Sarah Stuart's 2014 Blog

Sarah Stuart, an MBA student and former editor of the New Zealand Woman's Weekly, reveals the challenges of the programme in a weekly blog.

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The art of negotiation - How to peel an orange

08 October 2014

What's the most difficult part of a negotiation? Is it knowing whether to make the opening move? Deciding when to show your hand? Working out what you can afford to lose on? Stalling for time?

No. All of those steps are tricky. But they're tactics, the kind of attack-and-defend manoeuvres procurement managers mull over while they brush their teeth.

The real challenge in any negotiation is selling the result back to the home company. That, according to management consultant and lecturer Patrick Rottiers, is the most important thing to remember about your opponent (though I'm sure he wouldn't call them that). They have to look like a success and a leader when they take your deal back to their company.

Patrick runs the two-day Negotiation Skills Executive Education short course at the University of Auckland as well as similar MBA courses in both New Zealand and Europe. A Belgian-born veteran of international negotiation, he teaches much more than just poker moves and posturing.

Great deal-making is about creating more value, he says. Not in any kind of 'win-win' scenario. It's about stepping back to broaden the picture of what is possible, strategically thinking about all of the options, negotiating clause by clause - knowing always what your best outcome is and the line you will not cross - and never conceding anything without a trade.

First exercise on day one was team negotiations for an orange. Everything was on the table: skin, pith, seeds, flesh, juice. Each team needed to get more than 50 per cent of the whole. Our team cheated, just a little. We were a not for profit organisation working to feed kids in schools. Our juice-making opponents just looked greedy.

Taking a team to any negotiation is key, says Patrick. Each person can play a different role: leader, scribe (crucial for knowing exactly what has been agreed and what is still up for grabs), intervener (when tensions escalate or progress stalls). Having another team member back in the office ready to check/research when required is a good idea too. But make sure you get your team dynamics working.

Eye rolling, deference, nervousness, interruptions and other kinds of body language all speak to your opponents. How unified are you in the decisions? Who is really in charge? Great negotiators will have done some swift but crucial research beforehand on the other side's experience and ability to pay. They may know the hotel you're staying in, who else you are seeing, your previous two jobs (thanks LinkedIn).

"Remember, everything is up for grabs," says Patrick. That includes volumes, sales targets, territory, exclusivity, margins, marketing rights, the contract cycle and non-competition clauses, among many others.

There were tactics taught, of course. Who doesn't want to know what those steely-eyed procurement hacks dream about at night? Turns out it is making every move conditional on something else, avoiding making the first move and possibly for some, the dark arts of intimidation, bluffing and twisting what has already been said.

But crush and destroy never really works, says Patrick, due to that pesky problem of everyone having to satisfy their company that they've done the best deal possible in the circumstances. Make sure you have a couple of concessions up your sleeve they can take back as wins.

Our team did win most of the orange - well, the bits that would feed the kids. We handed over a co-branded, candied peel product that our philanthropic juice friends would use as marketing. It took five moves and more stalling for time than speaking.