Negotiate Like There IS a Tomorrow

Originally published by Forbes Business Council.

Many of us have engaged in negotiations that are so complex, contentious and soul-draining that our first thought afterward is, “I’m glad that’s over.” But unless you literally need nothing else from each other after you both say "yes," negotiations are rarely “over.” The success of “tomorrow” is intricately tied to the actions we take today.

I had the opportunity recently to participate in a conference attended by economists, management specialists and law professors working on understanding and modeling how parties negotiate and contract with each other. I was asked to frame the day using my now 20-year-old article in the Harvard Business Review, which one of my partners and I expanded into a book, The Point of the Deal: How to Negotiate When Yes is Not Enough. I was joined at the conference by a few other practitioners, all of whom brought practical experience and expertise to help shape the discussion.

The key point all of us made was this: If you need the other side to work with you after you sign the deal, then how you get your deals done matters—a lot. Some of the things you might be tempted to do to get the deal closed will come back and bite you during implementation.

Taking The Right Path To The "Yes"

Are there ever negotiations where you can do better for yourself by coercing, manipulating or lying? Sure—if you will never need the other side to exercise their expertise or good judgment, if the negotiation leverage will never shift away from you, and if your reputation doesn’t matter. If all of those things are true, then your conscience may be the only constraint on whatever tactics you think you can get away with.

But how often does that happen in real life?

If your negotiations are in sales, you have likely learned to tell how “expensive to serve” some customers will be by how well they communicate, whether they give you visibility into their future needs, or whether they’re loyal to the value you provide—even if you are not always the lowest cost. You also likely want repeat customers who will work with you to resolve issues and won't just complain or impose penalties.

The same is true on the other side, in procurement. You want your suppliers to deliver with quality and consistency, to utilize their best people and to prioritize you even if there is an unexpected shortage.

If, in either of these functions, you don't need any of those things (and I’m guessing that’s a rare occasion), then maybe you can afford to try using hardball or manipulation tactics — for example, tucking away “hidden costs,” goading them into overcommitting or pressuring them to do a deal that's “good today only.” But if the value you’ll realize from the deal depends on how well it’s implemented, then you have to get to "yes" in a way that paves the way for effective execution.

Negotiating A Solid Deal Before And After

If you want the deal to work after it’s signed, there are a few important things you should do during the negotiation:

1. Treat the deal as a means, not an end. The mindset you bring to the negotiation impacts what you do. As you prepare, develop strategies and respond to your counterpart’s offers, counters and other moves, ask yourself, "How do we realize actual value from what the deal is about, rather than just get a deal? If we don’t, what was the point?"
2. Consult broadly in order to implement effectively. Dealmakers like to keep skeptics and critics out of the room because they slow down the path to closing. But if those skeptics or critics have important information to share, or are necessary to implementation, then leaving them out until the deal is done kneecaps the deal before it's even out of the gate.
3. Use the negotiation to set patterns for problem-solving. People who act as if "what happens in the negotiation stays in the negotiation" have probably never tried to implement a complex deal. The negotiation is the first real example for the other party of what it's like to solve problems with you. Use it to set a precedent for how you will deal with each other when issues come up (because they inevitably will).
4. Discuss the nightmares so you can manage them. Instead of just passing marked-up documents back and forth trying to make the other side take on more risk and liability, talk about what might go wrong and how you can together or separately prevent it from going wrong, or at least mitigate its impact.
5. Don't let them overcommit. If they can't really deliver, then all the deal gives you is a right to have a dispute and perhaps collect some penalties. But is that the point of the deal? This means that if you really want a deal to be worthwhile, you have to "look out" on their behalf, too.
6. Run past the finish line. There's a lot of momentum as you wrap up a deal. Do your best to capture it by planning on a joint hand-off from the negotiators to the implementers. Those responsible for making it work need to hear the same story about how the deal came to be and what some of the trade-offs were. They must be aligned from the start.

As I mentioned, experts in both academia and business are continuing to analyze—and even quantify—how the way we get to a deal impacts how much value it actually delivers. It will be great to see how theory and practice come together to help us all do better, and I look forward to sharing future findings.

For more detail on our negotiation experience, visit our Strategic Negotiations page.