There is a lot of “buzz” in the media about always renegotiating and striving for better terms in new or existing agreements. However, negotiating agreements takes energy, knowledge, and time in a business. Knowing when it is worth it to negotiate can ensure that company resources are used wisely. Here are some scenarios in which negotiating may not be appropriate or useful.
The Work Is Already Covered
If the matter under consideration is already covered by an existing agreement, renegotiation may be detrimental, especially if the original agreement is favorable. It may be worthwhile to ensure all parties know the new “matter at hand” is covered under the XYZ agreement. Anything more may be an unnecessary expenditure of time and energy.
You Are Renewing An Established Contract
You or your organization may have an agreement that automatically renews periodically. If a member of your team reviews the agreement and determines that better terms are not possible or that any gains would be worth less than the effort to negotiate, then simply allowing the automatic renewal may be the best position in the agreement. Your organization may also be grandfathered into favorable terms or rates that would be null if any part of the agreement changes.
Short-Term Project With A Trusted Partner or Group
Let’s say you are in Operations and have engaged the IT team to install four new workstations. You have worked with your IT department before, and they have always been reliable and delivered on commitments. This type of agreement may only need a simple email confirming the scope of work and the timeline. There is no need to negotiate how many staff members will be assigned, what uniforms they will wear, etc.
Similarly, if you have a third-party vendor already delivering a negotiated body of work, and there is a minor adjustment that can be done in a quick phone call. In this example, a detailed negotiation may be unnecessary. A quick note in the project records is likely all that is needed. Documentation is useful. Bringing in teams to negotiate a 3-minute task is likely a waste of resources.
The Price is Set
Sometimes, the price and terms are set. This can be true for a highly on-demand consultant, software, hardware, art, venue, etc. Think of concert tickets. The artist and promoter set the schedule, location, duration of the event, and the process of buying tickets. You get to decide if you can accept the terms available and the advertised price. In these “take it or leave scenarios,” the best negotiators know when to recognize it’s not a negotiation.