Key skill sets for the negotiators of the future

In this practitioner advisory post, Jonathan O’Brien, CEO of Positive Purchasing Ltd, internationally recognised expert on negotiation and published author, explains what we need to start to do differently to succeed and gain advantage in the future.

Global economic contractions and widespread operational disruption are changing the way we do business in virtually all countries, industries, sectors and disciplines. As businesses attempt to navigate these unprecedented challenges, those that succeed will be those that strategize and plan effectively, while adapting business practices to suit conditions.

Within this context, the practice of negotiation is changing dramatically, both because of the current landscape and incredible developments in digital and data technologies. While general principles of negotiation are part of human nature and, as such, not set to change, the practice is fast evolving and new approaches are coming to the fore.

As successful negotiators of the future, we must understand how best to adapt our skills accordingly.

Exploiting data

With the emergence of new ways of accessing and utilizing vast data sets, our ability to exploit data becomes central to procurement and supply chain functions, offering potential to create unprecedented competitive advantage. This is driven by four major shifts:

• First, the automation of routine spend, driven both by data and new supersized ‘Amazon. com’-type marketplaces that look set to eliminate much of today’s core procurement business.
• Second, we will see an increased focus on strategic sourcing of areas and suppliers that hold potential to bring competitive advantage.
• Third, procurement and supply chain functions will need to become architects of a new generation of digital systems that will revolutionize how we work.
• Finally, we will see new levels of responsiveness and connection of suppliers and supply base possibilities to meet customer needs and aspirations, fuelled by an agile data-driven approach operating in real time.

The implications for negotiation suggest we will be doing less ‘value claiming’ and more ‘value creating’ negotiations with fewer, larger suppliers of strategic importance. Future negotiables are likely to be less around price and cost and more around how we can secure advantage and protect what we do.

Mastering remote negotiation

The Covid-19 pandemic has driven a sea change in how individuals and companies negotiate. Today, most negotiations are conducted remotely, without physical face-to-face engagement. Here, while the principles remain the same, the approach needed to secure the right result varies.

Technology to enable remote negotiation has been with us for decades but this style did not, at first, come naturally to many. Despite offices being equipped with state-of-the-art web and teleconferencing suites, people would often still opt to hop on a plane and fly somewhere for a face-to-face meeting.

Covid-19 forced companies to find new ways to operate without the need for travel. Previously resistant employees became masters of web-conferencing tools. Not only has technology advanced to become more user-friendly but, crucially, many people prefer it.

While technology used for exchanges and interaction may change, rules and principles of negotiation remain the same.

Difficulties can arise remotely through the absence or reduction in body language or paralanguage cues so that it is not easy to read the other party. But it also means they can’t read us and the reliance upon spoken and written words is heightened.

Anderson and Thompson (2004) go further to suggest that, in face-to-face negotiations, powerful negotiators use positive affect (a positive outward demeanour, empathy and friendliness) to invoke similar states in the other party, leading to increased trust, co-operation and better outcomes.

In remote interactions, eye contact is either removed or reduced and, as a result, negotiations can be cold, lack empathy, prevent winning trust and collaboration and rely much more on words used. However, these types of negotiation represent the future of how many deals will be done.

Getting good at the new skill set needed is essential. Each technology – written word, audio, video, intermediary – demands different approaches to be effective. For example, gestures and smiling should be amplified when using videoconferencing as even the latest tools can lose some visual stimuli.

Future-proofing capability

Arguably, negotiation for the future is more advanced and quite different from the practice that many in procurement and the supply chain know today. Whether developing data skills or remote negotiation competence, perhaps the most important lesson here is that improving capability is not a once-only activity but rather part of ongoing personal and organizational development within an ever-changing environment.

As economic, environmental and technological changes fuel unknown future developments in business practices, one thing is certain. Tomorrow’s negotiators will require an ongoing commitment to developing and enhancing their skill set.

Disclaimer: This article includes excerpts from “Negotiation for Procurement and Supply Chain Professionals” written by Jonathan O’Brien and reproduced by permission of Kogan Page Ltd.