How To Use Negotiation Skills To Ensure High Value IT Deals Do Not Fail To Achieve Optimal Value

Formal research into business negotiations found that the top challenges faced by organisations and individuals are (a) the price/value trade off and (b) developing alternatives/generating options, respectively. A recent Fortune Magazine review in partnership with Miller Heiman (the complex selling methodology gurus) found that sales staff quoted price as the number one reason they did not close transactions.

There has been much talk in the IT industry on both the buy- & sell side about 'partnering' to deliver solutions. The supporting data shows, it is doubtful whether this talk has translated into action.

Whilst most businesses would like to think that they are interacting with both clients & suppliers in a 'solution based' format, the role of price still dominates the landscape. This is due in large part to the inability of individuals to see the 'big picture' or to engage in creative thinking. Our research & experience tells us that one of the critical features of successful business negotiators is the ability to be creative & flexible.

Whilst many IT businesses have built their reputations on the back of their innovative and creative technologies, it would seem that creativity is often restricted to the design & engineering departments. One of the strongest drivers of human behaviour is the tendency to avoid potential losses. When assessing information about the future, managers are more interested in avoiding possible losses than attaining the same gains. This means that during negotiations that support complex and high value IT transactions, the focus is more often on managing risk to avoid potential losses, rather than on finding innovative and creative ways to create additional value for all parties.

The more complex the transaction, the more vital it becomes to manage risk. Rather than just trying to avoid deficits, we should concentrate on ways to invent options for mutual gain during negotiations.

To avoid falling into the price trap, ask yourself the following questions ahead of each negotiation and make this part of your negotiation strategy:

1. Vision
a. What are the key interests of all the parties to the deal that will be satisfied by reaching a settlement?
b. How critical will it be for each party to the transaction to act in a partnership mode?

2. Value
a. What are the specific objectives of all the parties to the transaction?
b. What are the boundaries associated with each of the objectives for all parties?

3. Process
a. What assumptions have you made that you could validate through questioning during the negotiation?
b. How can you frame the negotiation so as to support a collaborative, partnership based approach rather than a price centred negotiation?

4. Relationships
a. Do all parties have a similar desire for a lasting relationship?
b. How can you influence the 'climate' of the negotiation so as to assist in the achievement of a collaborative approach? ('Climate' pertains to non-verbal, physical and cultural aspects.)

Once you have covered these basic elements of preparation you will have time to be creative. Being creative is not something that comes naturally to all of us but it is an important negotiation skill. Use one of the well known creativity methodologies such as De Bono's Six Thinking Hats, or the Disney Creativity Model to help you create options.

If you want to truly embrace a partnership approach that delivers optimal value, you should waste no time at all in getting the creative juices flowing.

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