INTRODUCTION
I chose this title because it channels a little, the sort of business self-help paperbacks that seem to fill several shelves in WH Smith, while it also acts as my tribute to the late television legend, Sir Bruce Forsyth, latterly of ‘Strictly Come Dancing’ fame but who also presented the anarchic 1970s TV show, ‘The Generation Game’. He sadly passed away around the time of writing. Older readers will remember the hilarity of the out-of-control potter's wheel and the cuddly toy on the conveyor belt. But this article is not about games shows, it's about ‘The Negotiation Game’. Personally, I find many of the tomes available on business soft skills quite exhausting and irritating, titles like ‘The Power of You!’, ‘How to Have a Good Day’, ‘Pass Me the Bucket’ – ok, so I made that one up, but you understand my point. In this article I wish to pass along a few nuggets on negotiation skills in a hopefully digestible and entertaining manner. I am trying to avoid preaching, boring or deluging you.
DEFINITION OF NEGOTIATION
In my experience, negotiation skills do not come easily to many people. In fact, if I had a heart monitor I would bet that most readers will become a little tense and anxious at the prospect of negotiating a renewal of a contract with a large supplier. You are not alone and I offer these top tips or should I say, life hacks in the modern parlance, to make the process a little less stressful.
FAIR IS FAIR
What do we mean by fair? Well, certainly not ‘just’ in the legal sense. Let us be honest, there is no such thing as fairness in these sorts of business negotiations as far as can tell. ‘Fair’ in this context simply means what is deemed acceptable to both parties.
A PROCESS RATHER THAN AN EVENT
Moving on to the ‘deal’, it is important to take on board that this is a process rather than an event. It may take months. That probably sounds ridiculous to the uninitiated but everything takes time. A lot of time. That's why you may get a call about renewals from your account manager when they seem way in the future. Believe me, the time will pass quickly, especially when you factor in holidays: personal and the eight national Bank Holidays. In terms of duration, I would characterise getting to the deal, not as a marathon, nor a sprint but rather as a middle distance event, where a lot of the key manoeuvres take place once the final lap bell sounds… I am an athletics fan but even if you are not, I dare say you have seen the end of some of Mo Farrah's races on the TV news and will know what I mean.
KEY PLAYERS
Various key people will be involved: from the front line negotiators such as yourself and/or your manager/other colleagues to your Account Manager at the publisher/supplier to those behind (or more likely above) on both sides, i.e. the shadowy superiors who will actually approve or reject the deal. These are people I would not want to meet late at night in a dark alleyway… Think ‘Peaky Blinders’, that gang-based TV drama set in Birmingham; not the violence obviously but the brooding sense of menace.
POSTURING
As I write this, the pantomime season is in full swing. Oh yes it is… and it is appropriate as, rather bizarrely, negotiation can bring out the amateur dramatics in some of the key characters. Publishers will say, ‘If I give you this deal I will lose my job and as a result my delightful family will be out on the streets, etc.’ This is a real life example of guilt peddling.
In the initial phase of negotiations there could well be plenty of posturing like this. The customer: “We have next to no budget for this! Our Finance Director is like Dracula/the Grim Reaper/Scrooge.” However, unless your law firm has been in the press latterly for being on its knees financially, or a merger has just occurred, this will not wash. In fact, a merger situation may put up the price to ever more outrageous levels! On the grounds that an enlarged workforce will require more hard copy products and licences to electronic databases.
THE RATE CARD V INFLATION: A BATTLE ROYAL
The customer will refer to the inflation rate of 3%. The publisher/supplier will bang on about the rate card. Neither side will listen. For those unfamiliar with the rate card, this is the price that a supplier would love to be able charge in their dreams. If this sounds overly cynical here is what Wikipedia has to say on the subject:
‘A rate card is a document containing prices and descriptions for the various ad placement options available from a media outlet. Like the rack rate at a hotel, this is generally the maximum price that one may pay.’Footnote 1
USAGE STATISTICS – ANOTHER BATTLEGROUND
It is always worth requesting a set of usage statistics if you do not have them already. Your manager will most likely want to see them or at least be satisfied that you have seen them.
No doubt you are familiar with the phrase ‘lies, damned lies and statistics’. According to the University of York, Mathematics department:
‘Disraeli, Benjamin, Earl of Beaconsfield (1804–1881) quoted in 1895’
This quotation has frequently been attributed to Disraeli. The earliest attribution of the phrase to him I have so far traced is in the following letter to The Times dated 27 July, 1895Footnote 2 :
SUNDAY OPENING IN THE CITY
__________<>__________
TO THE EDITOR OF THE TIMES
Sir, Mr. Peake says that the figures quoted by me disguise plain facts.
I think Lord Beaconsfield said that there were three degrees of veracity—viz., lies, d—d lies, and statistics.
It may be so, but will Mr. Peake explain away the undoubted fact that the average attendance per hour at the Guildhall Gallery has been larger on Sundays than on weekdays, both this year and last year?
I am, sir, yours truly,
W. P. TREGOAR Ludgate-hill, London, E.C., July 26
Very soon after that, on Wednesday 20 August 1895, the same attribution can be found in an Editorial in the New York Times which begins as follows:–
‘OFFICIAL STATISTICS’
‘According to a saying credited to Lord Beaconsfield, there are three kinds of mendacity: lies, blank lies, and statistics. This means, doubtless, that nobody with a cause to maintain it ever lacked figures with which to do it. Even the anti-vaccinationists, for instance, by searching the inspiring tables of mortality in various countries, and especially by calling upon their own fervid imaginations, find no difficulty in proving that Jenner was a fiend in not too human form, and that a man vaccinated is for all practical purposes a man dead.’Footnote 3
In terms of online usage statistics there does appear to be an element of embellishment in the sense that just a fleeting touch of the screen is counted as using the system.
ROLE MODELS FOR NEGOTIATION
Almost nobody believes they are good at negotiation. The only person I can think of who says he is, is, well… President Trump. According to the Harvard Law School Program on Negotiation Daily BlogFootnote 4 :
“The late Nelson Mandela will certainly be remembered as one of the best negotiators in history. He was ‘the greatest negotiator of the twentieth century,’ wrote Harvard Law School Professor and Program on Negotiation Chairman Robert H. Mnookin in his seminal book, Bargaining with the Devil, When to Negotiate, When to Fight.”Footnote 5
In his chapter on Mandela, Mnookin cites Mandela's patience, tenacity, pragmatism, and strategic thinking: ‘He rejected the simple-minded notion that one must either negotiate with the Devil or forcibly resist. He did both. He was willing to make concessions, but not about what was most important to him. With respect to his key political principles, he was unmovable’.
So it is important to stick to your red lines and lines in the sand. If you are briefed that you must keep a particular product at renewal time then make sure you do. Or if you have a specific budget then don't overspend without approval from Scrooge, sorry I mean your manager! Approval in writing that is; do not rely on something said over the water cooler or in a lift.
IT'S BUSINESS, NOT PERSONAL
Try and maintain the best possible relationship with your contact on the other side. Listening and empathy are important. A touch of humour can go down well. Always be polite and helpful. Stick to the facts if things get heated.
An article entitled ‘Negotiating with Emotion’ from the January-February 2013 Issue of the Harvard Business ReviewFootnote 6 quotes an instance of a $3 million sale of a New York brownstone mansion nearly falling apart because of a dispute over an old washing machine, and a case where an angry woman flung a set of house keys at a man's face as hard as she could, drawing a lot of blood. She was furious with the man, her own husband(!) because he had agreed to sell their place for less than she thought it was worth.
‘SOFT ON THE PERSON, HARD ON THE PROBLEM’
Nick Davies, who runs the Really Great Training CompanyFootnote 7 and spoke at the BIALL Conference a few years ago, believes this is probably the single most effective technique according to those who really know about negotiation. He is at pains to point out that this does not mean that you agree with the other person! What it does mean is that you are empathetic and listen very carefully to what they say, while focussing whole heartedly on the problem. This will create a ‘cognitive dissonance’ in the other person. They will stop focussing on you and engage fully with the problem instead.
ICEBERGS AND BATNAS
Another of Nick Davies mantras is around planning and preparation before a negotiation meeting ever takes place. While the popular conception may be that ‘tactics at the table’ are how things get done, he maintains that like an iceberg most of the important work has be done in advance below the waterline, including the BATNA. A BATNA means the Best Alternative to a Negotiated Agreement. It is vital to have one of these up your sleeve in case things do not go as you wished when discussions finally take place.
MAKING OFFERS: ALWAYS GO FIRST!
According to Nick, trainer to the Royal Household according to this website. Wouldn't you just love to know who he is training?!
I digress. In terms of whether to stick one's neck out and make an offer when negotiating the evidence is very clear. All the research shows that the first offer acts as an anchor for the rest of the negotiation. Any discounts are taken off that figure. A practical example would be second hand cars at garages. They always have huge stickers with prices which are set by the sellers for this very reason.
WANTS V NEEDS
Be aware of the difference in wants and needs in any negotiation situation says, guess who, yes Nick Davies. If the other side say they want something specific, for example for your organisation to sign up for 2 years, you need to think carefully as to why they are making this demand. Once you uncover their real needs and establish the reasons behind their wants, you may find there are alternatives. The two years minimum may be a want because the supplier needs a long term commitment. If you like the product and know you are in it for the long term you could suggest 3 years and get a better deal.
TIMING IS EVERYTHING
A good deal cannot be hurried. Although the clock is usually ticking in the broad sense that there will inevitably be some sort of deadline, it quite often pays to be patient. And I mean that literally…you usually end up with a more successful outcome financially. It used to frustrate me when things went quiet and I worried that we would never reach agreement. But we always did…in the end. Gradually I got accustomed and finally even comfortable with the whole tempo of these kinds of transactions. I knew when we started one that it would be there in the background for months on end. It would always be there and there would be periods of intensive activity and lulls when no one touched it, or when it suited one party or other to play a waiting game. It may sound unlikely but the best deals can often be had when a publisher is at a certain point in their business cycle i.e. your account manager is under pressure to bring in some more renewals before their year-end.
DELAYS, DEADLINES AND LAST MINUTE DEALS
The lulls which can last up to a couple of months in my experience tend to occur when those involved are on holiday or frantically working on other matters.
Deadlines are usually fixed but can be a bit fuzzy. It is likely that as long as a deal has been agreed by email for example then that counts before all paperwork has been completed.
Be patient. The right deal is worth waiting for. You may be able to slip in some last minute sweeteners e.g. extra users added, some free access because the supplier is keen to close the negotiation by a certain point. Most likely someone more senior is breathing down their neck!
SIGNED, SEALED AND DELIVERED
Let's stick with signed. In my experience it can be difficult to get the signature of the person who can authorise the expenditure. This person is likely to very senior and not often around. This means that when agreement is looking close and a deadline is looming, you need to check they are not heading off on a 2 week ‘fly and flop’ vacation to the Maldives. They won't be impressed if they are just stepping onto a beach and suddenly get a request to sign off on a Lexis contract because you didn't check the holiday list.
CONFIDENTIALITY
I know it is the nature of the beast but I still find it very annoying that the large publishers have clauses forbidding discussions with other customers about pricing issues and disclosure of how much you have been fleeced for…. sorry, I mean the sum agreed at the end of the negotiation.
CHECK THE CONTENT OF THE FINAL CONTRACT
You would be amazed how many mistakes creep into the final paperwork. I can only conclude that the foot is taken off the pedal and exhaustion can lead to mistakes at the end of a long negotiation. For this reason I would check every aspect thoroughly; anything from dates, contents and any specially agreed items. This is totally worthwhile as sometimes contracts are carelessly copied over from one year to the next. Items that have been cancelled can reappear. The sooner this is nipped in the bud the better! Don't stop until the whole thing is finished properly.
MONEY, MONEY, MONEY
If you work at a magic circle firm THEN your bills from the likes of Thomson Reuters and Lexis could be vast. Did someone say millions? Do not have sleepless nights. My late and much missed father worked in international banking. As a teenager I recall asking him whether he worried about dealing with such massive sums. “It's not my money, Jack” he replied… and so all we can do is just go for the best possible result for our organisations
Follow these tips and hopefully a fair deal will be on the horizon…
Maybe your manager will feel moved to congratulate you at the end of the process. “Didn't you do well!” in the words of Brucie! If so don't forget to mention it on your appraisal form. Negotiation is a very useful and important skill.
To complete this article I drew up my ten top tips for negotiating a fair deal; here they are:
