Whether you are negotiating with your boss, colleagues, customers or suppliers there is always a risk of damaging your relationship. Be that an existing relationship or building and developing a new relationship – the risk is high.
Given Brexit is fast becoming a reality, whether there is a soft or hard deal, the impact will be widely felt in almost all business sectors, resulting in significant negotiations / re-negotiations having to take place.
This article is focused on TRADE NEGOTIATIONS – and offers some guidance to those involved in the negotiation process. Whether you are the business owner, procurement manager, a buyer, sales and development manager, retailer, manufacturer, working in logistics, a supplier, customer, a manager or member of a co-operative body or business agency – negotiations are critical to managing your business successfully and effectively.
Disruption is clearly on the horizon – and lots of it!
Can you still source your raw materials, products, equipment, plant parts, personnel etc. without disruption? Can you still sell your products and services in the same way, to the same customers, using the same processes and people, without any change or delay?
Are you facing into heated discussions and hard bargaining or would you prefer to work with your counterparts in a collaborative, creative, positive and productive way?
To help you achieve effective and collaborative negotiations, let me take you through some of the critical and essential steps in negotiating.
- Preparation is key. The most important single factor determining the outcome of the negotiations is whether you have clear, realistic and prioritised objectives.
- As a negotiator you need an intimate knowledge of:
- what you export / import now and could plausibly export/import in future;
- your competitors in the local and international markets;
- the access terms to your trading partner countries and any regime currently available (or in prospect) for your competitors;
- all tariffs on your import products now and what changes could accrue resulting from Brexit;
- your and your counterparts government policy on the role of trade with respect to the sectors you work in.
- You need to calculate the revenue effects in your business of a new or renewed trade agreement.
- Trade Value rather than Cost:
- Prepare for what you are likely to be offered.
- How can you reduce its apparent value to you?
- Can you suggest how little it has cost your counterpart?
- Do you know the cost of accepting it?
- Prepare where you can increase the value of the concessions or alternatives you offer and the perceived cost of your giving them.
Negotiating requires sharp, professional and practiced skills:
- Be well prepared.
- Have a calm and considered approach.
- Be an ace communicator – within your team and with your counterparts.
- Possess an interactive competence – being able to actively listen to and question other parties, respectfully and professionally.
- Be analytical and have the ability to prioritise clearly.
- Have the ability to define a range of objectives, yet be flexible about some of them.
- Be creative in exploring a wide range of options.
You may not always negotiate alone, and if you conduct negotiations with another colleague or with a group of colleagues, keep the following in mind:
- Who will lead?
- Who will do other specific tasks?
- How you will achieve a smooth (seamless) handover between you all during the course of your negotiations?
When conducting your negotiations, keep the following in mind:
- Negotiation is as much about listening and observing as it is about talking.
- Begin any negotiations with uncontroversial, general points.
- Stress the need for agreement from the outset.
- Listen to the other person’s tone of voice as well as their words.
And finally when agreement is reached, always follow through to actual implementation………
- Summarise your agreement in writing, get all parties approval. Your summary must clearly record who does what, how and by when.
- Draw up a plan of action / follow prescribed procedures and work with your colleagues and counterparts to follow through to a successful conclusion.
- Decide who needs regular updates on the progress of your agreement – your counterparts / your colleagues / your senior management / where applicable.
It’s good to remember your power in negotiating comes from negotiating with discipline and always make a good last impression – it is as important as the first one!
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