Every Employee a Skilled Negotiator. Really: How Negotiation Skills Could-But Don’t- Make Firms Much More Successful, and What to Do About It. | Professor Freeman

Imagine you know a way for an organization to measurably improve revenues, profitability, customer and vendor satisfaction, and employee retention; a method that can create a competitive advantage over peer firms. But…

Now imagine that when you go to advocate for it, people respond, “oh, we already know all about it,” or, “yes, we had a training about it last quarter,” or “yes, we have a team who specialize in it,” unaware that their organization is scarcely tapping into the method’s power at all, and that an opportunity for success is being squandered. What would you do?

That’s the state of affairs I and other specialists face when we talk about our subject- negotiation and conflict management. The field’s very success over the last thirty years has, we find, acted as a vaccine, inoculating firms from getting the full benefit of effective negotiation as an institutional capability.

For most executives and professionals of the past generation, negotiation has been a fun one-day training, a topic worth reading a light book about, or a highly popular, stand-alone graduate school course. To their surprise, effective negotiation is not about intimidation, naïve haggling, bluffing, or fast talk. It depends on a much more constructive, ethical, and wise approach that can serve their side beautifully, and everyone well.

The skills don’t just produce good ‘deals,’ – they foster better leadership, better conversations, better meetings, and better business relationships. Alumni consistently report it’s one of the most valuable courses they’ve taken. But therein lies the problem.

While tens of thousands of trained negotiators use their skills individually, surprisingly few firms have made the skill an intentional organizational advantage. That is, they’ve failed to make it a serious, high-priority group capability.

Picture an orchestra where a handful of members have musical instruments and occasionally play them, as other members smile, nod, and wander off. Yet when you ask, the conductor says, “oh sure, we have excellent musicians here.” Yes, some know how to make music, but the orchestra as a whole has no idea how to generate the power of a symphony.

A recent study found that negotiators who systematically prepare produce about 17% more wealth for those they represent than those who do not, and 10% more for the other side. What if an entire organization shared that capability?

In their book, Built to Win: Creating a World-class Negotiating Organization, Harvard negotiation experts Hallam Movius and Lawrence Susskind argue that when an institution is intentionally, culturally, collectively strong at these skills, it’s much stronger at most of the key tasks the firm carries out. Yet, stand-alone training, they argue- even hugely popular trainings they and colleagues offer at Harvard- does little to create this sort of institutional ability.

In fact, they offer evidence that one-day trainings alone do little to change organizations. Most of us who offer training in the subject have heard trainees say, “yes, I really enjoyed the training we did a few months ago…but I can’t say it’s changed much around here.” Ugh. Isn’t that the nature of training, though?

It doesn’t have to be. In 1984, General Motors’ car plant in Fremont, California was so riven with labor-management problems that many likened it to prison. Absenteeism was rampant, drugs, sex, and alcohol were everywhere, and outright sabotage was common. Not surprisingly, the plant made terrible cars.

Then GM reconstituted the plant and sent all the plant’s workers to Japan to learn how Toyota managed its labor-management relations. There, they learned about worker empowerment, total quality management practice, and team production methods.

Within a few months, the Fremont plant experienced dramatic improvements in employee morale, productivity, quality, and profitability- so much so that it consistently won national honors for product quality and became one of GMs most profitable plants. Today, automobile historians believe the reconstituted plant held the secret that might have saved GM from bankruptcy. Why didn’t it? GM’s culture and leadership never pressed other plants to apply Fremont’s lessons.

The Fremont case illustrates what an organization can experience when it fully commits to making itself proficient at a proven set of collaborative skills…and the lost opportunity of ghettoizing such a powerful skill set in one corner of an organization.

Negotiation experts know. We witness the loss daily as firms struggle, unaware of the potential of a genuine organizational commitment to negotiation and conflict management skill. But we also think we know a solution.

The key is to find leaders who understand the value of making everyone in their organizations widely competent to use negotiation skills as a team.

[Insert two brief examples- eg HP and McDonald’s]

Leaders who value negotiation as an institutional advantage don’t just OK a one-day training for a few executives and then drop the matter. They make the skill a basic part of the culture, method, and mindset of the organization- fostering it as a basic part of doing business, and genuinely cultivating the staff’s readiness, willingness, and ability to use it together in different settings.

They encourage cross-functional teams to plan with the help of negotiation skills. That way, their plans are not only more robust and promising, but have better buy-in too. They urge the inside and outside wings of the organization to use negotiation skills so the entire organization is more unified, focused, coherent, and capable in its relations with customers, clients, and vendors.

They nurture junior talent to learn the skill from seniors, fostering a culture of mentorship and a common language that builds harmony and skill. They press and urge their teams to fight ‘deal euphoria’ by testing key negotiations with specific measures of success, and use these reviews to hone their groups’ negotiating abilities.

In short, they use negotiation and conflict management as a way to literally make the organization more ‘organ’ like- healthy, harmonious, cohesive, and effective.

That focus takes leadership. Fortunately, a generation of leaders has trained in negotiation, and knows its potential power. What they need now is a vision for bringing the benefits of negotiation and conflict management to their entire organizations. I offer this vision here, and invite leaders to seize it. Imagine what a difference that emphasis would make on the groups they lead.

If only there were leaders who wanted such things….
* * *

[NOTES] http://www.amazon.com/Built-Win-World-class-Negotiating-Organization/dp/1422110478 My Gain is Your Pain May 16, 2009 By James Houghton Format:Hardcover As someone who used to work for a large manufacturing organization, and who was sent to several negotiating workshops, all I can say is where was this book 10 years ago??? One of my biggest frustrations after returning from a negotiations training program was the sense that while I may have been marginally more prepared to Get to Yes at a tactical level I was still operating in the weeds strategically. The price increase I proudly managed to wrangle from a customer with no other options may have been great for the bottom line over the near term but it ignored the quality improvements that an overloaded engineering department would have to deliver, or the division manager who eventually wanted to shut that product line down, or even the fact that it caused lasting damage to the relationship with the hijacked customer. While I worried about my BATNA Rome was burning and there was no way to really understand why until after the fact. Not until now. Because as Movius and Susskind have so clearly pointed out it is about the system stupid! It seems so obvious but the more companies can do to get sales and engineering and finance (and even the customers) aligned around a common set of (measurable) objectives the better the outcome of any negotiation will be. And the more those successes are shared and encouraged throughout the organization the more people will learn and the more engrained this more holistic approach will become. The book has lots of great real life examples to help illustrate both the common traps that we all fall into and the significant benefits that companies like HP and McDonald’s have gained from adopting this more systematic approach. If you read nothing else, the chapter that outlines the basic building blocks of the authors’ Mutual Gains Approach is especially helpful. For those of you have worked in the trenches and fought multi-front battles within your own organization you will wonder why such good common sense has not been adopted more broadly already. ——– http://cbuilding.org/gethelp