Strategic Negotiations: The Importance of Intelligence Collection in Negotiations

 

We all face negotiations in our private and professional lives in variety of situations. Most of us try to get low prices on what we buy, try to get better salary and conditions from the company in which we work, try to get our goods sold with highest possible prices, or even solve some of our problems via negotiations.

Negotiation skills is a necessary tool for entrepreneurs, managers, politicians, etc. Thus, it is important to get into the negotiation process with proper preparations. There are several strategies and techniques that experts and scholars suggest for negotiations and plenty books written on the topic each of which has useful tips and tricks for a successful negotiations. At this moment though, I want to deal with the essence of collecting intelligence before, during, and after the negotiation sessions.

One of the strategies in negotiations was introduced by Malhotra and Bazerman in an article published by Harvard Business Review. They introduced the concept of investigative negotiations in which the wise negotiator does not focus only on his/her own interests, but also on the other party’s. In this case, when you are not in a common ground with the other side and the opposing ideas are making you to put the deal down, you have to ask why the other party insists on its own position and why they want it. Knowledge about the WHY is not as easy as just asking questions and needs further and smarter investigations.

During my own startup I had to deal with several negotiation sessions and as I was involved in negotiations previously I could manage the negotiations well myself. I was mostly negotiation-oriented due to my previous professional and cultural background and I had to deal with some challenges during my startup in Sweden too. As a new online retailer I had problems finding the outside finance, as there was no previous credit inside the company. Moreover, none of the top manufacturers in the industry was ready to work with our company to sell us their products. Some believed online dealers are price killer while some others worried about their brands. In this case I had several negotiations starting with the bank, and further with the advertising agencies, manufacturers, distributors, government organizations, business incubator, etc.

At that time I used some parts of the investigative negotiations plus adding my own strategies and optimize the negotiation process. I got an e-mail from the bank announcing that at this moment they are not going to help me in the finance of the company. So, what I needed to do was to renegotiate the case with the bank, but for that sake I needed to collect the proper intelligence and act in a wise manner. I first called the bank and started a friendly conversation to find out why they rejected the loan application. What I found out after talking to the bank was that according to their analysis, the business was considered too risky and is not going to pay off the loan in future.

I also did more investigation in the case and tried to omit the constraints of the bank. Thus, I asked the bank for another meeting session to give them more information about the company. My company one of the incubator’s company and I had the support of a business coach at the incubator there. I do not speak Swedish language well and I thought it is better to have my business coach with me as he was always a helpful hand and my company’s friend over there. The reason for this decision was to omit one important constraint: the culture. Further investigation brought more intelligence that I could use. Finding sample of successful companies in the same industry and the same area could be convincing. So, in a research I found some cases. My business coach at incubator helped me find some competitive intelligence from the public financial information and then I took this as an advantage.

The new negotiation started and the new intelligence made the change on the bank’s opinion and two weeks later the company had the new fund in the bank account.

I had more negotiations on the company during the startup process and always gathered as much intelligence as possible to solve the problems. The company got the acceptance of the manufacturers and distributors and we even became the exclusive dealer in the whole country for some brands. I got better deals, better prices and the business went better. Most of these were done when I paid more attention in collection of the intelligence for negotiations.

My negotiations for the company were internationally based as we brought in brands from USA, Germany, China, Africa, etc. Thus, during the intelligence collection, I put more worth on the culture and made in-depth study for each negotiation.

Collecting intelligence is a panoramic view approach that the wise CEO implements for most of the business process steps. When dealing with the intelligence collection for negotiations it is important to act really smart. Here there are some tips for intelligence collection:

  • Being friendly and making friends in the first contact is one major step that serves the negotiator a lot. This way the adversaries are more likely to disclose some information beyond expectations.
  • It is not only the people of different cities, states, countries, or continents that have different cultures, but also people of different companies and organizations have different cultures. So, do not neglect the cultural factors and cultural intelligence.
  • Respect any type of information you have, as they are all the intelligence that you will use in future.