• Tweet
• 1 Comment
•  
• 

Here are some concrete guidelines for fostering a strong relationship between negotiating partners drawn from The Global Negotiator: Making, Managing, and Mending Deals Around the World in the 21st Century:

1. Start Forming a Relationship Before You Sign the Contract

While negotiators must necessarily be concerned about a deal’s contractual provisions, they should also lay a solid foundation for a business relationship from the very start of talks.

Unfortunately, many dealmakers do not.

In one survey, Jeswald Salacuse asked American executives whether their primary negotiation goal was to reach a contract or to start a relationship.

Fifty-four percent were focused on hammering out a contract. Their chances for a successful deal would be far better if they thought of themselves as relationship negotiators, not just contract makers.

Before sitting down at the bargaining table, you might also consider hiring a consultant to develop and guide a program of relationship-building activities that could include joint workshops, get-acquainted sessions, and retreats for executives from both sides.

2. Select the Right People to Manage the Relationship

Launching a business relationship requires diplomacy as well as technical expertise. To lay a solid foundation for the relationship, each side should select people with the appropriate interpersonal skills, knowledge, and sensitivity.

Indeed, these qualities may be more important in the long run than the technical knowledge of engineering, marketing, or finance, Just as diplomats must be vetted by the receiving state, parties to alliances might agree that executives appointed to manage the relationship should receive the approval of the other side.

3. Closely Involve Negotiators in Its Implementation

Too often, companies signing a long-term contract assume that a solid working relationship will develop automatically. For example, General Motors negotiated a series of joint ventures that ran into trouble once GM and its international partners began working together.

Why?

Because the teams that negotiated the deal were not involved in implementing it. After GM negotiators formed a joint-venture, they’d move on to the next deal, leaving other executives with the task of figuring out how to make it work.

During negotiations, both sides gain an enormous amount of information about each other and the deal. In the process, they may very well form a positive relationship. To mobilise these valuable assets, the negotiators themselves should play a role in implementing the transaction, at least from the beginning.

4. Work to Keep Leaders Involved and Interested in the Relationship

Many deals are formed with the active involvement of the companies’ leaders, whose personal relationship becomes a foundation for the relationship between the two organizations. After the contract is signed, it’s important to find ways to maintain management’s visible interest.

Try scheduling periodic meetings for leaders to review together the evolution of the relationship between their companies.

For example, your deal to produce imaging devices might call for semiannual meetins between the heads of your two firms, alternating between San Jose and Boston.

5. Educate Company Personnel About the Deal

Don’t assume that others in your firm will become as enthusiastic and knowledgeable about the deal as negotiators are. Indeed, others may view involvement with another company – whose culture and business practices they may not understand – as a burden, or even a threat.

Inevitably, those implementing any deal will encounter difficulties, such as delivery delays, failed technologies, and miscommunication.

Both sides will be better able to overcome these problems if their employees know and trust one another than if they view the other side with suspicion and hostility.

To overcome resistance within their organization, deal advocates should plan educational efforts that bring employees from the two firms together, such as meetings, retreats, seminars, site visits, and jointly produced memorandums and newsletters.

Remember: organizational relationships begin with personal relationships.

6. Meticulously Plan and Oversee Initial Joint Activities

Just as opening moves in a negotiation can either facilitate or hinder the steps that follow, initial joint activities between contractual partners can either ease or obstruct the creation of a productive working relationship.

Consequently, the two sides should carefully define and supervise the first moves in their relationship.

Don’t assume that everything will flow smoothly from the contract terms.

It may be better to start small, with actions that are sure to succeed, before moving on to more ambitious projects.

Before beginning the full-scale production of the imaging devices, for example, you would certainly first want to make and test a prototype.

7. Agree on a Schedule of Meetings to Review Progress

Although a business relationship is organic and evolves over time, this doesn’t mean that the two sides should not consciously shape it. To guide  the evolution of a sound relationship, both companies should adhere rigorously to a regular schedule of meetings, rather than just meeting from “time to time” or “when the need arises.”

• Tweet
• 1 Comment
•  
•