Anjana – a sales leader with an IT firm – is busy preparing for negotiations with a large bank on renewing her firm’s contract with them. Given it is a decent sized deal, Anjana has been preparing for these negotiations over the last several days by interlocking with the account delivery teams, getting buy-ins from the senior leadership & CFO on commercials, getting a handle on the likely strategies from the competition etc. It is no surprise, given the rigour of her preparation, that Anjana was feeling confident about her meeting with the Client CIO.
Just as introductions got done, George (the client CIO) set out the tone for the meeting in very clear terms. “We have done a cost benchmarking exercise and have concluded that while we are happy with your services, you are at least 25% more expensive than competition. Moreover, we think that you have not considered the potential for this contract to cover additional regions that can potentially double your business in the next 3 years. I need your confirmation on the commercials so that we can move forward”. While she was expecting some push back on the commercials, Anjana was not prepared for this. While, on the downside, the commercials pose a challenge, George has also given signals regarding greater volume of business.
These are classic situations where negotiators – despite the best preparation – are confronted with substantial new information that they are not prepared for. What are the options before Anjana? One option is to push through the negotiations with the available information and agree a deal. This approach could prove costly especially when one is signing a deal without a full understanding of what she is signing up for. The alternative option – and the recommended option – is for Anjana to fully explore George’s position, confirm the facts and take an adjournment. It is proven research that stepping out of a brainstorming session for a short walk can result in new ideas and break a set pattern of thinking. An adjournment has a very similar impact on negotiators – helps us reset our thinking, gives us space and time to look at a situation through multiple lenses and more importantly take help from our colleagues in developing alternative strategies. Are you adjourning enough in your negotiations?