Negotiation Strategy Formulation

They thought they had no choice. That’s why they almost gave in. I was in the room when it happened. A client (let’s call them Pollocks Pipelay) had been working with the same supplier for years. Solid relationship, reliable service. But one day, the supplier walked in and said: "𝙒𝙚’𝙧𝙚 𝙞𝙣𝙘𝙧𝙚𝙖𝙨𝙞𝙣𝙜 𝙥𝙧𝙞𝙘𝙚𝙨 𝙗𝙮 𝟯𝟬%. 𝙉𝙤𝙣-𝙣𝙚𝙜𝙤𝙩𝙞𝙖𝙗𝙡𝙚." Immediate silence and panic. They needed this supplier - They started calculating how to absorb the cost - There was no backup - No safety net Then I asked the team: "𝙒𝙝𝙖𝙩 𝙝𝙖𝙥𝙥𝙚𝙣𝙨 𝙞𝙛 𝙮𝙤𝙪 𝙬𝙖𝙡𝙠?" Nobody had an answer! I aimed to shift their view from fear to power Most negotiators consider a Fallback Plan (BATNA) a concept The best negotiators 𝙬𝙚𝙖𝙥𝙤𝙣𝙞𝙨𝙚 it. - We took a step back - We mapped the fundamental alternatives - We found a smaller but reliable European supplier Was it perfect? No Was it good enough to remove the fear of walking away? Absolutely At the next meeting, Pollocks Pipelay didn’t beg for a price adjustment Instead, they confidently said: "𝙒𝙚’𝙧𝙚 𝙬𝙚𝙞𝙜𝙝𝙞𝙣𝙜 𝙤𝙪𝙧 𝙤𝙥𝙩𝙞𝙤𝙣𝙨, 𝙗𝙪𝙩 𝙬𝙚 𝙬𝙖𝙣𝙩 𝙩𝙤 𝙢𝙖𝙠𝙚 𝙩𝙝𝙞𝙨 𝙬𝙤𝙧𝙠" You should have seen the supplier’s face The power dynamic instantly flipped: - Pollocks Pipelay secured better payment terms - The supplier dropped their price increase entirely - They knew they’d never be backed into a corner again I see this mistake constantly. Smart professionals walking into negotiations without a strategic fallback plan → 85% of negotiators lack a strong fallback plan →Those who anchor first with a solid BATNA secure deals 26% closer to their goals →Having a fallback plan reduces bad deals by 40% while preserving relationships Yet so many people still fear walking away. Make your Fallback Plan your power move 1️⃣ Before the negotiation: Identify at least two real alternatives. Don’t rely on assumptions. Map your ZOPA (Zone of Possible Agreement). Study their BATNA—what are their options if you walk? 2️⃣ During the negotiation: Signal strength (“We’re weighing options, but I’d like to find common ground”) Stay flexible—adjust if new information emerges. 3️⃣ After the negotiation: Document what worked. Refine your BATNA for next time. The Best Negotiators Don’t Fear Walking Away—𝗧𝗵𝗲𝘆 𝗙𝗲𝗮𝗿 𝗦𝗲𝘁𝘁𝗹𝗶𝗻𝗴 𝗳𝗼𝗿 𝗟𝗲𝘀𝘀. Don't be aggressive in negotiations. Just know your worth and your options. Think about your negotiations. Do you have a Fallback Plan? Or just hope for the best? Have you ever been in a deal where you felt trapped but found a way out? Or maybe you’ve walked away, and later realized it was the best move you could’ve made? Drop your story in the comments. Let’s talk about how having (or not having) a fallback plan (BATNA) changed your outcome.

Negotiating without a should cost model is surgery blindfolded. I sat down with a supplier armed with market benchmarks and way more confidence than I deserved. They quoted 15% above my target. I pushed back with data, they held firm. I eventually settled at 8% above and thought I did well. (I thought I knew how to negotiate back then. I didn't. I was just a rookie.) Ten months later, I discovered their actual cost structure. My "win" still left them with a 22% margin. I had negotiated against their asking price, not their real cost. That failure built my own negotiation framework. Seven steps, in order: 1. Build the should-cost model: Raw materials, labor, overhead, logistics, margin. If you cannot break down their cost, you cannot challenge it. 2. Map the power dynamics: Who needs this deal more? What are their alternatives? What are yours? Be brutally honest with yourself here. (And factor in every variable specific to your case). 3. Define your BATNA: Do this before the meeting. Not during, not after they pressure you. Before. Always before. (By the way, defining your BATNA isn't just figuring out who can bail you out of a jam. It is much more than that—I actually covered this in a previous post). 4. Identify their constraints: Cash flow timing, capacity utilization, competitor threats. Their pressure points are your leverage. 5. Prepare three scenarios: Best case, acceptable, walk-away. Know your numbers for each before you sit down. 6. Lead with value, not price: What problems can you solve for them? Volume stability, payment terms, multi-year commitment? 7. Document and review: Every negotiation teaches something. Capture it while it is fresh. Save the image. Use it before your next negotiation. #Procurement #Negotiation #ShouldCost #ArchitectOfValue #Procurestudio

Have you ever wondered how companies secure better contract terms? It’s not luck; it’s strategy. Negotiation is not about winning; it is about securing the best terms while maintaining strong relationships. It is about ensuring long-term value, flexibility, and a partnership that works for both sides. Here are some proven strategies: 1️⃣ Know Your Deal Breakers & Where You Can Give Not every term is worth fighting over, but some are non-negotiable. Before you start, be clear on what you absolutely need and where you have flexibility. If you give on minor points, the other side is more likely to meet you on the big ones. 2️⃣ Just Ask – It’s That Simple One of the easiest ways to save money? Simply asking. A quick “Can you do better?” or “Are there any discounts available?” can open the door to better terms. Vendors expect negotiations, and if you never push back, you might be leaving savings on the table. 3️⃣ Look Beyond Price – Value Matters Too Price is just one piece of the puzzle. If the vendor cannot move on cost, shift the focus to value. Ask for: ✔️ Better service levels or faster response times ✔️ More flexible payment terms ✔️ Free upgrades or additional features ✔️ Longer warranties or extended support These extras can be worth more than a discount. 4️⃣ Control the Renewal Terms – Avoid the Auto-Renewal Trap Many companies forget about renewals, which can include price increases. Before signing, check: 📌 Does the contract auto-renew? What is the cancellation notice period? 📌 Can they increase pricing without renegotiation? 📌 Do you have flexibility to adjust terms if business needs change? Make sure you can review and renegotiate before getting locked in again. 5️⃣ Silence Is Your Friend – Let Them Talk First After you ask for a better price or terms, pause. Do not fill the silence. Let them respond. Many people feel uncomfortable with silence and will start offering concessions just to keep the conversation moving. 6️⃣ Be Willing to Walk Away – Your Strongest Leverage Your greatest power in negotiation is the ability to walk away. If the deal does not meet your core needs, be ready to say no. This often shifts the conversation in your favor. It is not about playing games; it is about knowing your value. 7️⃣ Negotiation Is Not a Battle – It’s a Relationship The best negotiations do not feel like fights; they feel like problem-solving. If you collaborate instead of compete, you will secure better terms while keeping the relationship intact. A vendor who feels valued is more likely to: ✔️ Offer you their best pricing and service ✔️ Be flexible when your needs change ✔️ Go the extra mile when you need urgent help Bottom Line? Just Ask. Negotiation does not have to be complicated. Sometimes, all it takes is asking the right questions. Want help structuring your negotiations or optimizing your contracts? Let’s chat. #Negotiation #ContractManagement #Procurement #VendorManagement #BusinessStrategy #LetsChat

Negotiation success: Think smarter, not argue harder. How to use De Bono’s Six Thinking Hats. In my 30 years as a negotiation consultant, Edward de Bono’s Six Thinking Hats combined with state-of-the-art Negotiation principles have often been the difference between success and failure. Especially in extremely challenging negotiations. These thinking styles unlock clarity, creativity, and stronger relationships, even in situations that initially seemed hopeless. Edward de Bono’s Six Hats represent distinct thinking styles crucial for effective negotiation: → White Hat: Facts and objective information. → Red Hat: Emotions and intuition. → Black Hat: Risks and critical judgment. → Yellow Hat: Optimism and positive outcomes. → Green Hat: Creativity and innovative solutions. → Blue Hat: Process control and management. Here’s how I’ve effectively applied these hats in difficult negotiations: 1️⃣ Focus on Interests, Not Positions → White & Red Hats • Clarify underlying facts and interests objectively (White Hat). • Empathize with emotional motivations behind positions (Red Hat). e.g., Employees demand permanent remote work; management wants office return. Objective questioning (White Hat) reveals productivity metrics and workspace usage. Empathy (Red Hat) uncovers emotional interests like flexibility and family time, leading to a hybrid solution. 2️⃣ Invent Options for Mutual Gain → Green & Yellow Hats • Generate creative solutions (Green) highlighting mutual benefits (Yellow). e.g., Companies negotiating resource sharing creatively design a joint venture benefiting both economically. 3️⃣ Use Objective Criteria → White Hat • Anchor negotiations in data-driven benchmarks and unbiased facts. e.g., Parties reference market standards and independent appraisals in lease negotiations, agreeing on fair terms. 4️⃣ Prepare Your BATNA → Black Hat • Critically assess risks, alternatives, and consequences of no agreement. e.g., A buyer evaluates alternative suppliers’ costs and reliability, clearly identifying the best fallback option. 5️⃣ Build Relationships → Red Hat • Recognize and address emotional aspects to build trust. e.g., In heated negotiations, acknowledging frustration and validating concerns reduces tension significantly. 6️⃣ Separate People from the Problem → Blue Hat • Objectively manage the negotiation process to minimize personal conflicts. e.g., A good negotiator sets clear agendas prioritizing shared goals, preventing personal grievances from derailing talks. Next time you’re stuck, pause and ask, “Which hat am I wearing?” Switching hats can open unseen doors.

𝐈𝐧 𝐯𝐞𝐧𝐝𝐨𝐫 𝐧𝐞𝐠𝐨𝐭𝐢𝐚𝐭𝐢𝐨𝐧𝐬, 𝐟𝐚𝐢𝐥𝐢𝐧𝐠 𝐭𝐨 𝐤𝐧𝐨𝐰 𝐲𝐨𝐮𝐫 𝐧𝐮𝐦𝐛𝐞𝐫𝐬 𝐢𝐬 𝐚 𝐝𝐢𝐫𝐞𝐜𝐭 𝐭𝐡𝐫𝐞𝐚𝐭 𝐭𝐨 𝐲𝐨𝐮𝐫 𝐩𝐫𝐨𝐣𝐞𝐜𝐭’𝐬 𝐬𝐮𝐜𝐜𝐞𝐬𝐬. Preparation is the backbone of every successful vendor negotiation. When you understand your costs, set clear terms, and align on value, you’re building not just a contract but a reliable partnership. Here are some of the best practices we have learned for effective vendor negotiations at Venwiz: 1. 𝐃𝐚𝐭𝐚-𝐃𝐫𝐢𝐯𝐞𝐧 𝐄𝐬𝐭𝐢𝐦𝐚𝐭𝐞𝐬: Arriving at project cost estimation through detailed cost analysis sets a solid foundation. Use methods like Zero-Based Costing for detailed estimations, apply inflation adjustments to the last purchase cost, or use weighted averages from multiple quotes. When vendors see that you know your numbers, it builds credibility and respect, setting the stage for more productive discussions.     2. 𝐒𝐞𝐭 𝐂𝐥𝐞𝐚𝐫, 𝐀𝐜𝐡𝐢𝐞𝐯𝐚𝐛𝐥𝐞 𝐓𝐞𝐫𝐦𝐬: Define concrete targets for service levels, timelines, and ceiling costs. A well-defined service agreement—including specifics like payment schedules, quality & safety standards, and warranty terms—establishes a strong foundation. This clarity avoids misunderstandings and creates a structure that supports efficient, respectful negotiations.     3. 𝐋𝐨𝐨𝐤 𝐁𝐞𝐲𝐨𝐧𝐝 𝐁𝐮𝐝𝐠𝐞𝐭 𝐭𝐨 𝐅𝐨𝐜𝐮𝐬 𝐨𝐧 𝐕𝐚𝐥𝐮𝐞: Budget matters, but so does value alignment. Quality vendors look for clients who understand this. Show commitment by offering flexibility in terms, such as adjusting payment timelines or considering future projects. If a vendor can provide an extended warranty or additional service terms, it may justify a slightly higher costs if it aligns with your project’s goals.     4. 𝐇𝐚𝐯𝐞 𝐚 𝐁𝐀𝐓𝐍𝐀 (𝐁𝐞𝐬𝐭 𝐀𝐥𝐭𝐞𝐫𝐧𝐚𝐭𝐢𝐯𝐞 𝐭𝐨 𝐚 𝐍𝐞𝐠𝐨𝐭𝐢𝐚𝐭𝐞𝐝 𝐀𝐠𝐫𝐞𝐞𝐦𝐞𝐧𝐭): Always have a clear fallback plan. A strong BATNA isn’t just a backup; it’s a powerful leverage tool that ensures you’re negotiating from a position of confidence rather than necessity. In vendor relationships, the best negotiations are built on value, transparency, and mutual respect. When both sides understand the stakes and goals, you pave the way for enduring partnerships that drive long-term results. 𝐖𝐡𝐚𝐭 𝐧𝐞𝐠𝐨𝐭𝐢𝐚𝐭𝐢𝐨𝐧 𝐬𝐭𝐫𝐚𝐭𝐞𝐠𝐢𝐞𝐬 𝐡𝐚𝐯𝐞 𝐲𝐨𝐮 𝐟𝐨𝐮𝐧𝐝 𝐦𝐨𝐬𝐭 𝐞𝐟𝐟𝐞𝐜𝐭𝐢𝐯𝐞 𝐢𝐧 𝐛𝐮𝐢𝐥𝐝𝐢𝐧𝐠 𝐬𝐭𝐫𝐨𝐧𝐠 𝐯𝐞𝐧𝐝𝐨𝐫 𝐫𝐞𝐥𝐚𝐭𝐢𝐨𝐧𝐬𝐡𝐢𝐩𝐬? 𝐋𝐞𝐭’𝐬 𝐥𝐞𝐚𝐫𝐧 𝐟𝐫𝐨𝐦 𝐞𝐚𝐜𝐡 𝐨𝐭𝐡𝐞𝐫—𝐬𝐡𝐚𝐫𝐞 𝐲𝐨𝐮𝐫 𝐭𝐢𝐩𝐬 𝐛𝐞𝐥𝐨𝐰! #Venwiz #CapEx #Procurement

You’ve made it through the interviews. They want you. Now comes the part no one prepares you for: the negotiation. At the senior level, this isn’t just about salary. It’s about clarity. Leverage. Long-term value. Here’s how I advise experienced professionals to approach it - with confidence and strategy: 📌 1. Anchor in value, not emotion 🚫 “I was hoping for a bit more based on what I made previously.” ✅ “Given the scope of the role and the outcomes we’ve discussed, I’d like to explore a package that reflects the business impact I plan to drive in the first 12 months.” Why it works: It centers the conversation around their needs, not just your preferences. 📌 2. Don’t rush the conversation Let them make the offer first. That’s when you have the most leverage. If asked early: ✅ “Compensation is important, of course-but right now I’m most focused on mutual fit and impact. I’d love to revisit this once we’re aligned on the role itself.” Why it works: It signals maturity and keeps the focus on alignment-not just money. 📌 3. Ask smart questions before negotiating Sometimes what sounds like a good offer lacks context. Try asking: – “How is variable comp structured across the leadership team?” – “What does equity refresh or performance-based adjustment look like in year 2 or 3?” – “Is the title flexible at this level, or is it tied to comp bands internally?” Why it works: Questions like these show strategic awareness-and often reveal hidden negotiating room. 📌 4. Think beyond base salary At SVP, Director, or even mid-senior roles, the most meaningful levers may be: – Bonus structure – Equity or stock refresh schedule – Scope of team or decision-making authority – Flexibility, location, or growth pathway – Title (especially if tied to future opportunities) Don’t be afraid to ask: ✅ “If base isn’t flexible, could we explore other levers that would make the total package feel more aligned?” 📌 5. Know your walkaway point Negotiation isn’t just about getting more-it’s about getting clarity so you can say yes (or no) with confidence. Final thought: - You don’t need to be aggressive to negotiate well. - You need to be clear, prepared, and calm. And remember: -They’ve already decided they want you. -You’re not starting the conversation from scratch-you’re finishing it from strength. If you're approaching the offer stage and want to negotiate with confidence (not anxiety), follow me for practical advice on senior-level job strategy, storytelling, and career growth.

The Orange dilemma: Why splitting the difference might be splitting the opportunity Picture this: You’re in a #negotiation class. You’ve been paired with a stranger, given one orange, & told both of you need it. Naturally, everyone’s inner toddler emerges. "Mine!" echoes silently. The clock is ticking. What do you do? Most pairs—proud of their brilliance—cut the orange in half. Problem solved? Not quite. Both walk away with 50% of what they need. But here’s the kicker—nobody asks why their partner wants the orange. Now imagine this: one person needs the juice, the other needs the rind. Instead of splitting, they could both get 100% of what they want—if only someone had asked: "Why do you need the orange?" This isn’t just a fruity parable; it’s a reflection of what happens in #business negotiations all the time. Harvard research on integrative negotiation strategies highlights that focusing on interests (not positions) leads to higher-value outcomes. Yet, most negotiators default to positional bargaining—fighting over the orange—without ever exploring the underlying reasons. The "split the orange" mindset plagues businesses: • Budget battles: Two departments argue over resources & end up sharing a meager slice instead of collaborating to unlock new funding sources. • Partnership deals: Companies compromise on terms instead of digging deeper to discover complementary goals. • Hiring negotiations: Employers haggle over salary without discussing non-monetary benefits that might satisfy both parties. According to a study by The Program on Negotiation at Harvard Law School, #negotiations that prioritize interest-based solutions create 42% more joint value than those that default to splitting the pie. Yet, businesses often rush to divide rather than multiply outcomes. Why we default to splitting? 1. Lack of curiosity: People focus on positions (“I need the orange”) instead of interests (“I need juice”). 2. Time pressure: Urgency pushes quick fixes. 3. Fear of rejection: Asking deeper questions feels risky. 4. Cognitive biases: Daniel Kahneman calls this "System 1 Thinking"—the brain’s tendency to leap to conclusions without critical analysis. To avoid the orange fiasco in your next negotiation, try these tips: • Start with 'Why?': Understanding motivations creates better outcomes. • Focus on interests, not positions: Ask, "What problem are you trying to solve?" • Be curious, not combative: Approach negotiations like a detective, not a gladiator. • Expand, don’t divide: Harvard’s Getting to Yes promotes win-win solutions by enlarging the pie. Next time you’re negotiating—whether budgets, partnerships, or literal oranges—don’t rush to slice. Instead, peel back the layers, squeeze out details, & zest up your curiosity. Because the best deals aren’t made by cutting things in half. They’re made by finding ways for everyone to walk away whole. So, ask the question that could change everything: "Why do you need the orange?" #Leadership

Two weeks before contract signature, my incumbent supplier added £240,000 to the price. And I was meant to be on a flight to Spain. 9 months of procurement work Countless stakeholder workshops. A high-profile transformation hanging in the balance Now, my “done deal” had just exploded in cost Egg about to be smeared all over my face My CIO was saying: “We can’t delay. Just make it happen.” Instead of wine with my husband and parents in Alicante, I was pacing my flat in Manchester. Back then, I had plenty of negotiation tactics in my head. But my “strategy” was really just random acts of tactics. A push-back here A vague threat to re-tender there An awkward silence for good measure There was no system No process Just grasping Since then, I’ve built a step-by-step procurement negotiation framework I use whenever a supplier tries to move the goalposts. Here are my first 4 with real procurement examples: 1️⃣ Re-anchor to value before price Suppliers want you focused on the increase. You want them focused on the deal. "Before we talk numbers, let’s recap what’s on the table so we’re aligned." Spend 3-4 minutes on: 🔹The business problem 🔹Why they were selected (unique capabilities) 🔹The agreed scope 🔹The business impact if delayed Example: "This upgrade eliminates £500k a year in manual workarounds and is on track for a Q4 launch, which is critical for your client references in this sector." Now a pure “price increase” conversation is twice as hard for them to win. 2️⃣ Get all the asks on the table When you re-anchor, they’ll hit you with one demand. Example: "We need two extra consultants to meet your timeline." Don’t solve it yet. "If we worked with you on that, what else would be in the way of moving forward?" Keep asking until they say: “Nothing else.” Then confirm: "So if we resolved X, Y, Z, there’s nothing else stopping us from signing?" 3️⃣ Stack rank their demands Suppliers will give you a laundry list, new resources, extended payment terms, travel expenses.... Make them prioritise: "Which is most important to you, and which least?" Now you can decide where to give a little to protect what really matters. 4️⃣ Uncover the real driver If you negotiate only on what they ask for, you’re bartering. You need the why. Example: "What’s driving the need for two extra consultants?" 🔸Maybe they’re short-staffed 🔸Maybe it’s risk avoidance 🔸Maybe they’ve overpromised internally Once you know, you can: 💠 Offer your own project resources for certain tasks 💠 Shift non-critical deliverables to phase two 💠 Negotiate a capped rate for the additional consultants That 2016 project? The supplier walked away with scope they could deliver comfortably. We walked away £180k under their revised ask. And I still caught the last two days with my family in Spain. -- Enjoyed this? I write more Procurement stories in my newsletter. Link in my highlights.

Harvard Business School’s Program on Negotiation teaches a framework that every business owner considering a sale should understand. BATNA. Best Alternative to a Negotiated Agreement. It’s the foundation of all effective deal making and negotiation strategy. I use this concept often with clients who are struggling with whether to accept an offer or not. Here’s how the conversation usually goes. “We’re just not sure we want to accept this offer and sell.” “Okay. Let’s talk about your BATNA. What’s the alternative to selling?” "Well, we'd continue to operate the business." "Right. And remind me why you came to me and hired me in the first place." "Because we didn't want to continue operating the business for these five compelling reasons." Silence. "So now you've got the devil on one shoulder and the devil on the other. Which one scares you more? Continuing to run the business with all the things you told me were problematic? Or selling and dealing with the psychological and practical issues of that?" This is where most sellers get stuck. They think about selling in isolation.  They don't think about the alternative. The alternative isn't some magical third option where everything gets better. The alternative is continuing to do exactly what you're doing now. The thing you said you didn't want to do anymore. If you're not willing to accept a market offer, then you need a plan. A real plan for how you're going to grow the business to the valuation you want. And you need to accept that you're going to continue taking all the operating risk while you execute that plan. The market might go into recession. Your business might get worse, not better. There are no guarantees. But at least have a plan. Because the market isn't going to wake up tomorrow and decide they didn't offer you enough money. If anything, coming back to market later makes buyers wonder what's wrong. It's like a house that's been on the market too long. Everybody knows that house. And they're skeptical. Your BATNA matters. Think about it before you reject a legitimate offer.

The more you justify, the weaker you look. Especially in valuation defense. In negotiation psychology, excessive explanation is read as uncertainty. When you over-justify: You signal doubt. You invite scrutiny. You shift from authority to defense. And once you’re defending, you’re negotiating from below. Strong operators do something different. They anchor clearly. Then they stop. Here’s how to sharpen this in real deal rooms: 1️⃣ State the number cleanly. No apology language. No softeners. No “we believe.” Just clarity. 2️⃣ Support once — not repeatedly. Give the core drivers behind your valuation. Then let silence work. 3️⃣ Answer only the question asked. Don’t add context that wasn’t requested. Extra detail creates extra attack surface. 4️⃣ Control pacing. Slow delivery signals certainty. Fast delivery signals tension. 5️⃣ Tolerate silence. Silence feels uncomfortable. That’s exactly why it’s powerful. Remember: Credibility doesn’t come from volume. It comes from composure. When your numbers are solid, they don’t need emotional reinforcement. Authority is calm. Precision wins. Raj Brar Global Deal Strategist & Performance Coach