Bouncing Back

I don't know if I've ever mentioned the field I was in throughout my corporate career. I worked in the Aerospace and Software Development fields, and I was responsible for negotiating, documenting, and overseeing performance of both supplier and customer contract relationships. This position was one part legal professional (understanding and drafting detailed legal provisions in major contracts) and one part operational manager (assuring accurate specifications and schedules were contracted for and delivered by the other party). [Note: I was not a lawyer; rather, I was a trained contracts professional who sought legal review for my completed contract drafts after most details were ironed out.]



By the end of my Contracts Management career (before my happy decision to work from home on a full-time basis), I was negotiating and overseeing contracts for satellite and telecom systems worth hundreds of millions of dollars. Needless to say, I've conducted my share of high-dollar, high-risk and high-stakes negotiations. Based on this experience, you probably think I believe in wrestling the other side to the ground until they've given up every last penny and they're screaming UNCLE! In fact, that would be my definition of a very poor negotiated outcome. In such a negotiation, my side might have indeed come out a few pennies or a few dollars ahead of our objectives, but we would also have created a win-lose environment with our future business partner (whether a supplier, customer, investor, etc.). In that situation, what might the future of the business transaction look like...

What if the material you're supposed to supply to the transaction ships a few days late or has quality control issues -- will your partner be understanding or will large cost and schedule overrun notices begin flowing into your inbox?...

Or, what will happen when payment or delivery is due to you, but the other side has legitimate problems with the performance of their obligations -- will they bend over backwards to meet their commitment to you or just plod along with their normal bureaucracy?...

Here's another thought, did you really read every word of fine print in the contract, statement of work, specifications and delivery schedules? -- if there's any room for interpretation (and there always is), will your partnership deteriorate into the lawyers arguing over the legally applicable but generally irrelevant fine points?

Perhaps, then, a win-lose approach to negotiations isn't the best long-term strategy. I have always believed in seeking a mutually successful or win-win outcome where both sides come away with parts of the deal they feel really excited about. Does this sound a little wimpy to some of you? Well, my negotiation strategies were never based on leaving money on the table or going easy on the other side. There is a much more clever and sophisticated approach to bringing a win-win solution to your negotiation. Here's what you do:

1. Factfind: Spend as much time as you possibly can before and during the negotiations trying to determine what aspects of the deal are important to your opponent. Look outside of the obvious price parameters and consider issues like payments (more cash, earlier in the deal), public relations (issuing joint press releases to boost reputations), customer introductions, R&D sharing and collaboration, relaxing unimportant aspects of your specification, schedule or statement of work, etc.

2. Conduct Initial Negotiations: Go through your inital rounds of negotiations to clear out the minor issues and get a better idea of the actual price range that is in play.

3. Ask Your Opponent What They Need: You're now close to completing the negotiations, and you're down to the hard sticking points for both sides. You've done your homework, and you know most of what's important to them, but you still may not know everything. So ask them this question: "What does my company have that your company would find useful? Let's put any ideas on the table."

You may be shocked at how well this strategy works, and what they'll tell you is of value to them. There are often factors at play that you would have never dreamed of! On many ocassions, I have been able to offer up items of nominal value or cost impact to my company and yet were valuable enough to my opponent to close the deal on my terms. The results? My management was happy with the terms, the other side was happy with the collateral items added to the deal, the relationship would begin on a very strong and positive note, and our downstream ability to resolve those inevitable performance issues was immeasurably enhanced.