Never Negotiate B2B Contracts “On Your Feet!”

In our everyday life, we negotiate “on the run” frequently. Your spouse says, “I won’t be able to pick up the kids from school today. I was hoping you could.” And you say, “That’s fine…but can you pick up the dry cleaning?” Relationships require frequent re-negotiations of schedules, plans and duties to adapt to changing environmental and emotional demands. Maintaining healthy relationships with family, friends and neighbors requires flexibility and a skill at negotiating “on your feet.”

However, B2B contract negotiations are another matter entirely. As tempting as it is to negotiate contract provisions in a hallway or at the coffee machine, you may want to think carefully before jumping at what appears to be an easy opportunity to settle a contractual issue.

Hallway Obstacles to Negotiation

Let’s recognize some of the obstacles we face when engaging decision makers in unscheduled discussions outside of their office.

You have a very narrow timeframe. The average length of an unplanned, hallway conversation is less than 2 minutes. Most people you see in a hallway are going to or returning from a committee meeting, planning session, presentation or report. Their thoughts are elsewhere. You have very little time to review an issue and lay the foundation for your request/proposal. When executives are pressured to make a decision, the status quo often wins.

1. No one’s prepared. The two biggest liabilities are that you aren’t prepared for the conversation and neither are they. What do you need to do and what do they need to know to make a decision or concession? The issue may be simple and straightforward to you, but less so to them.
2. Interruptions can derail your conversation. You have no control over the physical environment. Cell phone calls, text messages, a cluttered calendar, colleagues in the hallway—all can disrupt and undermine the conversational opportunity.
3. It’s difficult to pursue a continuous line of reasoning. If faced with an obstacle or objection, will you have enough time and opportunity to probe your counterpart’s interests? Will your counterpart respond to open ended questions in a public context? Will you be able to ask follow up questions?
4. It’s difficult to limit unwanted participation by others. Many of us view hallway discussions as public and social. There are no assurances of privacy. Consequently, your counterpart may be reluctant to concede to your proposal in public.
5. There’s no opportunity to use collaborative problem-solving methods. Remember that negotiations aren’t contests of will—they are problem- solving processes in which two or more parties are attempting to reach an agreement that all are willing to implement. “Brainstorming” is just one method for probing for options and exploring solutions. Ranking priorities is another technique. Both are virtually impossible to use “on your feet.”

Taking Advantage of Unplanned Encounters

So how can you use a hallway conversation effectively in B2B contract negotiations? Make it simple, concise and straightforward.

• Take a minute to update your counterpart or provide information that was requested. For example if you were talking to an OR Buyer you might say “I was able to compile all of the data on product utilization of “X” that you requested. We have sorted it in some ways that we feel you will find interesting and informative.”

• Reiterate or check a minor logistical or factual point as a way of letting your counter-part know that you are mindful of the negotiation process and see it as high on your list of priorities. “Will you still have time on Friday at 9 AM to review this data in depth? I think it will take at least 45 minutes.

• Make a straightforward request that will result in a “yes” and remove the chances of an unwanted surprise. “You mentioned before that one of the hospitals financial analysts will attend the Friday meeting. Will you please verify their attendance? We have some cost saving ideas that you could implement immediately and I am sure they will want to understand our data.”

Parting Thoughts

Most of us look at hallway encounters as an excellent way to gain access to a key executive without navigating past administrative personnel and through a cluttered appointment calendar. But we run the risk of starting something that we can’t finish and ultimately doing more harm than good to our negotiating session. If pressured, it’s easier for a decision maker to say “no” or “let’s talk later” than to concede a vital contract issue. We promise you that you’ll find yourself second-guessing your timing.