1. Commercial discussions are multilevel
2. Don’t entertain commercial discussions with your counterpart
3. Everything is negotiable
4. In a contract discussion don’t say “the contract says [xyz]”
5. Don’t distrust your service provider but remain critical
6. There are two types of problems: your problem and my problem
7. In case of a problem, have an open mind
8. Escalate together
9. Don’t interpret the contract yourself
10. Don’t assume (what the contract says)
Bonus rule: “Seek first to understand, then to be understood” (Stephen Covey)
1. Commercial discussions are multilevel
They can initiate at the associate level and could end at the board level. It’s therefore advisable to apply a multilevel approach, meaning different management levels involved at different moments. This allows for the first management level to “test the waters” and find the ZOPA (Zone of Possible Agreement). The final management level can conclude the discussions based on what the lower levels have accomplished in terms of narrowing the gap.
2. Don’t entertain commercial discussions with your counterpart
Leave this to your contract manager or commercial lead. Talk about content only. When it becomes commercial, tell your counterpart that you will consult internally first. Delivery managers, project managers etc. who are involved in the “technical” side of a project should “stay friends” with their counterparts. It is advisable to conduct commercial discussions as a parallel track.
How do you recognize a commercial discussion?
Is the conversation about money, extra team members, scope, complexity?
If yes, it’s a commercial discussion.
3. Everything is negotiable
This means every aspect of the contract can be discussed, even if it appears to be carved in stone. E.g., the Latin contract law concept “rebus sic stantibus” allows parties to review their contractual obligations when there has been a fundamental change in circumstances.
4. In a contract discussion don’t say “the contract says [xyz]”
This puts a strain on the discussion and kills the creative thinking process that is required to find mutually agreeable solutions.
5. Don’t distrust your service provider but remain critical
They also have an interest in growing their client’s business.
6. There are two types of problems: your problem and my problem
Don’t make your problem my problem. Of course, you’re happy to help but it remains their responsibility.
7. In case of a problem, have an open mind
Search for creative solutions. If you’re emotional your brain automatically shuts down. This leaves less brain power to find solutions.
8. Escalate together
Say “we are unable to reach agreement at our level, let’s both inform our managers and ask for their opinion and support.”
9. Don’t interpret the contract yourself
Ask your contract manager instead. Contract provisions need to be read holistically and that takes skill. I have seen finance managers interpret the financial clauses in outsourcing contracts. That’s like the contract manager drafting the monthly financial report. Maybe not a good idea…
10. Don’t assume (what the contract says)
Don’t make an ASS out of U and ME. When in doubt, ask your contract manager. How often do you hear a colleague say “I thought the contract said ABC”? This happens for example when they were part of initial contract drafting but did not see the final version as it was signed.
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