The key to a beneficial Brexit deal clearly lies in negotiations, but has it become so unnecessarily complex that a deal is now an impossible task? With the EU refusing to budge over the Irish backstop and the UK unwilling to make any further concessions, is a no-deal the only plausible option?
As with many aspects of the business world, negotiations start with forging great relationships and having the skills to navigate and influence key stakeholders, particularly those who have the influence to scupper a deal-tricky atmosphere – whether this is on a shop floor, in a boardroom or in Brussels. And it’s not just about getting along with those you’re negotiating with. A critical first step in corporate business, and indeed in politics, is to sell the deal to key stakeholders with influence, particularly around signing off a deal and its’ implementation.
Failure to do so risks making concessions to get a deal, rather than trading value to gain something that has value to you (i.e. control over fishing waters), and we have seen this very situation unfurl as Theresa May has attempted to make her way through the murky Brexit waters.
The first step is to build the value of what you have to offer. In July 2018, May rushed in front of the British media and announced what was then referred to as the ‘Chequers Deal’, and for many MPs this was the first time they had heard the outlined deal. Knowing how convoluted and nuanced the deal would be, the PM should have invited key MPs, influencers and stakeholders – like Jacob Rees-Mogg and Hilary Benn – to view and discuss the deal before going public. Ensuring their buy-in to the potential negotiation outcomes and a likely deal would have avoided the constant embarrassment of May having her final deal voted down by the largest majority in Parliament’s history.
PMQs and the British media focused a lot on the fact that Corbyn objected to May’s deal but didn’t actually offer one himself, however, until the deal was immortalised at Chequers, May was just as aloof. There were plenty of soundbites and phrases about what she didn’t want, but nothing on what a deal would actually look like:
Her objective was too narrow, had little flexibility and a lack of understanding of what we could trade. It appeared to be a take it or leave it type of deal, with very little movement and latitude to trade – which is an essential in an effective negotiation strategy.
Freedom to trade with other countries and control our own borders are all well and good but this isn’t an objective. It didn’t consider what that would mean and what the UK would have to trade in order to get these things (such as the Single Market).
To build a flexible plan and negotiate effectively a negotiator should understand and be clear about the negotiation objectives. It should take into account the views and potential desirable outcomes of all the parties involved. In the case of Brexit this means the Government, the official opposition and other political parties, needed to gain support from the electorate, the British media and other EU leaders. It’s all too easy to lose sight of what you’re trying to achieve, and so an effective negotiator needs to remain focused.
The EU Referendum took place in June 2016 and Article 50 wasn’t triggered until March 2017. What were the Government doing in those nine months? Yes, the country changed Prime Minister but one would be forgiven for presuming that the Government were also getting ready for negotiations in this time.
What they should have been doing is planning for realistic alternative outcomes in case the EU negotiations didn’t go to plan – in this case, it has been no deal. We have heard time and time again that ‘no deal is better than a bad deal’ but, with the Bank of England, hundreds of businesses and the Government’s own reports saying that no deal is the worst possible outcome, it is clear that no deal isn’t a realistic fall-back that has been examined, evaluated, refined and accepted by the key stakeholders.
A fall-back is the potential alternative, or even better alternatives, to have at your disposal which can step up and replace the deal currently under discussions outside this negotiation.
You are only as powerful in negotiation as your fall-back strategy, and the more fall-backs you have is directly proportional to the negotiating power you can potentially harness. Sadly a ‘no deal’ fall-back certainly does not hold a lot of hope, particularly due to the lack of clarity surrounding the impact of such an alternative – a major rule of negotiation is to try to fully understand the consequences of an alternative and, where possible, try to improve your fall-backs and therefore improve your negotiating stance.
If you have no alternative to fall back on, and the other party knows it, you’re unlikely to get a good deal.
Those of you in the corporate world will know well enough, savvy buyers will always exert pressure at year end to get the best possible outcome! They undoubtedly know your share price depends upon achieving a certain level of sales. Making huge concessions will damage your reputation and set precedents for the future.
Smart negotiators are fully aware of the alternative possibilities outside this deal, and if they’re very strategic, will invest time and resources trying to improve the alternative outcomes while simultaneously negotiating the current one.
There have been a number of ‘experts’ and ‘analysts’ who have explained how EU negotiations work, stating that the EU will wait until the very last minute before offering a substantial concession, allowing the deal to pass. These ‘experts’ and ‘analysts’ have voiced the opinion that May and her team should hold their British nerve, watch the clock as it continues to run down, and wait for this miraculous concession.
It’s important that at this late stage heads remain calm and all decisions are considered carefully before conclusions are drawn – through careful and measured negotiation, fuelled with the essential preparation needed, we may well be able to get a good deal out of Brexit after all.