Negotiators need to know how to bring a deal back from the dead

How Can A Negotiator Save A Deal From Collapsing?

Negotiators need to know how to bring a deal back from the dead
Negotiators need to know how to bring a deal back from the dead
Image Credit: Photo by Micah Williams on Unsplash

So just exactly when is a negotiation over? I’m pretty sure that by now you know that this is a loaded question – a negotiation is never over. Even after we’ve been able to use our negotiation styles and negotiating techniques to reach a deal with the other side, we still need to make sure that they will keep their word and do what they promised that they would do. However, things can get just a little bit trickier if after the deal has been signed the other side comes back to you. The reason that they’ve come back is because they want a renegotiation of the deal. What’s a negotiator to do now?

Avoid Hostility

Avoiding feeling hostile towards the other side when they tell you that they want to make changes to what you have worked so hard to put in place is very hard to do. However, what you need to realize is that this kind of response does nothing to help you in most cases. The reason that it’s not going to do anything for you is because the other side has already determined that its vital interests require changes to the deal. Only by dealing with those interests are you going to be able to resolve their conflict.

Determine How Valuable This Relationship Is To You

Just because the other side wants to renegotiate the agreement with you does not necessarily mean that you have to renegotiate it. What you are going to have to before agreeing to do so is to determine just how valuable your relationship with the other side is to you. If the relationship is worth more than your claim for breach of contract, you ordinarily will be willing to engage in renegotiation. If, on the other hand, you conclude that your claim is worth more than the benefits from continuing a relationship, you may insist on going to court.

A key point for you to keep in mind is that it is entirely possible that you may not be able to accurately evaluate the worth of a claim or the value of a renegotiated contract without first engaging in discussions with the other side. Remember that satisfaction of a claim by going to court is almost always a lengthy and expensive process, this could be a further motivation to choosing to renegotiate.

Create Value For You In The Renegotiation

When your counterpart demands renegotiation, you may expect that any advantage he gains will mean that there has been a loss for you. An unwilling participant in a renegotiation is likely to be upset – they will fight over the smallest issues, voice recriminations, and generally to block proposed changes. Naturally, such talks are unlikely to lead to joint-gains. The challenge for both sides is to create an atmosphere in which problem solving can take place. Approach a renegotiation as an opportunity to raise new issues that will benefit you.

Understand The Costs of Failure

So what happens if you can’t renegotiate a deal with the other side? The answer is fairly simple – both of you are going to end up in court. As you approach the renegotiation process, you and the other side must carefully assess the risks of later facing each in court. Doing so will allow you to accurately evaluate the worth of various proposals. Notably, the side demanding renegotiation is likely to undervalue the risks and costs of litigation, while the party facing the demand will probably overvalue a lawsuit’s benefits. Therefore, it’s important for each side to ensure that the other has a realistic evaluation of alternatives to a successful negotiation.

Make Sure You Involve All Necessary Parties

If the other side decides that they want to renegotiate the deal, this time around there is a very good chance that there are going to be a lot more people involved. This time around you are going to have to include not only those who signed the original agreement but also of those who later gained an interest in the transaction. In many cases this can include people such as labor unions, creditors, suppliers, and government agencies.

Make Sure That You Design The Right Process

As a negotiator you need to realize that when you become engaged in a renegotiation emotions are going to be running high. Choosing the appropriate renegotiation process may help to keep things moving along. Sometimes the way that we describe the renegotiation may influence its success. Rather than using the label “renegotiation,” which conjures up negative images of a drastically rewritten contract, you might want to call the process a “review,” or “restructuring”.

Bring In A Mediator

Since there can be so much emotion during a renegotiation, it might make sense to bring in a mediator or other neutral third person to help both sides overcome any obstacles to a renegotiated agreement. A mediator might contribute by designing and managing the process in a way that provides a maximum opportunity to create value for both sides, they may assist with communications in a way that facilitates positive results, and by they may suggest substantive solutions to the problems that parties encounter during the course of their renegotiation.

What All Of This Means For You

We’d all like to think that once we had reached a deal with the other side of the table then our work would be done. It turns out that in the real world, things don’t always work out this way. In fact, after we’ve reached a deal with the other side, it is possible that they’ll not be happy with the deal and will come back to us wanting to renegotiate the deal. If this happens, then we’ve got some decisions that we’re going to have to make.

It can be all too easy for a negotiator to view a request for renegotiation with hostility. We need to be able to take a step back and evaluate this as another opportunity. Before you start any renegotiation you need to make sure that the effort is worth it to you – is this relationship something that you value? If you do decide to renegotiate, then you are going to have to find ways to make sure that you can get value out of the new principled negotiation. There is always the possibility that you won’t be able to reach a new agreement with the other side. Make sure that you know the true cost if this happens. Every renegotiation will involve more people than the original negotiation did. Make sure that you choose the right process and use the right words when you are renegotiating. If you need to, don’t be afraid to bring in a mediator in order to keep things on track.

No deal is ever done until it has been fully implemented. There will always be situations in which the other side changes their mind after the negotiation is over and done with. If they tell you that they want to renegotiate the deal that you worked so hard to create, take this as an opportunity to perhaps get an even better deal for your side. Take the time to talk to the other side and see if there is some common ground for a new deal. Every negotiator is willing to do some more talking with the other side if it is going to result in an even better deal.

– Dr. Jim Anderson Blue Elephant Consulting –
Your Source For Real World Negotiating Skills™

Question For You: Do you think that a request to renegotiate a deal has to be made within a certain amount of time after the original deal is signed?

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What We’ll Be Talking About Next Time

When we are involved in a negotiation that involves prices, we need to keep in mind that no matter what negotiation styles or negotiating techniques are being used, it’s the first number that either side presets that will play an important determining factor in how the rest of the negotiation goes. It turns out that opening offers have a strong effect on price negotiations. What happens is that the first offer typically serves as an anchor that strongly influences any discussions that follows. Where things can start to get crazy is when you realize that even random numbers can have a dramatic impact on people’s judgments and decisions. What all of this means is that negotiators need to know how to anchor prices during a negotiation.

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