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Wednesday, 23 September 2009

Can you negotiate?

I mean really negotiate, not haggle, or cave in to reach an agreement as quickly as possible, but really negotiate? Do you know all the techniques and tricks, what to do and what not to do to get the best possible deal?

Neither does Gordon Brown. For many years, firms and organisations have sent their staff on courses to teach them to negotiate. They may or may not learn anything, but the biggest output from these training courses is to show that most people don't have a clue how to negotiate, and after such training many of them still haven't a clue.

There is the salesman or buyer who is so fixated on price that he or she gets a bad deal on everything else, the executive who is so intent on getting an offer acceptable to the board that they get a lousy deal anyway, but worst of all there is the person who just doesn't have a clue how to play the game.

At the end of the 1990's recession a friend told me of the terrible time he was having as co-lead manager on a property loan that had gone bad. Working with him as co-lead from Barclays was a manager who had been drafted in to manage his bank's position in several workouts, after several years winning promotions in the personnel department in the north of England.

It turned out that issuing staff memoranda was no preparation for negotiations with delinquent but avaricious property owners, and the former HR man couldn't open his mouth without blowing the bank syndicate's negotiating position. Every round of discussions would start with his announcement of the concessions the banks were prepared to make followed by an interruption from the borrower before he could say what the banks wanted in return.

Fast forward to today and we hear our Great Leader playing the world's worst poker hand. True enough, the government has previously mentioned that it would review the need for a fourth Trident submarine and that will have been heard and noted in Beijing, Moscow, Tehran and Pyongyang, and the reliability of the current nuclear fleet is probably well known in such circles. But today Gordon Brown surpassed himself by telling the world what he was prepared to trade away in negotiations without setting out what, if anything, he wanted to see in return.

"Hey guys, I have a nine of clubs. Oh. Perhaps I shouldn't have told you that."


RW said...

Surpassed himself? No - Gordon has form. Remember the Brown Bottom gold sales: he told the market how much he wanted to sell and when, so everyone shorted.

TB was even worse: he gave up the EU budget rebate for nothing other than future goodwill, when the choice of the first EU prsident had to be made. Positively traitorous.

Alex said...

The gold sales were simply a matter of bad timing/execution. No idea why he sold then. The price has risen dramatically ever since probably mostly because of demand for the commodity rather than as a store of value. Brown has cost us far more plugging holes in the banks he regulated made by delinquent US homeowners. The most telling aspect was Brown's shock when he found out the geographic spreads of RBS and Barclays assets.

To be honest, Blair didn't have much of a choice over the rebate. That was lost when the government accepted the EU expansion. Mrs T won the rebate because the EU needed the UK for critical mass, but after all the eastern European signed up and with Turkey and maybe even Russia wanting to join, the UK lost their negotiating position on that one.

The biggest negotiating mistake I remember was Callaghan's premature announcement of a £100m shipbuilding deal the government was going to sign with the Polish government over a £100m shipbuilding deal. Without any way for Callaghan to back down once the deal had been announced, the Polish negotiators took the UK government to the cleaners.

The King of Wrong said...

The French government has a habit of pre-announcing defence export deals to their local press, perhaps in an attempt to bind the other party, but it inevitably goes wrong when the other party doesn't sign.

Still, it's clear why Brown's the World's Favourite Statesman or whatever award he's just won - everyone loves the poker player who can't avoid smirking/blushing when he gets good cards!