Reengineering Negotiations

With reengineering has come a shift in the way managers and their staff negotiate both inside and outside their organizations. Managers must now devise new ways for employees to interact with each other, with suppliers, and with customers and clients more efficiently, more responsively, and more profitably.

Several years ago, Roger Fisher examined the impact of a government’s or nation’s internal negotiations on its external negotiations.1 Fisher asserted that “internal” discussions frequently compromise the effectiveness of external negotiations and consequently undermine the ability of designated negotiators to satisfy national interests. In this article, I extend Fisher’s analysis from the world of international diplomacy to the corporate world.

By examining the unique dynamics of multiparty negotiations inside and outside organizations, I hope to: (1) help managers think about the impact of their internal communication and negotiation procedures on their own and their staff’s external negotiations, and (2) identify ways to reengineer systems of coordinated discourse between internal and external parties in order to improve the efficiency and results of their organizations’ externally negotiated agreements.

Internal and External Negotiations at Alta Systems

To differentiate between internal and external negotiations, consider the case of an information technology consulting services company, Alta Systems, that works with clients to develop specialized applications and integrated system solutions. The client manager’s world might look something like that shown in Figure 1.

Every time an Alta client manager interacts with a client (whether trying to contain a project’s scope, muster project resources, or navigate the politics of a client’s organization), he or she must reconcile the competing interests of and “mini-negotiations” among a myriad of constituencies: within Alta —senior and junior employees; within the client organization — project coordinators, line-of-business sponsors, and IT resources; within a third-party vendor, contractor, solution provider, or partner organization — sales reps, consultants, programmers, and so on.

While this diagram represents a complex multiparty negotiation, let us first focus on a relatively simple negotiation in which a senior executive at Alta asks a senior manager to contract with a subcontractor, System Solution Packages (SSP), to help deliver special, high-visibility projects for significant clients like the new pharmaceutical company, Farmitol. If we break the negotiation down, we find at least six smaller negotiations within that single interaction:

• External — between Alta manager and SSP sales representative.
• Internal — between Alta manager and senior executive.