Chapter 17: REPORTING RESULTS Is 99 Percent Enough?

CHAPTER 18

Commitment

T HE STRAIN OF I MPLEMENTATION

THE BURDENS OF TRAVEL are over, tense negotiations have come to a close, the sixteen-hour work days have reverted to normal length, and the detailed reports have been written. Now the real work begins. A common problem among negotiators is that they return to their companies, contract in hand, with the belief that the job is complete. Unfortunately “the deal” is only a piece of paper at this point. Proper follow through by all participants will really be the test of whether negotiations were a success or a failure. Follow through can even save negotiations that were a “wash.”

Exploiting the Investment

Investors rarely move into a market unless the timing is right. Those seeking investment generally have strenuous time constraints. Both groups also understand that the window of opportunity can close quickly. Political upheaval, exchange rates, and market movements can turn twenty-four hours into an eternity. And yet, after spending a great deal of time and money on negotiating a venture, either side or both may start to drag their respective feet during execution of the contract. This can happen because investors suddenly become wary of their new partners or because the recipients of the investment feel that, in retrospect, they got a poor deal.

In the first case, the company receiving the investment must do everything they can to assure the investor that the whole process will go as planned. A sudden change in the legal or political environment may even require a return to the negotiating table. Both sides must be committed to making the deal work to overcome these hurdles, but the greater part of the burden is on the investment’s recipient. In the second case, the burden of commitment is reversed. Investors must convince their new partner that the deal as contracted will be to the benefit of both parties. While the counterpart’s lack of commitment should have been discovered during the original negotiations, new information (or suitors) may be at the root. Here again, a return to the table may be required to save the venture.

Of course, many times there’s no real problem, only different senses of urgency. When investment is at the center of the deal, the pace will be set by whichever party has the lesser need. Companies hungry for investment will move at the whim of the investor. Investors hoping to gain marketshare in advance of competitors will find that the commencement of the venture will be very much controlled by their new partner. While a certain amount of gamesmanship is to be expected, all parties contracted are recommended to operate in compliance with the stated terms. In today’s marketplace, positions of power change rapidly, and the puppeteer can swiftly become the puppet.

Buyers and Sellers

The commitment between buyers and sellers in a simple trade may be significantly shorter in duration than that of investment venture, but it should be no less strong. Sellers that ship late, ship partial orders, or ship inferior or no product at all can put the quietus on the best of negotiations. Buyers that return specified goods, refuse delivery, renege on letters of credit, or pay late or never at all can have an equally devastating effect. Barring extreme circumstances, such behavior by either party shows a lack of commitment to the deal. If the offending party is a long-time player in international business, their procedures should have been uncovered during proper prenegotiation research, and the victims can only blame themselves. A degree of patience and recognition that failure may be an option will be required. Commitment requires that the victims salvage what they can.

If these deal busters are novices, the opportunity exists to save the deal and educate the offenders as to the value of commitment. Often times new players in the arena aren’t fully aware of their responsibilities or the ramifications of poor performance in trade. Those on the receiving end of the poor service or products need to make these novices aware that reputations make the difference between long-term and short-term players. They must be assured that they’ll be unable to solicit other business unless the contract is fulfilled as written. This posture may ring hollow with the truly devious who make up a small portion of traders. Commitment to completion here will not guarantee full success but will secure enough to make continued contact worthwhile.

Following Up on Failure

Even when negotiations have been a true failure and a bad deal has been cut, follow through can lead to success. A contract is a contract, and novices as well as experienced negotiators will, on occasion, sign “bad” ones. It doesn’t change the fact that the contract must be fulfilled if there’s to be any expectation of long-term operations in the marketplace. Besides avoiding the legal fallout, following through on a less-than-ideal contract will secure a reputation for commitment and honesty that can be exploited in other deals. It may also lead to a chance to renegotiate the original “sour” deal once counterparts recognize your integrity—not always, but sometimes.

Negotiations that have resulted in one side declining the proposed venture also demand follow through from professionals. Rarely are the differences irreconcilable and they may only hinge on changes in the marketplace uncontrolled by the negotiation’s participants. If your’s is the side that declined the deal, assuming you did so gracefully, maintain contact with the counterparts and express your continued interest in future dealings with their company. Maintaining some form of relationship, even if it’s as simple as a company newsletter or seasonal greetings, will keep your company in the “mix” if a potential deal does arise. It may even lead to a referral to a company that can provide the goods, services, or investment opportunity desired.

If your company was on the receiving end of the refusal, take heart and don’t take it personally. Find out the cause of the rejection and make every effort to seek a correction. Proposals may be rewritten, budgets reconsidered, product lines reworked, and policies reinterpreted. Maintain contact with the counterpart, thanking them for their considerations while expressing your continued desire to work with them. Resubmit your reworked proposal and offer to reopen negotiations. In the words of experienced salespeople everywhere, “‘No’ just means ‘not now.’” The worst that could happen is that you get a reputation for persistence.

Rules of Follow Through

ONE: BE PROFESSIONAL The term professional is used for those who’ve attained a high level of expertise in business. They have gotten that far because they’ve learned to separate personal feelings from their business life. This isn’t to say that they aren’t passionate about business. Professionals are the most committed of any participants in a deal. For them, “a deal is a deal” and whatever was agreed to must be acted upon by all concerned parties. Personal differences, emotions, wounded pride, or inflated egos aside, a professional will follow through on a contract. Anything less is unthinkable.

TWO: BE OBSERVANT Following through isn’t the same as plunging ahead blindly. Circumstances that surrounded negotiations may have changed significantly. Politics, finance, and even geography may have all taken a turn for the worse since the deal was signed—or maybe for the better. Few contracts have zero wriggle-room and negotiators must build as much of it into a deal as they can to allow for unforeseen circumstances. Those following through must be observant in order to catch those circumstances when they arise. Being able to observe what new found partners are doing is also part of follow through. Whenever possible, members of the negotiating team should be left “on the ground” until the contract is in full force and running smoothly. It’s okay to trust the other party, but that trust must be verified.

THREE: BE NICE Even when the sternest of strategies has been used to close a deal, there is always room for cordiality. Avoid quibbling over meaningless details and proceed with the execution of the contract. Patience will be required to some degree in all business dealings and in the early stages of follow through, especially with novice counterparts, who may put you to the test. Keep in mind that the relationship may last for decades and there’s little to be gained by enmity among the participants. It’s also best to remember that in the future, your mistakes may require the cordial patience of your new partner.