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Updated: 12 Nov 2020

Influencing Decisions in Risk Averse Organisations

risk loss organization

Question

What is your advice on trying to negotiate in a hierarchical, risk adverse culture? (i.e. decisions are often made by committee)

Alec from Britain

Answer

Welcome to negotiating internally within the constraints of most risk or loss averse corporate hierarchies. Telling you that you're not alone doesn't go very far to helping you make progress. So here are a few hot spot areas to focus your attention and assist you in achieving maximum internal negotiation skill leverage.

What is your company's decision making process? I'm not referring to the organisation chart. One of the best ways to find out how your company 'really' makes the sorts of decisions you're trying to navigate through to reach approval is to ask the old timers to tell you a story. Go to lunch with an old timer or group of old timers, and ask them to tell you about a time when a similar initiative was:

  1. Successfully approved, and who the key influencers and decision makers were in that process, and
  2. Left out to wither or killed, and who the key opponents and decision makers were.

Bring a pen and paper, or better yet record the session with a dictaphone - you'll likely be in for a yarn.

Some people are more influential than others, and they're often not those at the top of the tree. Once you have identified these shakers and movers, set to work gauging their opinion and winning their favour. Best achieved if you have others on your side to help persuade them. This is the time to draw upon your good relationships within the company. You may do wise to not float the solution as 'your' idea. Don't worry about the risk of not getting the credit. You will be noticed. If possible, plant the seed into a senior decision maker or influencer's mind, and have them think that the idea was given birth from their imagination. Their commitment will likely be multiples greater, reducing the risk that your idea will be one of many that is never prioritised. Alternatively host a group think session, and have the group think that the idea was theirs.

People are by nature risk averse, and business people are likely an ever more risk averse breed. This aversion to loss in decision making has been given the name 'Prospect Theory'. Too many corporate cultures frown upon taking risks, even if the potential gains and their probability are high. Since you're unlikely to undo our in-built evolutionary leanings, I suggest that you take a lesson from martial artists by harnessing this pattern. How, I hear you ask?

Rather than focusing all your energy on selling the benefits of your idea, work out the big bad downside of what won't happen and what will happen (they can be different) if your idea isn't seized upon - i.e. the loss scenarios. Really think it through the potential risks, and stretch your time-line as far as you conceivably can. Next take this doomsday picture and create a document or presentation. Share your document and presentation with those on your side - arm them with your facts.

Speaking of time - work out in advance your time-line to getting a nod to your idea or project. Marathon runners plan their route so that they can pace themselves. Be realistic but tenacious.

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It's becoming increasingly difficult to achieve cost savings and add value. This training saves those on the buying side from losing money and choosing the wrong vendors. You will also be equipped to more confidently take control by negotiating internally with colleagues or stakeholders. Read More
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Whether you're aware of it or not, you've been negotiating your whole life. We negotiate with our colleagues, customers, suppliers, bosses, family and friends. We negotiate for business agreements, higher pay, a better job, our home or car. We only get to choose whether we negotiate better or worse than others. Read More
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Calum Coburn
855-980-0126
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