When it comes to effective negotiation strategies positively impacting a situation, one standout case is that of engineer Haseeb Qureshi in the United States.
Having been passed over by more than 20 companies, the software engineer finally secured two job offers, each worth approximately $120k. Instead of settling for one of these, Qureshi told other companies that he had received several offers. He was about to accept an offer from Google with a package of $162k when he received a call from Airbnb, which offered him a package worth $220k. When Google came back with a counter offer, he went back to Airbnb and settled on an offer worth $250k – more than double his first offer around one month earlier.
At the corporate level, an example of smart negotiating can be seen through CIMIC’s purchase of engineering services group UGL. UGL had suffered large write-downs on the Ichthys Gas Project in the Northern Territory before CIMIC proposed an all cash offer of $3.15 per share in late October, 2016. As UGL’s share price had suffered losses following the company’s reporting of a loss in August, CIMIC had effectively backed UGL’s existing shareholders into a corner and with virtually no room to negotiate. As CIMIC announced that it had purchased more than 50.4 percent of the company late in November, UGL’s largest independent shareholder, Allan Gray, was forced to accept CIMIC’s offer, despite believing that the takeover price considerably undervalued the company.
Conversely, costs of poorly negotiated contracts can be seen through the time and cost associated with disputes on major construction projects. According to built asset consultancy Arcadis, the average amount spent on disputes of major projects around the world in 2014 was $51 million, whilst the average dispute took more than a year to resolve. Although the problems which led to these disputes were no doubt varied, it is likely that some of these problems would have started during the negotiation phase of contracts.
Although these are extreme examples, the reality is that engineers engage in various forms of consultation and negotiation everyday across all projects.
Indeed, negotiations are essential when engineers engage with clients, deal with disagreements or disputes, resolve disputes amongst other parties, take on new suppliers or employees, or enter arrangements with a new employer.
In all of these situations, the importance of effective strategies cannot be understated. Good negotiation strategies can be the difference between securing your next big contract or missing out. It can also be the difference between getting the best possible price for your services with the right terms of engagement compared to the lowest price you are willing to accept.
When dealing with disputes, effective conflict resolution could be the difference between reaching an amicable and workable settlement or being forced into expensive and time consuming legal proceedings. When making agreements with new suppliers or staff, the ability to devise mutually beneficial outcomes helps to put the relationship on a sound footing for years to come.
However, negotiation can be tricky. Many people fall into the trap of adopting and adversarial approach as opposed to one which focuses upon maximum benefits for both parties. On the positive side, a large number of engineers excel at talking about and explaining the benefits of their solution from a technical standpoint.
Engineers can learn valuable negotiation skills through Engineering Education Australia's courses: