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As the current economic uncertainty around the world continues, negotiation skills become even more important. This is one of the messages of my new book about the modern art of negotiation, “The Yes Book”, out on Random House on March 28th.

For five years now the global economy has been struggling against a backdrop of uncontrolled public debt, vulnerable banks, lack of credit for business and recession – all of the ingredients of that cocktail being inextricably linked. Whether it’s Eurozone bail –outs, Bank restructuring, or endless stories of single, double or even triple dips, you cannot avoid the conclusion that times are hard. This creates an imperative to negotiate better and more collaboratively…

We are all much stronger working together than we are on our own. In fact economic growth, which is the single answer to all of these problems can only be achieved if companies, governments and individuals engage in more trade – and deals are the basis of that trade.

In case you needed it, here is a reminder of some of those economic stats:

Firstly in the UK
UK growth fell again slightly in the fourth quarter of 2012, leaving Britain on the brink of a triple dip recession according to the National Institute of Economic and Social research forecasts. Only a return to growth in Q1 this year will avoid that almost unprecedented development.

The UK still has to overcome its continuing public debt problem (currently standing at 73.8 percent of GDP) and the loss of its cherished AAA rating.

Britain is apparently heading for a fifth year of falling living standards, with official figures showing a decline in average earnings growth last year from 1.7% to 1.4%.

All of this has had […]

In my upcoming book for Random House, “The Yes Book” I write about how rapid growth in technology is changing the way that we negotiate:

* Technology makes the world go faster – so we need to negotiate with business partners who can help us act more quickly. If we act on our own we may move too slowly and be outflanked by competitors.

* Technology globalises business – so we need to negotiate with business partners who can capture the overseas potential from operating in an increasingly inter-connected world.
Some current stats which illustrate the phenomenal growth in technology…

The World Wide Web was introduced in 1992
By 1995, only 16 million people worldwide, less than a half percent of the world’s population, were online
However, by 2000 that percentage grew to 5% (304 million)
By 2005 the number of users worldwide passed 1 billion, or more than 15% of the population
By 2012 it was over 2.4 billion according to internetworldstats.com
Of these, 167 million were in Africa – representing growth of over 3,000 percent since the turn of the century
Internet usage in the Middle East has risen from 3 million to 90 million in the same period. There are also now over 500 million Internet users in China

The trajectory is equally startling with respect to mobile and other devices…

By 2016 Cisco forecasts there will be 10 billion connected devices worldwide
People are spending more time than ever on their mobile phones. According to smartinsights.com, by 2014, mobile internet should take over desktop internet usage
On average Americans spend 2.7 hrs per day socialising on their mobile device (over twice the amount of time they spend eating and over a third […]

In my forthcoming book on negotiation (“The Yes Book” out on Random House on March 28th) I talk about social and economic changes which have made “negotiating” even more important than it used to be. One of the changes I identify is that previously we used to be able to rely on big institutions to look after us like Governments and big corporations.

Now we no longer have that reassurance for two reasons:

1) Governments have run out of cash and are increasingly cutting public expenditure.

2) Big companies which used to provide the prospect of stable employment are struggling to adjust to on-going economic uncertainty and the decline in margins brought about by the digital revolution.

So we are increasingly operating on our own as individuals, and we therefore need to be ever-more self-reliant and resourceful. From an economic point of view, being able to look after yourself as a negotiator is a key part of part being able to look after yourself financially.

You can see this shift towards self-reliance in the never-ending announcements of job cuts by big companies – the trend towards down-sizing means those who leave have to negotiate more creatively and skilfully to look after themselves, whether they are seeking new employment or setting up, funding and operating their own business. Those who stay in employment have to become even better at negotiating to look after what they’ve got.
Job cut announcements from big brands since the middle of 2012…

Goldman Sachs – announced it would be looking for further […]

In my new book on the modern art of negotiating for Random House, “The Yes Book”, I describe a number of social and economic factors which have caused the landscape for negotiating to change. It is now more important than ever to be an effective deal-maker. In the book I promise to keep this blog up dated with new stats on each of these trends, so that readers can see that this is an on-going phenomenon. The imperative to negotiate effectively is only going to intensify.

One reason for this is increasing competition in the global economy. This effects large corporates, small companies and individuals. In an era of ever-increasing competition, we need to be better at closing deals – partnerships with others can help us be more competitive, but on our own we are more vulnerable to the effects of competition for markets, pricing and jobs.

Here are some examples of that;

(A) Large Companies

The Mobile smartphone sector is a good example of how dynamic competition can change markets quickly.

According to IDC, from the first quarter of 2011 until the end of the first quarter of 2012, Samsung’s share of the global smartphone business soared from 11.3% to 29.1%, and the Korean manufacturer now leads the market – largely on the back of the successful Galaxy S II and S III phones. Apple with its iPhone grew from 18.3% to 24.2%. Back in the first quarter of 2011, Apple trailed just one company when it came to smartphone shipments. That company was Nokia. The Finnish firm suffered a free-fall as its share of the world-wide smartphone market plunged from 23.8% to 8.2% by the end of Q1 2012.

This trend continued throughout last year. Seemingly from […]

I commissioned research by YouGov about how Britain negotiates for my book, “The Yes Book”, out on Random House on March 28th.

YouGov interviewed 1,000 companies up and down the country of all types and sizes. The results were then assessed by the Centre for Economic and Business Research – one of the leading economics agencies in the country. Based on the results, they worked out that UK Plc loses more than £9 million per hour from poor negotiation, such as using antiquated bargaining tactics and not being prepared – equalling £17 billion per year (article here). That’s the equivalent of an extra 650,000 jobs for the UK economy.

You can read all about the research in the book, but here are some interesting additional stats, arising from the fact that the research responses were broken out between small and large companies, by region and between male and female responses.

Negotiating traits of small companies

* 66% of deals for Small companies are “repeat business” with customers or suppliers – meaning that the consequences of something going wrong in a deal are likely to be amplified many times over.

This is a higher percentage than for medium and large sized companies, so, you would think that Small companies have every reason to negotiate effectively. In fact however, across every single measurement of deal preparedness, Small companies seem to negotiate less effectively than larger ones. This covers everything from assigning roles within your own team, knowing what your Plan B is, thinking about the attitude and motivations of the other side, and sorting out basics of the negotiation like agenda, timetable and venue.

* Small companies also seem to be less effective tactically – […]

During the writing of my book on negotiation (“the Yes Book” on Random House) a number of people kindly sent in stories of their own experiences. I wasn’t able to use all of them in the book, but they are all too good to waste. Quite a few of the stories were on the subject of preparation – a subject which is all too often neglected in modern negotiation – the participants generally being too busy and stretched to consider ‘wasting’ time by preparing.

However, if you undercook your preparation you will end up with a raw deal. There are any number of topics to consider up-front from the make-up of the teams, to the negotiating atmosphere you want to create, from the type of person you are dealing with on the other side and their motivation, to opening and possible closing positions.

Here are a few of the insights on preparation sent in by contributors. If you have any stories on this or any other negotiating subject which you want to submit please send them via the form on the Contact page of this site, so that we can upload them to the blog.

Here’s Anny talking about negotiating for the attention of her audience as a speaker;

“My advice is – find out who your audience is by doing your research first. Google everything you can, get right down to the nitty gritty. I even look up potential client’s residences on Google maps, I see their Whois registration for their domains, I check Facebook, Twitter, LinkedIn, BBB, Yelp. I want to know who I am dealing with…”

And here’s one from Tony who learned the hard way about preparation when negotiating […]

So there I was, wanting to sell something on eBay. None of us could remember my wife’s password so we had to create a new account. And up came… the standard terms to click on. What do you do? You know these terms cannot be negotiated. eBay has millions of users and not enough bandwidth to negotiate standard terms with every individual, even if it wanted to – which of course it doesn’t. It doesn’t force you to sign the standard terms, but if you want to use the service you have no choice. This is an example of the power of having a “standard” on your side in a negotiation.

Standards can come from many different sources, a number of which I talk about in my new book about the modern art of negotiation, “The Yes Book” (out on Random House on 28th March and available for pre-order now on Amazon if you are interested). You may have legal precedent on your side or custom and practice, or, as in the case of eBay, a history of dealings on a standard basis with huge numbers of customers. eBay are not the only institutional supplier to enjoy this benefit – think of Banks and Insurance companies, too.

One good example from my own experience came from dealing with Locog, the administrative body set up to run the Olympic Games in 2012. Locog derived a lot of bargaining power from being the sole custodian of the use of the Olympic logo. Nobody else was able to use that “standard” without their permission.

You will no doubt have read of a number of examples of the power of commanding adherence to this standard. […]

Having just written a blog on the futility of “losing both ways” as an attitude in a negotiation, I wanted to write something more positive about the benefits of “fusing”.

“Losing both ways” is a mutually self –destructive approach in which one or both sides decide that they can’t win the negotiation so they set about causing each other harm instead. “Fusers” by contrast are interested in a more collaborative approach to negotiation, in which the needs of both parties are met. I have written about the benefits of “fusing” in my forthcoming book on negotiation, “The Yes Book – The Art of Better Negotiation” to be published by Random House on March 28th. Many people have kindly contributed negotiating stories as I was writing the book, not all of which I was able to include in the final version. Here’s a good one on the benefits of a “fusing” solution from Mat Morrisroe based around the deal he constructed between Bacardi and the Artist “Groove Armada”.

Bacardi Deal is a ‘Breeze’

“Bacardi wanted to create a branded experience for Music but they wanted to do something more than just brand a tent at a music festival. I had been brought into the agency KLP to do something different and I had a background in Music. We selected Groove Armada because they were free from their previous contract with a Major Record company and therefore had more freedom to act. They also had a collaborative manager, and the artist were seen as both credible and socially responsible – a great combination for a drinks Brand. We initially put on a concert with them in Moscow, and then decided to build on the collaboration by creating […]

All too often in industrial disputes, the two sides appear to get locked into a mental attitude of “losing both ways”. One or both sides decide that they can’t get what they want, and so they make it their business to punish the other side. This then becomes a more important objective than thinking round the problem to find a new solution which suits everybody.

I was reminded of this when reading in the Guardian that the Public and Commercial Services union has warned of new strike action over its ongoing dispute concerning pay, pensions and working conditions (here). It has said it will ballot its 250,000 members starting tomorrow. The union, led by the redoubtable Mark Serwotka, has already held three previous days of strike action, and is now focused on a review of working conditions which it says threatens working hours, sick pay and holiday benefits.

Given the current Government priority to manage the Public Sector deficit, this is not an argument which the Union is likely to win – the Government is determined to rein in Government spending. So strike action may seem like a good way of punishing the Government, even though it does not bring about any greater prospect of negotiating success, is disruptive for members of the Union and the General public, and may well harden Public opinion against the Union cause. This is losing both ways in action. I mention this phenomenon in my forthcoming book on negotiation, “The Yes Book”, published on Random House on March 28th. Here is a story, originally written for the book, though I subsequently took it out, about the UK Miners’ strike of 1984 which illustrates the futility of taking […]

Interesting piece from Andrew Sullivan in the Sunday Times about Obama’s approach to negotiations in foreign policy hot-spot areas like Iran and Israel (here). Sullivan argues against the conventional wisdom that Obama has been unsuccessful in making progress in negotiations with these two countries, but is instead playing a “long game”. If this is true then this kind of patience is a good example of an approach which is all too often absent in modern negotiations, where participants often look too impatiently for quick wins.

Iran’s regime has shown no inclination to compromise over its alleged development of nuclear weapons, and Israel has belligerently resisted efforts to force it to embrace a two state solution for Palestine or even to take a backward step in relation to building settlements in “occupied” territory. Yet Sullivan argues that Obama has simply been taking his time and allowing those who oppose him to defeat themselves rather than forcing the pace. Iran has become weaker economically as sanctions have bitten, and its currency is almost worthless. Obama has persuaded even China and Russia to impose sanctions. Sullivan argues that Religious leaders of Iran may be close to either being forced to accept international scrutiny of their nuclear power programme – or they risk being isolated internationally and presiding over an increasingly mutinous population. Israel has also become more isolated by its intransigence – its relationships with supporters like Turkey and the US have cooled significantly. It now faces the development of a non-Jewish majority in the territories it refuses to let go. The US can safely dilute its support even further as it becomes less dependent on Middle-eastern oil and more able to rely on home produced […]