"Improve our negotiation skills” may not appear near the top of every CEO’s to-do list. But that’s a mistake. A huge chunk of what a company does – selling to customers, buying from suppliers, striking deals and alliances, and resolving legal disputes – depends on effective negotiation. Crush that, and you’ll make better and more profitable deals; mess it up, and your margins will suffer. Not only that, you’re at risk for losing key customers, missing out on crucial relationships and on priority access to innovation and supply. Simply put, a lack of negotiation savvy undermines the execution of your strategy.
Skeptical? In our 2021 McKinsey survey of more than 125 CEOs and CFOs of companies with revenues topping $1 billion, 96% of the executives said that world-class negotiators in their companies would add at least 3% to their EBIT performance. These business leaders see the bottom-line impact clearly. They understand the value of proactively setting up the organization to negotiate successfully.
Surprisingly, despite this level of potential impact, only 22% of those surveyed strongly agree that their organizations are currently capable of capturing this value.
