More than a third of organisations are ill-prepared for business negotiations, according to a survey by sales performance and change management firm Huthwaite.
The Huthwaite Negotiations Survey 2010, which polled more than 440 business leaders across a range of industries, reveals 36.3% of organisations prepare inadequately or not at all for specific negotiations.
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The survey also found more than 48% of organisations follow no standard negotiation process, prompting Huthwaite chief executive James Fennessy to urge companies to re-think their negotiating approach.
“Persuading people to do what you want them to do, resolving day-to-day conflicts, negotiating agreements and influencing senior management colleagues are all activities which require considerable skill if they are to be successfully accomplished,” Fennessy says.
“Huthwaite… [has] carried out detailed research studies to investigate the skills used by people who are particularly effective in contract negotiations.”
As part of its research, Huthwaite has compiled a white paper titled Developing Effective Sales Negotiation Skills.
According to the report’s author, Richard Graham, successful negotiating is achieved via a certain skill set rather than knowledge.
“There are plenty of senior people in organisations who have been practicing their [negotiation] skills for many years but who are clearly far from perfect… We need a clear picture of the skills we should be using to bring success,” Graham says.
Graham identifies the following key skills needed to be a successful negotiator:
Seeking information – The skilled negotiator seeks significantly more information during the negotiation process than the average negotiator. Seeking information is useful for two reasons:
- Obtaining the necessary information with which to bargain.
- Using questions as a deliberate strategy. Questions can be an acceptable alternative to direct disagreement, keep the other party active and reduce their thinking time, and give negotiators time to gather their own thoughts.
Testing understanding and summarising – Testing understanding is a behaviour that establishes whether or not a previous contribution or statement in the negotiation has been understood.
Summarising is a restatement of previous points in the discussion. Both behaviours clear up misunderstandings and reduce misconceptions.
Skilled negotiators test and summarise in order to check out any ambiguities at the negotiating stage rather than leave them as potential problems for implementation.
Behaviour labelling – Skilled negotiators tend to give an advance indication of the class of behaviour they are about to use.
For example, instead of asking, “What is the unit cost”, they say, “Can I ask you a question – what is the unit cost?”
This gives the other party warning that a question is coming.
However, the skilled negotiator avoids labelling disagreement, such as “I disagree with that because of X”, and instead begins with the reasons and lead-up to the disagreement.
Feelings commentary – The skilled negotiator is more likely to give information about internal thoughts and feelings so that they appear to reveal what is going on in their minds.
This revelation may or may not be genuine but it gives the other party a feeling of security, as if they are privy to additional information.