The 4-Step Process to Making Sure Deals Never Fall Apart at the Last Minute
Follow these four steps in negotiation to make an agreement that sticks.
PHOTO CREDIT: Getty Images
"Have you ever agreed on something, then one of the other parties brings up the topic again three weeks later? You think, "Geez, we just discussed this and came to an agreement. Why are we going over this again?"
My company recently worked with business coach and executive advisor Tony Papa, director of Impulse Advanced Communications for over 20 years, to find the answer. Papa had developed a simple four-step framework of "discuss, debate, negotiate, and agree" to successfully mediate an agreement between two potential partners.
Papa realized that deals often fail because of the hidden elements and assumed expectations that each party brings to a negotiation. Apparent elements in a business negotiation might be the company name, type of corporate structure, and the percentage of ownership. These elements are known and can be easily discussed and handled by accountants and lawyers.
On the other hand, hidden elements are what each person believes the decision-making and conflict-resolution resolution process should be like. And assumed expectations are the unrealistic ideas each party brings to the meeting.
To counter these pitfalls, you must interview both parties and make a list of their hidden elements and assumed expectations for the deal. In this manner, the decision-making and conflict-resolution processes can be agreed on beforehand, and the areas for discussion can be individually addressed.
Once this list is made, you can follow these four steps:
1. Discuss the issues and set ground rules.
Put the first item on the list up for discussion. Set a time-limit beforehand. Papa suggests ten minutes.
Allow the first person to present the issue uninterrupted. Afterward, the others in the group can ask questions or clarify points.
2. Debate with a set time limit.
Set a fixed amount of time for debate. Papa suggests 20 minutes. However, this time limit depends on what the issue is, or what the impact would be and who would be impacted. During the debate, make sure to whiteboard the areas of agreement and non-agreement.
3. Negotiate the agreement details.
Using the whiteboard areas of agreement as a reference, settle the details of the current issue in the negotiation phase. Find common ground, compromise, and innovate towards a mutually agreeable and beneficial outcome.
4. Agree and memorialize the agreement in writing.
Memorializing is the critical and final step to reaching an agreement that won't be busted. Once you have decided the details, put your agreement in writing, and then follow through with what you decided. You should also memorialize the areas of non-agreement so these areas can be discussed in the future.
If you follow these four steps, the same exact issue in the same exact circumstances should not be brought up again.
At the very least, it should not change on the whim of one of the participants who "conveniently" forgot that an agreement was made, or who wants to continue pushing an agenda that was not agreed upon by others in the group.
One caveat on changing agreements
Sometimes you have to revisit an agreement. Situations can evolve. If agreed upon variables change after the deal is complete, revisit the terms and begin with step one.