Negotiation

Never Leave the Acceptance Process Out of Your Payment Terms

Always Define Deliverables and Acceptance Process

Have you ever had a supplier send you an invoice based on a payment schedule and a statement of work, but had no way of knowing if that work was ever completed - or if the deliverables were to the satisfaction of your business unit?

If your statement of work didn’t have clearly defined deliverables or an acceptance process for those deliverables, then the chances are there isn’t much you could about it – except pay the invoice and hope they did a good job.

But it should never be that way with professional services.

Any time you negotiate a statement of work with a professional services provider - whether it’s for a fixed-cost engagement or time and materials - you should always have clearly defined deliverables with milestones, an acceptance process for each deliverable, and payment terms tied to the acceptance of those deliverables.

Negotiating "Limitation of Liability" for Non-Lawyers

How do you negotiate the limitation of liability clause? If your answer is “I pass it on to our legal team” or, even worse, “I thought the all-caps meant it was non-negotiable”, then you’re missing out on the opportunity to get a better deal and avoid excessive risks for your organization.

You don’t need to be a lawyer to take advantage of limitation of liability. You just need to know your way around it - and then get your lawyers’ approval before signing.

How to Negotiate a Cap on Annual Increases

Have you ever had a supplier ask for annual fee increases during negotiations? It's a typical demand from suppliers. And most organizations simply meet them half-way by agreeing to a cap on annual increases.

But in many cases, allowing annual increases is like allowing the supplier to rip you off.

Watch this week's video to learn why annual increases make no sense and how you can use this clause to get better deals in negotiations with suppliers:

Why You Should Avoid Mutual Termination for Convenience

Ever ask a supplier for the right to terminate for convenience, only for them to ask for the same in return? Tit for tat might make sense in most negotiation situations, but when it comes to termination, you could be exposing yourself to unnecessary risk.

I’ve been in procurement for over 20 years. And I have yet to hear a valid reason for agreeing to mutual termination for convenience.

Why? Watch today’s video to find out:

How to Negotiate Complicated Legal Terms

Ever get stuck in a contract negotiation because you had to consult legal? It’s important for procurement professionals to refer to their in-house counsel when the legalities get complicated. After all, they are the ones with law degrees. But having a basic understanding of the common legal terms you'll find in contracts can be a key bargaining chip.

The good news is you don’t need a law degree to be able to understand some of these terms. And when you become the one who knows their way around a contract, you'll become the go-to person at the negotiating table.

That’s why this week we’re kicking off a new video series that will go through some of the more confusing clauses you'll find in many contracts.

If you want the upper hand on your next negotiation, watch this:

Why Poor Contract Management is the Ultimate Productivity Killer (and How to Fix It)

Do you spend time reading through long and complicated contracts, after they've been signed, just to understand what you’ve committed to? Does it take forever to retrieve contracts when it's time for a renewal or negotiation?

Are you, like so many others, managing your renewals using spreadsheets or Smartsheets?

If you nodded yes to any of these questions, you're probably wasting way more time on contract management than you realize.

The good news is it doesn't need to be this painful.

Check out today's video to learn how to get back some of that time you've been spending on manual, tedious contract management processes.

Here's an Almost Guaranteed Way to Generate Cost Savings from Software Licenses

For the past few weeks, we've been talking about how a good contract management process can help generate cost savings from technology agreements. When you have better visibility into your technology agreements, you're less likely to fail an audit or get hit with a software compliance penalty. And when renewal time comes around, you'll be able to negotiate with suppliers from a position of strength.

All of this results in cost savings.

But there's one specific area that can generate almost guaranteed and immediate cost savings — mainframe software licenses.

Technology vendors who supply mainframes like to scare clients into believing they're the only ones smart enough to manage the software licenses.

Not in my experience. We once helped a client save $1 million annually in management fees they were paying a mainframe data centre supplier.

Watch this video for the whole story...

How to Avoid Unexpected Expenses After Mergers & Acquisitions

Due diligence and post-acquisition review can be chaotic. Your team could be facing hundreds - or thousands - of contracts that they need to go through in just a couple of weeks.

With so much to do in so little time, it's easy to miss critical issues in some of the contracts.

But even one of those issues could end up costing your business millions of dollars in unexpected expenses down the line.

How do you avoid the chaos and minimize the risks while doing a proper review? Watch today's video to find out:

How to Avoid Negotiation "Dead Ends"

Have you ever gotten stuck in a negotiation?

Sometimes, after weeks or months of ongoing negotiations, you can reach a point where neither side is willing to concede on a term. And the negotiation comes to a crashing halt.

But if the deal dies on the table, both sides lose. Elite negotiators know how to push for their terms without hitting a "dead end" and jeopardizing the entire deal.

How to Keep Your Cool in Negotiations

Negotiation-Skills-5-1-1.png

Have you ever lost your cool in a heated negotiation?

It can be easy to let the other side get under your skin when emotions run high. Sometimes, all it takes is one underhanded comment to send you over the moon.

But letting your emotions get the best of you in a negotiation is what amateurs do. Elite negotiators know how to control not only their own emotions, but the other side's as well.

In this video, we'll discuss how your counterpart might try to get you to lose your cool and how you should respond to the provocation.

Click here for immediate access to all the videos

Video Transcript

Several years ago, while still cutting my teeth as a contracts negotiator, a good friend of mine encouraged me to take a few courses from Harvard’s Program on Negotiations.

One of the courses was “Dealing with Emotions in Negotiations”, and it touched on an issue that every negotiator will inevitably have to deal with, likely more than once in their career: having someone disrespect your authority in a negotiation.

As professionals, we carry certain corporate designations earned by way of merit and experience.

I’ve been an analyst, specialist, manager, and director. Each of those titles came with a set of responsibilities and a level of authority.

Some could view the responsibilities as a burden, but everyone has a strong emotional attachment to the authority they feel they’ve earned.

And when another person steps on that authority or tries to take some of it away, the response is equally emotional and often irrational.

A study was conducted on the behavior of drivers in mall parking lots, specifically with regards to pulling in and out of parking spaces.

The study found that drivers were more patient waiting for a car to pull out of a space if the car they were waiting for was more expensive than what they were driving.

Conversely, drivers would display a greater sense of urgency (and in some cases, real anxiety) if there was an expensive car waiting for them to pull out.

The car we drive, the suit we wear, our watch and our shoes all reflect our perceived level of authority with regards to those things.

As negotiators, we also have a perceived sense of authority and we’re constantly trying to assert it over our counterparts on the other side of the table.

And when we feel that our authority has been compromised, by way of a belittling remark or condescending gesture, it’s our response to the affront that often sets the table for the rest of the negotiation.

In the Harvard course, we heard the story of a former student who had to deal with a similar situation.

As a young, up-and-coming lawyer at a top law firm, she was given the task of representing a client’s management team in a critical negotiation with their Labour Union.

The Union had hired one of the top Labour lawyers in the country whose reputation as a tough, no-nonsense negotiator was the stuff of legends.

She scheduled a meeting at her office for 9 am on a Monday.

She arrived at 8 am to find a very nervous looking receptionist, who informed her that her counterpart was already there and waiting in the conference room.

When she entered, he was sitting at the table reading a newspaper. She walked over to him with her hand outstretched and said,

“Good morning! I’m…”

“I know who you are,” he interrupted without looking up. “Why don’t you grab me a coffee and we can get started.”

She froze. Her authority had been assaulted. With a few words and a subtle gesture, he’d reduced her role to that of a clerk and tilted the playing field in his favor.

What to do? Showing anger would portray her as emotional and inexperienced. Doing as she was told would be a sign of weakness.

She pulled back her hand, quickly gathered herself and replied,

“You know what, that’s a good idea. I’ll get us both some coffee while you grab the doughnuts.”

Balance restored.

We’re human beings and we all have emotions. It’s how we handle our emotions that makes all the difference in negotiations.

Two more to go! Next week we’ll look at Skill #6: Understanding BATNA.

To make sure you don’t miss any of these negotiation lessons, head over to oneviewnow.com/negotiator and sign up — we’ll make sure all the videos are delivered straight to your inbox.