The art of negotiating
Most of us negotiate every day of our working lives, yet very few of us probably had ‘negotiator’ in our original job descriptions. It might be as simple as corralling your team together for a meeting, agreeing a deadline or setting a rate for a particular job.
Each scenario has its specific challenges, but Simon Taylor, senior leadership consultant at Kaplan Leadership and Professional Development, is adamant there is a core set of skills and an overall approach that you can adopt that will help you arrive at mutually acceptable outcomes more quickly and confidently.
‘The best accountants and business partners are skilled negotiators,’ he says. ‘Whether dealing with auditors, clients, colleagues or the bank, they know that seeking mutually beneficial outcomes is the key to better relationships and better business.’
By way of illustration, Taylor asks you to imagine a scenario: you have been told by the finance director that you need to persuade seven budget managers to find 5% efficiency savings next year, and this is on top of cuts that were already introduced two months ago.
One approach is to be highly directive, he says. Tell the budget managers that it’s not personal and the savings are clearly needed. It’s just business and, after all, it’s the FD’s call, not yours.
‘But adopt this approach and the discussion will be brief, challenging and possibly emotional. And you will not have considered their interests and needs, and probably made your working relationship with them more difficult.’
Alternatively, reframe the problem as a joint concern, he suggests.
‘It’s not a competition. Everyone needs to work together. Consider how the negotiations can be fair, objective and – where possible – transparent. Crucially, every party must feel their interests are being addressed,’ he says. This is the first lesson of negotiation. It’s not all about you.
‘Any budget manager who has just been told about a 5% cut will naturally baulk,’ he adds. ‘Your job is to understand what is most important to them, why it is important and how you can help. You need to have an understanding of the individual, their role and their concerns if you are to find a way of accommodating each other’s interests. What functions could be shared across the business? Is there one department that could accept a more significant cut? How can the cost saving be spread out and how can long-term value be maintained?’
Taylor admits that it is often difficult to appreciate all these factors, as so many emotions and biases shape our decision-making.
‘Pride, hurt, recent events, first impressions, anxiety, fear… all of these can conspire to ensure that logic and reason are often the last things on our mind,’ he says. ‘Far too many negotiations fail, not because of the numbers, but because of the people delivering the numbers.’
Top negotiating tips
- Separate the people from the problem. Never allow a negotiation to get personal.
- Focus on interests not positions. Positions are the publicly stated wants or desires. Do not argue over positions, as this will only harden each party’s resolve. Explore beneath these positions to the interests that underlie them.
- Understand your own interests. Think of the short, medium and longer-term. Consult your stakeholders. If you do not know what you really want, you are unlikely to get it.
- Listen actively and with purpose. Most negotiations fail because one party doesn’t believe the other heard them. Don’t make that mistake.
Did you know...?
Demonstrating your negotiating skills could help you towards achieving performance objective 2, Stakeholder Relationship Management
This article was first published in Student Accountant