Taking part in complex negotiations is challenging, even for the world’s top diplomats, executives, and sales professionals. Your team’s performance on any front can be the difference between making the deal of a lifetime and months of work going to waste.
With so much at stake, you can’t leave anything to chance. And long before the introductory handshake, it is important to develop a strong game plan. The fact is, in the world of complex negotiations, success is a combination of skill, organization, and careful preparation.
What makes complex negotiations so difficult?
Complex negotiations involve a number of parties with different priorities that can be in direct contrast with each other. On the one hand, it is important to integrally understand the opposition party’s structure and possible strategy. But coordinating your own team is no simple task either. Complex negotiations often involve long-term, multi-front campaigns, designed with strategy and structure.
With so many moving parts, complex negotiations can feel a bit like multiple people juggling different balls all at once. And you can’t let any of them drop. Because if you do, even the most well-planned negotiation can fall through.
Letting the ball drop: Apple and US book publishers
With the rise of Amazon, US publishers were struggling to stay profitable. That was until multiple publishers negotiated a deal with Apple in 2010, just before the launch of the iPad. In the deal, the publishers could set their own prices and Apple would get a 30% sales commission.
Amazon wasn’t too happy with the idea, but was forced to follow this model when some publishers threatened to delay the release of digital book editions. As a result, Amazon increased its $9.99 flat price for ebooks to $14.99 on average.
As far as both Amazon and the publishers were concerned, this was a perfect deal.
A flaw in the plan
But in 2012, the DOJ began a lawsuit against all parties. According to US law, any deal has to demonstrate that it can create competitive value for the economy at large. The DOJ claimed the negotiators didn’t consider the ethical and legal implications, and the deal was unfair to customers.
In the end, three publishers settled the suit. But Apple, Macmillan, and Penguin are still refusing, claiming they did nothing wrong. Meanwhile, Amazon is planning to lower their ebook prices again. It seems Apple is back to square one.
Our top tips for surviving complex negotiations
What can we learn from Apple’s and other high-level deals to build a successful complex negotiation campaign?
1. Identify barriers to your deal
Complex negotiations involve a series of simple steps to reach a desired destination. But if you don’t know where you’re starting from, or where you want to end up, you will quickly get lost.
First, identify your target outcome, then ask yourself what barriers stand in your way. Being thorough and honest with yourself at this stage is important because these barriers represent your weaknesses. For every aspect of the deal, ask yourself:
- Who stands to lose more if this falls through?
- Is there enough trust between you and the other party? If not, how do you build it?
- Are there any legal issues that could threaten the deal?
- What are the different areas involved?
Once you’ve outlined your barriers, you will be able to begin preparing your overall strategy.
2. Construct your multi-front campaign
In the case of Apple and the book publishers, they had a lot to contend with. This meant the negotiations had to take place on multiple fronts.
Direct negotiations—the so-called “at-the-table” aspect of negotiations—are only part of a complex deal. Integrating multiple fronts into a complex campaign is essential for coming to a win-win outcome overall. Take some of the fronts Apple had to deal with:
- Multiple publishers – Apple needed to keep all parties happy.
- Rivals – They needed to ensure the deal challenged Amazon’s competitive advantage.
- Government – This brought down Apple’s otherwise excellent campaign and shows how losing on one front can mean losing overall.
These are just a few examples of the larger fronts. In reality, it is important to consider the context of your particular deal, preparing fronts in areas like financing, sales, distribution, internal issues… the list goes on.
3. Sequence the campaign
Within each front, you will have to decide which individuals to approach, and in what order. The same is true for the fronts themselves.
Good campaign sequencing involves approaching each front in a logical order so success builds on success. Imagine if Apple went to Amazon first. This could have given them time to re-open negotiations with publishers, and Apple’s efforts might have failed before the DOJ got involved.
Identify the most important fronts and send your hand-picked team in to get the job done.
4. Sharing information: when and how much?
With sequencing in place, you will be able to decide which information should be shared, and with which players. This is a highly tactical part of complex negotiations. You might want people to know a top investor is interested in your company, or you might want to keep smaller setbacks to yourself.
Deciding which information to share with the public is also an important part of well-coordinated complex negotiations. In 2013, Disney announced they were acquiring Lucasfilm after years of careful, highly personal negotiation directly with George Lucas. Such a delicate negotiation could have failed if the press found out at the wrong time.
5. Identify the wiggle room
If there’s one thing worse than months of negotiations failing, it’s months of negotiations failing unnecessarily. Be aware of when to stand firm, and where you have some wiggle room.
This comes from deeply understanding both your position and the other party’s position on any particular issue. Table-thumping in negotiation is thankfully a thing of the past. Success today comes from thorough research and preparation.
6. Listen, learn, and adapt
Complex negotiations are more an art than a science. Even if you follow best practices and assemble an amazing team, you will still need to be prepared to deal with change. As new developments impact your initial plan, you’ll have to go with the flow.
Listening, learning, and adapting allow you to manoeuvre around roadblocks. Even if things don’t go strictly according to plan, you will still be able to come to a win-win outcome with the right mindset.