Negotiation
is supposed to help us reconcile perspectives and interests. A simple
definition is “a formal discussion between people who are trying to reach an
agreement”. Based on this definition, a high proportion of business-to-business
negotiations must be considered successful: they reach an agreement. The
problem with this definition is that it is too inclusive: merely reaching an
agreement does not mean that either or both parties benefitted from that
process.
IACCM research findings suggest that most business-to-business negotiations
suffer from some (apparently fatal) defects. Among these are:
· A lack of coherence;
· Unclear goals;
· Rigid rules and
standards;
· Lack of confidence in
capabilities and process;
· Inconsistencies of
culture or value that negotiators make little effort to understand.
How do these manifest themselves? The findings here are interesting. For
example, negotiators on both sides claim that they value a sense of partnership
– yet in most cases neither feels the counter-party offers this.
Indeed, on digging further, you find that negotiators are generally not
confident about the behaviour or performance of their own organisation, so they
are understandably hesitant about what they will commit to, even though they
expect full commitment from the other side.
In addition, findings show that each side looks for “responsiveness” and hopes
for a “single point of contact, empowered to make decisions”. And again this is
something that both parties consistently feel is something the counter-party
lacks or – ironically – if they find a counter-party with these
characteristics, they don’t believe what they are being told!
Flexibility is another key value, but is once again something that
each side feels is missing from the other negotiating party. The findings show
that participants are critical of other parties for their use of
standard-agreement templates, which the participants feel either reflect the
wrong type of relationship or introduce an adversarial focus on legal and
financial risk allocation.
A key issue related to flexibility is how people engage with cultures that are
different to their own. Different cultures approach things differently, which
has important ramifications in any negotiation, and yet there is little
evidence that the parties seek to explore those differences and address their
respective concerns.
Ultimately, many negotiations suffer from a lack of clear ownership
and leadership. The interests of competing stakeholders make coordination
extremely difficult. As a result, negotiations are often quite
fragmented and decision-making may be inconsistent and desired
characteristics like ‘partnering’ and ‘collaboration’ are lost in an atmosphere
of scepticism, cynicism and a general lack of trust.
In an environment of growing complexity and increased interdependency, the need
for organisations to work together in relative harmony has never been greater.
Right now, the typical framework and approaches to negotiation are clearly not
helping. We reach an agreement, but at what cost and with what loss of
opportunity?
Contributed by: Tim Cummins, President of the International Association of Contract & Commercial Management
Article
first appeared in Bespoke Procurement Bulletin: 
