Most people avoid negotiations. It’s understandable considering that many times negotiations are centered around a conflict. But that’s not always the case and avoiding negotiations because you want to avoid conflict is like avoiding water because you don’t want to drown.
Negotiations are the lifeblood of business. They are the conversations you have with potential employees. They are the back and forth you have with a vendor. They are the explanations you provide and the feedback you get from your clients. They are the everyday conversations you have with your team members to motivate and lead them. Essentially, negotiations is just a fancy word for communication, collaboration, and compromise.
There’s nothing inherently adversarial about negotiations. There is no requirement that negotiations must be around a conflict. It’s two people (maybe more) that have their own wants and needs coming together to see if they can work together. Communicating about collaborations. Communicating about compromises. That’s it.
We often help our clients do negotiations, especially when it involves an important business deal. But that doesn’t mean lawyers have to be involved in every negotiation. In fact, we’d prefer that our clients build their own negotiation skills so that they can make better decisions for their businesses. Here are some suggestions for negotiating:
1. Think about what you want out of the relationship. If it’s a vendor, why are you hiring them? What are you wanting from them? What quality of work? When will it be delivered? If it’s an employee, what are you wanting him or her to do? If it’s a business partner, how are you wanting him or her to act? It’s important to give thought to what exactly you are wanting to receive. This may seem obvious but it’s surprising how many times people go into it without thinking about what they are really wanting out of it.
2. Decide what you’re willing to give to the relationship. There can be no “take” without some “give” in every relationship. Is it money to a vendor and if so, how much? Are you willing to give more time, perhaps to mentor an employee? Are you willing to adjust your behavior if requested by a business partner? Decide how much and what you are willing to give in order to get what you’re wanting in answer #1 above. Think about this before the negotiation starts. This helps you from sliding down too much.
3. Brainstorm what could go wrong. I know that you don’t want to do this step. No one wants to be “negative” in a relationship. I do get that. But it’s easier to try to anticipate what could go wrong and prepare for it than to try and solve the problem in the midst of heat and anger. It’s not that you think things WILL go wrong, it’s that if they happen to go wrong then there’s a plan in place. It reduces the risk in the relationship, which is what your business needs. There are enough risks out there that reducing some, where you can, only makes good business sense.
Once you’ve thought about what could go wrong (i.e. it’s not delivered, not completed, not quality work, doesn’t happen, costs more than anticipated, etc.) then you can provide for that in your agreement. “If you don’t ____, then ____ will happen” type of language. And remember that it goes both ways so expect that consequences will be there for you, too.
4. If it’s not a good enough deal for your business, walk away. This is the biggest mistake that I see. Clients feel they have no choice but to accept a bad deal. What they don’t realize, is that if it’s not a great deal on the face of it (assuming everything goes perfectly), then it’s a REALLY REALLY BAD deal if something goes wrong. You can’t just consider the potential upside without considering the potential downside. The downside can be catastrophic and nothing is worth that. So it’s important to remember that there’s always the option of walking away. You always have a choice. There will always be another solution, even if you don’t see it yet. Don’t get in that place of feeling pressured and subject to the emotions of fear and doubt. After all, negotiations are about seeing if you can work together, and sometimes you just can’t. That’s the way it is.
The bottom line is that negotiations can be a simple process. It’s not something to avoid. It’s to be expected and embraced as an opportunity to make better decisions for your business and your future. Set aside the thought that negotiations involve conflict. Instead, think of negotiations as opportunities to start a new relationship that will be beneficial for you both.