For these reasons, I advise companies to establish an internal center where employees can receive ongoing negotiation advice and assistance. While only large companies like Hewlett-Packard have done this so far, there is no reason that any company couldn’t do something similar on a smaller scale. The staff at such a center (which could be a single person) could help managers prepare for negotiation, offer analytic advice during ongoing negotiations, and review each negotiation once the results are in. The center staff could also track company trends and identify additional training or resources that might be helpful. They could locate and assign internal or external coaches to help negotiators facing consistent problems or challenges. Such a center should periodically report to upper management, identifying units that need help. For large companies, the return on investment in a negotiation center will pay off many times over in terms of company profitability. And even in a small company, the right advice in a single negotiation could mean the difference between a profit and a loss for the year.
Coaching won’t work well unless everyone involved has a common framework. Without a shared negotiation vocabulary, managers will struggle to provide useful feedback on recent negotiations. Moreover, without a shared underlying theory of negotiation, employees are likely to disagree on the usefulness of prescriptive advice.
Coaching offers negotiators not only feedback and encouragement but also opportunities to experiment. If you made a mistake last time around, you can decide in advance to do something different the next time. Then you’ll need to review the new results to determine whether you have improved. If these efforts aren’t documented, it’s easy to lose track of what can and should be learned. Each step requires a commitment of time and energy. Until it becomes an organizational norm, negotiation coaching is easily pushed aside when other pressing considerations arise.
Report Negotiation Results Internally
TO FURTHER IMPROVE NEGOTIATIONS, a few companies are considering publishing an internal negotiation newsletter that they will distribute on their secure company intranet. Each month, the person overseeing the newsletter will choose a negotiation completed by someone within the company. If they go forward with the idea, a business journalist will interview all the relevant individuals, including those outside the company, if they’re willing. Using a consistent framework for analyzing the success of negotiations, the journalist will prepare a descriptive account of what happened, highlighting the strengths and weaknesses of the preparation that took place, assessing the face-to-face interactions, and tracking subsequent implementation efforts.
A regular negotiation newsletter would serve three purposes. First, it would put employees on notice that the company is interested in knowing how well all negotiations are being handled. Second, it would reinforce the key concepts and theory of negotiation that the company wants the staff to use in coaching and performance reviews. Third, it would force senior managers to spend some time thinking about negotiation, a practice that underscores the organization’s commitment to coaching.
For a newsletter to work, a company must be willing to air its failures as well as its successes. This can be difficult to put into practice, especially in a competitive environment in which everyone wants to be seen as a successful negotiator. Anyone selected for close scrutiny should be praised for their openness and willingness to contribute to the company’s overall success, or the newsletter won’t be worth the effort.
CONTINUALLY IMPROVE YOUR ORGANIZATION’S NEGOTIATION CAPABILITIES BY:
• Monitoring and assessing negotiation performance
• Using a Preparation Worksheet
• Offering ongoing coaching
• Reporting the results of major negotiations
Negotiation Preparation Worksheet
DISTRIBUTE THIS WORKSHEET to everyone in your organization, and encourage anyone involved in an important negotiation to put in the preparation time necessary to answer the following questions.
What authority do I/we have to make firm commitments in this upcoming negotiation?
Who else needs to approve the analysis below?
What are my/our interests in the upcoming negotiation?
What are the other party’s interests?
What is my/our BATNA (best alternative to a negotiated agreement)?
What is the other side’s BATNA? If they have a strong BATNA, how might I/we raise doubts about how realistic they are being about their BATNA?
What options/packages might I/we suggest for mutual gain that meet the other side’s interests well and my/our interests very well?
What arguments/criteria/reasons can I/we give for preferring the option/package that is best for me/us? How can I/we help the other side sell this option to their back table?
What implementation problems are likely to arise if the other side accepts my/our proposal, and how might these be overcome?
Investing in Negotiation Training
THE HEAD OF HUMAN RESOURCES for a Fortune 500 company was responsible for ensuring that all 150 of the firm’s top managers received negotiation training. After surveying her options, she hired one of the best-known training firms to offer an intensive two-day program on negotiation at four locations in the United States, Europe, and Asia. In addition to presenting their usual teaching package of readings, lectures, role-play exercises, and case studies, senior trainers added special features closely linked to the company’s sales challenges. While the training process took six months from start to finish, the HR director felt it was worth the time and effort: 120 senior managers completed the course and gave it positive evaluations.
Two months after the program ended, the HR director received an e-mail from her company’s CFO. After investing almost $350,000 in negotiation training, the CFO informed her, the firm had just failed to renew a key contract with a longtime client. “What evidence can you provide that the training was worth the price?” the CFO asked. The HR director had no idea how to reply.
US companies spend millions on negotiation training for their employees each year. Some organizations pay to send their employees to standard courses that draw participants from across the country, while others hire consultants to tailor courses to their organization’s particular needs. After a one- or two-day session, managers go back to their jobs and, at least for a while, attempt to apply the negotiation skills they’ve learned.
The huge cost of negotiation training raises important questions. How much can the typical manager learn from a brief training course? How much value do standard and tailored programs add to an organization, and how can we measure that value? Which training approach is most likely to benefit which kinds of negotiators?
As it turns out, negotiation is as much an organizational task as it is an individual one, a point made above when I introduced the negotiation preparation worksheet. By changing companywide negotiation practices, managers can reinforce the good habits that employees acquire in training and encourage long-term innovation. Managers at all levels need clear guidance, however, on how to improve the return on investment in negotiation training. Here I provide an overview of the two basic types of negotiation training, discuss the goals of training as well as effective ways to assess results, and offer means of ensuring that the lessons learned in training will last. If you want to win at win-win negotiation, you must be able to count on your own organization to provide appropriate support at key moments, or at least not undermine your negotiating efforts. Negotiation training is one way to increase the odds that you will get the support you need.
Negotiation Training: Standard or Tailored?
CONSULTING FIRMS AND UNIVERSITIES offer short courses several times per year to an audience of midcareer professionals from all fields and sectors—public, private, not-for-profit. Should you go to one of these programs? Will it be worth the cost? Standard negotiation training incorporates exercises covering circumstances that all kinds of managers in a wide range of situations might encounter, such as salary or purchasi
ng negotiations. You need only flip through a random in-flight magazine to get a sense of how omnipresent such negotiation training has become.
Some firms and schools also offer courses tailored to a company’s or an organization’s specific needs. They present intensive negotiation sessions designed for groups of midlevel or upper-level managers. Like standard programs, tailored programs cover basic negotiation theories and concepts, but they also include simulations matched to the challenges that specialized staff face on a regular basis.
In the 1950s, psychologist Kurt Lewin described effective adult learning as a three-step process: unfreezing old behavior through diagnostic exercises, framing new ways of thinking about problems through lectures and readings, and freezing new approaches by giving participants multiple opportunities to reflect on and try out new strategies. Does this match your own experience?
Whether standard or tailored, most negotiation training programs follow Lewin’s basic model. They begin with a diagnostic—a simple two-party negotiation exercise. By comparing the outcomes of pairs of participants, trainers emphasize connections between particular negotiation strategies and outcomes. During the unfreezing process, participants often are shocked to discover how poorly they performed, typically by squandering long-term relationships in favor of short-term victories.
Reframing follows these exercises, as trainers present key principles for improving on-the-job outcomes. Subsequent exercises offer opportunities under fluctuating circumstances for participants to freeze freshly absorbed concepts and theories. In a no-risk, supportive training environment, participants are urged to raise questions about the sometimes awkward adjustments inherent in jettisoning their old approach to negotiation.
Drawing from the same body of theory as standard training, tailored programs highlight concepts that coincide with negotiation challenges confronting a particular group like yours.
The Goals of Training
WHAT ARE SOME REALISTIC GOALS for negotiation training? From an individual perspective, negotiation training can help you get better at sizing up negotiating situations, and it can jump-start the process of improving your performance. Unfortunately, the impact of negotiation training (as with training in other “soft skills,” including communication, facilitation, and cultural sensitivity) is often short-lived. If you try to apply what you’ve learned during training, and you don’t get the support you need (like on-going coaching), or you find that standard operating procedures in your company cut against what you have just been taught to do, you are likely to go back to whatever you were doing before that fit the setting you are in.
At the organizational level, training can help management benchmark the levels of negotiation skill already in place and highlight institutional obstacles to achieving better performance. Training sessions sometimes reveal the ways in which organizations impede success, such as limiting preparation time or inadvertently rewarding poor negotiating performance. One notable advantage of tailored negotiation training is that often it concludes with a discussion of how your organization can help you and other managers be better negotiators.
New ideas and skills acquired through negotiation training can add both immediate and long-term value to an organization. Better-trained negotiators can bring about improved short-term financial performance and also enhance long-term customer relationships, service delivery, and employee satisfaction.
Measuring Training Results
IN A PERFECT WORLD, negotiation training would almost always be a worthwhile enterprise. But in the real world of stretched-to-the-max budgets and overworked people, high-priced training programs sometimes appear to be a luxury. To what extent can you use the ideas and tools you’ve acquired in training to add value to your organization?
Unfortunately, many trainers fail to conduct even the most basic assessment of individual knowledge levels before and after training. Evaluations too often focus on atmospherics—Was the room comfortable? Did you like the trainers’ presentation style? Could you see the screen?—hardly the probing questions needed to determine whether training achievements will stick. Even when trainers do take time at the end of a session to assess whether participants absorbed key concepts, it’s too soon to say what value the organization might gain from its investment.
Here’s the good news: researchers have come up with novel ways of gauging the success of negotiator training programs.
Measurement Strategies
DONALD KIRKPATRICK, professor emeritus at the University of Wisconsin, has created a four-level framework for measuring training outcomes, updated here by training evaluation experts Jack Phillips and Patricia Phillips with a fifth level.
Level I, Reaction: Was the training enjoyable? Was it useful?
Level II, Learning: If I test you on the concepts, will you know more than you did before the training?
Level III, Application: Do you know how to apply the training?
Level IV, Impact: What is the impact of training on important business or organizational outcomes?
Level V, Return on Investment: What is the ratio of direct and indirect costs of training to the benefits yielded from it?
Imagine the following situation. A fairly large American-based manufacturer is having trouble holding its market share for one of its best-selling products—a line of pricey household appliances. Less expensive knock-offs are flooding the market. The company decides to invest in a tailored training program for its worldwide sales staff. Since the company sells mostly to large retail outlets, the training focuses on a series of mock negotiating situations reflecting recent reports from salespeople who seem to be having a hard time maintaining current contracts at prevailing prices. The two-day training for more than eighty people went as expected and the participants gave the program a 13 rating on a scale of 15. Written comments suggest that the sales staff appreciated the clarity of the presentation and hoped the concepts introduced by the instructors would turn out to be useful. At the tail end of the session, however, during a final question-and-answer period, one of the more senior salespeople asked whether the company was going to give the sales staff more flexibility to make individual deals with big-name retailers, since that seemed to be a key lesson from the training. Sales staff needed to be more responsive to the concerns of each potential client. Winning in each sales negotiation required inventing different packages of trades. The trainer couldn’t answer the question directly. None of the highest-level managers in the company attended the training, and the trainer did not have access to anyone with authority to grant such flexibility during the time she was preparing the course.
One way of assessing the helpfulness of a training like this is to use 360-degree evaluation. This asks individuals to assess their negotiation skill levels using a detailed online questionnaire before training begins. After training, all the participants are asked to evaluate their fellow trainees as well as their own progress. Questionnaire results show individuals how others perceive their abilities. Many participants are quite enthusiastic about the opportunity to measure their progress and learn how others rate them as negotiators. It’s not clear, though, that 360-degree evaluations will get us from Kirkpatrick’s Level II to Level III. And it certainly won’t get us to Level IV.
Instead, I offer a three-step process that might get you to Levels IV and V. These steps will certainly provide senior managers with the data they need to evaluate their return on investment in training. Remember, directors and other senior managers should focus on the impact of training on organizational outcomes, not just on the individuals who participate.
How to Gauge the Value-Added of Negotiation Training
ASSESS THE VALUE that organizations can gain from negotiation programs, especially tailored courses, using these three steps.
Focus learning. At the beginning and end of training, trainers should notify participants that six to eight weeks after the program is completed they will receive a follow-up e-mail message requesting brief descriptions of at
least two instances in which they intentionally used key ideas or methods presented during their negotiation training. Trainers have found that when participants are informed about this task in advance, and when their managers reinforce the message, they focus during training on skills they will try out at work.
Follow up on progress. Trainers send out the above-mentioned e-mail message, asking participants to respond with two short paragraphs describing their on-the-job efforts to apply what they learned. The trainers also ask for estimates of the savings or additional revenue their efforts generated for the company.
Report results. Whoever is tracking all of this compiles a report that not only describes individual achievements but also attempts to tally the overall financial savings or benefits generated by the entire group. Notably, I have found that the value reported in almost every instance totals at least ten times the cost of the training program.
TO ASSESS THE VALUE OF NEGOTIATION TRAINING:
•Know the benefits of choosing a standard or tailored approach to training
•Clarify your goals beforehand
•Use strategic measurement strategies
•Follow up and test progress regularly
Training can be a good investment for both individuals and companies, especially if it is keyed to building overall organizational negotiating capabilities.
THE IMPORTANCE OF GOOD NEGOTIATION COACHING
ALONG WITH WELL-DESIGNED TRAINING and the right kind of leadership, companies and organizations should take steps to ensure that all their negotiators, especially new arrivals and up-and-comers, get the feedback and coaching they need to improve.
Good for You, Great for Me Page 16