In the light of Brexit and a hung Parliament, David Freedman – Director of Sales at Huthwaite International – considers the crucial role effective negotiating can play for businesses.
In the wake of the EU referendum and a hung Parliament for the UK, the need for effective negotiation has been thrown firmly into the limelight. Indeed, in the run up to the UK’s General Election the majority of parties placed emphasis on the importance of negotiating regardless of whether they were campaigning for a hard or soft Brexit This raises an important question for organisations of all types – In a world where, frankly, the relevant skills are in worryingly short supply, how can professionals develop better negotiation skills? If they can, they’ll have a good chance to increase profit margins, streamline efficiencies and meet organisational goals.
Negotiating has been a hidden gem that far too many companies are failing to unearth. The most successful businesses don’t automatically default to cutting costs or raising prices when looking to increase profit, they hone their negotiating prowess. Yet its power, and the positive impact it can have on the bottom line, remains largely unacknowledged and hence underused.
“This could mean that many businesses have huge areas of growth potential that are being overlooked. Everyone recognises how crucial the negotiation process is as part of Brexit or establishing a stable government. But how many people have yet to realise the implications for their own businesses? With specialist procurement teams reducing in size, the skills and processes needed for effective negotiation are becoming scarce.
“This is something that the world’s best organisations are already focusing on. Indeed, a Huthwaite International survey of 124 of the top Global businesses revealed that the most successful companies had all reengineered their organisational negotiation capabilities, and during the time of the study, companies with no negotiation process suffered an average net income decline of 30.9% over a 12-month period whilst those with a formal negotiation process increased by 42.5%.
Another Huthwaite International study in 2014, of 1300 respondents in 53 countries, revealed just how prevalent the need has become. 55% of respondents took part in frequent short commercial negotiations that involve up to five negotiable issues, and 41% frequently took part in large, complex negotiations that involve many more issues. So, for vast numbers of professionals everywhere, there is clearly much at stake.
“The role of negotiation has never been so important. As economies across the globe shift and change, and services that were once highly differentiated are now seen as commodities, so do deals and supplier relationships require ever greater skill. By investing in a qualified and capable team of accomplished negotiators – either through the right training, the right recruitment, or both the capability becomes far less elusive . The enterprises that develop an abundance of that capability will be those that secure greater profit margins, increased efficiencies and a more sustainable business model.”
Huthwaite International has a whole host of online resources to help educate and up-skill those interested in improving their techniques. Extensive resources can be found online here:
1) Improving negotiation performance – A benchmark study of the world’s leading companies and how they are negotiating
2) How well are you negotiating? – what the top global companies are doing and what you can learn for your own business
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