In Built to Win: Creating a World Class Negotiating Organization (2009, Harvard Business Press) Larry Susskind and I argue that that negotiation is not only an individual competence, but an organizational capability. In the book we lay out a framework for assessing negotiation capabilities, intervening to improve them, and working to sustain improvements.
Our framework is informed by decades of consulting and training interventions with dozens of organizations and we provide illustrations from a half-dozen global corporations who have – in various ways – taken seriously the idea of building organizational capabilities, by doing something more than sending people to training courses.
In the two years that the book has been out, I’ve tried to reflect from time to time on new lessons, challenges, and solutions. There are seven themes that stand out:
The idea that negotiation is an organizational capability has drawn surprisingly widespread support, across a variety of sectors and contexts.
When Larry and I put forward this idea, we viewed it as somewhat novel, given the paucity of both literature and anecdotal stories among practitioners. To the extent that leaders had thought about building organizational capability, they had been thinking in terms of on-the-job mentoring, coaching, and training courses. So we wondered whether our premise would draw skepticism.
I’ve been pleasantly surprised at the enthusiasm it has drawn. Most leaders I talk with instantly endorse the notion that improving negotiation processes and behaviors requires a coordinated set of moves, based on a careful assessment. They can put forward examples of why and how past efforts to build capability have yielded modest results. They sense the return on investment that intervening more broadly can produce. They see the logic in setting up learning mechanisms. Moreover we’ve heard from practitioners and students from around the world who are excited by the approach, and are seeking to use it or study it in a systematic way.
A Negotiations Audit, which we see as a prelude to intervention, actually provides substantial stand-alone benefits to clients.
In a negotiations audit, we talk confidentially with negotiators and stakeholders to identify their theories-in-use, implicit success criteria, perceived reward systems, current strategies and tactics, and opportunities for improvement. The 5-10 page report (which we draft and circulate to interviewees for comments before finalizing) is a snapshot of what is happening in negotiations, for better and worse. It avoids attributing behaviors to any individuals, and examples are disguised in some cases so that no one is exposed. It therefore can serve to focus candid conversation among leaders and teams about next steps, even when there are no immediate funds for further intervention. Some audits we have performed have helped usher in new incentive structures; in other cases they have led to recognition that success criteria for negotiations needed to be made much more explicit; in still others the recognition that internal negotiations needed to managed much more effectively.
It can be unexpectedly difficult to convince leaders to start with a sound theory of negotiation.
While leaders have no trouble subscribing to an organizational approach to improving organizational capabilities, they are less ready to accept a single model of negotiation as a way to organize learning. There are things that seem to get in the way.
First, companies typically already have a menu of training partners. While some external providers are willing to adjust what they teach to a general model, many are not; they are invested in their own intellectual property and work to undermine efforts to rally around a central model by rallying their local clients to insist that they be retained. Vendors are sometimes connected to disparate parts of the organization, based on long relationships or geography. (In one global technology company we discovered 87 courses on negotiation from which employees could choose.)
Second, to protect their interests, vendors may insist that they already teach the model leadership endorses, when in fact there is only a superficial resemblance to it.
Third, leaders are often unsure how to resolve competing claims about the effectiveness of different models and training approaches. Faced with competing approaches, content, and messages, leaders are sometimes hesitant to commit to a single model of negotiation, particularly when different parts of the organization have different preferred vendors in place and want to keep the status quo.
Even with enterprise-level goals, it is often best to start smaller and scale up.
Because of the obstacles to adopting a unifying theory, but also because of financial constraints and challenges with turnover or instability, it often makes sense to focus first on building capability in a specific business unit or division. In this smaller context, results are seen more quickly. Everyone learns together from a shared starting point. It is easier to recruit a senior sponsor. Leaders can agree on simple operational measures for tracking meaningful progress. For example, we’ve worked with sales and marketing teams at the country level in both the manufacturing and pharmaceutical sectors to help them grow their capabilities together, across functions. We have provided both tailored training and focused coaching to help them to prepare to apply the Mutual Gains Approach in upcoming, high stakes negotiations. We have developed tailored, 1-2-3 tools for broad use by many distributed sales managers preparing for smaller regional negotiations. Occasionally, we have facilitated difficult conversations among team members about their roles and responsibilities in upcoming negotiations.
Starting at smaller levels allows us to go back to team and ask for specific examples of what happened differently in the negotiation as a result of their preparations and at-the-table behaviors. We can sometimes quantify results very precisely (i.e., the difference between a price the team was going to open with and the one it actually achieved, because it worked harder to think about the other side’s interests). Being able to document practical, short-term wins for leadership can be the key to securing the confidence needed to roll out broader assessment and intervention programs.
To play an effective (and essential) role in intervening effectively, champions and coaches need resources and time.
The last five years have been challenging financially for most sectors and organizations. Organizations are trying to do more with less. But I’ve found that when building capability in negotiations, organizations are often penny-wise and pound-foolish. They tap emerging and senior leaders for coaching roles, or to champion new practices; but then give them almost no tangible resources (time, most importantly) to meet their new challenges. This sometimes means that despite initial enthusiasm for leading change, the urgent crowds out the important. Therefore, it’s not enough to simply identify champions and coaches, or to train internal trainers. These ‘catalysts’ must be allowed the time to provide effective help, as well as to reflect on the patterns they observe. When problems arise that exceed their ability to respond, they need to be able to obtain assistance from additional internal and external resources. When leadership fails to set aside the necessary time and resource commitments, change and improvement are likely to stall.
Technological solutions can be difficult to adopt.
In Built to Win, Larry and I illustrated several kinds of online tools – a Learning Portal, a Coaching Panel, a Negotiation Workspace – that could help distributed teams to learn, communicate, and collaborate more efficiently together. We pointed to H-P’s Negotiator’s Garage as one example of an online resource where confidential and external resources could be collected and accessed by password-approved employees. We were enthusiastic about the WPP Group’s effort to create an initiative that brought together hundreds of senior leaders (after training) in a forum where they could post questions, gather answers, and share tools and information.
But our growing conclusion is that unless online learning and collaboration tools are of high and immediate value, enterprise-level sites attract less use than one would hope. Perhaps this is because productivity is at an all-time high, and managers are simply too taxed to take the time to participate in a learning community. Participants may find it difficult to ask questions or to share problems that leave them feeling “exposed” to a broader community of peers. Or it could be that the right technology, one with effortless workflow integration, has simply to emerge. At this point, I’m curious to see how tools and behaviors in this space evolve.
Efforts to improve negotiating capabilities take place in larger contexts, which matter a lot.
I am generally very optimistic about the potential for improving negotiation capabilities, at both the individual and organizational levels. However, over the last decade, globalization and creative destruction have continued at a breakneck pace, turnover in many sectors has accelerated, and employees are stressed and distracted in ways that they weren’t in previous decades. In these times, the case for improvement is strong; but there are also very strong headwinds to capturing and focusing attention.
Operational challenges are part of the story. Communication channels and devices keep employees mired in minute-to-minute tactical messages and behaviors. Long hours and mobile devices have made it harder to find the time to practice new interpersonal behaviors, and reflect on the results. Competing initiatives generate urgent emails and imperatives, and/or new measures and incentive systems.
Restructuring and turnover are also major impediments to learning initiatives. As global markets produce massive shifts in labor and capital strategies, huge operational disruptions result, and discourage investment in long-term efforts. Companies are acquired, restructured, and merged to capitalize on undervalued assets. Distribution networks or new regulations require that entirely new infrastructures be assembled.
Strategically, context matters as well. Larger firms in some sectors have discovered that they are no longer differentiated in clients’ minds from smaller, more nimble firms. A company that for years negotiated from a position of strength may suddenly find itself in a much weaker position because of new competition or technologies. Leaders seeking to improve negotiating capabilities in these contexts should start by moving to strengthen their value proposition. Companies who cannot make a convincing case for the added value of their products or services are likely to find negotiations much more challenging, because clients and other counterparts will treat them as a cost, rather than an investment.
It’s arguably even more important for companies facing these kinds of strategic challenges to prepare effectively, and often in new ways, for negotiations. But practitioners must be clear-eyed during the assessment phase in terms of diagnosing barriers to improvement and limitations on time and resources.
A final reflection.
Our field is now just beginning to think about how to improve negotiation capabilities in more systemic ways. My hope and belief is that the approach described in Built to Win represents a new and better way to improve negotiating capabilities, one that will continue to generate better results for organizations that follow it. I also hope that a growing community of leaders, researchers, and practitioners will help us to expand and revise the approach, to apply it in diverse contexts, and to share what they learn. For many problems, all of us are smarter than some of us.