Platt Perspective on Business and Technology

Negotiate smart, not shrewd … and avoid clever for the sake of clever too

Posted in strategy and planning by Timothy Platt on October 19, 2011

There is a myth of the shrewd business person as a smooth negotiator. Shrewd business people are masters of here and-now business tactics. They are really, really effective in beating out the competition in landing a here-and-now sales opportunity, and in setting up such an opportunity so they can follow through on it. In this, and when it is short term considerations and time frames that count, shrewd is good. A problem, however, arises with shrewd when long term is more important, and negotiating is always about long term – even when the specific issues on the table appear to be short term-only in scope.

• Businesses as ongoing organizations are long term.
• A business’ internal relations, as for example with its employees are long term.
• A business’ external relations with its suppliers, distributors, customers, neighbors and others are all long term.

When you approach long term needs and goals with strictly short term tools you set yourself up for long term failure – even as you appear to gain immediate, short term advantage and benefit.

I have written about negotiating and the negotiations process a number of times in this blog, and have touched upon these issues a lot more times that that at least in passing (see for example, postings in Business Strategy and Operations, in my Guide to Effective Job Search and Career Development, and in Human Resources and Personnel that have the word “negotiate” or related in their titles.) But I explicitly cite here a posting that I have included in Social Networking and Business as Negotiating for Overall Goals and Not Details. In a fundamental sense this is in fact a continuation of that posting. And my goal here is to at least briefly discuss one of the most important details for successfully completing a negotiations process that is often overlooked: time frames.

I cited a failed political negotiations attempt in my August 29, 2011 posting as cited above, and for balance I turn to a labor dispute example here that both sides may have won short term but at the expense of both sides severely loosing on any long term basis. This was a labor union versus management negotiation that I was a close-up witness to but that I was not actively involved in and it is a negative example that I have thought back to quite a few times since – and that I have seen played out several more times too in variations.

• The union representatives in these negotiations were shrewd people who knew the people they represented and who walked into those talks with a clear goal – maintain everything that union members were already receiving in the way of pay and benefits and expand upon that for both. But they took a very short-sighted approach in doing this, not looking past the next couple of years that this round of negotiations would explicitly cover.
• The management side of this was equally short sighted insofar as they also only looked to the immediate time frame and not to their longer term needs or the consequences of a strictly tactical resolution.
• So the union achieved its goals for all positions included as being unionized and under their leadership – but at the expense of relinquishing a range of positions as no longer covered by union representation. And looking beyond this particular round of negotiations and this particular contract-to-be, they did that same thing essentially every time they went to the table, garnering a better package every time for those left in their union, but reducing the size of and range of their union every time. They negotiated for the here and now but at the cost of incrementally moving into a progressively more and more minor position – each and every time and with reduced clout and leverage to match.
• And each time this tactically gave management an incrementally stronger position as fewer and fewer functional areas and positions that would perform them were involved in these negotiations and in danger of going out on strike or slow-down from that union. Non-union employees, not covered or protected by collective bargaining who walked could simply be let go and replaced and the union and union members could have no real say in that matter.
• But at the same time, this had negative long term impact for management too, as when each individual union – this and others they had to deal with became more marginal on their own, their only recourse was to work together through threats of sympathy strikes.
• This served to increase the risk liabilities that management faced, and I add this only served to create uncertainties for the unionized employees involved too.

Everyone on both sides of those negotiating tables was very shrewd and very cognizant of the short term and of immediate needs and goals. No one on either side of those tables looked past that to the fact that these were long term employees seeking careers and not just jobs. And this was a long term business and not just a short term business venture.

• It is better to negotiate smart and for the long term than shrewd and even if that means giving in on some of the short term and immediate benefit points that you might wish to reach.
• I add here that if you are negotiating in competition with another player seeking a same business opportunity as you are and you are willing to give on some of those short term items on your wants list, that can make all the difference in your winning the bid – and with you still walking away meeting your longer term needs.

You can find this and related postings at Business Strategy and Operations – 2 and the first 200 postings in that general directory at Business Strategy and Operations.

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