Every year untrained and under-trained business negotiators throw away in excess of $1.5 trillion dollars by failing to reach agreement, agreeing suboptimal deals and making bad decisions. This is the feedback from The Negotiation Experts at negotiations.com.
For over 14 years The Negotiation Experts have been diagnosing their global clients’ training needs in order to customize their training courses by asking telling questions in their Negotiation Diagnostic Profile.
The Negotiation Experts have announced they are starting to share some of their researched findings. They believe that it’s time to sound the alarm to business leaders around the world, to increase growth in revenue and bottom line profits. With online training coming of age, more staff can be trained more affordably without needing to leave their desks.
The Negotiation Experts has shared one of their most important questions, together with their clients’ global aggregated responses below. “How accurately can you or your team name and rank the other party’s top four negotiation goals or objectives?”
When leaders first see their teams’ graph, they’re both surprised and dismayed. Nobody disagrees that it’s crucial to first understand the other party’s goals. Yet only 12% start their negotiations armed with this vital information.
The Negotiation Experts cautions that since theirs is a self-profile, when they compare these results to performance on their negotiation training workshops (www.negotiations.com/training/), negotiators tend to overestimate their level of preparedness. So negotiators’ real level of preparedness is even less.
Note that only mid to senior level negotiators responses are included in their profile’s reports. Most are professional negotiators from sales or procurement departments, whose roles demand that they invest a substantial proportion of their time negotiating large B2B deals. So for less experienced negotiators, the picture is much worse.
There are multiple reasons for this epidemic lack of preparedness amongst professional senior negotiators. One of the causes can be seen in the responses to the Negotiation Diagnostic Profile question: “How long do you spend preparing as a proportion of the time you spend negotiating face to face or over the phone? i.e. Preparation/Negotiation”
Most negotiators do not invest sufficient time preparing for their negotiations. On top of this, The Negotiation Experts also shared that many who do invest enough time preparing waste a great deal of their preparation time by not using best practice toolsets or processes. While business deal profiles vary, The Negotiation Experts agree with the Harvard Program on Negotiation’s research. The research recommended that complex negotiations require a minimum of three to five times the preparation time compared with time spent negotiating.
Most business analysts assume that global organizations ensure that their negotiators have been trained before entrusting them with budgets and deals worth millions of dollars. Unfortunately this is not the case. Less than 10% of mid to senior level negotiators have received any formal negotiation training.
In the absence of negotiation seminars, most organizations hope that negotiators are at least bridging the gap by reading negotiation books or other self-education. A mere 5% have read one or more negotiation books. This raises the question of how negotiators are meant to agree the best deals.
“In business, most negotiators are expected to learn by doing. A few lucky negotiators get to take on a support role in team negotiations, watching and learning from a veteran negotiator. Yet lessons from commercial deals are by far the most expensive. Their cost can be measured in lost deals, less value being created, reduced margin and longer deal cycles, which often results in missed business opportunities. The problem is that nobody is bothering to count these very real business costs.” says Negotiation Expert Calum Coburn.
The Negotiation Experts shared that entrepreneurs and SME negotiators entering their public negotiation courses usually start off worse in their level of preparedness and negotiation skill level, when compared with corporate negotiators. The Negotiation Experts believe that this could very well be one of the major reasons most new businesses fail within the first two years.
While it’s useful to train negotiation teams in how to make better presentations, or how to work as a team – the return on investment for negotiation training is immediate and goes straight to the business’ bottom line. The Negotiation Experts’ clients achieve payback of their training investment within a few days to weeks after graduating. For those organizations that hold on to their trained negotiators, this payback can easily exceed a multiple of ten to twenty times within the first year of graduation.
Global GDP was $75.6 Trillion in 2016, as measured by the World Bank. It’s easy to calculate that even a very modest two percent improvement would have resulted in a $1.5 Trillion in value being created. This could have translated into more deals being agreed in less time, less businesses folding, more bonuses and higher salaries, plus better business decisions flowing from internal meetings. The Negotiation Experts believe the true lost value number to be closer to double digits, when they analyze the lost value negotiators fail to capture using their innovative Negotiation Sim.
The Negotiation Experts has agreed to soon release more of their findings. In the coming weeks they have undertaken to further analyze their global client responses to their profiles and assessments, and to again share their recommendations for businesses to improve.
Notes for Journalists:
Q: how many negotiators took part in this research? A: over 5000.
Q: how many countries were represented, and which regions were in the majority? A: over 60 countries are represented across all six continents. Northern America and Europe make up the majority of responses.
Q: how long does it typically take a negotiator to complete the profile? A: 12 minutes.
Additional exclusive information will be provided to journalists on request. The Negotiation Sim can be demonstrated via screenshare.
Release ID: 263953