Why it matters
Growth relies on our ability to continuously leverage the potential in the increasing number of relationships we are a part of. It goes without saying that it is crucial to have accurately analysed the situation before sitting down at the negotiation table. Research and our own observations of negotiations show that many invest too few resources in the analysis phase, often failing to fully exploit the potential in the situations they find themselves in.
Additionally, many negotiators tend to negotiate on autopilot, doing things more or less as they always have, regardless of the fact that context and situation vary significantly between negotiations.
The potential for value creation through the professionalisation of negotiation skills is therefore particularly significant, even in organisations that believe they are already quite adept at negotiation. Simply put, they lose out because they don't challenge the status quo.
"That's how we've always done it"
One might ask why additional training and development of negotiation capabilities would be necessary. Perhaps there is an established process in place. Moreover, employees may have extensive experience in negotiation and may not feel the need to further develop their approach in this area. They have found their "style" and have performed well!
Unfortunately, the combination of experience and lack of reflection on the need for personal development, is often the direct path to unconscious repetition and, consequently, diminishing results.
“What got you here won’t get you there!”
Marshall Goldsmith
The science is clear:
Negotiation must feel safe
When something feels safe, when we experience being in control, and have a plan for what is going to happen, our confidence and ability to perform increase.
If, on the other hand, we are stuck in an outdated pattern of action without understanding the underlying logic and lack control over the situation, doubt creeps in. We become uneasy, our uncertainty shines through, and we do not perform optimally.
At the same time, our doubt and uncertainty will be perceived by the counterpart as weakness and can easily be turned into a significant negotiating advantage for them.
We become more confident and, consequently, better through training and practice. Negotiators can naturally convert this confidence into increased firmness and control in the negotiation process.
This means that when we sit at the negotiation table, we both reduce the risk of "being ripped off" by our opponent. But, perhaps even more importantly, we improve the opportunities to identify and realise value that we would otherwise never come close to.
Overall development in the relationship between buying and selling:
Increased professionalisation built around a much more structured approach to category management. This has restricted sales access to the actual users and budget owners they were previously in contact with, and instead channelled the sales process through the purchasing function.
Increased digitisation has created a situation where procurement has access to knowledge about the selling company, products, and local and global competitors to a much greater extent than before. Despite temporary scarcity situations, this has led to a shift towards a more competitive position for procurement.
The initiative has predominantly shifted from sales to procurement. This means that we see, to a much greater extent than before, proactive buyers who approach the supply market with a specific need and reactive sellers who are limited to responding to the specifications presented to them.
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