Adapted from “How to Do More with Less,” by Lawrence Susskind (professor, Massachusetts Institute of Technology), first published in the Negotiation newsletter.
Times are tough, and managers need to find a way to squeeze more out of every contract negotiation. How can you improve how your organization negotiates?
Though we tend to think of negotiation as an individual task, it’s just as much an organizational one. A world-class negotiating organization needs to find ways to support employees on an ongoing basis. Here are four steps you can take:
1. Offer opportunities for practice. Your organization should offer opportunities to individuals or working groups to engage in negotiation practice sessions. Such practice will give employees opportunities to test and model new ways of handling the problems identified in the audit in a safe, controlled setting. Through practice, employees will gain experience carrying out key negotiation tasks, such as asking open-ended questions and creating value.
2. Give negotiators latitude and direction. What do negotiators need from their leaders? They need adequate time to prepare for important talks, autonomy to explore multiple options simultaneously, rapid feedback when they are close to reaching a deal, and appropriate oversight to ensure they do everything possible to create and claim value.
Many organizations know what they should do for their negotiators, yet they don’t make the necessary reforms in their operating procedures. For example, when a line manager in one organization disagreed with her negotiating counterpart about future sales, she suggested they add a contingent element to their contract that would allow them to bet on their differing predictions. But when the line manager brought this ingenious arrangement to the finance department, its officers didn‚Äôt know how to draw up a contingent agreement and told her to remove all uncertainty from the deal.
Sadly, in this instance, one of the best ways of creating value had been ruled out-of-bounds. The lesson: Organizational leaders must be willing to adapt core operating procedures to keep up with improvements in negotiator skills.
3. Monitor and reward negotiation results. It’s not enough to turn people loose with a new set of skills. They need to know ahead of time that careful decision making will be rewarded. Your organization might promote examples of negotiating ingenuity and share valuable lessons in an online newsletter, for example.