WHITE PAPER May 10, 2017

Negotiating changes

Negotiations involve change: price increase, scope of work modification, request for discount, union demands, reduction in volume, change supplier, design change, people changes.

Negotiations involve change: price increase, scope of work modification, request for discount, union demands, reduction in volume, change supplier, design change, people changes.


Recession = Change = Pressure


During recessionary times negotiating change is more difficult. Both sides have more pressures and this adds to the intensity of the negotiation. TIP: Follow two important Karrass negotiating principals. Preconditioning and Acceptance Time. When you do, you will find your ‘change negotiations’ will be more productive, and you’ll be better able to preserve the relationship you’ve established with the other side.


Preconditioning — No One Likes Surprises!


As you prepare for your ‘change negotiation’ start making the other side aware of your thought process and the conditions that are causing the change. Keep the other side aware of changing market conditions impacting this decision. Preconditioning makes it easier for the other side to accept your position. They understand what is driving it and understand that you have taken time to analyze a variety of options.


Acceptance time — Allow time for preconditioning to do its work.


Allow some time between when your preconditioning messages are sent to the other side and the time you need to sit down to negotiate. If the other side hears about the need for change (price increase, downsizing, cancel a project) on the day of the negotiation, there is going to be increased resentment and resistance. You may trigger a ‘knee-jerk’ reaction that could damage both sides.


The changes you are proposing probably will impact others. The other side needs time to do their own internal preconditioning. During the process of negotiating changes, use every conversation and every meeting as an opportunity to reinforce the importance of mutual interests in your relationship.


Bragging Rights


You’ve probably been told not to brag. But in preconditioning bragging is important. Consider implementing an on-going preconditioning process. This really helps when you enter a difficult negotiation. You do this by documenting.


Document any time you do something extra that benefits the other side. Such as: provide extra help when they need it; perform beyond what was called for in the Agreement; bail them out when they make a mistake or something breaks; provide extra ordinary service; give them additional goods or services at no extra cost; lend them some extra people to help out on a project. Brag a little about these things that you do for them. Document it in a short note or email. “Glad I could help!”


Maintain your list of these ‘extras’ you have provided them and don’t be afraid to use it during your negotiation. Their acknowledgment of your extra effort helps.

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