“Can Your Business Survive the Recovery?” was the title of a newspaper article.
It got me thinking, so I designed a simple survey to find out more information.
If the recovery is slow, then what challenges might businesses face at the bargaining
table?
The 2010 Negotiation Challenges survey asked 5 simple questions. I wanted to take
a pulse, so to speak. Not surprisingly, the issues dominating negotiations are still
largely financial. Small business owners, executives at midsized companies and many
sales professionals answered the survey giving us a great cross sample of perspectives.
The purpose of this report is to identify:
- Major negotiation trends based on the opinion of those in the trenches,
- Typical negotiation challenges, and
- Necessary skills to meet those challenges.
This Sums It Up!
“I need (house) prices to come down, but if they do, the value of my condo goes
down too. It is very complicated.” Neree Dastous as reported in the New York Times
Business Section.
Talk about being between a rock and a hard place. This is the primary economic challenge
of our times. |
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Conundrum
The challenges reported in this survey were the same challenges companies faced
in 2009. Financial issues dominated the topics, from customer expectations on price
reductions, to rate wars and higher raw material prices. This led to one particular
challenge: Re-negotiating something to get a “better deal”. Not only do 53% of companies
actively seek a “better deal”, they fear that 49% of others will actively seek to
get a “better deal” from them too. This presents quite a conundrum. |
Challenges
People report three main re-negotiation challenges: Lack of leverage 38%, lack of
good alternatives 34%, and 34% lack a range of competencies. These results are not
surprising in light of the financial challenges that all businesses, large and small,
have faced in the last 16 months. The stakes are much higher now. The economy has
weakened; selling prices remain deflated, while costs hold their ground. |
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Each company brings with it the assumptions, expectations and hidden agendas associated
with its idea of a better deal for them.
Solid negotiation skills are clearly required. The issue then becomes, what do I
need to be effective?
Only the Sharp Will Survive
Business professionals want to have a back and forth conversation with their counterparts.
They want to know how to: leverage common ground and make counteroffers and tradeoffs.
This is very promising and supports long term growth patterns. |
Yet, 46% of respondents also want skills to manage “hardball tactics.” This means
that people think that they will be collaborative, but fear (rightly or not) that
others will bully, or bluff. This fear skews a negotiator’s good intentions to negotiate
a mutually beneficial deal. Hardball tactics may also lead some to agree to terms
that are not aligned with their company’s best interests.
This statistic is really surprising, and a little sad. We believe in our good
intentions but distrust our counterpart’s intentions. Is that mistrust warranted?
 Have
we focused so much on beating price into the ground that we’ve lost sight of the
bigger picture?
Conclusion
Businesses can no longer rely upon “old school” us-versus-them negotiation tactics
to get their way. Too many business people are wary of that method, and there is
literally no more room to give. Little remains to be squeezed. Businesses will have
to sit down with their vendors, customers, contractors and landlords to create long
term solutions. This is beyond problem solving for the next quarter. |
The question becomes this: Is my business sustainable in the long term if we continue
to operate as we have in the last 16 months? If not, then what needs to change and
who can help you make those changes? Only by working together, for what could be
a long “recovery”, can we come out of this whole. Quick fixes and half measures
will quickly fizzle.
Jeanette Nyden J.D., author of
Negotiation Rules! A Practical Approach to Big Deal
Negotiations, is the president of J. Nyden & Co., Inc, a negotiation skills training
company. For more information and free negotiation articles visit
www.jnyden.com
Jeanette can be reached at 206-723-3472 or
jn@jnyden.com.