Negotiating During Challenging Times

By Mark Jankowski

As the economy tightens, effective negotiation skills become more important than ever. It is imperative to commit yourself and your organization to achieving “WIN-win” deals. Though overused and often misused “WIN-win” simply means: “the best way to get what you want, is to help them get what they want.” The simplicity of this phrase, however, is belied by the difficulty many people have in executing on it, particularly in challenging economic times.

To survive in the short term, it may be tempting to take advantage of the other guy. You may convince yourself that tough times call for tough tactics, and that the end justifies the means, but how will you feel when your ‘partner’ can’t or won’t fulfill their end of the bargain? One-sided agreements are often broken because players will either find a better deal or will be unable to keep their own doors open.

Using an upper hand to strike an unfair deal might seem like a good idea initially, but this approach fails to take into account the enormous cost associated with replacing a ‘partner’ or ‘vendor’ that is no longer able to perform. Not only do costs increase, but also the problems can impact your own clients or customers…missed deadlines and reduced quality. Ultimately these “win-lose” deals impact on profits due to higher costs, or the increased concessions and higher discounts you must offer your customers in order to retain them.

One aspect that many people tend to overlook is that relationships built during challenging economic times are the ones that tend to last a lifetime (and beyond). One famous example is McDonalds® and Coca-Cola®. The story has oft been told of a struggling Ray Kroc trying to obtain a soft drink vendor. Kroc did not have the money to pay for the equipment as he quickly expanded the hamburger chain. Coca-Cola® saw an opportunity and struck a deal that deferred equipment payments. Other soft drink vendors had the opportunity to make this deal, but they were unwilling to take the risk. Coca-Cola® saw the opportunity and forged a partnership that has lasted decades.

How can you strike “WIN-win” deals? You must start by completely understanding what your customer is trying to accomplish and then deliver your service or product in a way that will help them accomplish that goal. Recently we consulted with a software company that was trying to negotiate a deal with a chain of bookstores. We asked them: “What is your goal?” It was a simple question, but we received 12 different responses, ranging from: “close the deal” to “get all of their budget” to “prevent our competitor from bidding”. No one in the group provided the answer we were looking for, i.e. that their goal was to find a way that they could help this bookstore chain sell more books! If they find a way to do this, all of those other goals will fall into place.

When we first started Shapiro Negotiations Institute, I was asked to make a pitch to a young firm experiencing explosive growth. When I sat in the office of the Executive Vice President of Training, she was obviously overwhelmed. Her desk was covered with folders, proposals, and brochures, and her floor was stacked with boxes, files, and books. She looked me in the eye and said: “I am very busy and I do not have a great deal of time, but we need a negotiations program, so tell me what you can do for us.” Rather than telling her what wonderful negotiation programs we could deliver, I paused and asked her about all of the folders, files, and folios that had infiltrated her office. She told me, “I am in charge of building a corporate university from scratch and I have no background in training, and I have exactly two weeks to do it! That is why I need you to be as brief as possible in telling me about your negotiations programs.” I was brief. I told her that I would not even discuss negotiations programs with her that day. Instead, I asked her if she would be interested in visiting one of my clients that had recently won an award for establishing the premier Corporate University in the United States. Her eyes lit up. Within a week we were on a plane together flying to spend a day with that customer. It was only on the way back that I began to discuss negotiations programs with her. Her organization has been a client ever since.

In good times it seems as if opportunities are everywhere. In down times it seems as if they are nowhere. Of course, the way you look at things often dictates how successful you will be in these tough times. The pessimists among us will see the phrase as “opportunities are nowhere” and fail. The optimists, however, will see it a bit differently, and conclude, “opportunities are now here” and find ways to succeed. It is these optimists that will gravitate towards the challenge and forge “win-win” relationships during down economic times that will pay dividends for years to come.

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