How has COVID-19 affected negotiation? What will change moving forward? How has it impacted communication and technology? While COVID-19 has changed the world in numerous ways, Keld Jensen points out that change was happening well before a global pandemic shut the world down. Hear his take on the future of negotiation in this episode of Negotiations Ninja.
Outline of This Episode
- [2:20] The European Union and AstraZeneca
- [7:59] How negotiation may change
- [15:03] The erosion of trust in negotiation
- [19:25] The importance of relationships
- [20:44] The world of technology
- [25:16] Adapting to new technology
- [31:38] The speed of change
- [32:56] How to connect with Keld Jensen
Is the way we negotiate changing?
Keld has been doing research with the World Commerce & Contracting Association about the perception of negotiation in the future. He believes we’ll see more online negotiation. But Keld points out that we saw that before COVID as well. Seventy percent of all negotiations were predominantly handled online before COVID. It’s here to stay because it was here already.
Having said that, Keld points out we must be careful. Sure online negotiation allows you to save money on travel, hotels, and time. But he emphasizes that face-to-face negotiation still delivers better results than online negotiation. Online should be used as part of the negotiation—but all negotiation can’t be shifted online. People like to meet in person, shake someone’s hand, and look in their eyes.
Negotiating online isn’t the same as negotiating face-to-face. Keld has been busy the last 10–11 months doing online negotiation training because it’s a different animal altogether. Dr. David Matsumoto has pointed out that negotiating online lends a false sense of security. People believe that they can’t be read, so they’re expressing emotions that they shouldn’t. In doing so, they become even easier to read.
Keld’s study found that 40% of the 70% of people conducting negotiations online were negotiating via email. That makes it even more complicated. There’s a tendency that people feel like they’re hiding behind emails. They sometimes act more boldly than they would in person.
Is online negotiation leading to unnecessary loss?
If you were negotiating pre-COVID, you’d catch a plane, sit down and have a meeting, and perhaps go out for dinner. Even if you’re struggling to reach an agreement, you’ll put more effort into the process. Why? Because you took the effort to fly up there, and you’ve invested time and energy. Canceling a whole day feels like a complete failure and a waste of money. If you can’t reach an agreement on a 15-minute phone call, you aren’t as invested. You can say “whatever,” and hang up and move on. It’s easier to give up.
The increase in technology facilitates the need for immediate gratification. But if you don’t get that, people will walk away more readily. They could be losing out on fruitful deals for their companies. Keld advises some people to pause negotiations until they can meet in person again. If you aren’t in a hurry, you can certainly wait for that opportunity.
Social negotiation = financial success
In the western world, time is money, we talk too much, and we don’t listen. In Asia, negotiation is quite different. They take their time, they listen more, and they appreciate the social aspect of negotiation. One of the benefits is that those who want to listen and improve recognize the importance of the social relationship.
Keld believes we will start realizing how important the social relationship is when dealing with each other. It’s nothing new. But in the period leading up to COVID, people started to forget about it. He believes we have reached a point where we are learning that the social part can be translated into financial success.
The erosion of trust in negotiation
One of Keld’s negotiation cornerstones is trust. It’s essential for collaborative negotiations. Sadly, Keld thinks we will see a decline in trust in the negotiation process. Worldwide we are seeing a decline in trust toward authority, governments, politicians, etc., due to COVID and lack of information.
Because negotiations are happening online, you don’t get the same opportunity to get to know people, shake hands, etc. You have to be careful. Keld feels that more organizations are aware of the importance of negotiation as a management tool than ever before.
People are waking up to risk mitigation in contracts, and they’re being renegotiated. He feels that the interaction between contracting and legal will be closer. The contract will become a result of what is happening at the negotiation table. It will become more of an integrated process.
Where do we go from here?
Sixty-five percent of all the people participating in the study want to improve communication and increase data-sharing. Fifty-seven percent said they need more collaboration in future negotiations. He believes we’re coming out of COVID with a different view on negotiation—hopefully with more collaboration.
How does Keld feel about negotiation technology being implemented? What are his thoughts on the AstraZeneca/EU contract negotiation? Listen to the whole episode to find out!
A challenge to my listeners: What tools do you have available right now? Zoom, Teams, etc. How can you utilize Clubhouse or AI? In what ways can we leverage technology to your benefit and make it easier to pick up? How do we make it more fun? It can be overwhelming and burdensome. But we need to find ways to make it feel like an opportunity. Send me a message on LinkedIn or text me #Negotiation at 587-315-5948 with your ideas!
Resources & People Mentioned
Connect with Keld Jensen
- Keld’s Website
- Connect on LinkedIn
- Keld’s YouTube Channel
Connect With Mark
- Follow Negotiations Ninja on Twitter: @NegotiationPod
- Connect with Mark on LinkedIn
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