Whether before or after a contract is signed, business negotiators are often caught off guard by bad news that threatens the viability of a deal or partnership. When deciding how to negotiate a business agreement, organizations benefit from shifting their mindset—from simply trying to close the deal to carefully considering how the partnership or other outcomes are likely to unfold over the long term.
For readers looking for immediate guidance, here is the core takeaway:
Successful business negotiators don’t just focus on signing a deal—they design agreements that can survive future uncertainty, market shifts, and unexpected risks.
Recent business history shows how quickly optimism around deals can shift.
When Big Deals Raise Second Thoughts
In late 2016 and early 2017, news stories abounded about companies reconsidering planned mega-mergers.
Abbott Laboratories began searching for ways to exit its acquisition of medical test maker Alere after investigations raised serious concerns about the target company. Meanwhile, Verizon reconsidered its acquisition of Yahoo! following disclosure of massive data breaches affecting billions of user accounts.
Such cases remind negotiators that risks often surface after agreements are signed—or just before closing—when backing out becomes costly and contentious.
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Discover step-by-step techniques for avoiding common business negotiation pitfalls when you download a copy of the FREE special report, Business Negotiation Strategies: How to Negotiate Better Business Deals, from the Program on Negotiation at Harvard Law School.
Why Negotiators Miss Predictable Risks
In their influential book Predictable Surprises: The Disasters You Should Have Seen Coming, Max H. Bazerman and Michael Watkins argue that individuals and organizations often fail to act on risks that are visible in advance. Cognitive, organizational, and political barriers prevent decision makers from recognizing looming trouble.
A key culprit in negotiation is short-term thinking.
Research consistently shows that decision makers tend to discount future consequences while focusing on immediate gains. Leaders under pressure to deliver quarterly performance, for example, may rush toward mergers or partnerships that promise quick relief but carry long-term integration risks.
The result? Deals that look promising in the moment later unravel.
Three Guidelines to Avoid Being “Predictably Surprised”
So how can negotiators bring long-term concerns to the bargaining table? Here are three practical guidelines for those seeking better business negotiation outcomes.
How can business negotiators avoid being predictably surprised and bring long-term concerns to the bargaining table? Here are three guidelines for those looking for new guidance on how to negotiate a business deal:
1. Add long-term considerations to the conversation. You may understand the value of discussing what will happen during the implementation stage of a business contract, but you may have to convince leaders in your organization and your counterparts across the table to give future concerns the same attention. If short-term concerns—such as a current financial slump—are looming large, try to counter them through your negotiation behavior. Vividly portray the potential risks of rushing into an ill-thought-out deal, such as a broken agreement, bankruptcy, and so on. Seek unbiased advice from financial and legal experts about the risks of a deal. In addition, try to set deadlines for your negotiation that will give all parties plenty of time to weigh the pros and cons of a deal.
2. Take time to build rapport. The more time you spend getting to understand your counterparts and their organizations, the better equipped you will be to assess whether your partnership is a good idea or not. Even if you get along well with those seated across the table, seek out information about the organization’s culture and share information about your own. What values and norms are employees of both firms encouraged to ascribe to? How are employees selected, trained, and assessed? Spend time visiting one another’s headquarters and speaking to employees in different areas. If you are thinking of merging, discuss how your workers would be combined and what challenges you might face. Even if you are hammering out a simpler deal, such as a purchasing agreement, it pays to know whom you’ll be working with.
3. Prepare for adverse circumstances. Another common cognitive bias that exacerbates short-term thinking is the tendency to be overly optimistic about the future. Our unrealistic expectations about how a deal will play out lead us to search only for information that confirms our existing views and overlook information that might challenge them. This error explains why so many new businesses quickly fail. Negotiators need to envision not only best-case but also worst-case scenarios, including the possibility that conflicts will arise during the course of their partnership. You may be able to head off conflicts through two deal-design First, agree in advance to regular check-in meetings throughout the life of your contract to address any disagreements, dissatisfaction, or misunderstandings that arise. Second, prepare to handle such conflicts efficiently by including dispute-resolution clauses in your contracts that mandate the use of mediation.
The Negotiation Mindset Shift That Matters
In the excitement of dealmaking, it is easy to focus exclusively on closing the agreement.
But skilled negotiators play devil’s advocate. They look ahead, stress-test assumptions, and design agreements capable of weathering change.
Learning how to negotiate a business deal means preparing realistically for challenges—not simply celebrating the signing ceremony.
Continue Learning Business Negotiation Strategies
Effective negotiation strategies are critical in today’s complex marketplace. If you want practical tools to improve your outcomes, consider downloading our free special report, Business Negotiation Strategies: How to Negotiate a Better Business Deal, written by leading negotiation experts.
The guide offers practical techniques to help you navigate even the stickiest business deals.
How do you ensure long-term concerns are factored in when negotiating business deals? Share your experiences in the comments below.
Claim your FREE copy: Business Negotiation Strategies: How to Negotiate Better Business Deals
Discover step-by-step techniques for avoiding common business negotiation pitfalls when you download a copy of the FREE special report, Business Negotiation Strategies: How to Negotiate Better Business Deals, from the Program on Negotiation at Harvard Law School.
