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>> Interviewer Virtually everyone finds negotiating challenging
at times. So, today we’re talking to Patrick Esson who is the Managing Director of Aransa,
a company that specialises in negotiation strategy and helping organisations boost performance
by improving the way people negotiate. Aransa uses and teaches a method called Value Negotiation,
which they claim enhances working relationships and produces highly profitable agreements.
Patrick, lots of people offer negotiation training. What’s so special about your approach?
>> Patrick Well, it’s a potent combination of sound
theory and practical experience really. Excellence in any field requires more than technique;
you also need the right mental attitude. In negotiation that comes from having confidence
in one’s ability to understand and reach agreements, with people who see things differently.
That includes coping with all their idiosyncrasies, emotions and difficult behaviour.
The behavioural theory behind Value Negotiation was developed at Harvard in the ‘80s and
is now taught at many of the world’s leading business schools, including INSEAD. As you
know, Aransa consultants have many years of experience, negotiating at the sharp end of
business. We are also closely associated with Horacio Falcao, who leads the negotiation
programme at INSEAD. By combining our own experience and Horacio’s expertise we enable
people to use a proven approach, which achieves great results and robust agreements.
Many people wonder whether they have negotiated a good deal or have possibly missed an opportunity.
Many others think they have a great agreement only to find later it isn’t, when the other
side appears to let them down. The vast majority of training in negotiation skills focuses
on how to use power and glosses over the human factors. That’s why it often fails to achieve
the best outcome and produces agreements that don’t live up to people’s expectations.
Power may appear to produce a good result, but that can be an illusion.
>> Interviewer Oh come on Patrick, Most people quite like
the idea of being powerful. is there a problem with that?
>> Patrick That’s a very good question, because power
is certainly seductive. Using bargaining power does work up to a point, but it’s not reliable,
it can easily go wrong and it’s not appropriate in every situation.
When we talk about power in the context of a negotiation, we mean the capacity to influence
or even control someone else. One way we can do that is to offer them an incentive in return
for doing something we desire. Alternatively, we might threaten them in some way, unless
they give us what we want. People, who rely on bargaining, focus on these incentives and
sanctions as their main source of power. It’s basically a carrot and stick approach.
But we need to be careful how we use power, because it’s a double-edged sword. If we
pursue our own interests too strongly, people are going to resist. But an even bigger problem
is that, when the going gets tough, people tend to become more cagey about sharing information.
That leads to guesswork and the sort of misunderstanding that lies at the heart of many disputes. It
also stifles the creativity needed to maximise value. As you know, it’s virtually impossible
to make the right decision without good information. Some people try to get round resistance by
using a softer approach. They are very open with information and make concessions early,
hoping to generate goodwill . They have to trust the other side to play fair and reciprocate.
Unfortunately, this more often leads to people taking advantage of their naivety.
That’s why it’s better to have an approach that doesn’t rely on power. Instead we need
to be seen as both firm and fair; firm in order to look after our own interests and
fair to ensure people are committed to making the agreement work.
>> Interviewer So how do you achieve both when it comes to
difficult issues? >> Patrick
People are more inclined to help us achieve our aims, when their needs are also being
met. That’s why, to get the best outcome, we need to understand the interests of the
other parties, along with our own. Then we can explore ways to maximise satisfaction
of all those interests. A big mistake bargainers make is to focus on a proposal before exploring
the interests and options well enough. At some stage, we must also agree what’s going
to happen and who’s going to get what in a way that’s clearly fair and reasonable.
This legitimacy ensures people are committed to making the agreement work.
But all of this hinges on having a sound relationship and being able to communicate effectively.
So, contrary to what many people may think, techniques for prioritising issues, making
proposals and trading concessions are only of secondary importance. The first priority
is to build a bridge with the other parties. This is what makes high value, reliable agreements
possible. >> Interviewer
But Patrick, people have been bargaining for centuries, why do you think we need a new
approach now? >> Patrick
The evidence is all around us in the form of missed opportunities and needless disputes,
which waste enormous amounts of time and money. Much of that waste could be avoided through
better negotiating. But negotiating isn’t only about commercial
deals. Many internal decisions also involve negotiations between people with different
points of view. They need to reach decisions without descending into a huge argument. Conventional
bargaining won’t help them. In fact, it’s more likely to be divisive and cause turf
wars. Think of the world we live in now. It’s
a world of globalisation, lean organisations, tight quality control, just in time delivery,
strategic partnerships and large-scale projects. It’s complex and fast-moving. In this environment,
organisations need strong relationships and robust agreements, both internally and externally.
Bargaining came to the fore during the industrial unrest of the ‘70’s. It’s a fairly crude
way to resolve a conflict and get a deal, which does the job but is not great. Ironically,
its crudeness is one of the reasons we still have so many disputes in this country.
What it comes down to is that bargaining is out of date.
>> Interviewer So what is it about Value Negotiation that
makes it so profitable? >> Patrick
Well, it’s particularly valuable for modern organisations, which need those strong relationships
and robust agreements. People are attracted to this method for several reasons:
Commitment. It delivers agreements that people buy into and want to make succeed.
It saves a lot of time, money and stress. Better communication and relationships ensure
people are able to resolve issues more quickly and avoid costly disputes.
The there is the actual value itself. People who use this approach know they’ve got a
good result, because it fosters creativity and makes agreements possible that power bargainers
can only dream of. And, not least, because it’s a much more
enjoyable and satisfying way to work together. >> Interviewer
And how can people learn more about it? >> Patrick
Well basically Horacio, who I mentioned earlier, Horacio Falcao has written a comprehensive
book on the subject. Horacio has a proven track record and is hugely popular at INSEAD.
But the truth is, most people are not going to become great negotiators just by reading
a book, which is why we are also offering a range of hands on training and coaching
programmes in the UK. Our link with Horacio ensures we provide world class training, based
on the same material and methods that have already proven their worth in one of the world’s
leading business schools. But when this is overlaid with our own concrete experience,
gained from many awkward negotiations, one’s getting the added bonus of that.
There is more information about the book and the training on our website.