Is Negotiation Compatible with Having a Goal of Sustainability?
Negotiation is about getting the best deal we can, isn’t it? So, how can we think sustainably when we are negotiating with customers and suppliers and we have financial targets to hit and bosses to impress? Although what does “sustainability” mean anyway? In business it’s about finding the balance of profit and purpose. It means always doing the right thing for all your stakeholders in your ecosystem, all the time. So negotiation and sustainability are at odds, then, or are they?
Let’s first tackle the glaring objection: “if I create a culture of sustainability in my company, profits will suffer, or worse I will be out business”. Not true. All the evidence shows that companies that are leading the way in sustainability are also outperforming their peers financially. This myth has been busted.
So if we are a business committed to sustainability and we have a negotiation with a client or supplier, how do we do it? Can we achieve the ideal outcome, namely both sides do better than expected? Let me offer 4 steps to success.
1. Leave your ego at the door. Negotiations require empathy, understanding and the ability to listen. If you’re going into a negotiation with a win-at-all costs attitude, ready to beat your opponent into submission, you might win once, but not long term. The ego-driven mentality of winning a race or a football match won’t work and will lead to domineering, unhealthy relationships. Successful business is about building lasting partnerships where everyone in the supply chain benefits.
2. Really understand what are their needs. At TableForce, we call this getting to know what’s on their “sheet of paper”, i.e. what is important to the other side. We should spend 80% of our time working out what’s on their sheet of paper than on 20% looking at ours. If you have a customer or supplier who has a big ego and has no interest in your sheet of paper, don’t work with them! It will only lead to “win-lose”, which always leads to lose-lose in the end.
3. Be comfortable with saying no. This is really hard for some of us, especially if we are the supplier wanting to get the order. However, it is an essential part of any negotiation as it helps to establish trust in the relationship, to find where the boundaries are and to navigate towards the best outcome. Although, the word “no” must be followed by “but”: “No, I can’t give you a price discount, but… we could improve our lead-time so that you can deliver to your customer sooner”.
The risk if we don’t say no is we end up in a compromise. And compromise is dangerous. I remember once at the end of completing the acquisition of a company, a transaction that I had led, the owner turned to me and said “a successful acquisition is where both sides feel equally screwed”. I laughed outwardly, but inside I squirmed and felt some remorse. I didn’t want him to feel like that. Perhaps if we had spent more time truly understanding each other’s perspectives, needs and future plans, i.e. what was on each other’s sheet of paper, then we could we have reached a place of genuine win-win that meant a better outcome for all of us? And could we have taken it further and made it a win for the owner’s employees, for his suppliers, for his community?
4. Grow the pie. If we have done the first three steps well, then we have built a relationship of trust during the negotiation and we can now explore how to grow the pie for all stakeholders, e.g. find new products we can add in, involve another supplier in the deal, agree to host an event for the local community, which in turn gains their support.
Both sides need to come to the table in any negotiation with respect, genuine compassion, a desire to seek understanding and a spirit of collaboration. Once we take our egos out of the way, focus on the needs of both parties, be prepared to say no and focus on growing the pie, we will be on the path to a sustainable future for all. And by acting in everyone’s interests, not just our own, we all do better as a result. The data is proof of that.*
*The word “sustainability” often makes us think on environmental issues, but it’s about acting in a sustainable way in every aspect of life. The 17 UN Sustainability Goals are geared towards achieving “a better and more sustainable future for all by 2030”. The goals include addressing world poverty, mental health, gender equality, innovation & infrastructure as well as, of course, climate change.