How to negotiate effectively
towards a practical agreement and
a sustainable business relationship
....saving time, money, and stress

I always encourage my clients to discuss, negotiate, and write a business agreement, rather than just accepting a standard draft or verbal promises. This is particularly relevant if the parties will have an ongoing relationship.

Business Executives sometimes seem to shy away from negotiations. Some think a negotiation is a confrontation that will harm the relationship. Others think it's simply better to get on with the business and only worry about things when they go wrong. Even when interacting some don't speak up as they feel dependent on the other party.

However, open and honest negotiations are in both parties' interest as they will allow both parties to:

Explain and learn what's important for each party;

Find and define common ground;

Practice together how to deal with differences, both the talking and listening aspects, preventing or resolving escalated conflict.

One of my clients had terminated a supplier relationship for the same service twice before they realised their own lack of openness and clarity contributed heavily to both relationships failing. Of course it is both parties' responsibility to query and explain.

I have found the following 5 practical negotiation checkpoints to be critical. Applying these during your negotiations will bring both parties closer together, in the interest of a successful business relationship.

  1.   Understand purpose

Make sure you understand everything that is written in the draft contract and its practical use. If you don't fully comprehend why something is written: ask! If the other party can't convince you of its practical use, suggest it is removed and see how they react. This will clarify the purpose of clauses for all.

  2.   Express expectations

Ensure your expectations for the relationship are included in the contract; deliverables as well as process and behaviour. Deliverables need to be defined in relation to business requirements and not a translated entity. You cannot expect the other party to satisfy you if you don't tell them what you need and expect. Relevant documents can become contract appendices. Everything that is talked about but not included in the contract can (and often will) be forgotten, especially when key contact people move on.

  3.   Anticipate issues

Use your experience to play 'what if' scenarios and include them in the contract. Ensure consequences and remedy strategies of non-performance are included. It is a lot easier to talk about these when they are not yet reality.

  4.   Balance interests realistically

Ensure the contract is balanced so that both parties feel they are winners and look forward to making the relationship a success. If you feel the contract is not completely fair to both sides, find out what is making you uneasy and address it. Be realistic about the other side as perfection is rare; rate your contract partner relative to others. Be aware of becoming too demanding as this requires exceptional sensitivity and communication skills, and risks the other party giving in only to focus on minimising their losses rather than helping both parties to gain.

  5.   Communicate inclusively

Foster open communications during (and following) negotiations with both entire teams to ensure the spirit and language of the contract reflect what you expect on an operational level, and there are no surprises for anyone.

Effective negotiations will cause some relationships to be terminated early on. That is far better and cheaper than suffering from escalated issues later. Relationships that survive effective negotiations have a level of maturity and robustness that help make the joint experience that follows more successful and enjoyable for all involved.

  Related Plutonic Zoo services

Plutonic Zoo is a consultancy organisation that provides impartial professional services to maximise the business value created from investments in information and technology.

Victor facilitates negotiation workshops towards practical agreements and sustainable business relationships. Workshops are customised for each group's unique experience, needs and circumstances.

If you are interested in discussing your situation please contact our Managing Director Victor Konijn for a no-obligation confidential discussion. Victor can be contacted on 1 300 654 523 (+61 2 9401 5516) or .

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