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Your Weekly Walkaway - Inexperienced negotiators could prove costly
The Weekly Walkway highlights negotiation in its ‘good’, ‘bad’ and sometimes ‘downright ugly’ forms. Newsletter Issue No. 9 (11th November 2022)
What to expect?
Tactic of the Week - Russian Front
Thought of the Week - Inexperienced negotiators could prove costly
Their Week - Recession looms as the UK economy starts to shrink
Remember: You are a negotiator!
You are always managing some form of conflict, a difference in opinion or interest.
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QUOTES OF THE WEEK
“Never let a good crisis go to waste”.
“As sure as the spring will follow the winter, prosperity and economic growth will follow recession”
Robert Foster Bennett, Politician
TACTIC OF THE WEEK
Your opponent gives you two alternatives – the first of which is not great but the second is even worse i.e. being sent to the Russian Front. They are trying to push you towards taking a suboptimal deal but trying to make it look better by comparing it to something terrible. Remember, you do not have to accept either offer, counter-propose your own offer and keep the negotiation moving forward.
THOUGHT OF THE WEEK
Inexperienced negotiators could prove costly
The last deep UK recession was from 2007-2009 (we had a brief one in 2020). This means a whole generation of negotiators has never had to navigate through a recession, let alone high inflation and a cost of living crisis.
In the best of times to ensure you achieve a good negotiated outcome or elevate a good negotiation to a great negotiation, you need to carry out extensive planning & preparation. You need to know and understand your’s and the other party's objectives, and you need to hang all of this on a structure that will enable you to maximise the opportunity. Today's news that the economy has shrunk and recession looms put an even greater emphasis on solid planning and preparation than ever.
When times are good, and a business is buoyant, there is a much greater resilience to mistakes or opportunities not being maximised. However, over the next couple of years, sensitivity to the profitability of a deal will be heightened, and everyone will find themselves and the deals they make under the magnifying glass.
For people who have been around the block a few times, they have their experience to fall back on, the been there, done that T-shirts if you will. But what if you joined a business after university at 22 years old, you are now 35/36 years old, possibly in middle management and no doubt with a decent amount of responsibility? You may have direct reports that will look to you for guidance through the next few years of very choppy water. You don’t have the experience to fall back on and may be left exposed and make mistakes.
One way I see these affecting companies is in the shift of the balance of power in negotiations. If your team is inexperienced, but your counterpart is experienced and has dealt with this kind of economic instability before, then they have a tried and tested approach that works. Therefore, they will have more power, and that power will be used.
So what do you do?
Do you cross your fingers and hope for the best? Or do you look to your senior team members, who have experienced recessions, to guide you?
It may seem counterintuitive during times when every penny matters, but you need to invest in this missing generation. Invest in training them how to negotiate when times are incredibly tough. Crossing your fingers will not work, and imagine how well they will negotiate during the good times when they do eventually return.
Recession looms as the UK economy starts to shrink
By Michael Race, BBC News
The UK appears to be heading into recession after the latest official figures showed the economy shrank between July and September.
The economy contracted by 0.2% during the three months as soaring prices hit businesses and households.
A country is in recession when its economy shrinks for two three-month periods in a row. The UK is expected to be in one by the end of the year.
The Bank of England has forecast a "very challenging" two-year recession.
A recession has been widely expected in the UK due to the prices of goods such as food, fuel and energy soaring, which is down to several factors, including the war in Ukraine.
Higher prices for goods has led to many households facing hardship and cutting back on spending, which has started to drag on the economy.
As our ‘thought of the week’ speaks to, we have an entire generation in the workforce who have never seen or worked through a recession. There is both risk and opportunity ahead.
How we all navigate better-negotiated outcomes through this time is imperative.
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