Power in negotiations with large organizations: Are we negotiating differently during the current pandemic?
Many of my clients are already feeling the fact that the current crisis is hitting us in an “undemocraticˮ way. The larger and more strategically positioned an organization is, the more power it has in negotiations.
Why is that the case? Because crises and uncertainty make large organizations look more attractive – and thus more powerful – to their negotiating partners. Large organizations know this and can exploit this advantage tactically in the negotiation process.
“Attractivenessˮ influences negotiating power.
Managers and experts ask me, “What can I do to strengthen my position and also get a pay rise – in spite of the crisis?ˮ
Clients with existing contracts ask me, “What can I do as a party to a contract to continue being given commissions?ˮ
The candidate asks me, “How can I score points in the application process and get the job?ˮ
The entrepreneur asks me, “How can I increase my chances of getting a foothold in the organization as a cooperation partner?”
All of you are interested and ready to act. But the object of your desire often keeps you waiting? That’s because negotiating power influences negotiation tactics.
Negotiating power in 4 words:
These four words describe the quintessence of negotiating power:
• The ability to say “noˮ,
• having a good alternative, and
• the deal being less necessary to you than to the other side.
Even if we cannot exert any influence on this situation, there is one thing that we can always do: Understand and equip ourselves.
Understand how large organizations tick – and how this influences their negotiation tactics:
Security and status – advantages in a crisis
Large organizations are much sought after in a crisis. Not necessarily for what they offer but for the feeling of security that they provide. Also because well-known names are often associated with status: See article “Status in negotiations: What you should do when your counterpart has a higher status than you”.
Besides security through size (too big to fail), they have other advantages: less competition and large capacity (staff). In other words, they can afford to wait and choose.
However, those who think that company size is a protection against lack of liquidity and insolvency may be mistaken. Recent history has shown us how large organizations failed to recognize the pulse of the times and how this “blindnessˮ led them into a bottomless pit.
At the moment, however, it could become a problem for you if you want to negotiate with a counterparty who is not in a hurry.
Organizations are also struggling with internal challenges.
1. Officially it is the “writtenˮ rules that “governˮ organizations – hierarchies, internal procedures, formalism – the consequences of which are:
• complicated decision-making and slow implementation,
• shared/collective decision-making where no-one knows the ropes or feels responsible,
• difficult (if not impossible) communication and cooperation if inexperienced or unmotivated employees or lawyers act as negotiators.
2. Unofficially it is the “unwrittenˮ rules that dominate – company politics, internal power games and preferences – the consequences of which are:
• intransparent decision-making processes,
• blockades by participants with diverging interests and positions,
• communication that does more harm than good,
• little flexibility in corporations whose holding company is based abroad and makes decisions from there.
What is different in the negotiation process at the moment?
• The exploratory phase (before the negotiation itself) takes longer.
• The need for security increases in crisis situations.
• The willingness to invest decreases.
• A rigid and wait-and-see attitude prolongs decisions.
• Decisions that are not urgent are not taken.
What helps in negotiations with large organizations:
1) Don’t make hasty assumptions:
You don’t yet know the motives behind your negotiation partner’s behaviour.
Organizations that placed their bets on innovations before the crisis have a clear vision and strategy – see the article “Hands-on Leadership: leading with professional competence”
Maybe your negotiation counterpart is only interested in finding the best brains and solutions for himself. I have clients who have been offered interesting job opportunities in the middle of the crisis. The application process, including negotiation, took between 4 and 7 months – but it was totally worth the wait!
Stay calm and try to understand the motives of your negotiation partner so that you can react appropriately.
2) Upgrade your offer
The requirements of companies have changed rapidly in recent months.
What skills and services does your negotiation partner require? What else can you add/change to make your offer more attractive or suitable?
3) Trade uncertainty for an edge
If you are or want to continue to be a salaried employee – here are a few ideas: How to brave job insecurity.
Would you like support in negotiating with large organizations? If so, I am happy to be there for you.
My programs “Grow your value!ˮ and “Grow your influence!ˮ have been designed precisely for you:
Try it out. In a 60-minute Target Setting session – in Vienna or online – we will review your issues and take the first steps. You will see that by doing this you have already achieved a lot. If you are enthusiastic and would like to continue along this path with me, this initial meeting will be free of charge.
I will be happy to accompany you on your way and share with you all the experience that I have gained in over 20 years of negotiating.You can reach me at: firstname.lastname@example.org or +436602400135.
Your Raluca Ionescu