Brexit and negotiation

BREXIT and NEGOTIATION: what can we learn at this stage?

The original blog was written in June 2017. It is interesting to reflect that the key issues identified here remain unchanged, more than 2 years on. One key point, which looks at how changing the negotiation team affects the negotiation, is even more relevant today as the UK government changes its stance and approach as the lead negotiators change. In all, the Brexit negotiation continues to be a great example of the challenges of negotiation, and suggests a number of behaviours to minimise if possible in our own negotiations.

The United Kingdom has chosen a path leading to its separation from the European Union. However you feel about the rights or wrongs of that decision, there is a lot to be learned from the set up and delivery of a complex negotiation, in which both sides are playing for high stakes.

As of this week, the negotiations are due to enter an initial phase, although this is against a background in which the status of the lead negotiators on the UK side has been altered by the outcome of the recent election, in which the political party forming the government lost its majority.

However, prior to that there has been a series of other steps which both sides have been engaging in. The efforts by the EU to establish their negotiating position has been complicated by having a wide range of stakeholders (in this case, sovereign nations) who have positions to establish and protect, as well as the stakeholders internal to the EU. Building a coherent position across that stakeholder group is a significant effort.

The EU team also has the challenge of ensuring that the views of the EU Commission, the EU parliament are considered, as a minimum. Equally, the UK team has a range of stakeholders to manage, covering both the right and slightly more centrist elements of their government, as well as a range of other significant stakeholders who are able to influence the approaches being taken.

The election result has changed the balance of power within the UK negotiation team, as the UK parliament has moved measurably to the centre away from the right, with a consequent possibility of a move from the ‘hard BREXIT’ dialogue pre-election. This has yet to be played out in full.

Both sides, in the weeks leading to the 6th June, have been making a number of positional statements about what is clear and what is acceptable to both parties. The UK in particular has been keen to lead with a ‘no deal is better than a bad deal’ theme, although the clarity of the message about the consequences of that are at best mixed across the various media outlets reporting on the progress of activity.

From the EU side, strong messaging is also evident, more about both the consequences of leaving (a large bill) and the ground rules to be met for certain areas which the UK is interested in (such as retaining tariff free access to the well established European single market).

All this is as expected. The messaging both sides is developing aims to put across markers or positions which either side may actually hold to, or not. Of greater interest is the efforts, particularly on the UK side, to develop negotiation positions across a range of subject areas, all of which may or may not be linked.

Early reporting suggested that there was yet to be a clear idea of exactly which areas of interest the UK needed to focus on, and what the range of possible outcomes which could be accepted were. Even more challenging is that there is a wide range of positions which were desirable within different factions in the UK; as an example, the range from ‘we must have open access to European markets’ through to ‘WTO rules will be just fine’.

This points to a number of areas of learning which we can then apply to our own negotiations.

Firstly, there is the challenge of not knowing, or agreeing, the range of issues, and the range within those issues, which are being negotiated. This gives any negotiator a really hard time, as having some fixed points of reference is a significant help in developing rational lines of persuasion.

Secondly, when developing a complex negotiating strategy, it is really helpful not to change the team on a regular basis. For those students of team dynamics, a drastic change of personnel often requires a reset of the team which needs further time (and BREXIT has a somewhat fixed negotiation duration). If we look at the handy guide to BREXIT negotiators  (The Guardian), we can see that the UK side has lost 2 key negotiators, previously chiefs of staff in the Prime Ministers headquarters. And the position of the Prime Minister herself is surely less certain than previously.

On the EU side, the French President has changed, although the absolute role of that person may be less central to the negotiation given the range of the EU side. For our own negotiations, stabilising the negotiation team and getting alignment on message is just as important and holding that team steady in a negotiation really does help.

Thirdly, we can consider the impact of Time on a negotiation. Clearly, having a deadline causes some behaviours to take hold, like maintaining a sense of urgency and pace. As the UK government is currently distracted by trying to reach an agreement to establish a working majority, then the forward progress of the whole activity is likely to stall. This will create pressure on those engaging, although less so on the EU side, as the need to a clean solution is less pressing (in this writer’s view).

In our own negotiations, we can see that time pressures cause different behaviours; this is why we strongly advocate having a well thought out time line from initiation through to delivery of the product or service in mind.

Lastly, for this review, we can consider the concept of value claiming or value creating negotiations; the fundamental question here is how the two sides are set up to achieve an outcome which is mutually beneficial for both sides, thus creating value.

At present, the positioning and relationship level activity and development of trust being reported suggests that this is not an end point which is actually in view. Current behaviour and language used suggests this is setting up a value claiming negotiation, in which territory will be fought over fiercely, to the detriment of one party or the other. This is so significant that we will be returning to this whole subject shortly. For our own negotiations, we have to think about the whole outcome we are aiming to achieve, and make sure that our negotiation preparation and behaviour allows that outcome to surface.

The UK position is complicated greatly by a divide in the country in understanding what the outcome needs to be. All positions are available, and equally well defended by their supporters, although the ranges of outcomes, from a ‘small’ BREXIT to a fully-fledged ‘cut all ties’ approach are available, with the economists usefully being able to demonstrate that virtually any position has either equal benefit or peril.

We’ll continue to watch what is happening in this negotiation and look for areas to link back to our own commercially focused activities. Do get in touch if you’d like to share your own thoughts on Brexit negotiation strategy or you’d like to chat through you own negotiation challenges.

About Mark Hubbard

Director

30+ years experience in procurement and supplier management, in line and consulting roles
Previous employment: Positive Purchasing Ltd, SITA,
QP Group, BMW, SWWS, Rover
Education: BSc in Engineering Metallurgy, MBA University of Plymouth
CIPS: Member

Contact Mark Hubbard