A negotiation process is made up of different phases, which chronologically build on each other. The most challenging and risky phase, for example during a corporate acquisition, is the period following the dealmaker’s moment of glory. It is the transition phase right before the realmakers are in charge, when the contract has been signed but execution has not started yet. In this phase, lawyers are clarifying details, HR experts are conducting exploratory talks, and employee representatives are forming new committees. In this phase of reorientation, companies tend to lose their best people.
Phase of the Dealmaker
Dealmakers want a deal because that is what they are being paid for. They tend to take considerable risks in order to close a deal and keep information close to their chest. Sometimes, they will not consult with key people and consciously avoid putting critical points on the table to close the deal.
The phase in which neither Deal- nor Realmaker are in charge is the most dangerous for your organization. After the Dealmakers have withdrawn, the first surprises usually come to light. The Realmakers have no choice but to take over and tidy up the mess. This phase is so precarious because there no one person is in charge. For instance, sales managers have made promises without putting them in writing and the product manager will be confronted with the promises made.
The product manager will likely raise the matter to the decision maker for resolution. Should they adhere to the supposed verbal agreements between sales managers and customers or stick to the written agreement? They wait forever for a response. This phase has little to do with the actual negotiation - this uncertain phase poses a leadership challenge for all parties involved. Interestingly enough, executives like to withdraw during this phase. A common comment heard during this time is «I’d rather say nothing than say something wrong».This attitude results in increased uncertainty for all parties, especially for employees, and is the breeding ground for rumours and speculation.
Phase of the Realmaker
Realmakers are responsible for implementing the agreement that has been negotiated. They are driven by the following factors:
Realmakers ask for time bufferst o be built into the timeline – precision is valued over speed. Realmakers know that there will be surprises that need to be dealt with during implementation.
Realmaker openly share information and expect the same from their negotiation partners. They know that sharing information will result in long-term success.
3. Number of people involved
Realmaker involve all stakeholders in the negotiation that have a role in implementing the agreement. They know that involving key people from an early stage will be beneficial for implementation later on.
4. Critical points
This is where the difference between dealmakers and realmakers is most pronounced. Realmakers know that they will have to pay for everything that was swept under the carpet in the negotiation. Therefore, realmakers tend to express critical points openly during negotiations – as a result, they are often seen as waverers or naysayers.
As the decision maker you should bear in mind one fundamental point ahead of a negotiation: be aware that giving a mandate to Dealmakers will likely result in surprises after the signing. If your main priority is to close the deal, then Dealmakers are the right pick. If long-term security is of greater importance to you, then link the success of the deal to its execution and implementation. This is the only way to ensure that important information is brought up and negotiated during the Dealmaker-phase. In addition, it makes sense to only grant bonuses for the attainment of previously agreed targets.