By Felix Miller, Associate Trainer, Rational Games, Inc.
First, good deal negotiation requires both a clear structure and teams that can make that happen. That structure can come from many sources: my favorite is McKinsey’s framework of context, problem, (aspired) solution, impact, learning, stakeholders and deadline. We must first understand the essence of the desired deal before we try to craft it.
This also means imagining the best possible outcome, facing the possible worst- case result squarely and appreciating the wide range of options that exists between them. Given the complex interdependencies and inevitably unsatisfied needs and interests of all parties, regardless of context, this can be quite a daunting intellectual exercise indeed, one that takes us well beyond traditional strategic planning.
Second, good negotiation process requires the judicious use of collaborative tools. Very concretely, good negotiators are familiar with all the collaborative tools that allow for fast, open and transparent communication flow as well as storing data and assigning and recognizing responsibilities between team members both in person and online. From CRM marketing “pipelines” to modern project management software like Slack and Miro, all team members are always aligned on roles, decision rules, assigned stakeholders, priorities and deadlines. And these digital tools enable smooth “rowing” once the teams hit the water.
Third, good negotiators excel at managing their home front. Good internal stakeholder management is the key. Deals are struck by good negotiators and their team at the table but must then be “bird-dogged” by someone skilled in both process and people management as well as thoroughly conversant with the content. This may all be done by the same person but often it is not. Usually, additional internal stakeholders need to be consulted. The rule of thumb in this: less is more. Big-ticket deals engage high-stakes talent such as team leads, directors and c-suites. The more time these professionals can spend on their responsibilities at the negotiating table, the more effective they are.
Companies may therefore want to wisely follow the principles of comparative advantage, appointing key specialists in every corner of their firm. This means engaging not only managers responsible for traditional Marketing, Sales or HR remits, but also educated and experienced negotiators serving them fluidly in deal times, regardless of context. Stakeholders are kept informed with information channels as lean as possible to help reduce complexity and facilitate information flow.
Finally, good negotiators set up their teams early. When is the best time to start forming the team and structuring the deal? VERY early indeed. Negotiations are by nature fundamentally strategic but also improvisational, often developing in unexpectedly creative ways. You may suddenly be called upon to change, consolidate or diversify suppliers, negotiate with new investors or simply change your location venue. Your team must follow you on a dime in all of this. And so the later you organize and staff the team, the harder it will have to work to turn around complicated situations.
The end of result of all of this: intellectual capacity freed up to focus on ideas, higher ROIs, optimized cost structures and smoother team decision making. What is not to like?
– Felix Miler is Negotiation Advisor at Just Spices GmbH in Düsseldorf, Germany. Together with his team. he imagines, structures and executes complicated deals which deliver win-win for all parties.