Five Contract Negotiation Styles to Accelerate Success


KEY TAKEAWAYS:

  • The five common negotiation styles are:  accommodating, avoiding, collaborating, competing, and compromising.  
  • Identify your negotiation style and your counterparty’s negotiation style to create your negotiation strategy for a deal.
  • With well-thought-out strategies, negotiators can plan when to use certain styles to achieve desired results.  


The goal of a contract negotiation is to reach a desirable outcome.  Knowing the desired outcome is critical as you build your strategy to achieve it.  If you want to close a sale with a new customer, then you choose approaches that enhance building relationships.  By contrast, if you want to terminate a supplier that is not performing, then you care less about the relationship and care more about getting a satisfactory outcome.

Once you know the desired outcome and acceptable business parameters to achieve that goal, you will face many strategic decisions on your journey.

One strategic area in negotiations is knowing when to use a certain negotiation style or behavior.  Once you know these, you can alternate between styles when needed.  You can also identify when your counterparty is using a certain negotiation style and improve your response to accelerate success.

Top Five Negotiation Styles

The five common negotiation styles are:  accommodating, avoiding, collaborating, competing, and compromising.  These are adapted from the Thomas Kilmann Conflict Resolution Model and tend to correlate well to negotiation styles.   

  1. Accommodating:  Accommodating negotiators prioritize maintaining the relationship between the parties.  This style seeks to satisfy the other party’s needs while minimizing the level of conflict involved in the negotiation.
  2. Avoiding:  Avoiding negotiators prefer to remain objective and avoid creating tension.  They often defer responsibility to others to remain neutral.  They do not actively pursue their own interests or the interests of the other party.  
  3. Collaborating:  Collaborating negotiators jointly problem solve and seek to create win-win scenarios.  Collaborative negotiators are great at finding innovative solutions to problems.  
  4. Competing:  Competing negotiators are results-oriented and focused on getting their own way.  They do not focus on the relationship with the other party or maintaining a good rapport.  
  5. Compromising:  Compromising negotiators aim to find middle ground that is mutually beneficial to all.  However, it is different from the collaborative style because it does not seek win-win solutions.  Instead, compromising negotiators seek a solution where each party sacrifices.  

Examples of Each Negotiation Style

Once you know these five negotiation styles, it is fun to start identifying them as you negotiate.  Here are a few examples that you might see:

  1. Accommodating:  This style is often used for our internal negotiations with operations, finance, and other subject matter experts.  We need to maintain good relationships with our co-workers and accommodate/advocate for their business requirements with our counterparty.  With counterparties, we may decide to resolve a contentious issue by accepting their position.
  2. Avoiding:  This style is often used when primary negotiators need to defer to tax or other subject matter experts for deeper analysis and guidance.  We can avoid conflict with our counterparty by deferring to subject matter experts.  This can also arise if a counterparty is inflexible yet does not want to initiate a conflict.
  3. Collaborating:  This style is often used to resolve business issues that need customization and creative solutions.  This is a preferred negotiation style to build relationships.  This is often used for unique solutions/statements of work.  When negotiating contracts, a collaborative negotiator will use explanatory comments to proactively explain proposed markups whereas a negotiator with a competitive style might not.
  4. Competing:  This style is often used when positions are not flexible or cannot be compromised, such as limitations of liability and indemnification.  In extreme cases, this style can move from assertive to aggressive.
  5. Compromising:  This style is often used in the negotiations of important yet flexible issues such as choice of venue.  It can also be used (very carefully) to close out final negotiations when parties “trade” final positions on different issues.  

Machine learning tools like ChatGPT can be useful when we are preparing for negotiations and want to be sure that our emotions don’t get the best of us.

How to Respond to Each Negotiation Style

There’s always two (or more) parties to any negotiation. So after you identify your desired negotiation strategy, try to determine which one(s) your counterparty is using. This will help you understand whether or how to adjust your style to get the desired outcome from the negotiation.

  1. Accommodating:  If we have an issue that is contentious and we decide to accept a counterparty’s position as accommodation, then consider highlighting it!  Determine when to remind the counterparty that in the interest of moving the transaction along, we sacrificed a key issue in their favor.  This is especially useful when we have other issues we cannot compromise.  Likewise, if the counterparty announces their accommodation, then we can consider noting that the issue is not as significant as other issues (to diminish the importance of their accommodation).  
  2. Avoiding:  If an issue is delegated to others, make sure the issue being avoided can be addressed by others not in the negotiation and schedule updates from the others.  If the issue can be addressed by the negotiating parties, then consider approaching the counterparty one-on-one to determine if the counterparty is avoiding the issue and why.  
  3. Collaborating:  While this style may be time-consuming and resource-intensive, it is often a great way to showcase expertise and partnership.  Stay open-minded to new, creative solutions.  And be sure to include your subject matter experts, perhaps even at the negotiation table.  
  4. Competing:  Take care to avoid reacting aggressively or combatively to a counterparty in competitive mode.  When two negotiators are both engaging competitively, the risk of damaging future relationships is magnified. It helps to recognize it and even articulate that you see that the issue is very important to the counterparty.  Take breaks if necessary.  If your position is also inflexible, then consider deferring the issue to a later time to make progress on other issues.  
  5. Compromising:  If you are short on time or resources such that collaboration is not viable, then compromising might be your best bet.  Ideally, try to address all areas of conflict to avoid additional conflict in the future.   

The contract negotiation process is dynamic and iterative.  With well-thought-out strategies, contract negotiators can plan when to use certain styles to achieve results.  Likewise, learning these styles can help us suppress the urge to react to counterparties.  Instead, we can pause and identify the best negotiation style to be used.

Follow Marlene on LinkedIn to learn more about strategic planning and her lessons learned as general counsel.

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