Deploying Negotiation Skills To Make Sure Complex IT Agreements Don't Fail To Deliver Optimal Value


Formal research into business negotiations discovered that the biggest challenges faced by organisations and individuals are (a) the price/value trade off and (b) developing alternatives/generating options, respectively. A recent Fortune Magazine review in affiliation with Miller Heiman (the complex selling methodology gurus) found that sales resources cited price as the number one cause they did not close transactions.

There has been much talk in the IT sector on both the buy- & sell side about 'partnering' to produce solutions. Looking at the supporting data, it is questionable whether this talk has converted into action.

Whilst most organisations would like to believe that they are engaging both clients & suppliers in a 'solution based' format, the role of price still dominates the process. This is due in large part to the failure of individuals to see the 'big picture' or to engage in creative thinking. Our research & experience tells us that one of the vital features of successful business negotiators is the skill to be creative & flexible.

Whilst many IT organisations have built their standing on the back of their market leading and creative technologies, it would seem that creativity is often limited to the design & engineering departments. One of the strongest drivers of human behaviour is the tendency to avoid potential deficits. When considering information about the future, managers are more interested in avoiding possible losses than achieving the same gains. This means that during negotiations that support complex and high value IT transactions, the focus is more often on managing risk to avoid potential deficits, rather than on creating innovative and creative ways to create additional value for all stakeholders.

The more complex the transaction, the more vital it becomes to manage risk. Rather than just trying to avoid losses, we should actively focus on ways to create alternatives for common gain during negotiations.

To avoid falling into the price trap, ask yourself the following questions ahead of each negotiation and make this part of your negotiation strategy:

1. Vision
a. What are the key interests of all the parties to the deal that will be satisfied by reaching an agreement?
b. How critical will it be for each party to the deal to act in a partnership mode?

2. Value
a. What are the specific objectives of all the parties to the deal?
b. What are the limits associated with each of the objectives for all stakeholders?

3. Process
a. What suppositions have you made that you could confirm through questioning during disucssions?
b. How can you frame the negotiation so as to contribute to a collaborative, partnership based approach rather than a price centred negotiation?

4. Relationships
a. Do all parties have the same requirement for a lasting relationship?
b. How can you influence the 'climate' of the negotiation so as to support a collaborative approach? ('Climate' pertains to non-verbal, physical and cultural aspects.)

Once you have covered these simple elements of preparation you will have time to be creative. Being creative is not something that comes easily to most of us but it is an important negotiation skill. Use one of the well known creativity methodologies such as De Bono's Six Thinking Hats, or the Disney Creativity Model to help you create alternatives.

If you want to really embrace a partnership approach that delivers optimal value, you should waste no time at all in getting the creative juices flowing.