Understanding how the Bank Selects and Trains Negotiators
Negotiation refers to the process by which a discussion or dialogue is undertaken with the purpose of reaching an agreement. There are usually two or more parties that are involved in a negotiation. Negotiation is a skilled activity and there are specific strategies and techniques that need to be deployed in order to negotiate on a matter successfully enough (Brett and Thompson 2016). This assignment takes the form of a report and discusses the negotiation procedures that are undertaken by a financial services provider (Standard Chartered Bank) that is primarily involved in offering various types of loans in addition to financial market and cash management products. The report discusses the manner by which negotiators are selected and trained by the bank, it talks specifically about how training is imparted in areas such as sales as well as negotiation and recommendations are provided on how both of the processes can be improved upon. Then the assignment outlines the process that is undertaken by the company bank entering into any significant negotiation, describes the post negotiation review process of the company and concludes with reflections on my personal skills and abilities as a negotiator, based on a recent personal experience in negotiation that I went through.
Since the bank that I work for is an international financial services provider and since the core business activities are the sanctioning of loans, I have noticed that negotiators who are hired by the bank are people who are well versed in the subject of finance and hold at least a bachelor’s degree in the subject if not a Master’s degree. The bank makes it a point to recruit negotiators who have studied finance at the college level and who are familiar with all the financial concepts and theories that are needed in order to carry out sales negotiation pertaining to loans, with success. The negotiators who are hired by the bank are also equipped with good argumentative skills and persuasive skills, both of which are needed to conclude a negotiation with success (Druckman and Wagner 2016).
Standard Chartered Bank puts negotiators through a rigorous process of training and development. Negotiators are trained in soft skills, as these are skills that are needed to communicate with customers effectively and for opening and closing deals. There are special trainers who are hired by the bank to train the negotiators, given that negotiation forms a vital part of the core business. A few of the specific skills that the negotiators get to learn from their trainers at the organization where I work are hard bargaining skills, understanding the variety of ways by which conflict of interest can end up affecting a negotiation. Negotiators are also trained in ways by which their emotions should be leveraged and controlled in order to get deals through and they are even trained in ways to build effective relationships with customers as building long lasting relationships with customers or even short term but positive relationships with customers has a role to play in influencing the decision of a customer to apply for a loan or credit (Brett and Thompson 2016).
The Process Undertaken by the bank before any Significant Negotiation
There are differences between the ways by which the employees of the organization are trained in sales and in negotiation. Sales executives are taught how to get a deal through by hook or by crook. They are specifically trained in aggressive marketing techniques and are taught not to give up and to pursue customers relentlessly in order to get a deal through, but to not the extent of course that this borders on harassment. With negotiators however, the training process imparted is one that is quite different. Negotiators are trained in skills that are aimed at hard bargaining especially in concluding complex deals. They are trained to be as persuasive as possible when speaking to customers so that customers feel inclined to use the bank products. Soft skills training is something that is imparted to negotiators. The pros and cons of acquiring a loan or any other form of services by the bank are impressed upon by the negotiators on the clients. Clients are made to understand in the nicest way possible, why dealing with the bank is a good idea and the many ways by which they can benefit if they do so. A lot of skill and tact is employed in the process of negotiation which is not the case with plain marketing, and this is where the difference between the two forms of training lies (Fells and Sheer 2019).
The training of sales executives and the training of negotiators is something that can be improved upon by the bank in a number of different ways. To begin with, sales professionals and negotiators should be subjected to regular workshops and seminars on their subjects of specialization. They should also be subjected to informal tests and quizzes at the workplace that will be aimed at testing their knowledge on their independent areas of specialization. The sales executives and the negotiators need to be allowed to interact with expert professionals from the domain of sales and marketing and also negotiation, both financial negotiation and legal negotiation, in order for them to acquire the training skills and techniques that they need in order to push deals through and to ensure that a good bargain is made with customers, through every deal (Gelfand and McCusker 2017).
Before the bank enters into any significant negotiation with a customer, there is a process that is followed for the same.
Initially the bank does is to engage in a preparation and planning process. The negotiations that take place are generally conducted in teams. The right negotiators for the job are selected and they are briefed about the type of negotiation that they are about to enter into and also the type of customer that they are likely to be dealing with. If the customer is problematic, the negotiators are duly warned about the same. The lead negotiator is usually appointed on the basis of seniority. The main ideas and suggestions that need to be communicated to the customer during the negotiation is something that is made known to the negotiator at the preparation and planning stage, by the company’s management. What is also made known at the preparation stage are concepts such as BATNA, ZOPA, Framing and Anchoring. BATNA is a legal acronym which means best alternative to a negotiated agreement. ZOPA in negotiation is concerned with the range of deals that can be made in way that all the parties that are involved in the negotiation process have their interests looked into. Anchoring is the attempt by which reference points are established around which arguments or negotiations are likely to revolve. Framing refers to the ways or manner by which offers are made and arguments are placed as part of the negotiation process (Lewis et al. 2017). The next important step in the process is to define the ground rules for negotiators. They cannot be rude to the customers and argue with them and they can also not force the customers to accept a deal. Their job will be to act as persuasive with customers as possible and stress on the value creation of the subject deal and how it would be beneficial for them (Hofstede 2019).
Post-Negotiation Review Process
The company always clarifies with the negotiator and with the customer why the process of negotiation is taking place and a justification is provided for the same. For instance, there are certain loans and credit programs that a customer may not be interested in but which the bank decides to persuade the customer to buy, based on the customer’s personal and professional credit requirements. Bargaining and problem solving techniques are what the negotiators of the bank are briefed upon before they actually go ahead and engage in the process of negotiation (Lewis et al. 2017). The customers are encouraged to partake in what may be termed as hard bargaining in order to get deals through and to make sure that customers do not feel harassed or compelled to say yes to any deal. The sample applies for negotiations that are carried out with investors. The negotiators are trained in soft communication skills that are needed to communicate effectively with customers and investors and to create a good impression upon them instead a negative impression. Furthermore, the negotiators are also briefed on closure and implementation before they are made to partake in any bargaining and negotiating activity on the part of the bank. Hence, the bank lets the negotiators know exactly the types of techniques that need to be put in place in order to close a deal and that too with the degree of success that the company expects (Ting Toomey 2017). Additionally, some of the important steps or processes that negotiators are made to go through prior to a negotiation actually taking place are team selection and preparation, the exchanging of information and techniques on how the negotiation should be opened and how the negotiation strategy ought to be developed. They are also briefed on how the negotiation must be closed and the commitment of the client gained in the process. This is followed by a process where the negotiation is reviewed and feedback if any is directed to the training department.
The post negotiation review process is a phase that comes after a negotiation has been officially carried out or undertaken by the bank. The post negotiation review process is the procedure that is implemented to determine how successfully it is that a negotiation has been undertaken. The achievements of the negotiation process are analyzed and it is reviewed as to whether or not the negotiation could have gone better than planned. A separate review team is set up to evaluate the negotiation deals and discussions that the bank participates in with its clients and investors. The post negotiation review process is very critical as it is through this particular process that it is determined by the bank, whether or not the negotiators are doing a successful job or not. The main role of the negotiator is to close a deal successfully with a client using good communication skills and a considerable degree of persuasiveness among other things in addition to negotiation techniques. Therefore, the bank relies more on its negotiators than it does on its sales and marketing executives in order to ensure that important business deals go through, or are implemented successfully enough. It is also determined during this particular process as to whether the negotiators who took part in the discussions with the clients are sufficiently skilled enough or whether they need to be sent for further training and development in order to be able to do their jobs better (Ting Toomey 2017).
Personal Experience of Negotiation
I personally, have undertaken several negotiations for the bank and one particular incident that comes to the mind is the one where I had to close a deal on a loan that was being offered to a property developer undertaking a massive real estate project. The developer enjoyed with strong financial and credit profile hence did not require a significant loan value from our bank to carry out the project. In fact the reason why they had approached the bank for financing was because they needed some short term credit facilities to fulfill the construction obligations. I was designated by the bank to conclude the credit facilities of a greater sum of money than what the required, I had to engage in a prolonged by successful process of negotiation. I was polite and respectful throughout the discussion but I also drove a hard bargain by explaining explicitly what they stood to gain by availing the loan of a larger sum of money such as tax rebates and concessions among other things. I managed to pull the deal through, and when I look back at the experience I realize that it was the use of techniques such as tact and diplomacy which ensured that I was successful in closing the deal apart from the fact that I was able to communicate well enough with the customer and get him to see things from not only my point of view, but to see how procuring the loan could be good for him (Zhu and Carless 2018). Value creation is another technique that I utilized in the negotiation by making the customer realize that taking the loan would be for his benefit, while making sure that the interest at which the loan was being offered was convenient both for the customer and the bank. I could of course have been more patient during the negotiation. I was too eager to pull the deal through. Had I been more patient, I could have persuaded the customer to take a loan of a higher value or sum than the one which he purchased, in the end.
Conclusion
Thus, negotiation is not an easy activity and there is a lot of skill, tact and diplomacy that goes into closing a negotiation or engaging in a successful negotiation. The financial negotiations, especially, are those that are quite long drawn out and involve the use of a lot of hard bargaining, with the expression of emotions being kept to a minimum when the deal is being undertaken. The key to conducting a good negotiation is patience and diplomacy over and above the fact that the negotiator has to be familiar with the terms and conditions of the deal that is being negotiated. The negotiator must be able to speak effectively to the person at the other end, and push the deal through using his or her power of persuasiveness, while refraining from being too pushy and difficult at the same time.
References
Brett, J. and Thompson, L., 2016. Negotiation. Organizational Behavior and Human Decision Processes, 136, pp.68-79.
Druckman, D. and Wagner, L.M., 2016. Justice and negotiation. Annual review of psychology, 67.
Fells, R. and Sheer, N., 2019. Effective negotiation: From research to results. Cambridge University Press.
Gelfand, M.J. and McCusker, C., 2017. Metaphor and the cultural construction of negotiation: A paradigm for research and practice. The Blackwell Handbook of Cross?Cultural Management, pp.292-314.
Hofstede, G., 2019. National Negotiation Styles. Processes Of International Negotiations, p.193.
Lewis, M., Yarats, D., Dauphin, Y.N., Parikh, D. and Batra, D., 2017. Deal or no deal? end-to-end learning for negotiation dialogues. arXiv preprint arXiv:1706.05125.
Ting-Toomey, S., 2017. Identity negotiation theory and mindfulness practice. In Oxford Research Encyclopedia of Communication.
Zhu, Q. and Carless, D., 2018. Dialogue within peer feedback processes: clarification and negotiation of meaning. Higher Education Research & Development, 37(4), pp.883-897.
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