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Contract Negotiations: Should You Dominate or Collaborate?

Contract Negotiations: Should You Dominate or Collaborate?

Negotiations are often tainted with the shadow of self-interest. Participants in a negotiation are often concerned with what they can gain from it rather than what they can give to the other person. This shouldn’t be a surprise—humans are built to be competitive

However, people are also naturally cooperative when they want to be. Negotiations don't always have to be a winner-take-all fight to the death, and collaborative negotiations can result in long-term working relationships. 

What Negotiations Often Look Like

A regular contract negotiation, where there's a fixed "pie" that needs to be split between negotiating parties, is likely to be highly competitive. There's a certain amount of profit, land, or control to be divided, and each party is interested in getting their fair share or more. Seems reasonable—if you want something that badly, why wouldn't you compete for it?

While being competitive in contract negotiations is totally normal and healthy, it's not the only way to achieve great results. In fact, working collaboratively with the other party and building a cooperative working relationship has the potential to increase the size of the pie. This means both parties have the opportunity to profit from the increase in scope, keeping everyone happy. 

Going into a contract negotiation with a positive collaborative mindset is a great first move, but how do you get the other person on the same cooperative wavelength?

How to Steer Toward More Collaborative Negotiations

Some of the world's greatest innovations were built by cooperative relationships—a little give and take on both sides. If you'd like to break through the competitive barrier, you'll also need to have the other person thinking the same way to achieve the desired results. Here are a few useful tips on how to do that.

Make Your Position Clear

With any negotiation, it's important to have a predetermined BATNA (best alternative to a negotiated agreement). If you're negotiating a sales contract or a contract for a job, your BATNA might be a contract with another party or another job. When you know your boundaries, let the other person know in absolute terms that you're not willing to let up. This will prevent any unnecessary discussion. They usually won't try to push you if they know there's no hope. 

Ask Open Questions 

Asking open questions shows the other party you're interested in their needs. Having a clearer idea of their needs and their BATNA will benefit the discussion. Let the other person talk—it'll reveal what they're thinking, and they might say something that sparks a dynamic and cooperative conversation.

Find Solutions That Benefit Everyone

Paraphrase what the other person has stated to show you understand their needs. Suggest new pathways that take both parties' needs into consideration.

Contract Presentation

When delivering a contract proposal, don't skip over the fine details. The contract should be neat, professional, and utterly free of typos. Make sure you have a reliable PDF to Word converter handy as having both file types will streamline providing documents. Word files are good for making changes, but PDF files can be easier to read. 

An Ideal Collaborative Contract

Negotiating a contract can be stressful and challenging, but the success of your business depends upon it. Luckily, there are many different ways of approaching negotiations. 

If you're interested in these topics, join your local chamber of commerce. 

 

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