Strategy & Execution

The Art of Negotiation: Lessons Learned from Military Leaders

Negotiation is the process by which two or more parties who perceive a difference in interests or perspectives attempt to reach a mutual agreement.  It is aimed at resolving points of difference and to craft outcomes to satisfy the interests of those involved.  Successful negotiation requires both parties to move away from polarizing and usually entrenched positions, to consider a realm of possibilities.  The outcome of a good negotiation means that neither party feels cheated, manipulated, nor taken advantage of. 

In the business of insurance and risk management negotiation takes place each moment of every day.  It is evidenced in claims resolution and coverage disputes, loss control recommendations, audits, policy forms, and the pricing of coverage.  It is a key ingredient in talent recruitment, mergers and acquisition, as well as career development.  And negotiation applies to many purchasing decisions, ranging from office equipment to management systems to advertising services.

How important is it that you master the art of negotiation? Studies show that people who do not learn negotiation skills are 60 percent less successful than those who do.  Simply put, negotiation enhances productivity and performance.  And it is an essential element to increase revenue and profitability.  Just imagine its impact to your organization if all members of your team advanced their understanding of and ability to negotiate.

Lessons Learned from Military Leaders

In enhancing your negotiation skills, there is much to be learned from military officers around the globe who are under intense pressure to win outcomes that involve life-and-death situations.  While the stakes of your negotiations may not carry the same consequences as the military, you feel the same pressures to make rapid progress, project strength and control, coerce rather than collaborate, and trade resources for cooperation rather than taking the time to get genuine buy-in.  Skilled military leaders use five highly effective tactics when levels of uncertainty confront them:

  1. Understand the big picture – start by discovering the other party’s point of view.  Use what you learn to shape the negotiation and determine how you’ll achieve your objectives.
  2. Uncover hidden agendas and collaborate with the other side – find out what the other party’s motivations and concerns are.  Propose several different solutions and invite your counterparts to improve on them.
  3. Gain genuine buy-in – use facts, rather than coercion, to persuade others.
  4. Build relationships that are based on trust rather than fear – deal with issues head-on.  Make incremental commitments to encourage trust and cooperation.
  5. Pay attention to process as well as desired outcomes – consciously control the game by not reacting to the other party.  Slow down the pace of the negotiation and actively lead the other party into a constructive dialogue.  Be strategic rather than reactive.

 

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