With the world in quarantine, businesses shutting their doors, and workers doing their jobs from home…how can we move business forward? How can we continue to thrive and even grow?
As I speak with CEOs around the country, they tell me there are still important deals that need to take place in order to keep their businesses alive. But now they do their deal-making remotely…virtually. However, virtual negotiations have significant challenges. We have found that some forms of remote negotiations just don’t work.
Fortunately, we have been negotiating deals using technology for decades. What we have learned can help you overcome some of the major pitfalls that create difficulty for negotiators that negotiate virtually.
Why Email Negotiations Fail
We recognize that many companies have been trying to negotiate deals using email for years, but the consensus is that their outcomes are not ideal. Research by Janice Nadler of Northwestern University and Donna Shestowsky of UC Davis state that there are several problems with negotiating over email that drive less than optimal outcomes. Here are some of the issues:
- Email negotiations are asynchronous. This creates numerous problems including a lack of real-time feedback.
- There is less ability to persuade and influence.
- Misunderstandings occur that can be detrimental to your deal and your relationship.
- Flaming or rude, impulsive behavior increases.
Our experience has been that email negotiations do not allow for the ability to rationalize your position. If you can’t explain why your offer makes sense, the other party will likely not agree to your offer. This results in impasses that can’t be resolved over email. Our recommendation is don’t negotiate by email…if you do, you will hurt your business with low margin deals, deals that strain your ability to deliver, and deals that destroy your relationship with the other party. Not to mention the high likelihood that your deal may end at an impasse.
When Might Email Negotiations Work?
While email negotiations are not advised, we have found that there is a time when email negotiations can work. You may not get the very best outcome, but you can still get a good outcome if you consider the following:
- Make sure both parties agree that they want to get a deal done. In other words, the selling must be done before you begin the negotiation. (see the article on Don’t Negotiate Before the Selling is Done).
- Both parties must have a strong familiarity with each other. You should know the other party very well, understand what’s important to them, and have a degree of mutual respect.
- There needs to be a solid foundation of mutual trust between the parties.
Our experience is that when all three of these are in place, your chances of getting a decent outcome in your negotiations is much higher. However, there is also a high probability that you are leaving value on the table.
What Works Best in a Virtual Negotiation Environment?
My team and I have negotiated deals virtually for years. While our preference is to negotiate face-to-face, there are times when we use technology to negotiate a deal. This usually is driven by the other party having members of their negotiating team spread out throughout the country or other parts of the world. In these cases, not everyone involved can physically be at the table.
The solution is video conferencing. This allows every member of the negotiation team to meet live…in a synchronous communication mode that gives us the ability to have a real-time dialog. We can rationalize our position and receive instant feedback. We can see the other party’s physical reactions which gives us a tremendous amount of information about how to proceed or adjust. It allows us the ability to correct misunderstandings and helps avoid rudeness.
However, we have discovered that there are best practices that need to be in place for video negotiations to be successful:
- Make sure you know who is on the video call and why they are participating. Sometimes there will be people in the room that are not visible and have not been introduced. Some might be joining the audio portion only and are not on screen. This can cause obvious problems. If you are not aware of a person who is instrumental in the negotiation being present, you may not think to address their concerns, you may offend them, or they may pop in with a new set of thoughts and ideas that you are not prepared to address.
- Assign specific roles for each participant on your team. Identify who will lead or facilitate, who will provide subject matter expertise (SME), and who will take notes to capture details. Make sure each person understands what they need to be prepared to discuss.
- Take frequent breaks from the video session to have off-line conversations with your team. You will need to do this to make sure you and your team are aligned. It gives you time to process and check-in to formulate how you will move forward. When you and your team are not together during a negotiation, you must have some time to compare thoughts, ideas, and next steps. If not, you will easily fall into “group think” and begin to make bad decisions.
- As in all cases, make sure the selling is done before the negotiation begins. You don’t want to attempt to sell the other party while trying to agree on deal terms that define how you will do business with one another. (see the article on Don’t Negotiate Before the Selling is Done).
These are trying times for many of us. The challenges of a virtual work environment are many. But deals are still being done. They must! Every negotiator should have a proven and tested process. They should have tools that they can rely on to get predictable results. They should have a way to measure their progress…because as we all know…being able to measure changes everything. With these in place, and the use of best practices that have been developed over several years, virtual negotiations can end with great success. If you are lacking a proven process for attaining outstanding results, check the button below to learn more.