In Built to Win, Larry Susskind and I argue that improving negotiation outcomes requires treating negotiation as both an individual and organizational capability.
The notion of organizational capabilities has been catching on. Recently McKinsey Quarterly surveyed a range of organizations and leaders about what they are doing to build organizational capabilities to drive business results. McKinsey defined an organizational capability as “anything an organization does well that drives meaningful business results.” Their survey asked executives how well their companies create and manage training and skill-development programs, and how effective those programs are in maintaining or improving on their priority capabilities.
Nearly 60 percent of respondents said building organizational capabilities was a priority for their companies, but 75 percent said their companies weren’t good at building the most important capability. The survey also found that:
While McKinsey’s echoes a number of points made in Built to Win, it does not spell out a clear remedy. How can leaders systematically implement a cost-effective change program that targets both individual skills and organizational capabilities?
In the area of negotiations we offer the following prescriptive advice.
In times when dollars are short, globally competitive companies simply cannot afford to continue with training-and-more-training as a leadership development strategy. There is a more powerful, less expensive way to improve negotiations. If companies and other organizations took only these four steps, they would greatly improve the effectiveness of their programs.