During almost two decades of business development deals and alliance formation, I’ve sat along side and across the table from word-class negotiators at companies like Microsoft, Oracle, Intel and Accenture. I’ve also made enough humbling mistakes to learn the hard, lasting way what helps and hinders successful negotiations.
Here are the key lessons I’ve learned.
Enter into negotiations with two outcomes in mind.
First, the one you shoot for; the big win. Second, the one you’re prepared to accept, and without which you’re prepared to walk away.
Answer the question How long is too long?
Know by when you must reach a letter of intent and a definitive agreement. If you don’t know, you aren’t ready to begin.
Little company/big company power dynamics can’t be ignored, but they don’t mean you’re powerless.
Counter an imbalance by creating more leverage. Play to your particular strengths.
Uncover and validate deal-breakers as early as possible.
Know what the other party cannot or will not do. Ignore these boundaries at your own risk.
‘Yes, and…’ is often more effective than ‘no.’
Rather than decline a point on principle, try offering what they want in exchange for more of what you need.
When you must concede a point, ask for something in return.
Whether you get it or not is another matter, but you may be pleasantly surprised.
It’s never just business.
People negotiate, not companies. Treat the other with the same respect you expect from them. A take-no-prisoners approach may win the day, but it won’t create lasting value.
Surprises are the enemy.
Introduce no major points into a definitive agreement that you haven’t already negotiated in a letter of intent.
The deal’s not done until you’re looking at their signature.
I’ve seen plenty go sideways in the time after a handshake and before a fully executed agreement. Don’t stop working the deal until it’s truly done.