By Phil Ingle | Founder, Owner & Managing Director | Phil Ingle Associates Ltd
We are all born negotiators. We negotiate every day, consciously or (maybe mainly) sub consciously, and especially in the financial services. Persuading and influencing people about our products, services, wants and needs is seen as natural, and sometimes we even put in extra effort because it seems like a ‘negotiation’.
But with constantly changing business environments, how is the art of negotiation evolving, and how can we evolve with it?
Negotiation seems as old as language itself. The earliest negotiations are unsurprisingly not recorded. You might expect that by now we would have become better at it. Maybe some have, I fear some have not. Does that include you?
My work in this area can be traced back to being trained in negotiation skills in the late 1980s. At that time, while lending money and trying to get it back, I found myself sent on a course (in a room, but we didn’t say that then: it was always in a room…) and had a fascinating few days pretending to sell cars I didn’t own and trying it on with some more senior colleagues who clearly had no hesitation at lying to me. While we were on the course, anyway.
The revelation though came in the following days. I noticed my client meetings getting better results more easily, with some novel approaches to repayment, often because I was listening to the customer more than trying to dictate. That was when we also keenly studied the negotiation “bible”, Getting to Yes by William Ury & Roger Fisher.
What has changed? I now train others in negotiation, though this is in a room only about half the time. As a human being I negotiate every day, sometimes very poorly, yet I look to learn.
To help you consider your negotiation skills, I share three areas of development that are taking on more importance, especially in the financial services.
Basic Negotiation Skills & Their Absence
The first key element is the absence of basic negotiation skills. Wide scale data on this is hard to come by, so I rely on my own observations from training hundreds of people in recent years. While frequently asked for training on Advanced Negotiation Skills, the rationale for such requests seems to revolve around the understanding that people are being “rolled over” by superior negotiators. In some cases, they are right. Yet it is not Advanced Negotiation skills that are required.
It is the basics.
The most basic element of ‘skill’ is preparing for the negotiation. For some – especially in the financial services – this means going into the meeting with a ‘bottom line’. The perception that “we are too busy to spend time ahead of the meeting” ignores what making the negotiation effective really involves. The bottom line in preparation is that the bottom line is not enough: you should be thinking about the transaction you are negotiating and the nature of the relationship you have and want to build, while the negotiation is completed.
This requires not just a bottom line but a top one too: What is it you really want? This could be phrased as your wildest dreams. From this, a realistic mid-point (not 50% between your wildest dreams and your bottom line!) or outcome can more easily be envisaged.
The Negotiation May Not Work Out
The next essential is your BATNA – Best Alternative To a Negotiated Agreement – Ury & Fisher’s wonderful acronym for a walk away situation. We can all realise, at least on an intellectual level, there is a possibility every negotiation will not end as planned. The question is: What will you do if you cannot agree? A ‘walk away’ or Plan B is something that lends huge confidence when negotiating, especially in complex commercial transactions.
With a BATNA, preparation remains the key.
Once prepared though, what style of communication will your negotiation involve? Over the last four to five years, face-to-face meetings have reduced in number, as have phone calls, but screen-based calls are coming to the fore.
The changes here seem rather basic to some, but the impact remains the same; you are looking for trust. For this I use the tried and tested ABC tool: Appearance, Behaviour, Communication. Your online appearance should be curated so that people can see your face and especially your eyes. Get you webcam at eye level (not staring down at your laptop), some light on your face instead of behind you (preventing your face being silhouetted), and consider the background, going virtual if that helps. Wear solid colours too – to prevent the camera blurring around stripes & checks.
Your behaviour needs to adjust too, but maybe more subtly than when face to face. Posture can be varied to good effect (some leaning in to take interest) and a few visible hand gestures can also work well. Generally the more of your body language that can be observed, the easier it is to build trust.
Communication wise, your voice tone will reflect much of your meaning, but it needs to be heard. Is your built-in microphone up to it? A plug in, more professional version will make you sound better, and being easier to hear puts less effort on your listener, with less opportunity for misunderstanding too.
The Third Essential: Cake
This comes from Barry Nalebuff & Adam Brandenburger’s excellent Harvard Business Review article Rethinking Negotiation. They use a simple but effective example of how important it is to grow the size of the cake, not just argue over the size of your slice. Looking for synergies with clients, suppliers and colleagues is a way of building relationships not just achieving a transactional win. Their investment pooling example provides a graphic quantitative method, while showing how keeping an eye on the bigger picture – the size of the cake – rather than the detail of what is mine/yours, can make win/win more easily and more often.
The route to a bigger cake size is more ingredients. Negotiation in financial services will remain not just what you get, but what you – and the people you negotiate with – give.
For more on this subject, have a look at the Harvard Business Review article 9 Tactics for Better Remote Negotiations by Milan Prilepok.
