June 2008 Newsletter

Business acumen gets an edge this summer…sharpen your negotiation skills, here’s how:

Lessons from an Expert: an interview with Johan de Villiers, a masterful negotiator and Director of Enspire Aviation (Pty) Ltd

At what level in a company do you think sound negotiation skills become essential?
Negotiation is a way of life. You can either choose to improve on this skill or do nothing about it. From a junior position, negotiation skills should be taught. This should be regardless of seniority or operational position in the company. The company will either benefit from improved purchasing margins, sales margins or improvements inter-departmentally. Training for relevant staff will also result in additional skills retention within the company.

Have you ever witnessed a negotiation fail miserably, and if so what were the major factors that resulted in the downfall?
During my tenure at a previous company, we were in advanced negotiations to be purchased by a major player on the Johannesburg Stock Exchange in 1998. After the purchase price was agreed upon, our managing director tried to hold out for an additional couple of million. The other party immediately broke off all negotiations and walked away from the deal.

As a shareholder and director of the company, I lost a small fortune. I subsequently voted with my feet, resigned and went off-roading across Africa for 6 months. That company was liquidated a year later…

If a negotiation does not provide a win-win solution to both parties, it will ultimately fail.

In your experience how useful would you say ultimatums are in the negotiation process?
I generally view ultimatums in a negative light. Ultimatums may be required where one needs to adhere to a definite time-frame. This could be for any number of reasons, i.e. exchange rate, economic climate, client opportunity, expansion plans etc.

When an ultimatum, however, is used as a “stick”, it may lead to an undesired outcome. The Golden Rule: Only use it if needed and if so, apply gently.

Would you generally undertake extensive research before entering into a negotiation with a client?
Yes. An obvious answer at first glance, but the usage of the word “extensive” needs to be clarified. It brings to mind a quote I once read:

"... negotiations commonly follow a four-step path: preparation, information exchange, explicit bargaining, and commitment. ... Negotiation is, in short, a kind of universal dance with four stages or steps. And it works best when both parties are experienced dancers."

In a case where the preparation phase might lead to a protracted waste of time, the actual business opportunity that presented itself may be lost, or the other party might engage with another player. Nothing succeeds like first mover advantage in business.

What are the risks associated, if any, with being impatient while negotiating with a client or colleague?
Impatience might be confused with desperation, or lack of negotiation experience! With our need for instant gratification, this is a common mistake made by inexperienced negotiators.

In your broad experience what is the most valuable piece of advice you would offer to somebody involved in an important negotiation?
Three things:

• As difficult as it may be, always try to see the situation as the other party sees it.

• Most important decisions are made by only a few people. Keep the team small.

• The harder it is to substantiate your logic during negotiations, the weaker your position is.

Johan de Villiers previously held the position of CEO at IT Giant Enterprise Connection where he successfully negotiated a multi-million pound merger. He recently formed the company Enspire Aviation ( enspireaviation.co.za ) and spends his time importing and piloting helicopters. He is also part-owner and director of corporate marketing company Boutique Marketing ( www.boutiquemarketing.co.za )

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Negotiating Imperatives: Add Some Power to your Punch

'Any business arrangement that is not profitable to the other person will in the end prove unprofitable for you. The bargain that yields mutual satisfaction is the only one that is apt to be repeated.'
B. C. Forbes

It is sometimes assumed that you have to be relentless to be a skilled negotiator. While this is true it does not refer to how you should treat the party with whom you are negotiating. Instead success in the negotiation equation is reached by relentlessly subscribing to some tested methods.

A masterful negotiator not only gets a result but also builds relationships through the power of consideration. It is possible to achieve results that benefit you and promote those around you in the process, here’s how:

Play private detective
If you have all the facts and figures surrounding a situation you know the possible outcomes and which one you really want out of the arrangement. Understand the people / business you are negotiating with and you can tailor your own approach to ensure credibility. If you don’t understand what you are dealing with find an expert to inform you.

Tell your ego to take a walk
Great negotiators are concerned with the outcome, not acquiring status or beefing up egos. They know what they want and they will recognize and shelve their own feelings of self-importance in order to get it.

Dance to the beat
Timing is important in any negotiation. Make sure that you don’t push ahead too ruthlessly, or conversely seem slow and complacent. The former can make the other party run away, the latter may make them lose interest or become dismissive. Gauge how the other parties are behaving and decide how to act accordingly.

An ear to the ground
Listen patiently and don’t interrupt unless necessary. Think and listen first, talk later. This subtly communicates you are operating from an informed position, and thus a powerful one. Attentively listening also means that you improve your chances of having the last word and consequently the most influence.

Arrive with a compromise
Know how far you are willing to concede in advance and then stick to it. If you have considered the real worth of your service, company or product before entering into bargaining you are less likely to undersell yourself, or succumb to the corrupting forces of greed. 

For more information on negotation skills training click on www.you-unltd.co.uk 

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