Negotiations: Controlling the Flow of Information

In any type of negotiation, information flows between the parties. The information flow can be between the principal negotiators, technical team, finance team, and management or staff not directly associated with the negotiations.

It is imperative that you control this information flow on your side and seek out your counterparty’s data. By designating one point of contact for all communications, your company can present an accurate presentation of your proposal. Information can become distorted if your company does not present its product in a coordinated fashion. It is very easy to take a single data point out of context during complex negotiations.

Valuable information can be extracted from a counterparty not controlling the flow, such as:

• Seriousness of negotiations. Is your counterparty truly trying to fill a need or are they merely gathering bids to determine market price? Was a winner picked prior to start of negotiations and your company is serving only as a backup and/or justification?
• True price. What is the real price at which they will transact? Do they have room to move?
• Competitor information. What price are your competitor’s bidding? What terms are they offering that are more attractive to the counterparty? Who else is in negotiations with the counterparty? Where does your company rank in regards to other proposals?
• Deal considerations other than price. What risks are they trying to mitigate? Is it schedule, product reliability, technology risk, credit or guarantees?
• What is their approval process? Is the principal negotiator the one who approves the deal? If not, who does? What internal committees approve the deal and what are their concerns?

Control the flow of information on your side by insisting that all communications be routed through one point of contact. This includes technical information, finance or any other contacts outside the negotiating team.

If there must be information directly exchanged between technical or other teams, ensure that either the principal negotiator or other commercial person is involved in the meetings. During any such meetings deflect any requests for commercial information back to the point of contact.

Instruct your team and personnel not involved in the transaction to refer any inquiries to the point of contact.