Executive sponsor, separation manager and deal team
Meeting Agenda, Whiteboard, Strategy Documents
Spend one day or more to prepare materials for a two hour play.
There are three choices: 1) Use dedicated negotiators 2) The M&A manager negotiates 3) The CEO or senior executive negotiates.
When dedicated negotiators are used, the question of efficiency arises. If they did not follow the deal from the start, do they understand all the subtle nuances that are necessary for the negotiation?
When M&A managers negotiate as well then they may not have the training and experience. This might be a concern to many executives who decide to step in themselves.
When executives negotiate the deal the issues, there are no further escalation points, nor are there options to ‘hot-swap’ them for someone else. Also, senior decision-makers usually come late into the process and are unaware of subtle nuances that have evolved earlier in their absence. Once senior executives take over, the negotiators are automatically downgraded to footmen, and they lose any ability to lead or influence negotiations afterwards.
A solution to these issues is to have a negotiation expert (usually from external corporate advisory) take care of the bargaining and let the owner make the strategic and ultimate decisions. Such experts need to be involved from the beginning of the project and attend all meetings with the other side to catch all the nuances and information that will make the difference during the bargaining process.
Find the latest negotiation experts career opportunities here.
Successful negotiation starts with thorough preparation. Structure and strategy throughout the negotiation process is a must. This means having a pre-agreed strategy before each negotiation session.
There also needs to be a negotiation team. An ideal team consists of one negotiator and one observer. The observer assesses the counterpart, collects quotes and arguments and analyses their motivations and BATNA (Best Alternative To a Negotiated Agreement)- while the negotiator either listens actively or bargains. Every negotiator will have a natural preference in style.
A good negotiator will be able to adapt to the circumstances and guide the other side towards a collaborative style that allows the best outcome for both sides. The cyclical structure every negotiation should follow (before each negotiation session) as depicted below. Be aware of the typical negotiation mistakes:
Collect and document the outcomes from the negotiation session and assess status. This will considerably help prepare for the next session.