Creating a WorldClass Negotiating Organization Presented by Hallam

Creating a World-Class Negotiating Organization Presented by Hallam Movius Co-Author of Built to Win: Creating A World-Class Negotiating Organization

In Difficult Times… … Negotiations are often the difference between success and failure • Re-negotiation of external deals: commercial contracts, ventures, sales and purchasing agreements • Internal negotiations: new roles, processes, responsibilities • BUT: people tend to think of negotiations at the tactical level (c) 2009 Hal Movius / The Consensus Building Institute

Negotiation as “Execution” Negotiation Strategy Negotiation (c) 2009 Hal Movius / The Consensus Building

Typical Success Criteria • “We made them come down 20%. ” • “It worked out fine; we compromised. ” • “They were really steamed, so we must have done pretty well. ” • “We got 4 out of the 5 things we wanted. ” • “We did slightly better than our walk-away. ” • “After six months, they blinked. ” • “We caved, but at least they’re happy with us. ” (c) 2009 Hal Movius / The Consensus Building Institute

(c) 2009 Hal Movius / The Consensus Building Institute

Intervening Ineffectively • We brought in a trainer who was very entertaining • The training workshop received high ratings • For some reason we continue to struggle • It must be our people – they just aren’t as clever as the people in the examples that our trainer used • Maybe we need “advanced” training? (c) 2009 Hal Movius / The Consensus Building Institute

The Bad News • Most negotiators are terrible at creating value; particularly in tough times, most negotiators default to a “traditional bargaining game” which leads to unnecessary impasses, added risk, added cost, and lost value • Most leaders don’t know how to help negotiators create value • Most learning strategies include no up-front assessment, no “tailoring” of the learning experience, and no back-end support to ensure ROI • Most human resource managers are wasting resources on generic negotiation skills programs • Most organizations do not capture key learning from negotiations (c) 2009 Hal Movius / The Consensus Building Institute

Why Is So Much Money Being Wasted? • Organizations and negotiators lack a clear theory of negotiation • Leaders have failed to realize that negotiation capability resides both in individuals and in organizations • Until now there has been no clear and effective alternative to “training-and-more-training” (c) 2009 Hal Movius / The Consensus Building Institute

Nine Steps to Better Negotiations From Built to Win: Creating a World Class Negotiating

Sad But True: 30+ years of Research 1. Negotiators tend to assume a “fixed pie” even when there is value to create… – – By assuming a single issue when there are many By assuming that interests are in direct conflict … and then behave in ways that elicit value-claiming behaviors from their counterparts 2. Egocentrism: Not enough time spent imagining counterparts’ alternatives, interests, criteria, stakeholders) 3. Fundamental Attribution Error: Misplaced emphasis on the power of personality and attitude – It matters much less than aspiration levels, alternatives, problem-solving capability, and how the situation is construed 4. Misplaced faith in power and rationality – People will actually reject “superior” deals that violate their fundamental sense of fairness (c) 2009 Hal Movius / The Consensus Building Institute

The Mutual Gains Model: (c) 2009 Hal Movius / The Consensus Building Institute

Better Success Criteria • A result better for all parties than their no-agreement alternatives • Maximize chances to discover and exploit differences for joint gain • Generate a contract that is understandable and likely to be implemented effectively • Efficient process, in terms of time and resources • Manage risks associated with brand reputation • Make future dealings easier • Reflect the values of the organization (c) 2009 Hal Movius / The Consensus Building Institute

Begin with Assessment • Start with a good theory • Conduct a “Negotiations Audit” • Provide diagnosis and recommendations – where are the opportunities? What are the barriers? • Identify sponsors and champions (c) 2009 Hal Movius / The Consensus Building Institute

Intervene Effectively • Mandate a better preparation process – Introduce or revise forms and templates – Train/involve stakeholders • Create a virtual center of excellence – Start a monthly newsletter • Focus on basic process • Align incentives with success criteria • Train/backstop trainers and coaches (c) 2009 Hal Movius / The Consensus Building Institute