Leadership in negotiations is critical. The leader is responsible for setting expectations and parameters for your side in regards to pricing, strategy, deadlines, process management and more. Failing to define this opens the door to many potential deal-ending difficulties, and is likely to erode your position on the way to closing.
There are many moving parts, not least of which is negotiation team selection. Who you choose to have on your side of the table—and more importantly, how they perform while they are there—is going to have a strong bearing on your chances of arriving at a favorable outcome. This consideration goes beyond picking those directly involved. You may need key technical or financial expertise in the wings to build your value case at critical junctures. We know that conferring with a keen financial team member behind the scenes can provide the insight to quickly defuse a potential customer’s objection, establish value and credibility, and keep the negotiation moving forward.
This is why it’s vital to include careful team selection as part of your pre-negotiation process in light of your objectives. What resources and talents will you need, and among those, who will be directly involved and who will take a support role? Having examined the deal closely, including the other side’s motivations and likely positions, you will see what mix of sales, services, finance, technology and legal support you will need to leverage. Most negotiations only involve a few people directly, but indirect involvement by team members with discrete fields of expertise is often necessary.
Once you have your team assembled, call an internal kickoff meeting where the rules of engagement and communication discipline are clearly outlined. Remember, a team divided is a costly team. Nothing can derail a negotiation process more quickly than undisciplined communication or a divided team. Cross-talk and side conversations during negotiations may muddy the value argument, degrade your ability to manage the agenda, and ultimately cost you credibility. A lead negotiator needs to know all the information that is being shared. If side conversations happen, they should be pre-planned within your team, including positions and the possible outcomes from them. Savvy negotiators on the other side know how to employ “divide and conquer” tactics to extract more favorable terms by creating parallel conversations with other members of your team. The result can be degradation of your deal, confusion or loss of face. Regardless of the amount of planning, surprises in deal-making are bound to happen. What is preventable are surprises that occur from your team.
This is why having a lead negotiator who defines the rules of engagement and serves as a single point of control for agenda management is so important. Have you set expectations for how to respond if the lead negotiator on the other side bypasses your lead negotiator to probe one of your junior team members for sensitive information or better terms? Who will control the drafting of documents and therefore help you control the conversation and manage the agenda? These are all things you must make clear before your team begins the process.
The level of detail on team selection can vary greatly depending on the size and complexity of the deal. But one thing never changes: Teamwork is critical, even if it’s just two people buying a car. In business, a carefully selected team that knows their objectives and can present a unified front will win more deals than the team that does not.