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The Right Personality For The Right Negotiation

July 2017 Communication, Pricing

There is an oft-quoted legend about Alexander the Great from the time of his ultimately forsaken campaign to conquer India. After defeating the armies of King Porus, (Porus ruled the swath of land between two of the five rivers of Punjab – Jhelum and Chenab), he ordered the vanquished king to be brought forth to decide his fate. Legend has it that when Alexander asked Porus how he would like to be treated, Porus replied, “Like a king.” Impressed, Alexander allowed him to retain his power and continue to rule over his land as a surrogate of the Macedonian empire.

What struck me about the story is the equivalence that it creates between Alexander and Porus. When I first heard that story, I imagined Porus gracefully walking in, dressed in his armored finery and boldly facing up to the lord of half the civilized world. For all I knew, Porus may have been bruised, grimed and in chains, bearing the immense grief of having seen his kin die at the hands of a feared foreign aggressor. In the story, they appeared as diplomats whereas in reality they must have squared off as adversaries, which begs the question, could it have turned out any differently? What if Alexander had interpreted the reply as a form of defiance that he should stamp out to set an example to his troops, who, as we know from history, were on the brink of revolt? Or, what if Alexander had deemed it emperor-like to laugh his response away as the last pompous declaration of congenital arrogance? Any of those endings have a historically justifiable non-zero probability. Except, of course, Porus prevailed. Probably because of the kind of man Alexander was- a charismatic leader who enjoyed the company of bold, fiercely loyal men. Porus hadn’t lost easily, he had personally led his men in battle (much like Alexander) and he’d fought a hard fight and was only defeated due to some ingenious maneuvering on the part of the Greeks. So, when he was asked by Alexander to decide his own fate, Porus, in an adversarial situation, chose audacity. The rest, as they say, is history.

Negotiations are no different, although not as dramatic and not as much a matter of life or death. Not surprisingly, on occasion, they devolve into a hypercompetitive, personality-driven blood sport.

There are reams of material available in print and online on the different types of personalities one can meet at negotiations, how can one to recognize these types, classify them, followed by prescriptive advice on how to relate to them, how to manage them, how to counter them etc. What they don’t talk much about is the ‘Porus’ part of the equation – what personality or personalities you need to deploy such that you can adequately negotiate with the other party.

But, before we get into that, a note on the personalities we meet at negotiations. Contrary to what the books say about reacting in real time to who we face upto, that aspect of the negotiation doesn’t have to be a mystery, there are ways to know who you are about to meet because fortunately, in real life, things tend to be different from theory:

  1. You are usually aware about what sort of a negotiator your counterpart is. Barring a newly acquired customer/account or a change in the purchasing/procurement personnel – which should constitute a small percentage of your negotiations – most of the guys on the other side of the table should be familiar. If they are not, well, you should make yourself familiar with them before the actual negotiation. Have a pre-meeting or two. Exchange a lot of emails. Engage with them before the big day to size them up. That should become a fundamental component of the preparation process in your organization. As an aside, if the negotiator at the other end is a real unknown and a bit of interaction doesn’t offer any clues, there are other mechanisms you can deploy to understand your counterpart’s negotiation style. Try changing the rules of the negotiation – nothing big – something small like ‘Should we have dinner before our negotiation?’ and see how they react. It can be telling.
  2. The culture of the company you are dealing with is very indicative of the kind of individuals you are going to deal with. Clues about a company’s culture are widely available in this age, from vision statements to the history of how the company has dealt with various organizational problems. Similar information can be gleaned about how sophisticated and/or evolved the purchasing/procurement organization is by understanding their financials and emphasis on cost control or by analyzing how organized they are about their preparation for the upcoming meeting etc.

Once you have a handle on who you are about to face, the next step is to identify who should be on your team to enable a successful engagement. To do so, the most important aspect is not necessarily the personalities they are going to counter – it’s a very important aspect but not the primary one. The most important aspect, in my experience and that of other negotiators I have interacted with, is the type of negotiation you are preparing for. The behavior of the other party depends more on what’s at stake, the amount of business being negotiated and the type of problems that need to be solved through this engagement because, and this is where the theory becomes a little too prescriptive, people adapt their behavior according to the situation they find themselves in. When there is no pressure, even the most temperamental person can be calm and vice versa. The underlying philosophy while putting together a team for an upcoming negotiation should therefore be on matching the right people for the right negotiation tempered with the kind of personalities they will be facing.

TYPES OF NEGOTIATIONS:

Negotiations come in different packages as determined by what’s at stake and the history, if any, of the engagement. Figuring out who can be fit in then becomes simpler. Getting all the required skills for a negotiation in one person might be a challenge which is why some negotiations are better handled by a team of complementary skills and personalities.

The different types of negotiations that crop up on our calendars usually will fit the below types:

  1. The Regular Repeating Negotiation: The onesie – twosie negotiations where you have a long-term relationship and where the payoff is a small discount in return for regular running business. Think of a customer where you enjoy most, if not all the business, and where you meet every year or so to negotiate a percentage or two of discounts in return for renewal of their orders.
  2. The Big Reward or The Inflection Point Negotiation: The negotiation where there is a lot of room for you to grow because you have low share or because the customer may have just introduced some new business into the equation. Alternatively, the customer has completely changed the ground situation – maybe because they merged with another company or some external situation like a competitor exiting the market. On the flip side this can be the negotiation where you, as a supplier, may have caused issues for the customer that you now need to salvage – think of a supply disruption or a big quality problem in your product.
  3. The Special Circumstance or The One Off: Negotiations that are rare but are not necessarily on the horizon usually – a merger/acquisition proposal for instances. These are pivotal events that can potentially change the course of the company’s fortunes.

HOW TO BUILD THE RIGHT TEAM FOR A NEGOTIATON

Each of the above negotiation types must be peopled with a mix of personalities who have the skills to tackle any of the primary or concomitant problems that a negotiation may present. You should think of not just the mix in terms of skills but also in terms of seniority of the individuals on the negotiation team to ensure you’re your customer perceives the seriousness with which you are treating their request for engagement.

Below are some guidelines for getting the right teams for different types of negotiations:

  1. The Regular Repeating Negotiation: These negotiations can be easily handled by an individual or two who are very process oriented individuals who have the reputation to be tough on any exceptions to defined expectations. These individuals are the reliable, solid performers of your group who function like clockwork. Most importantly, they don’t shirk from a confrontation and have the ability say no when the situation warrants. Such individuals are best for these negotiations where the stakes are small. They will keep the procurement honest, keep the relationship in check and execute without error.
  2. The Big Reward: Negotiations of this type require creating solutions, provide an opportunity to greatly enhance the relationship with the customer and make a lasting big-bang impact on the fortunes of both the parties. You need creative problem-solvers in your team who understand your offering enough to solve the customer’s problems and are connected well enough inside your organization to pull them off. You also need a relationship builder in your team, the person who has curiosity, social skills and the skills to connect with everyone.
  3. The One Off: The one-off is like the big reward but at a much larger scale and requires more sophisticated planning and careful analysis of what’s at stake and what the other party is comprised of. These negotiations are often multi-faceted and may require the inputs of myriad set of functional groups such as legal or finance etc. Below are certain factors to keep in mind when putting together a team for such a negotiation:
    1. Ensure the team consists of people with the right seniority – these negotiations have a high visibility and having senior people ensures that it is taken seriously internally and similarly perceived by the customer.
    2. Think of having a front-end team and a back-end team. Front-end team consisting of a similar mix of people as the big reward negotiation and the back-end team peopled with individuals with strong analytical skills and subject matter expertise – be it legal, financial, compliance etc.
    3. These engagements are long and must be necessarily choreographed. There would be many pre-meetings and a host of meetings focused on the actual issues. Proper care should be given to who attends which meeting depending on the purpose of said meeting and the issues that might be discussed. You might put some of the back-end people on some of the pre-meetings where the discussion is based on some subject matter, for instance.

The underlying assumption for the above is that you have the right resources already available in the organization and the writ to call upon them when necessary which depends upon how your company is organized, how it hires and how it enables its employees. In other words, it depends upon whether your organization is built to negotiate competently and if it’s not, that should absolutely be the first thing for the organization to work upon.

Norman Schwarzkopf Jr, the American Commander-In-Chief during the First Gulf War, had this to say on the merits of preparation: “The more you sweat in peace, the less you bleed in war.”  Putting the right team together is often the hardest part of preparing for a negotiation, although a lot of people tend to underestimate its significance. Get the right people on the bus, as Jim Collins says in ‘Good to Great’ and they will figure out what’s the right thing to do.

 



About the author

Pravin Vemuri is a Senior Pricing Manager at Cypress Semiconductor. He has managing pricing for the past nine years spanning its various facets – from strategy setting to process definition to creating systems that deliver efficient and effective business results.

Pravin Vemuri
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