The Negotiator Magazine

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How are internal and external negotiations alike?

Both internal and external negotiations are complex, multi-party deals. They involve tangible resources --time, money and people -- and intangible resources -- trust, honesty and reputation. Further, both involve complex working relationships that are continually evolving. In the external world, yesterday’s competitors may be today’s customers. Tomorrow they may be partners. Internally, working relationships are just as intertwined, particularly as cross-functional organizations replace traditional, silo-based corporate structures. Yesterday’s turf-conscious manager might be tomorrow’s critical project ally.

Often, even if the external supplier or partner stays the same, the point of contact -- your negotiating counterpart -- changes. However, this person often moves up in their organization, increasing the value of a well-developed relationship. In the same way, internal negotiations almost always involve ongoing relationships.

Based in part on this complexity, successful negotiators cannot view the world with a win-lose mentality. The web of relationships requires that traditional, adversarial negotiation be replaced by "interest-based" or "principled" negotiation. Whose interests must be met for a deal to be successful, value-generating and long lasting? External negotiations require rapid informed decisions, which in turn require proactive internal negotiating so interests are clear. Account managers can no longer afford to consider just the customer’s desires; they must balance those desires with internal interests. What if the customer is happy but you are not?

Organizations need a win-win approach both externally and internally to increase and prolong value. For example, biotech scientists can help their business development colleagues "expand the pie" by clearly identifying strategic areas for corporate partnering. The cross-functional team that negotiates with a prospective partner can engage the team from a startup by articulating multiple benefits to the partnership, including internal scientists’ interest and resources to devote to the project. In this scenario, the internal and external negotiations should mirror one another to maximize appeal.

What are key strategies for negotiating internally?

The overarching strategy for effective internal negotiations is to communicate, communicate, communicate. Your purpose should be to:

The more you communicate -- and the more ways you communicate -- the more people will be involved and invested in your success. Communication cultivates relationships through consistency. Consistency pays off. When you need something out of the ordinary, people will get you what you need and go to bat with you if they trust you and understand your motives.

In order to do this effectively, you must first identify key internal parties. Ask yourself:

Other key strategic questions to answer include: What is the preferred timeline for internal review and approval? How does that match up with the customer’s timeline for making a decision? Work backward from the ultimate decision and plan your internal negotiations accordingly. Internal negotiations are about knowing who needs to be available, whose buy-in you need and what needs to happen to get the product out the door.

To know this, you also need to know what needs to be customized. Check in internally before making any promises to a customer. The last thing you need is a customer who is excited for a product that meets his needs perfectly but that cannot be developed and delivered. Once you have enlisted the support of your internal partners, be sure to ask them who else to include in your planning for the external deal. The more complex the deal, the more elaborate your web of internal support must be.

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