Issue 4.11 | September-October 2014

In this Article: progress is built on negotiation as much as it is on innovation. The first in a two-part series on negotiation.

by Jonathan Wilson

All human progress is the result of innovation negotiation. But it is innovation that gains our most avid attention. Our generation idolizes the great innovators, and many an emerging leader longs to emulate the success of Steve Jobs, Mark Zuckerberg, Elon Musk and, now, Tim Cook and Jony Ives. Together, Ives and Jobs in particular represent to us the zenith of innovation, where engineering precision and aesthetic purity combine in such a humane way – extraordinarily useful but, also, simple and elegant.

The jury that is the market is now watching to see if the Apple Watch, announced last month, continues Apple’s tradition of, not necessarily initiating innovation, but certainly doing a very thorough job of completing it: in other words, to radically, often comprehensively, improve upon and then substantiate nascent products, often within robust, corresponding ecosystems.

As most such stories do, Businessweek’s September 18 cover story focuses on Apple CEO Tim Cook’s distinctive tactics to ensure the company maintains its innovative edge. It would seem he is proving himself as a worthy successor to Jobs, able to continue Apple’s tradition of late-stage innovation. But within this story is buried another crucial reality that undergirds Apple’s innovation. “Tim’s a tough negotiator,” claims Glenn Lurie, CEO of AT&T Mobility.

Negotiation for Innovation

The ingenuity we prize gives innovation its often glamorous sheen, but innovation is a not just a brain-driven process, it is a social process. It arises out of multiple human interactions, and each of those interactions is, to a small or great degree, an act of negotiation. Successful innovation is contingent upon successful negotiation.

To bring us the Apple Watch, along with continuing refinements to existing Apple products, negotiation has remained a constant and dominating feature of Apple’s cycle of innovation:

  • It takes negotiation to change a culture. For the past two years, Tim Cook has surely and steadily re-crafted the operating culture of Apple, moving largely away from tiny Skunk Works silos towards large collaborative teams nearly oblivious to each other’s functions, so focused are they on customer experience. To do so will have required constant, sustained negotiation – with his co-leaders, with team leads, with staff in general.
  • It takes negotiation to gain the contribution of excellent people. In pursuit of its Watch, Apple’s obsession with aesthetic and functional purity led to the recruitment of the revered watch expert, Dominique Fléchon, as an advisor, and the permanent hiring of TAG Heuer’s Vice President of Sales, Patrick Pruniaux. Each act of recruitment is the result of a negotiation process.
  • It takes negotiation to gain valuable partners and resources. Separately, Apple has recruited medical experts to help it develop its health apps (prominent in the Apple Watch). Probably for industry insight and not for technology, it acquired Beats, along with founders Dr. Dre and Jimmy Iovine, a negotiation with a $3 billion expense tag.
  • It takes negotiation to deliver value to customers. Apple is routinely engaged in negotiations with vendors, product and service partners such as IBM (a one-time arch rival), operational partners in its supply chain, government regulators, and carriers such as AT & T and Rogers. These negotiations cover a wide range of value: price, cost, margin, time, intellectual property, geographical coverage, and on and on.

Apple has excelled at creating ecosystems – the Apple Watch will join its powerful App Store and iTunes ecosystem. Creating and sustaining this kind of technological ecosystem is, as we see from the above list, entirely dependent on the most powerful ecosystem of all: the social kind. Innovation is social. It is by people, for people. That’s what makes it both magic and messy. Negotiation is a key social mechanism that enables both the creativity and delivery of innovation.

The Incalculable Value of Negotiation

Many of us view negotiation quite negatively. To some it is merely a dull, perhaps energy-sapping necessity on the road to something more interesting, but for many it is much worse: a distasteful and intimidating close cousin of mortal combat. For while we know that people can help us achieve our desired outcome, we’ve had too much exposure to the pain of people hindering what we think constitutes progress. Perhaps this is why too often companies assign the worst possible individuals to negotiation: snake-oil salesmen and bullies.

At its best, however, negotiation is nothing more (or less!) than the social process of gaining willing participation in the creation and delivery of value. Even more, negotiation leads to an enriched value proposition.

  • For one, a major component of negotiation is not talking, as is often assumed, but listening. This opens up enormous opportunity to learn. As your company engages with staff, vendors, partners, intermediaries, distributors, and customers – in short, with every dimension of the social ecosystem influencing the success of your innovation – constructive negotiation will yield crucial, value-enhancing (and error-correcting and disaster-pre-empting) insight.
  • For another, negotiation is the very mechanism by which the stakeholders of the ecosystem will take ownership of the innovation and support its entry into the market. A strong social foundation ensures that the value of your innovation is given a fair shake in a tough marketplace.
  • Finally, ongoing, persistent negotiation is the means by which implementation is not only enabled, but broad-reaching in impact, as stakeholders are continuously engaged to believe in and utilize the innovation. Negotiation helps the value of your innovation to develop traction and longevity.

The attentive reader will think, “this sounds a lot like collaboration,” and you are right. Negotiation is the pathway to collaboration; and collaboration optimizes value creation, because it pulls into working dialogue and cooperation diverse (and seemingly competing) viewpoints, skills, insights and interests. This is where the magic happens, the innovation that we dream of.

Negotiation is not the art of cunning or trickery. It is not oppositional. It is not the work of outwitting someone to the point where they are doing what you want, it is the art of gaining a willing co-labourer in the task of creating something far better than what either of you could have imagined. Like an Apple Watch.

Another leadership insight from

Coming Next: The next issue of Leadership by Soul will describe four key stages of negotiation that move a crucial business relationship from a condition of alienation to collaboration that creates and enhances value.

Related Articles:

Collaboration and the Value of Losing Control

Just Collaborate: Overcome Three Barriers to Strategy Execution

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