Most companies do not have a negotiating framework for major deals


I recently completed a major consulting and negotiation project with a global bank. One of the more lively discussions was on how training can help senior executives develop a framework for strategic negotiations. It was clear from my consulting part of the project that negotiating with strategic clients within a required framework was quite a foreign concept. My experience in working with global accounts over the last 30 years shows that most companies do not have a negotiating strategy or framework when negotiating with their Top 20 clients.

Let’s get back to the bank. The robust discussion resulted in most of the senior managers admitting to the fact that they did not have a framework in place to get better results in negotiations through value. It was still based on who was the ‘top gun’ negotiator.

Upon reflection, when I consider key research I have conducted over the past 20 years, I think nine out of ten don’t actually have a negotiation framework or genuine strategy that is used when the business is negotiating with any of their Top 20 accounts.

So why do so many companies fail to develop a negotiation framework for major deals?

Most fail because they do not sit down as a leadership team and decide, what is the value proposition like for our top 20 clients and how do they measure our offering. Secondly they don’t have a framework in place for how to engage with key stakeholders before the negotiation to create trust. If you want key stakeholders to see you as problem solvers, you need to demonstrate this capability before the negotiation.

The framework would also enable senior managers and executives to decide what the substantive issues would be in critical negotiations and start to develop some workable scenarios. This creates choices, and sets a framework for what you do and what you do not do in major negotiations.

Finally the framework should focus the team on results; this means that we as leaders need to measure a range of possible outcomes, not just the dollars. How persuasive the team is during the negotiation on your value proposition should be as important as the final deal.

If you have a major deal with a key client pending, in your next strategy meeting ask the question, “Do we have a set framework for how we negotiate major deals with key clients?”

If you get deathly silence and the deal is important, call me as I am happy to share some key insights.