I love the New Year because it gives us an excuse to hit the reset button and start anew. Technically, we could hit that button at any time, but there’s something about the changing of the year that makes it right for a reset.
There seems to be a big reset underway in terms of how leaders are looking at their businesses. Many are resetting because COVID is seemingly having less of an impact on our lives, and all those policies we put into place during the pandemic are being revisited. That’s spurred a broader look at performance, and leaders are wrestling with how to improve.
When considering sales teams’ performance, leaders are looking at everything from close rates to deal size to deal profitability. Likewise, procurement leaders are looking at everything from cost reduction to supply reliability to the speed of vendor acquisition. As leaders from both sides of the aisle look at their teams, their negotiating performance is being scrutinized.
Fixing negotiating performance is not as simple as “just training.” In fact, many negotiation struggles are amplified by what’s happening beyond the negotiator’s skill set. Here are two struggles we’ve been discussing with clients most recently and the effects they’re having on their businesses.
“I’m not feeling confident in my team’s ability to get a good deal.”
One effect of this struggle is that leaders have a hard time delegating authority to their people. Instead of giving latitude with limits, they require lots of approvals and permission stages before their team can do anything at the negotiating table. As a result, their dealmaker’s creativity and resourcefulness are limited while negotiating. This, in turn, reduces their ability to get a good deal.
Resolving this struggle begins with an honest conversation about what a good deal looks like. From there, we look at how well-documented their negotiation process is (typically, it’s not documented at all), along with what leadership needs in order to feel comfortable that their people are well-prepared to negotiate a good deal. In addition, we examine how well dealmakers are supported at the negotiating table: institutional knowledge to draw from, advisers to guide, authority to negotiate, etc. Then we can consider the team’s skills-development needs in the context of their negotiation culture.
“I have to step in to save or fix the deals that are in trouble.”
There are a lot of similarities here to the struggle around feeling confident about the team’s ability. However, this one has a special twist to it: If leaders constantly feel the need to step in to fix or save a deal, it means they may not have a culture of development. Instead of being a coach, they’d rather be a hero.
Those who play the hero aren’t always doing so out of ego or some nefarious motivation; they often do so because they find it quicker or easier than taking the time to coach. When we consistently see this behavior among leaders, it usually indicates a blind spot because they’ve been taught only how to lead and manage — rarely are leaders taught how to coach.
Another way to resolve this struggle is by looking at how leaders gain visibility into their team’s negotiations. Frequently, leaders are brought in far too late because their team didn’t understand when to ask for help (assuming they knew they were in trouble in the first place). Building better negotiation reporting and communication systems can help resolve this issue, especially when they’re coupled with skills development, which will help teams recognize they’re in trouble before they need a hero to save them.
It’s easy to blame performance on lack of skill. However, in our experience, it’s rarely just about skill — it’s about the entire culture of negotiation that surrounds your dealmakers. Leaders who take a more holistic approach not only do better at improving their circumstances, but they also excel at creating lasting change.
It’s the New Year, and it’s a good time to hit the reset button to effect a meaningful change in your company’s negotiation culture.
We Can Help You Improve Your Company’s Negotiation Culture.
Is your team struggling at the negotiating table? That may be the result of leadership’s lack of confidence in their abilities or their need to step in and “save the deal” instead of properly coaching their negotiators. We can help! Drawing on nearly 50 years of real-world negotiating experience, we’ll assist you with getting better deals, saving time, and creating value for all involved — not to mention preserving and even strengthening relationships. Let us partner you with one of our advisers, ensuring that you’ve got the broadest view of your deal.