In this episode of The Confident Negotiator, host Rob Cox and RED BEAR's Director of Client Engagement, Brandon Wilson, dissect invaluable insights derived from comprehensive research involving 20 diverse companies. This discussion not only highlights key negotiation trends poised to shape the corporate world in 2024 but also addresses the pivotal challenges and common pitfalls negotiators face, coupled with robust strategies to navigate these complexities.
Designed to elevate your negotiation prowess, this episode serves as a crucial companion to the e-book, offering a dynamic blend of theory and practical advice. Tune in to enrich your understanding and ensure your negotiation strategies are both innovative and impactful for the year ahead.
Transcription of the Video:
Rob Cox: We're back. Hello everyone, and welcome to the Confident Negotiator Podcast. I'm Rob Cox, and with me today is RED BEAR's Director of Client Engagement, Brandon Wilson. Brandon's here today to chat about our latest e-book, the 2024 State of Negotiation Trends e-book. It's a 20-page e-book, comprising research from 20 different companies who we've interviewed representing over $60 billion in annual spend and over $55 billion in revenue generated. Brandon, thank you for coming back on the podcast.
Brandon Wilson: No problem. Thanks for having me back.
Rob Cox: Let's dive right into the e-book. Can you give us an overview of this 2024 Trends e-book and who could benefit from it?
Brandon Wilson: Yeah, so the origin of this e-book was basically the idea for us to produce some type of annual report or a state of negotiations. So with that idea in mind, we ultimately ended up back at the start of our typical engagement process, which is strategic alignment. So any client that we work with, first thing that we do is conduct a series of interviews throughout the organization. And part of what consistently comes out of those interviews includes new trends, negotiation challenges, mistakes that people are making across the organization, things like that. So we were already capturing this information for all of our clients and leveraging it individually with each of them. So we thought, what if we take a step back, take a look at a larger number of clients, and then dive in and analyze that information to identify collective trends, challenges, and mistakes that we see organizations facing in 2024? And that's ultimately how we got to this e-book. We took a sample of 20 organizations that Red Bear's worked with within the past year, and these are global organizations across a variety of industries, across a variety of functions. So we often work with either sales or procurement teams, but we also work with any and everything in between. So engineers, operations, legal, finance, you name it. So this e-book is relevant for any professional who finds themselves on negotiating on behalf of their organization.
Rob Cox: Excellent. Thank you for that. Brandon, you talked a little bit about challenges. Let's turn to 2024. What are some of the top challenges negotiators need to keep an eye out for in 2024?
Brandon Wilson: I'd say there's two primary challenges that are carrying over from previous years and continuing into 2024, but both with slight variation, so the first of which is inflation. If there was a main character in the 2024 story, it would probably be inflation again. So while inflation peaked back in mid-2022, the recovery has been slow and most likely we'll continue throughout 2024. So with a lot of focus on the Federal Reserve, and a lot of economists predict that while the rate hikes may be coming to an end, that goal of cooling inflation back down to 2% most likely won't happen this year. So that means while the price increases that we see for goods and services may be lower than previous years, those inflationary pressures on businesses won't be ending anytime soon.
Brandon Wilson: There's inflation. And then the second challenge I'd say would be global supply chain issues. So supply chains while stronger than in previous years, they've rebounded from the impacts of covid. They are facing new threats. And there's geopolitical pressures in areas like Eastern Europe that continue. And then there's new geopolitical pressures emerging out of the Middle East. And the combination of these two causes a variety of global issues for supply chain. So whether that's trade barriers or sanctions or logistical disruptions, currency fluctuations, regulatory changes, there's a lot of uncertainty throughout the globe, and that obviously has an impact on the global supply chain.
Rob Cox: Excellent. A lot of uncertainty, a lot of challenges this year for sure, for negotiators in both sales and procurement. Turning to the trends that are highlighted in the e-book, what are some of the trends for 2024 that are highlighted in the e-book that negotiators should know about?
Brandon Wilson: So, for the trends, I believe we highlighted five of them. So I'll just touch on a few. One of which is negotiation time, time pressure has always been an element of negotiation. That's not anything new. However, the manner in which it's presenting itself now is slightly different. So with the recent changes to buyer behavior and the trend towards online buying and buyers conducting a significant amount of their own research upfront, the sales cycles have become increasingly compressed, which leaves sales professionals with less time to understand the needs of their customers, less time to build relationships and ultimately execute and negotiate creative deals. So this accelerated timeline can add significant amount of pressures and makes it challenging to explore more comprehensive negotiation strategies and say in addition to those time pressures, there's also the relationship building factor, which is another trend that we came across. I already spoke to the highlighted the challenges of inflation and global supply chain disruptions, and those themselves can lead to tense conversations and can cause strained relationships. And then if you couple that with the ongoing shift to remote interactions where there less actual face-to-face time with the other party, and there's fewer opportunities to build and nurture that relationship aspect. So as we continue into 2024, it's critical that organizations place a focus and a premium on that relationship factor, and that's both internally and externally.
Rob Cox: Excellent. Thank you for that, Brandon. Let's talk about some common mistakes. The 2024 Trends eBook also covers 10 of the most common mistakes that negotiators face according to our research. Now, our listeners will have to read the e-book to learn all 10 mistakes, but what in your opinion, are some of the most common mistakes that negotiators face?
Brandon Wilson: Yeah, so to your point, I won't spoil the e-book and get into all 10, but I'll touch on two or three of the more common mistakes that we see out there. So one is not setting high aspirations. So in short, what you don't ask for, you don't get. And when we introduce this topic, I think it's most people focus in exclusively on cost or price, but setting high aspirations is applicable for any negotiable. So whether that's access to key decision makers or access to other critical information, scheduling, flexibility, warranty terms, payment terms, whatever it may be. So setting high aspirations, it goes beyond price. And it's important to remember that those who ask for more typically get more. And also to keep in mind that once aspirations are laid out there and they're known, they can always be lowered, but it's very difficult to raise aspirations once they've been communicated.
Brandon Wilson: Excellent. In addition. So another common mistake we see is not balancing the competitive and collaborative dimensions of a negotiation. So our negotiation philosophy here at Red Bear is based upon our negotiation model that any commercial negotiation has three dimensions. So there's the competitive, the collaborative, and the creative. And oftentimes we find that an organization's negotiation culture, if you will, may lean too heavily in one direction. So typically we'll see sales organizations that can tend to be overly collaborative than on the other side. You'll see procurement organizations that tend to be more competitive, and it's overemphasizing either of those elements can be detrimental. So what we introduce is that successful negotiation involves finding that right balance between the competitive and the collaborative, which ultimately allows both sides to get to that creative breakthrough.
Brandon Wilson: And one more mistake I'll share today is not understanding power within a negotiation. So in our workshops, we talk about six sources of power in any negotiation, and I won't get into all six of those now, but power is perception. And if the other party perceives you to be powerful, then you have power. It's that simple. So an example of this is if we're working with a sales organization, our instructors will ask the group who has the power, you or the buyer, and they'll all say the buyer. And if we're working with procurement, we'll ask who has the power, you or the seller? And they'll say the seller. So typically it's common for us to see that most people believe that the other side has all of the power. So it's critical to have a proper understanding of the different power dynamics and be aware of them and then leverage them accordingly and properly.
Rob Cox: Excellent. Well, thank you for that, Brandon. A lot of mistakes covered in the e-book. A lot of good mistakes covered just there just now. So thank you. Let's talk about strategies. What strategies can our listeners use to come out on top in 2024? What advice can you share?
Brandon Wilson: Yeah, so the e-book does a great job diving into some powerful negotiation concepts and strategies that can help any negotiator tackle the mistakes and trends that we've seen playing out. And I encourage listeners to go check out the full e-book itself to see all that information. But I'll preview a few of those strategies here. One of which is uncovering needs over once. So this ties into one of our negotiation principles. And negotiation success can often hinge on being able to distinguish between those once and needs and once our specific measurable demands typically can only satisfy those in one way. And the needs are more general subjective, they're less measurable, but oftentimes they can be satisfied in a variety of ways. So having that ability to uncover and truly understand what the other party's true needs are, allows both sides to be more creative and can lead to a true win-win agreement.
Brandon Wilson: And then final, perhaps most important strategy I would say is planning and planning is critical to negotiation success. Finding and taking the time in advance to develop and think through your negotiation strategy, anticipate what the other party strategy may be, and then identify areas where you need to gather additional information. One of the most valuable tools that our participants and our clients walk away with is our negotiation planner. It's a one page document, front and back summarizes all of the key information, the concepts, the principles, everything that we introduce here at RED BEAR. And we often find it's those clients that place a premium on planning and encourage their team to plan before negotiations even require them to use that negotiation planner. Those are the clients that achieve consistent sustained success throughout their organization.
Rob Cox: Excellent. Thank you for those strategies, Brandon. Brandon, and thank you again for your time. You've been very generous with it. Thank you for listening. We'll see you next time right here on the Confident Negotiator Podcast.
