As negotiators, we all believe that when we reach the end of a negotiation and have a deal that both sides can agree to, the deal is done. This is the time that we start to pack up our negotiation styles and negotiating techniques and move on to our next negotiation. However, there will be those times that things don’t turn out the way that we thought that they would. What can happen is that once the deal is done, there is always the possibility that the other side will demand a renegotiation of the deal. This can both surprise and anger you – why did they agree to deal if they now want to renegotiate it? When this happens, you need to keep your anger under control and follow the following guidelines on how to proceed with re-negotiating with the other side.
You Need To Find Ways To Avoid Becoming Hostile
When you get a demand for renegotiation, it’s tempting to respond with hostile, belligerent, or moralistic objections. Bad news — such responses are rarely effective, however, as the other side typically will have determined already that its vital interests require changes to the deal that was just negotiated. Only by dealing with those interests can the other side resolve their conflict.
Always Keep The Value of the Relationship In Mind
So just exactly why would you be willing to sit down and renegotiate a deal that you already worked out? It turns out that your willingness to renegotiate a contract typically corresponds to the value you attach to a potential future relationship with the other side. If the relationship is worth more than your potential 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 decide to not renegotiate and instead insist on your contractual rights to the point of resorting to litigation.
Use The Renegotiation To Create Value
When the other side demands renegotiation, you may expect that any advantage they gain will guarantee a loss for you. An unwilling participant in a renegotiation is likely to be unwilling to change their views – they will quibble over the smallest issues, voice recriminations, and generally to block proposed changes. Clearly, such talks are unlikely to lead to joint-gains. The challenge that both sides are facing is to create an atmosphere in which problem solving can take place. Even if you feel forced into a corner, approach renegotiation as an opportunity to raise new issues that will benefit both sides.
Make Sure That You Understand The Costs of Failure
As negotiators, we need to understand that if the renegotiation goes badly, then there is a very good chance that we 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 other as defendant and plaintiff. By doing this it 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 any alternatives to a successful negotiation.
Make Sure That Everyone Who Is Affected Is Involved
A successful renegotiation requires the participation of not only those who signed the original agreement but also of anyone who later gained an interest in the transaction, such as creditors, suppliers, labor unions, and government agencies.
If Needed, Consider Hiring A Mediator
Amid the stress and ill will often generated by a renegotiation, a mediator or other neutral third person may be required to help the parties overcome obstacles to a satisfactory renegotiated agreement. A mediator might help you out by designing and managing the negotiating process in a way that provides a maximum opportunity to create value for both sides, by assisting with communications in a way that makes positive results easier to achieve, and by suggesting substantive solutions to the problems that parties encounter during the course of their renegotiation.
What All Of This Means For You
The one thing that no negotiator wants to hear is that, after having completed a principled negotiation, the other side wants to renegotiate the deal. As you might expect, this can cause a negotiator to become angry and upset. However, the correct reaction needs to be to accept the fact that a renegotiation needs to occur. What negotiators really need is a set of guidelines to help them negotiate the renegotiation process.
Clearly one of the most important things that a negotiator needs is the ability to keep their anger at having to renegotiate an agreement in check. Becoming angry will not help anyone move towards reaching another deal. When you start to renegotiate a deal with the other side, you need to keep in mind the value of your relationship with them. This deal is only one deal, your relationship with them may go on for a much longer time. When you conduct a renegotiation, you don’t have to just go back over the same well worn territory. You can use the renegotiation to search for ways to create new value in the next deal that you’ll be trying to create. This time around, make sure that everyone who needs to be involved is sitting at the negotiating table. If you feel that you are not going to be able to reach an agreement with the other side this time around, then consider bringing in a mediator.
In this life, just because we reach a deal with the other side does not mean that it will be the deal that gets implemented. There will be times that the other side comes back to you and wants to renegotiate a deal. You need to be able to keep your emotions in check and view this renegotiation as an opportunity to get an even better deal. If you can follow the guidelines that we’ve discussed, then both sides should be able to come out of a renegotiation with a deal that they can live with.
– Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World Negotiating Skills™
Question For You: Do you think that you should ever let the other side renegotiate a deal more than once?
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What We’ll Be Talking About Next Time
There are many different types of negotiations that we can engage in. However, one of the most difficult is when we are called on to use our negotiation styles and negotiating techniques to negotiate a conflict. In these situations we are going to be dealing with parties that may be very emotional and they may not be open to using logic and reason to find a way to resolve the issues that are being discussed. When this happens, we are going to have to find ways to maintain both our power and our status in order to keep the negotiations moving in the correct direction. Our goal has to be to encourage the parties that are involved to cooperate with each other instead of competing with each other.