Korn Ferry

Brexit Bargaining

The negotiations have already begun in a conference room in Brussels, and the outcome will reshape the world's fifth biggest economy and its relationship with all of Europe for years to come. 

We are talking, of course, about Brexit, where leaders from the United Kingdom and the European Union began their formal divorce proceedings this week. The talks themselves may last for up to two years, when the division will actually begin. But for now, all eyes are on Prime Minister Theresa May and her ability to extract favorable terms at a time when recent elections weaken her party's position. It is a position many business leaders find themselves in for reasons that may be related far more to competition, the economy and technology than politics. 

"She does face the same things as most leaders, and the parallels are quite interesting,” says Khoi Tu, senior client partner Korn Ferry Hay Group in the U.K. There’s plenty to be learned from the political ongoings, he says.  

Already, the UK's Conservative party, with no overall majority following recently called elections in the country, seems to be backing down from its formerly tough stance. The government had wanted to conduct two sets of parallel negotiations. One determining how much Britain would pay to leave the bloc, a so-called divorce settlement. The other, determining what will be Britain’s future trading relationship with the EU, if any. Now it looks like the negotiations will start with the determination of how much cash the UK needs to pay before discussions on trade can start.

That is just one of many contentious issues that will surround the Brexit talks. But according to Tu, while the scale is different, there are similarities in the talks with which business chiefs may resonate.

The key lessons of leadership, he says, can be reduced to an acronym P-A-T-H. The first thing is Purpose. A leader must outline a purpose for an organization that other people find compelling and therefore what to join. For instance, Tesla founder Elon Musk focused on changing the world in many ways, including the way cars are fueled. "Working for Elon Musk is clearly intense, demanding and relentless, but he has a big idea,” says Tu. As a result, people want to follow him. The UK must communicate a compelling vision for an outcome of the Brexit negotiations. 

Next, comes Agility. "Leaders must have the ability to switch gears and do so when the market signals it is necessary,” says Tu. That agility can help in situations like the Brexit negotiations where it isn’t even clear what the form of the discussions will take. The leader will need the ability to react in real time to what may be fluid and fast changing events. Or put another way, be prepared to negotiate a different topic than the one you expected.

Then there is Teamwork. “Really good business leaders can maximize diversity of thought,” says Tu. “They manage conflict as opposed to avoiding conflict.” He explains that “creative abrasion” in a team can help spark new and better ideas. “You want to feed off that but not burn the house down,” he says. Better still, if correctly done then all stakeholders get included in the team.  

And finally there is Humanity. Like all politicians, May faces the challenge of being and staying a popular figure, of showing humanity. Leaders, Tu says, need to show that they are living breathing people who share the same hopes and desires of the people they are working with and working for. Such resonance with people can increase power when negotiating because your team will have your back.

Contributors

  • Khoi Tu

    Senior Client Partner

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