental objectives.
	3.	Departmental objectives are mismatched to business strategy.
 
The magnifying effect of this layering of mismatches results in a negotiated outcome that fails to deliver the business strategy, and in many cases has a directly contradictory outcome. So, the overarching business strategy is bound to fail in its execution. Consequently, our first task is recreating the connections between specific negotiation goals and business strategy.
 
The connection between organizational strategy and its execution – its negotiation – is inextricable, so it’s critical to consider the end-to-end process with all its many facets as the strategy is developed.
 

## BRINGING IT ALL TOGETHER
 
What is negotiation culture, at its most fundamental? A great place to start is with the meaning of the words themselves. Both have their roots in Latin: Negotiation is from the Latin negotiari, meaning to carry out business. Culture is from the Latin cultus, meaning foster or cultivate.
 
So, negotiation culture is Fostering a [new/better] way of carrying out business.
 
To implement a successful negotiation culture requires us to understand and address shortcomings in three key areas:
 
The people that we hire, the methods by which we develop their capability, and the ways in which we encourage their behaviours.
 
The replicable process and methodology provides a more consistent chance of success in multiple scenarios, and the tools provided to support those processes with the thinking that underpins them.
 
The organizational structures that we put in place provide governance, guidance, and empowerment. Cultural reinforcement develops habits, facilitates communication, and creates a safe learning environment and a corporate memory which reduces reliance on the knowledge of few individuals. 
 
Let’s return to our original questions: “Why do I need to change the culture of my organization and why would I choose a negotiation culture?”
 
Because an organization with a strong negotiation culture has everything in place to execute and deliver its commercial business strategy. Because the commercial world is changing, and the speed of change will continue to accelerate. Because it is imperative to keep pace with change today: the competitor you’ve never heard of is doing it already.