A new research study has revealed that more than a third of organisations are ill-prepared for business negotiations; more than 48% follow no standard negotiation process while 36.3% prepare inadequately or not at all for specific negotiations.
The study, conducted by Huthwaite International in the Asia Pacific region, polled business leaders from a diverse range of industries – including advertising and media, banking and finance, information technology, manufacturing, medical and pharmaceutical, professional services and retail.
According to Professor Barney Jordaan, Programme Director of the Negotiating Skills course at the University of Cape Town’s Graduate School of Business (GSB), the research highlights the need for many companies to rethink their negotiating approach because it can be a key competitive advantage.
“This research builds on previous studies which proved that having a clear and defined approach to negotiation makes a massive bottom line difference – those businesses with negotiation skills have an edge over those without. They are able to not just broker better deals for themselves; but also develop and maintain profitable relationships,” he said.
Jordaan, who also heads up the Africa Centre for Dispute Settlement at Stellenbosch University, says that specifically successful negotiation is not about what you know but about how you do it. Having and practising the right skills and having a clear strategy are both critical.
Jordaan explained that too often negotiations are entered into with no goal other than to simply ‘win’ the negotiation; and those taking part are often not prepared for all the dynamics and eventualities that can occur in and because of such circumstances. Their thinking is tactical and short-term, instead of strategic and focused on the long-term; practicing the right skills.
“Good negotiation begins with careful preparation and research about who you need to negotiate with; what assumptions, strategies and tactics should drive the process for optimum results; what you‘re going to do if there’s no deal; and, critically, what the ideal agreement should like (deal design)? It’s like inviting important guests for dinner: it’s not just about who should be invited and how to create the right ‘mood music’ for the occasion, but, more importantly, what to put on the menu and time and effort spent preparing the meal. Most of our time should be spent in the kitchen before the dinner.
“Successful negotiation is not about ‘winning at all costs’. In fact, coming up with mutually acceptable solutions that keep relationships in good order are more beneficial to businesses in the long run than deals where only one party gets its way,” said Jordaan.
Jordaan commented that a ‘winner takes all attitude’, which can involve using ...
dubious tactics like bluffing or exaggeration to ensure that the negotiation is ‘won’, can lead to serious ethical and reputational implications for organisations. These, in turn, impact on a business’ negotiation power and the long-term relationship with the other side.
This approach often harms relationships; it increases the likelihood of recurrence of the issues and increases the cost of negotiation.
To minimize the chances of this happening, Jordaan added that it is important that individuals are taught of the negative impact that their own personal behaviour can bring to a situation. “The first step is teaching people to ‘unlearn’ certain behaviour. Often there is a lack of understanding of how detrimental one’s own, often unconscious behaviour can be to a negotiation,” he said.
The UCT GSB negotiations short course uses modern negotiation theory, research, situational, role-playing and mediation practices to ensure that the most efficient practices, processes and skills are imparted to the students.
“On the Negotiating Skills short course we unpack the people, process and problem elements of negotiation, focusing particularly on negotiation in longer term commercial relationships. Delegates leave with the ability to manage all three dimensions more effectively for improved results and to apply the learning to most negotiation situations,” said Jordaan.
The course, offered by the Executive Education unit at the GSB, runs from 1 – 3 June. For more information on the course, contact Mario Pearce on 021 406 1268 or sms “Neg” to 31497.
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Journalists needing more information or an interview with Professor Barney Jordaan, please contact John Scharges on 021 448 94 65 or
