If a deal goes wrong those involved are likely find themselves in conflict, but an optimistic approach can resolve a problem and preserve a business relationship
All too often in commercial agreements, something goes wrong. Typical examples are supply issues, poor service levels, competitor activity increasing pressure, the people changing or a new strategy being launched (payment term changes or price changes).
When these changes occur our instinct is to dive into a problem-solving exercise. However, focusing on the problem can result in conflict as the only solution is a compromise (with loss of value to both parties). If a problem of this nature needs solving then the level of dependency and relationship is either long-term, with high levels of trust and openness, or is new, and long-term opportunities have been identified. The primary building block of joint problem solving is building trust, and you get trust by giving trust.
The urge is always to look at your own costs and risks. This will result in distrust. Alternatively, the other party focuses on their own goals and if we give too much trust they will exploit it. This dilemma is usually what stops parties truly working together.
The skilled negotiator recognises one party's problem is the other party's opportunity. If they are able to creatively look at ways they can trade other issues against the problem, then they can expand the total value of the commercial agreement for both parties.
Often, when faced with problems, people can become defensive and start to impose sanctions: "If you don't do this... then we won't do that." This negative mindset will strangle negotiation and eliminates options. Taking a negative, competitive attitude to a problem within negotiation will lead to a breakdown in any relationship and is more likely to end in deadlock.
Instead, try to ask: "How can I make the other person's business more profitable as a means of getting what I want?" This requires a mindset change from both parties. We must look at all the issues and think about what variables we can introduce to add value and keep the relationship moving in a positive direction.
We need to adopt high levels of diplomacy and trust while ensuring we embrace a can-do mindset. We should employ ransoms such as "If you can... then we will." These 'carrots' can be used to develop value without giving anything away for free, and ensure trading moves in a positive manner.
Joint problem solving takes two willing parties, and the depth of relationship required usually takes months, or years, to build. Approach problems with optimism and recognise the opportunity that presents itself. The only way to be creative prior to any problem-solving is to ensure that you have properly prepared.n
Graham Botwright is a partner with The Gap Partnership specialising in
commercial negotiation consultancy and development solutions.