The Idea in Brief
Why do so many deals that looked great on paper end up in tatters? Negotiators on both sides probably focused too much on closing the deals and squeezing the best terms out of one another—and not enough on implementation. Bargainers with this deal-maker mind-set never ask how—or whether—their agreement will work in practice. Once implementation begins, surprises and disappointments crop up—often torpedoing the deal.
How to avoid this scenario? Bargain using an implementation mind-set. Define negotiation not as closing the deal but as setting the stage for a successful long-term relationship. Brainstorm and discuss problems you might encounter 12 months down the road. Help the other party think through the agreement’s practical implications, so your counterparts won’t promise something they can’t deliver. Ensure that both sides’ stakeholders support the deal. And communicate a consistent message about the deal’s terms and spirit to both parties’ implementation teams.
Deals negotiated from an implementation mind-set don’t “sizzle” like those struck by bargainers practicing brinksmanship. But as companies like HP Services and Procter & Gamble have discovered, a deal’s real value comes not from a signature on a document but from the real work performed long after the ink has dried.
The Idea in Practice
To adopt an implementation mind-set, apply these practices before inking a deal:
Start with the End in Mind
Imagine that it’s a year into implementation of your deal. Ask:
- Is the deal working? What metrics are you using to measure its success?
- What has gone wrong so far? What have you done to put things back on course? What signals suggest trouble ahead?
- What capabilities are needed to accomplish the deal’s objectives? What skills do your implementation teams need? Who has tried to block implementation, and how have you responded?
By answering these questions now, you avoid being blindsided by surprises during implementation.
Help the Other Party Prepare
Coming to the table prepared to negotiate a workable deal isn’t enough—your counterpart must also prepare. Before negotiations begin, encourage the other party to consult with their internal stakeholders throughout the bargaining process. Explain who you think the key players are, who should be involved early on, and what key questions about implementation you’re asking yourself.
Treat Alignment as a Shared Responsibility
Jointly address how you’ll build broad support for the deal’s implementation. Identify both parties’ stakeholders—those who will make decisions, affect the deal’s success through action or inaction, hold critical budgets, or possess crucial information. Map how and when different stakeholders’ input will be solicited. Ask who needs to know what in order to support the deal and carry out their part of its implementation.
Send One Message
Ensure that each team responsible for implementing the deal understands what the agreement is meant to accomplish. Communicate one message to them about the terms of the deal, the spirit in which it was negotiated, and the trade-offs that were made to craft the final contract. Example:
During IBM Global Services’ “joint handoff meetings,” the company’s negotiators and their counterparts brief implementation teams on what’s in the contract, what’s different or nonstandard, and what the deal’s ultimate intent is.
Manage Negotiation Like a Business Process
Establish a disciplined process for negotiation preparation in your company. Provide training in collaborative negotiation tools and techniques for negotiators and implementers. Use post-negotiation reviews to capture learning. And reward individuals for the delivered success of the deals they negotiated—not for how those deals look on paper.
In July 1998, AT&T and BT announced a new 50/50 joint venture that promised to bring global interconnectivity to multinational customers. Concert, as the venture was called, was launched with great fanfare and even greater expectations: The $10 billion start-up would pool assets, talent, and relationships and was expected to log $1 billion in profits from day one. Just three years later, Concert was out of business. It had laid off 2,300 employees, announced $7 billion in charges, and returned its infrastructure assets to the parent companies. To be sure, the weak market played a role in Concert’s demise, but the way the deal was put together certainly hammered a few nails into the coffin.
