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What's the Real Point of the Deal?


What's the Real Point of the Deal?

Negotiating as if implementation matters is quite different from just “doing deals” for the sake of reaching agreements. It means doing some things that go against common wisdom. These things include the six steps below.

1. Recognize that the real purpose of the negotiation is not to sign a deal, but to accomplish something.

Often this means working backwards from what it is you are hoping to accomplish, to determine what it is you really need your counterpart to help you do. Understanding what you and they need to do differently after the deal is signed will help inform how you should negotiate.

2. Make sure that stakeholders (yours and theirs) are aligned so that implementation can proceed smoothly.

Typically, this requires consulting more, rather than less, broadly speaking. When implementation matters, you need to involve more stakeholders, on your side and theirs, than might be strictly necessary to reach agreement. Leaving the implementers out of the negotiation makes it more likely that they will be unwilling or unable to live up to commitments made on their behalf.

3. Recognize that the way you deal with each other during the negotiation will impact how you work together during implementation.

Whether we like it or not, the negotiation is the first, best example we have of what it is like to work together. We can use that opportunity to create a useful history of collaboration and problem solving, or we can waste it by posturing, withholding information, springing surprises, coercing, and damaging trust.

4. Confront the hard issues instead of repressing or minimizing them to get the deal signed.

It is easy to bury your head in the sand and avoid raising difficult topics during the negotiation. After all, you don’t want to give offense, and besides, those problems “might not happen.” But ignoring risk doesn’t make it less risky. Addressing it jointly, however, gives us more opportunities to prevent potential problems or to mitigate their impact.

5. Make sure your counterparts understand what they are agreeing to, and can actually deliver, rather than treating any ambiguity or potential difficulty in performing as “their problem”.

Some negotiators measure success by the number of commitments they can extract from their counterparts. But commitments they can’t deliver on are hardly worth the paper they are written on. Relying on enforcing penalties in the contract later doesn’t get you a successful event when you need it.

6. Pay attention to the transition from the negotiating table to execution.

The deal is not done when it’s signed. Use what you learned at the table to propel you and your team right to successful execution. A fast lap in a relay race is useless if you drop the baton instead of handing it off smoothly. If there needs to be hand-off to others who have to take what was negotiated and act on it, don’t leave it to chance. Make sure the hand-off happens, that both sides are involved, and that it covers not only the words but the intent of the agreement.

Doing these things is hard. It runs counter to a lot of incentives that have been built into the jobs of some negotiators. It flies in the face of many things our culture teaches us about deal making. It requires some different skills, and it may cost you some deals that you might have closed if you had disregarded this advice. But if you have something worth negotiating, and if implementation matters, then doing deals any other way is just plain irresponsible and foolish.

Source: Danny Ertel and Mark Gordon for Ivey Business Journal