Filed under: negotiation
Negotiations, as Jim Camp says, “Start with No!”
No, means disagreement.
So if you’re going to disagree, you need to do it correctly (thanks to Paul Graham).
I really love my business owners. They’re new to having a contracts person in-house, but they appear to understand my purpose and don’t make it too hard for me to implement proper contract management processes and procedures.
But it’s not something that has happened over night and it’s not something that transfers from one individual to another without my participation. In other words, if I have a good negotiation/contracts experience with one business owner, I have to do it again with the next one. This increases the length of time it takes to build a reputation within the organization. It also means that not all of my business owners will be equally satisfied with me or my performance.
Some of this is due to human nature. You’re simply not meant to be best friends with every person you meet. There’s just too much individuality and uniqueness in personalities. There’s also the nature of each deal to worry about. Sometimes you’ll have an easy win (from your perspective) which looks impressive from the outside. Or sometimes you’ll just work really hard and be rewarded with a successful outcome and a grateful business owner as a result of your hard work.
What do you do, however, when you feel an internal relationship slipping away? You know what I mean – that situation where you KNOW you’re doing the best you can, but for whatever reason, your business owner is just not on the same page with you. Or perhaps YOU are the business owner and you need your contracts person’s help, but you feel like they just don’t get the fact that you have deadlines, budgets and other constraints?
See, I’ve got one of these going on right now. I have a business owner that I respect highly and knows his business. He also knows his vendor and he has put in the effort to understand my position. Here’s the scoop: long-time vendor on an important aspect of our business, agreement that’s over a decade old, vendor isn’t a sole-source and doesn’t perform as well as we would hope. I really am encouraging him to start fresh from our template Master Agreement. It would add in some of the checks & balances-type language that would give us some amount of leverage to encourage better performance.
The vendor, of course, doesn’t want to review our paper (it’s a 30+ page document). The business owner doesn’t want to do anything that would damage the relationship. His initial suggestion was to do a document comparison of the old doc against the new one and identify the differences and pull those in via an amendment. Frankly, that would take longer than just starting from their template agreement again and doing a redline. I’m slammed as it is. If we’re going to re-open negotiations across the board, it doesn’t make sense to start with their document.
His second suggestion was to use outside counsel. That’s well within his right – assuming he’s got the budget to spend. But I would prefer he doesn’t (I don’t like wasting the money on something I can do for him). Again, we’d simply be opening the door to a negotiation to edit a decade-old agreement rather than start from the template.
And now he’s talking about going through our template himself and looking for those things that he would love to pull into the existing agreement. I would rather not see him spend that kind of time on it – as it seems that he really wants our better language yet is afraid that pushing our template will ultimately damage his relationship with the vendor.
I’m not sure what to tell him at this point. Any suggestions for him or me?
Filed under: contract management
I’ve talked before about contract management systems. That’s probably the single biggest “new” technology in the last several years that assists us with our daily lives.
But there’s a more well-known, yet unsung, bit of technology that I use daily as well. Can you guess what it is? If you said a word processor, you’d be close.
Anyone who knows me knows that I’m a huge Macintosh fan. In fact, “fan” might not be strong enough of a term to use. Which means, that by default, I am not exactly full of excitement for Microsoft.
I suppose this started a long time ago, in a galaxy known as DOS. Back in the day, I used a word processor that was the dominant force in the marketplace: WordPerfect. I started in version 4.2, went to 5.0 (then quickly to 5.1). I simply loved the white courier monospaced font on the blue background. WordPerfect was my buddy. I used it faithfully for years – even when other folks started using a new product called Word. (Remember function key combinations and the function key overlay?)
The irony is that Word for Macintosh was much better than WordPerfect 3 for Mac. I also couldn’t control what my employers were giving me to use, either. So it was with great reluctance that I learned how to use Word. But I never understood how a piece of software that could originally fit on a single 400K floppy disc now need a DVD for the regular installation.
Anyways, in the middle of law school, I was turned on to a feature which assisted in document editing and versioning. It’s called “Track Changes” and it, more than anything, is that daily technology which helps me with contract redlining. I teach everyone with which I exchange documents about Track Changes. Lawyers, contract negotiators, business owners, senior executives. Everyone! If you’re not using it… let me know and I’ll teach you how (without Balloons, though).
So it comes as no shock to me that Microsoft knows statistics on EVERY Word feature, along with the propensity for use. Wanna’ guess at the top 5, which together accounted for about 32% of ALL feature use?
1. Paste: 11%
2. Save (WordPerfect FunctionKey: F10)
3. Copy (WordPerfect FunctionKey: F12 – block, Ctrl+F4 – Move)
4. Undo (WordPerfect FunctionKey: F1 – undelete)
5. Bold (WordPerfect FunctionKey: F6)
In fact, paste is so popular (especially the toolbar icon), that Microsoft moved it to prime real estate on the default toolbar! And “Accept Change” is at #100 – so folks are using Track Changes to some level of popularity. Good for them!
Which leads me to an interesting observation. WordPerfect didn’t have a simple Paste function (it was a part of the “Ctrl+F4-then-select-from-a-menu” set of options). I wonder if that is why no one uses it anymore. 😉
I was talking with some folks today about Purchasing versus Contracting. I have worked in a lot of places and only one had a consolidated group (which, even then, was technically segregated). So, I’m interested in your feedback. Thank you!
(You must have flash installed to see this survey.)
Filed under: negotiation
When I tell people that I’m a professional negotiator, most simply cock their heads to the side – a little wide-eyed. Sorta’ like the way my dog does when I say something a little odd. But after the initial shock, they usually come at me with a slew of questions about the job… and how they can better negotiate their own deals.
Generally, I tell them that it’s the same as the age-old joke about “How do you get to Carnegie Hall?” … “Practice, practice, practice.”
Negotiation is no different. To get better, you just have to do it over and over and over again. You have to try… you have to fail. And you really will fail – miserably. Repeatedly. But over time, as you figure out your style and you learn from each mistake, you’ll get better. So what happens to most people along the way that makes them feel like they can’t be a good negotiator? Well, I’m not exactly sure.
I think part of it is our culture. Within the United States, with minor exception, we don’t operate in a bargaining society. We’re used to paying the advertised price for the things we want as they are delivered. But this is not representative of all human societies. Look at the Mexican and several other Hispanic and Latin cultures, for example, and you see a much different experience. EVERYTHING is negotiable, and people who grow up in those societies are superior negotiators as a result. What’s really interesting about these individuals, though, is that they don’t think of it as something special… and don’t think of it as negotiating. It’s just a part of the transaction.
This tends to make some folks assume wrongly that culture or some other innate ability allows someone to be a good negotiator. On the contrary, it’s still practice. A good comparison for this is sports. Folks would like to assume that certain cultures, races or other immutable trait makes an individual predisposed to be a better athlete. This allows someone who is less skilled an excuse for not being as good.
But the US Olympic Committee performed a study in 2003, describing the success factors (and obstacles) that most influenced their Olympic development (thanks to Curt Rosengren’s M.A.P. Maker for the headsup). Let’s look at the success factors (the percentage is how often that factor was ranked in each Olympian’s list):
Top 10 Success Factors
1. Dedication and Persistence: 58.1%
2. Support of Family and Friends: 52.0%
3. Excellent coaches: 49.4%
4. Love of sport: 27.1%
5. Excellent training programs and facilities: 22.3%
6. Natural talent: 21.9%
7. Competitiveness: 15%
8. Focus: 13%
9. Work ethic: 11.6%
10. Financial support: 11.5%
Look at #’s1-3 and then at #6. Dedication, persistence, support and coaching are all ahead of natural talent. And even ahead of competitiveness and focus, which, by the way, also tend to be seen as drivers of good negotiators.
So… get out there and practice. And if you need support or coaching and can’t find it anywhere else, shoot me an e-mail. We can help each other.
The Licensing Handbook Blog is the companion site to the Software Licensing Handbook. Covering a licensing topic every week, Jeffrey Gordon attempts to offer advice, add humor and sometimes even a bit of wit to a practice that most people find abhorrent – namely, reading a contract from start to finish.
Filed under: pricing
Ever felt like you had no negotiation power when it comes to price? How would you like to have enough power to not only affect the price of A vendor, but ALL vendors?
Well, there’s at least one buyer. Wal-Mart. Their purchasing power is the stuff legends are made of… and here they go again. Only this time, the power is being used against another historical pricing powerhouse: the music industry.
I wonder how this is going to play out.
Filed under: audit
[We’re going to try something new today. If you’ve done a case study before, you’ll recognize the format… if not, it’s not rocket science. The following is a story about a completely fabricated (but possible) situation. There is no end. It’s up to you to evaluate and make suggestions. In other words, what would you do based only on the information in the story?]
Acme Corporation received the audit letter in July. The notice informed them that their vendor, WidgetWorks, was invoking the audit provisions of their agreement and that they would be contacted in a few days by an outside auditing firm to schedule the audit. The recipient at Acme sent the notice to their contracting group, who reviewed the notice and waited for the auditing firm’s call.
During the review of the notice, Acme assembled all of its documentation regarding the WidgetWorks products installed at Acme. They pulled records from contracting, purchasing, IT and accounts payable. In essence, they performed their own mini-audit in preparation for what WidgetWorks might discover.
Meanwhile, Acme’s contracting team unsuccessfully attempted to find copies of any agreements with WidgetWorks. Curious, the contracting team worked with IT to investigate the possibility of a click-through agreement during the WidgetWorks installation process. Sure enough, one existed, but it didn’t contain any “audit rights” language. After several internal discussions, it was decided that without contractual language allowing an audit, Acme would not comply with the request.
As might be expected, WidgetWorks wasn’t thrilled to hear that Acme didn’t want to allow the audit. Through a phone call between WidgetWorks and Acme it came to light that Acme actually licensed multiple versions of the WidgetWorks product. The older versions (which Acme was using) did not, in fact, have the audit language. However, the newer versions (which Acme had purchased but was not using), did contain audit language.
Acme suggested to WidgetWorks that if they would like to limit the scope of their audit to auditing usage of the newer versions, Acme would be willing to comply. WidgetWorks kindly refused.
OK… what should Acme and/or WidgetWorks do?