Louise Lupton, a negotiation expert who has worked at The Gap Partnership, uncovers the misconceptions about internal negotiation and provides a back-to-basics guide to how to excel when deal-making with colleagues.
Commercial negotiation with counterparties from other companies is a sophisticated and cerebral skill, requiring a sharp intellect and emotional resilience. But I’ve heard seasoned negotiators from the corporate world argue that internal negotiation – that is, negotiating with people from their own organization – is even more intellectually and emotionally challenging. Wait, what? Isn’t this counterintuitive? After all, if you’re working for the same team, playing in the same ballpark, and operating from the same home ground, shouldn’t that simplify things? The reality, of course, is that it’s not that cut and dried. The somewhat inconvenient truth is that in order to successfully negotiate internally, you must consider and plan your approach and behaviour just as carefully as you do in your external deal-making.
Despite this, organizations very often place more emphasis on – and put more budget against – upskilling their people for external negotiations, since they visibly drive sustainable outcomes and maximize profitability. These are the “rock star” deals that help to meet KPIs, drive growth, and lay the foundations for future development. In so doing, they get people noticed and can impact relationships, success, and promotion, both positively and negatively.
So if internal negotiation is the under-resourced younger sibling, living in the shadow of its generously supported external equivalent, this could in part explain why it’s perceived by some to be tougher, with higher stakes. Another reason could be linked to a well-researched phenomenon known as attribution bias. This refers to a human tendency to attribute the negative performance of other people to their inherent character but to attribute our own less-than-optimal performance to the external situation. (Sounds familiar? I believe we can all recognize this, if we are honest.) Apply this to an internal negotiation scenario in which you, the negotiator, are potentially being judged and assessed by those who have influence over your career and salary prospects, and the stakes become not only higher but rather more personal to boot.
In the workplace as elsewhere, we are surrounded by opinions, interpretation, and assumption, and the influence of this can be disproportionate. As a result, having a strong understanding of what these biases might be from both your and their perspective is key to unlocking more creative and collaborative outcomes.
Let me bring this to life with an example from my own world. I recently had a conversation with a client who told me about a protracted negotiation she was having with a colleague internally over email. The longer it went on, the more other colleagues were brought into the email trail. Instead of stepping back and not responding – both approaches she may have taken with external clients – she felt it was her right to make her feelings known over email with the world cc’d in. But in fact, all she was doing was fuelling an internal perception of negative behaviour. It was only when she stepped back to analyze the lack of resolution that she realized she had totally omitted any consideration of the other party’s position, job role, and KPIs. She had also not tried to get inside their head. The irony is that these fundamental negotiation planning assessments would have been absolutely standard for my client – a highly trained and capable senior executive – to carry out as part of any external negotiation! Once she applied them to her internal negotiation, she understood that the colleague’s personality was such that negotiating by email was the issue – they had reacted negatively to the unwelcome and uninvited gaze of the crowd on cc. In order to get back on track and let the internal counterparty have her (my client’s) way, it was simply a case of my client going to see them face to face, having done her research and preparation.
This much is clear – negotiation inside the workplace has just as many intricacies as negotiations with clients or suppliers. Because, whether internal or external, negotiation takes place inside the other party’s head. What’s more, the relationships you have with coworkers don’t necessarily determine the type of negotiations you have with them. To get inside their head, think about character assessment. What do you know about them, their role and position? How long have they been in the company? How do they operate and what are they renowned for? How have you seen them respond to other people or situations? Are they stimulated by visual (what they see), kinaesthetic (what they feel), or auditory (what they hear)? Are they fact-orientated or do they respond better to relationship builds?
Another approach prior to an important internal negotiation could be leveraging other stakeholders. Are there people who can give you insight you may not already have? For example, a better understanding of their job role, or how their KPIs may differ from your own. There may be an element of your expectations that goes against one of their KPIs or that has a detrimental effect on another project they may be working on. The more you know, the more prepared you will be. Alternatively, preconditioning the other party can be a powerful way of setting out expectations. Alerting them early on to your position, or keeping them in the loop, could avoid pitfalls further down the line.
Negotiating internally is in fact no different to external negotiation provided we prepare mentally and physically in the same way. It is still the process of two sides working to achieve an outcome that satisfies both. But because internal negotiation is home ground, a comfort zone, it may bring lack of preparation and a diluted sense of alertness, especially if we see and talk to these people every day. Alternatively – or as well as – it could be accompanied by overconfidence and ego – neither of which are desirable traits in a skilled negotiator.
As unhelpfully, some people fail to recognize that internal meetings can be negotiations, and so completely miss the point when thinking about what their conflicting interests and competing objectives might be. Or, there may be more of a competitive mindset at play as two parties believe they are fighting for limited resources. Internal negotiation is also impacted by the size of the organization – the larger the company, the higher the levels of complexity, and cross-cultural and political perspectives.
Whatever the hurdles, what we do know is that internal negotiations can be maximized by employing the same approach to your external ones in terms of planning.
Prospect the situation or conversation. Do your homework on the purpose and be clear on what it means for both parties. Think about the information you have, but equally the information and insight you don’t have. Who can you talk to that might be able to help with that? Think about the type of questions you’ll need to ask to get this information. Consider what bias may be at play from both sides and the impacts this may have on either position.
Predict their approach to this situation. From what angle will they approach and what might their reactions be? How might they start the conversation? Where would they have gone to do their prospecting? What information will they have and what will they be looking to gain?
If too much emphasis is placed on the Power held by the other party, then you are already on the back foot. Remember you’re more equal than you think you are. What are their personal/professional circumstances that may be impacting their decisions, strategy or behaviour? How might they be impacted by stakeholders? What pressures might they be under that haven’t been considered? Think about positions, KPIs and strategic viewpoints. What power lies where? Most importantly, have a backup plan, and think about what theirs might be too.
Plot ways in which you can create potential value together and understand that you’ll be coming from different angles with different priorities. This will help you to gauge how they may move throughout the discussion.
Position your own behaviours, analyzing impact and managing expectations. What will your approach be? How much can you push back? How much do you need to accept?
Negotiations within businesses are just as challenging as those outside. But there are
differences. When negotiating with suppliers or clients, buyers may change roles, deals may be lost or businesses restructured; you may also negotiate with several different people across one organization. Internally you might just find the people you negotiate with or against are going to be in the office again tomorrow, next month and next year. Recognize the pressure this will create and manage the conflict just as you would with any other negotiation. Navigate your way through it and apply the same levels of preparation to all.