As reality TV show The Apprentice has painfully shown, whilst sales people may think they are natural born negotiators, many fail to get the best deal when under pressure. Few people are willing to acknowledge, however, that negotiation affects not just sales but every facet of a business, from the shop floor to the boardroom. HR Zone looks at the risks of failing to arm your staff with this neglected skill.
It seems obvious that sales people have to be skilled negotiators to secure the best deals. After all, they’re the ones pulling in the business that affects the bottom line. And yet, according to The Gap Partnership – specialists in negotiation skills development – only one in 10 salespeople will have received formal negotiation training. With so few sales people receiving the right training, the likelihood of staff in other areas formally developing those skills is even smaller.
Experts are now arguing that to ignore this area of skills development is a classic business mistake and could cost a company a significant margin.
Steve Gates, Managing Director of The Gap Partnership, explains why: “Expecting negotiators to rely on natural talent alone is a high risk strategy. Some people will shine and others will find their performance seriously lacking because they haven’t received the skills development they need.”
What is more, negotiation lies at the heart of every relationship in business. For example, buyers have to negotiate to reduce prices and secure great after-sales support. HR Directors are increasingly in need of developing the skill, both for internal negotiations with staff and unions, but also because many of them are becoming involved in external relationships, such as TUPE negotiations.
In fact, anyone who holds a budget, manages staff or has a responsibility for forging external relationships needs to use negotiation. Developing a negotiation mindset can make a big difference to relationships with customers or suppliers, which fundamentally affects a company’s long term sustainability. Developing creative negotiation skills can also enhance relationships between employees, making internal negotiations, such as pay rises and changes in working practices, easier to facilitate.
John Hobson, Human Resources Director at Fujitsu Services certainly subscribes to this point of view: “I have to say that it [the training] had benefits beyond what they taught us about negotiation. It made people look at how they operate in life; some say it was a life-changing experience.” John introduced the training for HR staff who were becoming more involved with sales people in acquiring new business, in particular TUPE negotiations. “HR have saved around £2 million over the past year, all through being more commercially aware and skilled … so a definite contribution to the bottom line”
So, why are companies still neglecting to develop this aspect of their staff’s development? Unfortunately, it’s a skill that is still seen as the preserve of a handful of natural born negotiators, with an almost mystical secrecy surrounding the process. As a result, few companies include it in their training and development plans.
This opens them up to risk, argue The Gap Partnership. They have identified that the more senior the executive, the higher the risk, as these are the people with the biggest budgets and the most power. People assume that the ‘big guns’ have got where they are because they are good negotiators, but this isn’t always the case and they can be at risk of conceding too much or too quickly, or even of saying ‘yes’ when they should be saying ‘no’.
If this is the case, then it pays to look at the right skills development for all staff, not just middle managers or sales forces. It can be difficult for senior executives to concede that even they need to attend workshops, but many companies are now seeing the benefits of this approach.
EMI is one of them. When new HR and corporate development teams came to the company, they provided the spur needed to put negotiation training on the company’s agenda for the first time, for staff at all levels.
Charlie Thelu, Vice President of Global Purchasing for EMI explained the context for their training need: “I’m responsible for the conduct of a large number of negotiations with suppliers and potential suppliers on behalf of EMI, mainly B2B suppliers, such as media agencies, IT consultants, software providers and more. I’m also responsible for purchasing across the company, which operates in 50 countries … Ultimately [negotiation training] helped us to get better deals.”
There seems to be a growing body of evidence that taking a thorough and committed approach to developing the negotiation skills of your key teams really can make a difference to the bottom line.
Rather than assuming that skilled negotiation comes through years of practice, it seems that more companies should start putting negotiation dead centre in its learning and development plans. And if this is the case, then whilst it may be that sales teams recognise the need the most acutely, senior HR executives should start thinking about where it fits into the wider picture.