Business

Minimize the financial impact of crises with effective negotiations

Managing contracts at risk will require discipline, mindfulness and commitment to a vision that goes beyond what we are experiencing.

6 min read

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Minimize the financial impact of crises with effective negotiations
Minimize the financial impact of crises with effective negotiations

As the world faces the magnitude of the COVID-19 virus , we find that our daily lives are transformed in ways that we never thought were possible. Companies are experiencing a period of increasing uncertainty. All signed contracts appear to be at risk. Many companies are restricting travel, limiting employee meetings, and even allowing work from home. In an instant, a world that we thought couldn't be more virtual did exactly that.

We face the new challenge of managing our businesses without face-to-face interactions. How do we stay connected to our customers, suppliers, and employees while distancing ourselves from each other to ensure public and personal health? How to minimize the damage to everything we have worked so hard to build?

The biggest challenges will be around how we renegotiate our contracts, resolve conflicts and protect the future. Working remotely presents its own challenges, but it also creates a new world of opportunity. Here are five tips to help you navigate through this public crisis.

The medium does not matter

Regardless of whether you are negotiating face-to-face, virtually or with a carrier pigeon, the same principles of negotiation apply. However, you must consider the medium and the impact it can have. For example, working virtual unlocks many possibilities that you do not have when you work in an office, such as using technology to communicate with members of your team, access information and data incognito, take advantage of collaborative tools and even create more dynamic presentations and attractive. Having established that, when not working in person it may be more difficult to observe and interpret the body language of the other. Therefore, you have to be more attentive to verbal signs of flexibility. The point is: do not allow the media to inhibit your negotiation, better take advantage of it to open up more possibilities.

Get curious, not defensive

Requests will come in to change current contracts or to withdraw from existing obligations, if they have not already been made. Your initial reaction to one of these requests is to take a defensive position and protect what you have, but my advice is to be more curious. These are extraordinary moments, and although the common theme is COVID-19, don't assume that you understand all the reasons for that request. Make questions. It seeks to understand what is happening in the other business and the way in which the crisis is impacting them. The more information you have (identifying what is most important to them), the better solutions you can offer.

Resist the need for all entrepreneurs to solve problems

As entrepreneurs, we tend to move fast. We solve problems. And we pride ourselves on doing both well. In fact, it is most likely the reason our businesses are successful. However, at this time it is important to think about how you can give the other what they need in a way that is acceptable to you. This requires you to pause and give yourself a space. Rather than trying to find all the reasons to say “no,” find ways to create “yes.” Think about what you want and need. Just because we're in the middle of a crisis doesn't mean you have to give up everything. Take the time to think about your options.

The crisis is momentary – negotiate thinking about it

Changes you make to an agreement to address current issues can become the new standard, unless you put limits and requirements on the terms you agreed to. For example, simple phrases like “this time” or “related to COVID-19” can help ensure that after the crisis, the other side does not return expecting your generosity to continue to infinity. Instead, you will be able to limit the changes that were made during an extraordinary moment.

Emotions still exist in the virtual world

Much of the conflict you will deal with is related to emotions. After all, people are concerned about their jobs, taking care of their families, and / or saving their businesses. Virtual communication can sometimes mask the underlying emotion. If you ignore those emotions, you could be considered callous. And worse yet, ignoring them could turn a collaborative conversation into a competitive one. Although you cannot control the emotions of others, I invite you to be aware of your emotional state. If you feel very close to the issues or are emotionally related, consider including someone who is less involved in the outcome. This person will be able to offer you more balance and perspective.

Having said this, minimizing the long-term financial impact of COVID-19 while managing at-risk contracts will require discipline, mindfulness, and commitment to a vision that goes beyond this moment. But if you take advantage of this time wisely and incorporate the virtual opportunities presented by the need, you can get out of this in a much better way than you could imagine.

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