When Negotiations Go Sour

Previous: Things not left unsaid

If everything was perfect, you wouldn’t need a contract. Contracts are for when things go bad.

Sigh. If only I could impress on you how important this is. “Good faith” negotiations are filled with optimism and the excitement of building something. The paper gets signed. Then reality sets in. Underperformance, sliding delivery dates, misrepresentations, failure to meet specifications, dissolution of a venture. All of these happen and that’s when ugly sets in. Contracts need to foresee these circumstances and grant remedy to the “infringed” side or mechanisms for correction. The larger the contract, the more paper will be committed to spelling out the solutions for these circumstances. It’s often an unpleasant, exhausting and grinding experience which will expose both your and your interlocutor’s “real” sides. There are times where these items break the negotiations, but it’s better to end negotiations then enter into a relationship where the outcome is going to be failure.

Don’t lose your cool. Or lose your cool.

It’s about style. You may be the quiet type who can use a minute of silence to completely turn the terms of a negotiation around, or you may be the bang-on-the-table, threaten-to-pack-your-bags-and-leave kind. Some people can do both. These are tactics, you should never consider this to be strategy. Always assume that at some point negotiations will reach an impasse and break down. By this point you should have some feel for your opposite and enough EQ (the best negotiators have great empathetic abilities) to understand what works, and what is merely theatre.

Stuck? Move on.

Can’t reach a solution? Move on to the next points. Come back later, perhaps everyone’s perspective has changed. (If these stalemates occur more than a couple of times during negotiation, you may want to reconsider the whole deal.)

Give something for something.

Don’t just lower your offer, make a trade. Connect two dots, or think of it as balancing scales. In a sales contract the buyer may want you to lower your price for which you can probably trade off Quality Control issues due to the shortened lead time (I’m not saying make a crappy product, but you can be looser with QC on your end if you know you will have a longer period to deal with defects in product after delivery).

Lead, don’t follow.

I debated whether to include this as a strategic point. It’s definitely an acceptable negotiating tactic to speak first and dominate the negotiations, but that’s a tactic. Strategically it’s correct to lead in order to set or manage expectations during the negotiations. If you’re starting a new job and expecting 90 Thousand, but if the employer speaks first and offers you 60, you’ll never even get close to 90. It also means you didn’t do your homework on the company and similar positions.

One person speaks.

There is a good cop/bad cop methodology in negotiations. You are negotiating with two negotiators from Acme Corp, W. E. Coyote and R. Runner. Coyote always tried to act clever and leverage you into a corner, while Runner then comes along and saves the day with an offer that seems to undercut his colleague’s difficult position. Day saved!

It’s an act!

But it’s a good one, and used by pros with experience.

We are not pros with experience. Instead, the most senior person on the team negotiates the points, but he can ask another member of the team with specific experience to negotiate certain items (these can happen simultaneously in different rooms), with prior preparation and agreement on guidelines before the sessions. In any event, only one person will speak. If your number 2 is asked a direct question by the other team he should answer factually, but defer the negotiation to you (this is a type of divide and conquer tactic).

Speak in absolutes, not ranges.

“How much are you looking to make?” “Between 50 and 70 Thousand.”

You’ll get 50 Thousand.

It’s never personal.

(Unless it is.) Always keep your objectives in sight, no matter what means the other side uses to distract or confuse you. One egregious tactic is the use of ad hominem attacks. It’s often a weapon of last resort, or shows the character flaws of the person sitting across from you.

At the end of the negotiations the two sides will most likely need to work together, accruing bad blood at an early stage will foreshadow what will probably be the outcome of negotiations if not the working relationship – a quick end.

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