When it comes to negotiating deals, you’re probably like me—some good wins in your past and maybe a few plays which could have gone better.
On the bad deals, was it because you misunderstood your position relative to the other side? That’s where my deals have gone south. Always looking for help, I found a nice piece from FOT alum, Jason Seiden, about the steps required in successful negotiations. Click through for the whole article, but I will focus on two of Jason’s rules:
- Figure out the best alternative you’ve got to a negotiated outcome… and mentally prepare yourself to walk away from the negotiation if you can’t get at least that for yourself.
- Figure out what you and the other parties need. (Not just want, but need.)
Basically, know what your best option is to negotiating, and don’t confuse wants and needs. Good advice, and it came to mind as I followed a story happening between St. Louis and Bensalem, PA. Express Scripts is a profitable pharmacy benefits management company with its HQ in St. Louis and facilities in Bensalem. In August, the Service Employees International Union, which represented the workers in Bensalem, protested Express Scripts’ attempts to negotiate with the union to cut pay and benefits. Sounds like the Mott’s case over the summer, right? Here was Express Scripts’ take:
“Our goal has been to arrive at a competitive wage and benefits package that would allow us to keep jobs in the Bensalem community… Labor costs in Bensalem are the highest in our system by a significant margin. We have asked the Bensalem union to agree to some adjustments that would bring that facility in line with our other facilities nationally. These adjustments are essential for us…to stay competitive, and to keep these jobs in the Bensalem community.”
Right or wrong, this is the company clearly stating their needs. Sadly, this ended worse than the Mott’s deal—the story in the Philly newspaper just 2 months later read, “Express Scripts closing… 365 employees will lose their jobs.” Ouch.
Looking at this deal using Jason’s rules above, you have to wonder what really happened. Did the local union decide that 365 fewer jobs was a better alternative to a reduction in pay and benefits? I am not picking sides here, and I flat out hate the idea of people losing their jobs, but it’s hard to ignore the economy stinks, unemployment in that area runs north of 8%, and the company had excess, non-union production capacity in St. Louis.
And I am not at all talking about the fairness of this call—the union, of course, wanted no drop in pay—I’m just talking about the pure business logic of it. The company had needs, and they ended up getting met at the expense of Bensalem employees. No one’s happy about that.
So why look at this deal? Express Scripts is still in negotiations with other facilities down the street in Bensalem. Another 600+ jobs are located there. If I am an SEIU employee at one of those places, I hope that someone is polishing up on their negotiating, because round one went poorly. I agree with Jason that taking a hard look at the true needs of both sides is the place for them to start.
I have spent the last 20 years of my professional life advising leaders to make great talent decisions to drive business results. In my current gig, I lead talent acquisition and management for a multi-billion-dollar, 100% employee-owned construction company. I geek out on analytics, succession planning, etc. and love it when we position folks to do their best work. That’s fun stuff. I tease bad HR people, because I think we can all do better, myself included. That’s fun, too.