Raise your hand if you can handle one more thing on your plate right now. No one can. It seems like everyone spends their time putting out one fire after another. Today more than ever before, negotiations happen in pieces and on the fly. You might quickly shoot off an e-mail or join a web-conference at the last minute. This disjointed approach to negotiating will not change for the better. And that the bigger the deal, the more likely you will have 4 or more stakeholders involved making decisions (not including legal, of course).
Studies show that those who prepare close better deals more quickly. In fact, planning is the single-most-important thing you can do to influence the deal in your company’s favor. When you find a few minutes to prepare, what would be the most effective use of that time? Here are five key questions to ask of your stakeholders before you start any negotiation, or re-ask in a long, drawn out complex negotiation. Answering them will give your company the advantage.
- How will this agreement further your company’s business goals? Just keep in mind that different stakeholders might have different goals. Your role, as the contract professional, will be to limit the goals to one or two overarching goals for the company – not the stakeholder. You will be more powerful at the bargaining table if you are able to keep the conversations aligned with your company’s business goals. And, by keeping an eye on your company’s goals you will know more quickly how to communicate with your counterpart and your stakeholders.
- What’s motivating your company to want to do business with them, and what’s motivating them to want to do business with your company? Again, what is motivating one stakeholder might not be the same as what motivates another. Understand these motivations so those motivations don’t undermine your deal. List the factors that motivate your company as a whole, and then list the factors that motivate your counterpart’s organization.
Successful negotiators know how to leverage common ground into a financially lucrative deal. So keep motivations in mind when haggling over the issues that seem to separate you.
- Know the non-negotiables (everyone has them)! In other words, what must you absolutely have in order to close the deal? If something is a deal breaker, know this early on, and when the issue is discussed, address it openly and with certainty. This will also help you avoid spending time and energy talking about options that are not really an option.
- What issues can your company give a little on? These issues become your tradeoffs. Ask the (customer) stakeholders questions like, “Are there parts of a service or product that can be eliminated to reduce price?” or ask the (supplier) stakeholders “Can you work on a shortened deadline without risking quality?” Identify the items that you’re willing to trade off in exchange for something from the other company in return. Do not give something up without getting something of value in return. For a great, simple tradeoff matrix to help multiple stakeholders understand the company’s entire range of what to give and what to get, buy your copy of The Contract Professional’s Playbook. There is a whole chapter on making effective tradeoffs.
- Who are you talking to (at your counterpart)? Is the person you are negotiating with the decision-maker? Who else has a vested interest in the result of this deal? When negotiating with a non-decision-maker, or with one of many decision makers, you need a different objective. Your objective shifts to provide information for them to pass along, and to reassure them that your solution will meet all of their needs, even the needs of people who you are not talking to at the moment.
There are two main advantages to sketching out your responses to these questions. First, the process itself solidifies your thinking about what you believe would be a good deal for you and your company. Second, and possibly more important, the process will give you an immediate picture of what you do not know. What you do not know now can kill the deal. As you can see from these simple and straightforward questions, preparing for a negotiation doesn’t have to be onerous and time consuming.