The Language of Negotiation: Why Good Negotiators are Better Interpreters

Have you ever found yourself in a negotiation where the stakeholders just can’t seem to understand each other? Between the business unit, the lawyers, and the supplier, it’s almost as if everyone is speaking a different language. And guess what? You’re the one who has to make sense of it all.

Misunderstandings often arise when there isn’t a solid contract in place with clear definitions of the what, how, and when of a supplier’s deliverables. These miscommunications can turn a straightforward negotiation into a complex ordeal.

The Three Languages Every Negotiator Needs to Understand

To negotiate effectively, you must become a skilled interpreter, understanding the language of each party involved. Let’s break down the three critical languages:

1. The Customer’s Requirements

Imagine you’re at a bustling market. The customer, represented by a technology group or business unit, is figuring out what they need. They work with the supplier’s sales engineers to develop technical requirements and timelines, often using Gantt charts and project plans that can be as clear as mud.

2. The Lawyer’s Legalese

Now, step into the shoes of a lawyer. Good technology lawyers understand the customer’s business well enough to know the tolerance for risks like confidentiality and intellectual property infringement. They use intricate language to protect against these risks, but this legalese can be daunting.

3. The Supplier’s Pricing

Suppliers are in business to make money. They might add subtle “gotchas” in the contract to maximize revenue while minimizing their risk. It’s like navigating a minefield of fine print and hidden costs.

As a contracts negotiator, your job is to ensure all these dialects are translated correctly for each party. Internal negotiations between the business and lawyers can take weeks before the supplier even sees the first draft. Then, months can be spent negotiating with the supplier because neither side fully understands the other.

How to Simplify the Dialogue in a Technology Negotiation

Here are three steps to simplify the dialogue and make negotiations smoother:

Step 1: Translate the Requirements

Lawyers typically have a strong command of English, but without context, even the simplest terms can be confusing. For example, if a lawyer is concerned about protecting intellectual property and hears that the supplier will provide offshore development and support services, they’ll instinctively tighten the contract with restrictive confidentiality and IP indemnity clauses. By providing more context—such as the specifics of what sensitive data may be exposed—you allow the lawyer to tailor clauses that protect the business while enabling the supplier to operate effectively.

Step 2: Translate the Legalese

Most technology professionals understand English, but legalese can be a different beast altogether. As a negotiator, you must translate this into plain language that makes sense to the business. For example, the business might derail negotiations by siding with the supplier on a carve-out for breach of confidentiality in the limitation of liability clause, simply because they don’t understand why it’s there.

Step 3: Translate the Pricing

Twenty years ago, technology acquisitions focused on physical hardware, making pricing simpler. Each widget had a price, and bulk purchases meant discounts. Today, we see a paradigm shift towards virtual, cloud-based technologies and offshore resources. Suppliers constantly devise new ways to maximize revenue from faster and cheaper virtual technology. Good negotiators need to understand these pricing nuances and ensure the customer grasps their implications. For instance, some large software companies have profited immensely because their customers didn’t understand “per core” licensing in virtualized server farms.

Clear Communication Reduces Time and Complexity

Technology negotiations are complex and time-sensitive. Helping everyone understand each other’s language will simplify the process and position both sides for success.

Engage and Reflect

Think about the languages you’ve had to translate as a negotiator. Which ones did you find most challenging? Share your experiences and tips in the comments. Let’s learn from each other and make our negotiations more effective and efficient.