Mad Management: Essential management skills need negotiation in ever changing times

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This is the first of a series of three articles addressing key managerial skills in today’s ever shifting business environment. The idea was sparked by a deep conversation over lunch with my old friend and colleague, Neil Rackham and his wife Ava Abramowitz.

As I mentioned in an earlier article, it was Neil’s highly original behavioural research that introduced me to negotiation as a unique skill way back in the late 1970s. He is currently carrying out ground-breaking work in behavioural skills at Sheffield University.

What is needed today is a System of Collaboration, of which principled negotiation behaviour is the key skill.

Ava, who is a lawyer in the USA, has been paralleling much of my work in negotiation and collaboration, unbeknown to either of us, specifically for architects. She has written a superb book on negotiation for the profession called, unsurprisingly, Architect’s Essentials of Negotiation. In fact it is a great book for anyone involved in construction projects. Ava runs courses for law and architecture schools in Washington, as well as being an adviser to top professional bodies, while I ran negotiation training for the oil and gas industry and the Civil Service, amongst others, for many years.

The book and, even more so, the lunch conversation, got me thinking about what a vital skill negotiation is today in the world of organisational management and how, with Brexit rudderless and large corporations constantly under scrutiny, it would help to get negotiation thinking into the manager development portfolio – as part of system thinking. So, what are the implications for the UK senior managers today insofar as negotiation is concerned?

1. In business and the trade unions there is a recognition of the importance of negotiation; but too often the model they are working to, is not appropriate – either “hard” or “soft”. It should be “principled” negotiation, as the Harvard research has indicated.

2. In the political realm the politicians see no need to understand the dynamics of negotiation – as Brexit is amply demonstrating. This is a making them appear amateurish and badly prepared, as indeed they are.

So, why do we need to negotiate at all? In my earlier work it boiled down to three points:

• We need the other party in order to achieve our goal and we do not have enough power to coerce them.

• We need to achieve our legitimate goal as a junior partner in a business relationship.

• We need to build an enduring relationship that will deliver a stable business or state of affairs which will profit both/all parties (for whatever reason) in the long term.

However, now I realise that its most fundamental value is that the right negotiating process raises the consciousness of the implications of what is being attempted and, if it is principled negotiation, it optimises the chances of it being done properly in a timely fashion. In other words, it is a preventative activity that should stop the wrong things being done and the right things done badly.

Here is an example: A mine in South Africa was planning to move from open cast to underground, as the sides had become too steep for the trucks. They were in the very early stages of a partnering contract negotiation and consequently introduced their plans at the blueprint stage to the contractors who were in the framework. Two contractors asked very important questions of the mine owners. One was by the shaft sinkers: “Why do you need a separate ventilation shaft?” (they didn’t). This saved time and millions of rand. The second was by the mining contractor who told them that the shaft headgear they had chosen was not the best for the kind of work that was to be done. This cut the operating costs significantly for the life of the mine.

This interaction did not just happen by chance. The mine had decided that all its strategic projects would be run within a framework of contracting partners and that a key part of that was to involve the partners early in the planning process. Here was some pretty conclusive affirmation of the value of collaboration. Prior to this they had been a command and control client and still had several expensive disputes on the table over time and quality failures.

However, the fly in the ointment was that the top management did not really get the dynamics of collaboration and therefore did not change the reward system to reflect the emphasis on cooperative behaviour. They did not invest in negotiation training for their key players - unlike Motorola, Xerox and Exxon in the eighties. So the procurement staff were unable to deploy the skilled negotiation behaviours required to sustain a high trust relationship, and often slipped back into the easier “hard” negotiating styles that confused the contractors. Productivity and innovation suffered.

What is needed today is a System of Collaboration, of which principled negotiation behaviour is the key skill. Ava Abramowitz, by her teaching and her book, is contributing to developing this system among the legal and architectural professions in the USA. What I propose is that it also becomes a taught subject in our business schools, either as part of the syllabus or as a programme.

Then I suggest that our politicians attend these courses, beginning with the Brexit team. It is impossible for our civil servants to get the best deal for the UK in the negotiations if their mandate is to “be hard”. Look at the success Los Angeles has had in getting the Olympics in 2028, by some pretty intelligent reasonable negotiating to a Win/Win/WIn. If only ...