NINE LESSONS FOR

NEGOTIATORS FROM THE B-

WORD

MATT STOCKDALE

There’s no getting away from it and so I will declare it upfront: this article deals with
that by now, most notorious of portmanteaus in modern British politics. At a mere
six letters long and starting with the innocuous letter “B”, I am of course referring to
Brexit. The truth is that short of going into hibernation and avoiding all news
sources, none of us can get away from it, and so it was that a recent Brexit article on
the BBC website particularly resonated with me, and led to me formulating some
Brexit-themed negotiation thoughts that I would like to share with you now.

Whichever route is decided for Brexit - deal, no deal or remain - and the subsequent
impact, each will inevitably lead to numerous conversations and debates around
contract renegotiations, risk alleviation, supply chain, and so on - the list is pretty
much endless. The one thing we can be certain of is that there will also be countless
more articles, blogs and discussions upon this subject. Many of these will have a
political angle. As a commercial negotiator however, my job is to spare you my views
on the politics, and instead draw out the salient discussion points within my area of
expertise.

Here then are my thoughts on this most topical and thorniest of topics. My hope is
that they air key topics, raise pertinent questions, and marshal trains of thought to
enhance and inform your commercial negotiations.

1. The UK had no plan for Brexit, but the EU did have a plan - a plan for
its own survival.

“90% of negotiation is planning”. Anyone who has worked with The Gap
Partnership’s negotiation consulting and development capability programs will be
aware of this mantra. We do not claim to be the first to emphasize just how
important planning is. Indeed, there are thousands of quotes on planning a mere
internet-search away, just one of which is US President Abraham Lincoln’s “If I had
10 hours to chop down a tree, I would spend the first 9 sharpening the axe.”

So why the obsession with planning? Well planning, both strategic and tactical,
allows you to break down the process, give direction and clarity to the situation, and
ultimately equips you with confidence in your goal, and what the other party can
give you.

"The 5Ps of Planning" is a framework in which the foundations of a negotiation plan

can be built. A robust plan begins with a review and understanding of the balance of
POWER. It is important to understand who has this balance of power, perceived or
actual. POWER provides you strategic and tactical options as to how you can
approach the negotiation. The more POWER, the wider the options available to you
as a negotiator.

Options and Time are two of the main considerations when analyzing the balance of
power. Negotiation is not what only happens at the table - so to speak the face-to-
face - it is the whole process; the holistic - start through to conclusion. Every
intervention needs consideration for action. This assessment may result in a desire
to shift the balance of power in your favor, or into a more favorable position by
programing the sequencing of events. Identifying what can be done prior to the
negotiation by seeking to precondition and shift expectations of the other party.
POSITION to frame the negotiation in advance.

Tactical preparation requires you to PROSPECT what information is required;

where to get this information and to whom these requests need to be made.
Information is vital, information is power.

PREDICT what the other part might do, what questions they will ask, what their
opening position will be. You should then PLOT the main trading variables,
priorities, positions and moves. A robust plan allows you as a negotiator to remain
conscious of what your counterparty is doing throughout the negotiation. In order to
plan effectively there must be an understanding of where you want to end up and
what you wish to achieve. There are many questions and considerations that will
need to be answered.

2. "Brexit means Brexit", but what on earth did that mean?

If negotiation is about leaving the other party satisfied irrespective of the outcome,
then ultimately negotiation must be about the journey and not solely the
destination. In this case there is more than one party, the EU and the electorate. The
UK government have continued to lead with the outcome i.e. the destination and not
the journey. In order to achieve the outcome effectively you need to understand your
objectives. You will end up somewhere else if you do not know where you are going.
What is the expected outcome; where do you need to be?

Much confusion can be caused by not understanding what is required. Take the
example of a cost price increase or a fee increase on a service. What is being
measured? What are the metrics involved? Gross or Net Price/Fee, Gross or Net
Profit, Gross or Net Margin/Cash Margin, allowance of client degradation/erosion?
This is by no means an exhaustive list, and I’m sure there are many more metrics
you can apportion to a comparable project. If you do set these objectives, ensure you
have considered them. Objectives are often set to a minimum requirement as
opposed to a real or best outcome. In the former case, when the objective is met, do
you stop? You should always consider maximizing the value of the negotiation.

3. The first rule of politics - you have to be able to count.

In the commercial world the numbers matter. In a capitalist society the aim, to
paraphrase, is to invest in activity or industry for the creation of profit. This, I would
suggest, is a common objective in differing guises of all readers. Therefore, the
numbers do matter and it is imperative to understand the commercials that
underpin any concession, trade or proposal.

The Gap Partnership have identified 14 behaviors of a skilled commercial negotiator.

Specific behaviors serve us within different circumstances, or types of negotiation
that we find ourselves within - transactional, collaborative, creative and or internal.
However, if we are discussing commercial negotiation then we need to ensure that
we understand the financials and/or the financial impact, as big or small this must
be taken into account. An important consideration is not solely the impact of your
negotiations on the P&L, but also on your team and the multiplier effect of these at a
holistic level.

4. The clock was always ticking

Time is one of, if not, the biggest factor that can apply pressure within a negotiation.
Along with options, otherwise known as a BATNA (Best Alternative To a Negotiated
Agreement), time is an absolute in the balance of power. In a negotiation you must
be in charge of yourself, the other party and the process. It is also important to
understand the crescendo effect and the impact this may have.

The crescendo effect is the increase in pressure in relation to time. As time reduces,
the pressure raises exponentially to the point at which the curve reaches the apex. At
this maximum point of pressure most of the proposals occur and the biggest
concessions are made. If you have time, you can shift the balance of power in your
favor. If you know the other party are timebound or have an internal time deadline
imposed, you can use this information to maneuver them into a position, using it as
a lever.
5. “No deal” was an empty threat

At The Gap Partnership, the issuing of a ‘threat’ is a strategic decision that can be
taken. A decision to issue this threat must come in combination with an
understanding of the implications to the relationship for the longer term and the
trust within the relationship. A third consideration is, “Do you have the balance of
power?” If you do, then a threat can drive the desired outcome, to highlight the
implications. The more subservient the party, if power is assumed correctly and you
have got inside their head, to more power you are likely to yield.

A threat can be seen as a self-vested competitive approach to value. Not right or

wrong, it is simply a strategy - the premise being the other party will yield to your
threat of action. However, if you threaten then you must have the ability to follow
this through and then apply these actions accordingly. If not, then all credibility
about the position that has been taken is undermined. If you lose credibility due to a
veiled attempt, the other party might see all future actions, positive or negative in
the same vein. In addition to this, these actions could destroy trust. If you issue the
threat and execute on this the other party will not “like” this course of action, but
they will trust you. You did what you said you would.  

So how could the UK use “no deal” as a threat when the EU could watch public
parliamentary debates in which former prime minister Theresa May was told that
she didn’t have a mandate?

6. The Irish border issue just wouldn't go away

We are not AI bots negotiating using algorithms or statistics - although these

technological advancements are happening sooner than we think. We are human
beings, and the human element is what makes negotiation a “special” subject. As it is
both a science and an art, mistakes will occur. The crux therefore is that we do, and
will continue to, make mistakes. Burying your head in the sand will not make an
issue go away.

An audit of an issue and bringing this to the fore is an option to ensure the topic is
discussed. Even if it may need to be parked with alternative variables or other
avenues discussed in order to unlock contentious issues. This can also be viewed
through the lens of positions versus interests. A position is a taken point; you will
not negotiate someone from a position and trying to do so may fuel a contentious
issue. Exploring and understanding the interests that make up the position taken by
the parties is the important aspect.

Asking the question “Why?” and trying to understand the other parties’ position and
underlying interests will allow for a wider agenda and conversation. In transactional
negotiations it can serve you to apply pressure and shift the balance of power, while
in collaborative and creative scenarios it allows for deeper understanding and
exploration of options that may help to unlock a deadlock or non-negotiable
variable.

7. The EU dreamed that the UK might change its mind

This phrase may resonate with some: “There are those who make things happen,
those who let things happen, and those who wonder what the hell just happened”.

Being in charge of the negotiation process is critical, i.e. making things happen
whether this is alignment, time, the agenda, taking a time out, understanding
priority variables or understanding when to walk away. The concept of “hope” -
hoping the other party might make a specific proposal, being hopeful they will
accept the latest offer or that they will be fair, open, honest and trusting - should not
enter a negotiator’s mind.

If you hope within a negotiation, there is a strong likelihood you will be

commercially exploited and be taken advantage of, consciously or otherwise. Skilled
negotiators leave nothing to chance. They do not hope the other party will do
something; they ensure this happens.

8. MPs couldn't agree on anything

Parliament and the antiquated rules of both Houses are showing how difficult a
consensus is, both cross and inter-party, especially when you need this to take
motions through. Internal alignment is where we spend a large percentage of time
on consulting engagements. Why? Simply because this is often an area we can
impact on the most. More importantly, it is often alignment or misalignment that
ensures a negotiation plan fails or at the very least has a sub-optimal outcome.

Let’s conduct a quick experiment. I challenge you to take a room of people, get them
to close their eyes, and ask them to point north. Unless you are at a cartography
convention, I suspect they will have a differing view - often polar opposite. A
common misconception is that because we are all from the same organization, we
will have the same objectives and perspectives. But different disciplines have
different priorities. Never assume that X will agree with Y.

9. It was all a terrible misunderstanding

Trust or the requirement for trust is a vital aspect in any collaborative negotiation.
What happens when there is a breakdown of trust? How quickly can relationships
turn sour? Without trust, there is little chance a dependent relationship will
continue to succeed or succeed at all. In a commercial relationship, trust allows for a
greater sense of collaboration. If you trust the other party, you are more willing to be
creative, understanding and aligning on goals and outcomes which develops greater
trust. Ever-greater trust is required as you become more dependent upon each
other. It takes time to build and is often immeasurable, but it is a barometer of any
on-going relationship.

So in summary, here are my “Nine Lessons for Negotiators from Brexit”:

1. Understand your objective.

2. Understand your metrics.
3. Know the commercials.
4. Time is a crucial factor in the balance of power.
5. Understand how proposals might be received, and the credibility of them.
6. Issues will not go away.
7. Make things happen. Do not hope it will be okay.
8. Internal alignment is part of the process, and the downfall of many.
9. Trust is immeasurable but incredibly important.

Please consider each of them in your commercial negotiations whether ongoing,

imminent or in the distant future. Because while none of us can escape the current
political turmoil as the fall-out from Brexit continues to rage, what we can do is
mindfully and consciously take some constructive learnings into our commercial
lives.

This article was written prior to the decisions in Parliament of week commencing
2ndSeptember 2019 in which we saw a number of proposals made by Prime
Minister Boris Johnson to table a ‘No Deal’ option and a subsequent snap General
Election.