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Traditionally Defence Negotiations have been based on persuasion - arguing each clause to the ground in an attempt to find compromise. There's a better way though.
Somebody once said that the definition of stupidity is doing the same thing over and over again but expecting a different result. Everyone laughs (a bit nervously) when they hear that because we all know that it is true and that we are culprits – we’re all a little bit stupid, if you will.
Despite the fact that we know we’re doing it, and the result isn’t changing, we continue to do it either because it’s easy and doesn’t require a lot of skill or because it’s become a habit. The “it” can be many things but often when we’re faced with a difference of opinion or the need to get somebody to agree to do something, the “it” in question is persuasion.
We seem to kid ourselves that if we keep telling the other person that they are wrong and we are right, and throw lots of words at them, at some point they will miraculously change their mind, slap themselves on the forehead, acknowledge our brilliance and agree to see the world the way we do. It doesn’t often happen though – in fact it almost never happens because most people hold fairly strongly to their views and tend not to be swayed by the other party’s logic. Just watch any parliamentary debate, two kids arguing over who should get the last doughnut in the pack or a couple of blokes in the pub arguing about who will win on the weekend by comparing the relative merits of their favourite football teams.
So, what does that have to do with Defence negotiations? The “traditional” approach to negotiating Defence contracts – and this applies equally to the Commonwealth and contractors – is essentially based on persuasion. Wrestling each clause to the ground by arguing and debating, trying to win the debate then finally finding compromise (or to put is less delicately, the least objectionable outcome acceptable to the parties). Technically that’s called positional bargaining or distributive negotiating (or win/lose). Great for buying a fridge but not the best approach when negotiating complex, high-value, long-term acquisition and sustainment contracts. It tends to be slow, competitive and leads to tension and erosion of trust and collaboration in the relationship.
There is a better way though. Mutual gain, or integrative negotiating (win/win), is defined differently – “the process by which parties in conflict adjust their positions by trading issues”. Mutual gain negotiating can be quite a lot quicker than positional bargaining and it builds trust, generates value and enhances relationships. That said, it does require the parties to be curious and flexible and display a higher level of skill than simply arguing to win the point.
So, what is the difference in practice?
Distributive negotiating is about persuasion and leverage. It involves explaining, influencing, selling, convincing, arguing to win, challenging, debating, urging and forcing. Lots of arguments, high levels of stress, multiple escalations, blame, finger pointing and so on. People who adopt this stance tend to see the role of negotiation as one of denial – try to hang on to every position and concede as little as possible.
Mutual gain negotiating is about understanding and trading. In order to trade effectively, the parties in conflict need lots of information. Negotiating dialogue involves lots of questions, exploring needs, constraints, motives and priorities, discovering the other party’s interests and inhibitions, their fears and aspirations. The purpose is to create better understanding on both sides, so that appropriate trading opportunities become more obvious. It involves the exchange of information to structure expectations (so there is still some telling as well as asking questions). People adopting a mutual gain approach see the role of negotiation as one of enablement rather than denial.
Generally, people spend far more time persuading than engaging in negotiating dialogue. The reason? We all love our own logic and views and we tend not to be terribly interested in the other party’s logic and views (other than to disagree with them). Persuasion is easy – we all learn to do it in childhood – so we tend to fall back on using persuasion as a means of getting the other party to change their position as a matter of habit. On the other hand, negotiating dialogue is more difficult – we have to be genuinely interested in the other party’s views, beliefs and logic, not so we can find a million ways of disagreeing with them but rather so we can find ways of trading with them.
In the past few years, Scotwork consultants have acted as lead negotiator for the Commonwealth in Defence acquisition and sustainment contracts worth in excess of $2 billion and helped to move those negotiations out of the “traditional” competitive, distributive win/lose paradigm into the realm of mutual gain by training the negotiating team (including training the contractors’ negotiation team alongside the Commonwealth team, which at first blush appears to be counter-intuitive but isn’t) then guiding the preparation and ultimately leading the negotiations “at the table” to get a better outcome for all parties and build trust and relationships along the way.
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