How to Manage Your Negotiators: Critical Do's and Don'ts

Originally published by Forbes Business Council.

Stop me if you’ve heard (or lived) this one: One of your direct reports is responsible for a critical negotiation with an important customer or supplier. You ask them how the negotiation is going, and they say, “Fine.” When you ask for more details, they say something along the lines of “They’re being difficult, but I’ll get it done.”

Some version of this scenario plays out hundreds of times daily across many large companies, with a few variations. Sometimes, the negotiator comes back instead and says, “They won’t budge. What can I give them?” Or, “I’ve tried everything, but they want what they want. We either give it to them or lose the deal.”

How do you, as a manager, respond? Do you get into the nitty-gritty, ask for the play-by-play, and tell them what you’d do instead? Or do you give them a new bottom line and tell them to “just make it so.” Neither feels like a great choice for the outcome or for your negotiator’s professional development.

Most negotiators believe that to really know what is happening in a negotiation—and to be able to help meaningfully change the outcome—“you had to be there.” But as a manager, of course, you can’t literally “be there” across all of the reasonably important negotiations going on in your company, division or function. Here's what to do instead.

Two Big Mistakes To Avoid

One of the hardest but most important things to do as a manager is to avoid trying to run the negotiation by remote control. When you dole out instructions and incremental concessions that you’ll allow the negotiator to offer, you are demoting the negotiator to a messenger. And in business, your counterparts don’t want to negotiate with a messenger. (Think about the last time you bought a car: Did your salesperson grow in your estimation or in their ability to persuade each time they went back to check with the manager?)

But you also shouldn’t lump all flexibility you may have into one move, give your negotiator a simple “bottom line” and let them know they can do any deal so long as it’s no worse than that. We know how that story ends. Negotiators are rewarded for getting deals done, and for many, the easiest way to do that is to rapidly give as much as they can. If the other side accepts it, they are done, and if not, it wasn’t their fault (because you tied their hands). As a manager, if you give your negotiators all that leeway, most of your deals will likely get done very close to that bottom line, which will not be great for yours.

One other significant downside? Neither of these two approaches is likely to let your negotiators get much better over time.

Three Steps To Better Results

If you want better negotiation outcomes, I recommend taking the following steps.

1. Define success.

One useful model for defining success comes from the Harvard Negotiation Project—it serves as a good structure for preparation and coaching. But you can also ask a series of questions to help determine the desired outcomes: How important is price? What other interests do you have? And if you don’t do this deal, how would you instead go about meeting those interests? How open are you to creative tradeoffs among some of your interests? Does the precedent you set in this negotiation matter? How about the ease of implementation of the deal? And does the relationship matter?

Once success is defined, you can instruct negotiators accordingly, evaluate their performance and reward them for doing the right things.

2. Prepare.

The next step is to leverage the most practical tool a manager has over any negotiation: how the negotiator prepares. You can’t be there for the negotiation, but you can and should make sure that your negotiator prepares—not by thinking about how much they’ll offer and what concessions they’ll make, but about how they will meet that richer and more complex definition of success I described above. If they want a deal that is better than what they would do if they had to say “no deal,” what does a no-deal scenario look like, and could you improve that scenario so it is easier to say no to a bad deal? If they want a deal to meet your interests and the other side’s, do they even know what those are? And have they considered possible ways to combine or disaggregate issues to make that happen? If they want a relationship to last through the negotiation and beyond implementation, what should they do about that?

3. Keep improving.

It's not only about getting a good result in this deal but also about getting better and better results over time, so it's important to invest in building negotiation as a real discipline in the organization, something to learn about and keep improving. That commitment to treating negotiation like you do manufacturing quality, product innovation, and customer success can take many forms. But it invariably requires research and learning from experience: after-action reviews, customer surveys, process improvement sprints and other methods of analysis. All those things you already do when you think a particular business process or function matters should be applied to you and your team’s negotiations.

Managing negotiators is not about how much authority you give your team to close the deal. It’s about how well you prepare them to succeed on their own.

For more detail on our work with Professional Services firms, visit our Strategic Negotiations page.