Disappointed by Results? Improve Accountability in Business Negotiations

Adapted from “Disappointed by Results? Improve Accountability in Negotiations,” published in the January 2009 issue of the Negotiation newsletter.

When it comes to planning and carrying out talks, negotiators are too often left to their own devices.

Here’s how to guide your employees toward better results.

How satisfied are you with the outcomes that negotiators in your organization achieve?
Most likely, you can think of a few successes worth crowing about, a few you’d like to sweep under the carpet, and many more that turned out just so-so. Maybe your department never manages to sign the most promising job candidates.

Or perhaps your sales force consistently brings back average deals,no matter how much negotiation training you give them.It’s tempting to blame the people involved for such problems, but when you do so, you overlook the organizational structures and decisions that contribute to poor negotiated outcomes. In particular,many organizations fail to set clear,effective accountability standards for their negotiators.In today’s marketplace, where everyone is trying to do more with less, organizational leaders need to set up strong accountability measures based on clear guidelines and the right types of incentives and consequences. When negotiators know they will have to provide a rationale for their actions, their negotiation behavior often changes significantly, researchers have found.

By contrast, negotiators who lack accountability may feel confused about which direction to take or apathetic about the task at hand.The following advice, based on recent accountability research and theory by Harvard Kennedy School professor Jennifer Lerner, University of California At Berkeley professor Philip Tetlock,and others, will inspire negotiators to reach far beyond mediocrity.

1. Set up accountability measures in advance.

One of the most common mistakes managers make is to ask employees only after they’ve negotiated to justify their decisions.In one study, Tetlock looked at participants’ ability to predict accurately the behavior of others.When participants were told in advance that they would have to justify their responses, their performance improved. But when they were told only after viewing key data that they would have to justify their responses, they failed to improve.
Knowing in advance that we’ll be accountable for our decisions appears to motivate us to do our best. Tetlock also found that making decision makers accountable in advance (rather than after the fact)helped them avoid overconfidence,a common and costly negotiation error. Therefore, be sure to tell employees during the planning stages of a negotiation that they’ll be expected to justify their decisions.

2. Communicate Key goals.

Accountability can backfire if negotiators become so vigilant about the prospect of justifying their actions that they factor every minor detail they encounter into their decisions. Tetlock, Learner, and researcher Richard Boettger found in one study that accountable decision makers tended to factor unimportant information into their decisions,such as the other side’s age and personality, to their detriment.

How can you make sure your negotiators focus on the issues that matter? Take the time to talk with them about the most important issues at stake in upcoming negotiations. If sales volume is less important than building a strong, long-term relationship with a particular customer, carefully articulate this preference. At the same time, stay open to the possibility that the negotiator will persuade you that other goals, such as a clearer delivery window, are equally important.

In addition, when it comes time to discuss performance incentives,tell your negotiators that they will be rewarded based on their ability to follow through with a sound process that achieves the goals you’ve laid out together. In doing so, you will help negotiators stay on track—and avoid being distracted by irrelevant details—once talks begin.

3. Coach employees on the negotiation process.

Negotiators who are held accountable for their decision-making process are less likely to irrationally escalate commitment to initial decisions than are negotiators held accountable for decision outcomes, Stanford University professor Itamar Simonson and UC Berkeley Professor Barry Staw found in their research. It seems that negotiators will feel less pressure to support initial decisions that turn out poorly if they feel confident that they are following a sound, well reasoned plan.

You can help employees come up with a smart process by acting as their negotiation coach, according to Massachusetts Institute of Technology professor Lawrence Susskind. Suppose that Joel, a member of your sales team, is preparing to approach a longtime supplier with the news that its contract will be rebid and could be given to another company.Joel needs help figuring out how to break this bad news to the supplier while trying to maintain the relationship. Acting as Joel’s Negotiation coach, spend time asking him questions about how his contact at the supplier’s company is likely to respond to the news.Together, brainstorm strategies for keeping the conversation productive and positive. You might even role-play the upcoming discussion and try to throw Joel a few curveballs.

Role-playing offers several advantages to negotiators. First, by shifting the focus from the outcome of the negotiation to the process,this type of rehearsal offers negotiators concrete guidance. Second,because accountability sometimes triggers competitive behavior in negotiation, encouraging employees to think through the likely responses and interests of the other side in advance can help them devise creative solutions that will benefit everyone involved. Finally,if talks get sticky, negotiators will be more likely to seek you out as a sounding board if you’re already familiar with the scenario.

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