internal negotiation and the deal-approval process

A Harvard Business School study in 2009 evaluated forty-five companies and determined that the most significant negotiation problem they faced was the internal negotiation between and competing needs of silos, that is, a lack of internal negotiation alignment.  Each silo (legal, pricing, marketing, sales, product managers) viewed the negotiation through its own lens rather than viewing it holistically.  The study found, for example, that legal departments were simply redlining contracts in an effort to reduce risk to zero without factoring in or weighing the reward, and then adjusting risk profiles accordingly.

Most companies have one of two kinds of internal negotiation strategies.  The first is a highly centralized one in which all deals have to be approved by a committee of multiple stakeholders either in person or using deal-approval software.  The result of this approach is less variance but slower response to the market.  The second strategy is to simply allow salespeople and regional leadership to make their own negotiation decisions.  The result of this approach is fast decisions, but with more exceptions.

At Think! Inc. we've spent the last sixteen years relentlessly driving to develop a solution to this problem.  Our goal was to achieve better business results by forging cross-functional alignment between all of an organization's silos.  Our solution is a middle ground, which we refer to as radically centralized strategy with radically decentralized execution.  Find out more in our white paper entitled, The Evolution from Sales and Negotiation to Value-Based Decision Making.