Best Practices

Best Practices


We have all been watching the high-level negotiations taking place between the United States and its trading partners over the past several months. The impacts have been felt in the stock market as well as by companies that have had to make changes to their supply chains and pricing in order to offset increased costs. It might be instructive to look at these negotiations and see what lessons we can take away for our own businesses.

First, it is notable that we can observe these negotiations at all; this is possible because they are happening, to a significant extent, in the public view. Is that good or bad? It depends on what you are trying to accomplish. The key takeaway, though, is that the degree to which negotiations are in the public view is something that should be carefully considered in advance.

In general, with regard to business negotiations, it is beneficial to keep the details of the negotiations fairly quiet and limited to the negotiating team and certain others who will be affected by the outcome. Widening the public or corporate view of the process tends to put a higher level of pressure on the negotiating team, which can be counterproductive. It may also slow down the process as many people may want to offer opinions and input, which takes time to sort through.

In addition, negotiations often are not linear in their progression. Offers may be made and withdrawn or modified, and these complications are best handled by the team on the front line.

There may be some situations in which you do want to open up the negotiations to company- or community-wide view; these would be situations in which you want to harness the energy of the wider population to effect change or in which you want to prepare the wider population well in advance for the impacts to come.

For example, in the case of the current trade war with China, I believe the relative openness of the process is designed to do a few things: prepare the American public for the impact of tariffs, create a wider awareness of the trade inequalities being targeted, and put pressure on China by means of the relative performance of the respective stock markets. Whether this is a good strategy or not remains to be seen, but the lesson to consider the degree of visibility is timely.

Another point to consider is battling on multiple fronts at the same time. I was surprised that at the same time the United States was dealing with the China trade wars, the administration chose to threaten Mexico with tariffs unless they stepped up efforts to stem illegal immigration into the U.S. We did, at least temporarily, delay threats of tariffs on cars imported from Europe.

Battling on multiple fronts simultaneously can be difficult, especially if those battles tap into the same resources. It also can create a much wider range of potential outcomes that become difficult to analyze or anticipate. In your own business, you may want to stage high-level negotiations in an orderly fashion to the extent possible. If you must conduct them simultaneously, try to utilize different teams in order to spread the resourcing, but keep communication going between the teams so they can manage any impacts of one negotiation on the other.

Another facet worth discussing is that of widening the aspects of the negotiation into new territory. In the negotiations with Mexico, it was widely commented that mixing trade negotiations with immigration and border policy was new and perhaps dangerous ground. In general, though, it is highly useful as you prepare your negotiating strategy to consider all of the various aspects of the relationship that can be brought to bear.

The key is to analyze each one and decide strategically which you will choose to introduce into the negotiation process and which you choose to avoid. In your analysis of the strategy, be sure to consider the potential reaction of the other side to the issue. Think carefully about what issues the other negotiator may bring into the negotiation once you widen the scope. You may end up creating a much bigger and more complex negotiation than you bargained for, and the pros and cons of this scenario must be thought through in advance.

I have written before on the importance of time as a tool in business negotiations (see my August 2018 column). This is especially crucial in the negotiations between the U.S. and China. I am sure the U.S. negotiators put a lot of thought into the timing and extent of the first and second tranches of tariffs. Other key dates are the G20 meeting (held June 28-29) as well as the U.S. presidential election in November 2020.

As you plan your negotiations, be sure to identify key dates and timelines, which may include such things as contract start or end dates, plant startups or shutdowns, new product launches or industry category transitions, new customer business and the like. If you start the negotiation process too early, it may drag out due to lack of urgency, while if you start too late, you may be under pressure to meet some real deadline. If there are no real deadlines to meet, you and your counterpart in the negotiations process may want to set some expectations for the pace of the process and its expected end point.

A final point is to carefully and dispassionately assess the relative negotiating position of your own company versus that of your counterpart. Consider the size and importance of your business to the other company and vice versa; think also about how this may change going forward. As the negotiation progresses, be mindful not only of the specific deal you are trying to negotiate but also how the relationship should feel at the end of the process. Getting a good deal but significantly damaging the relationship may not be beneficial in the long run.

Sara Lefcourt of Lefcourt Consulting LLC specializes in helping companies to improve profits, reduce risk and step up their operations. Her experience includes many years in marketing, sales and procurement, first for Exxon and then at Infineum, where she was vice president, supply. Email her at or phone (908) 400-5210.

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