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” Strategy Negotiation (c) 2009 Hal Movius / The Consensus Building Institute

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

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 Organization (2009, Harvard Business Press) (c) 2009 Hal Movius / The Consensus Building Institute

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 and 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

Nine Steps to Better Negotiations From Built to Win: Creating a World Class Negotiating Organization (2009, Harvard Business Press) (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

Less Expensive, More Effective (c) 2009 Hal Movius / The Consensus Building Institute

Negotiations as Opportunities Strategy (Value Propositions, Types of Trades, etc) Negotiation (c) 2009 Hal Movius / The Consensus Building Institute

Questions (c) 2009 Hal Movius / The Consensus Building Institute