9 Tactics For Better Remote Negotiations

Negotiation Strategies
9Negotiations
Tactics for Better Remote
by Milan Prilepok
July 21, 2021
Creative Crop/Getty Images
Summary. Covid has changed the way companies should negotiate. Today all
traditional deal terms are up for grabs and it behooves negotiators to carefully
reevaluate their assumptions, assess their industries, prioritize their asks, and
involve key stakeholders more deeply... more
Whether you’re a manufacturer looking to sign a new supplier
agreement, a tech company trying to close a big commercial
contract, or a retailer wanting to modify its warehousing terms,
the Covid-19 pandemic has changed the way you should
negotiate.
There are two reasons for this.
First, everything — from what and how much you buy, to who or
what you sell, to the length and terms of the contract — is up for
grabs. Savvy negotiators will rethink their assumptions and
evaluate current and anticipated shifts in their industry, assessing
the implications for their own organizations as well as the
changing priorities of their partners. The world of buyer-supplier
relationships that emerges over the next few months may look
very different from the stability, growth, and predictability that
prevailed pre-pandemic.
Second, some negotiations will remain virtual even as the world

opens up. Based on my experience, client conversations, and
analysis while leading our negotiation practice at McKinsey, only
10–15% of negotiations were remote or virtual before the
pandemic. I anticipate at least 25% of negotiations will be remote
going forward. Those will most likely be less complicated deals
but also could include portions of those that are more complex.
In this article, I’ll discuss what these two changes mean for how
you should negotiate in the coming months.
A New Landscape
Let’s start with what has changed when it comes to deal terms.
Many traditional terms are getting torn up just at a time when
organizations are renegotiating contracts that won’t expire for
several years. It’s critical to get these right.
There are many reasons for this volatility. For one, every industry
is now starting from a new position. For example, automotive and
aerospace companies have lived through a year of lean demand
and are basically restarting for 2021, while the entertainment
industry is balancing a surge in demand from streaming services
at the same time that virus restrictions made production of new
content challenging. Distressed companies in many sectors are
likely to merge, potentially reducing the number of buyers or
suppliers.
Pricing, too, may be more volatile as supply chain conditions shift
rapidly. Because suppliers now may be unable to meet the full
demand of their customers, buyers may find it advantageous —
though expensive — to get treated as preferred “front-of-the-line”
customers in situations where supply is limited. This is quite a
shift from bargaining on price or long-term volume as they might
have done in the past. Meanwhile, suppliers that can offer more
flexibility in payment terms may find a greater number of
partners. Another promising approach for buyers and sellers alike
is to get creative about non-financial terms such as intellectual
property ownership, exclusivity, access to innovation, risk-
sharing, investments and resource contributions, and contract
flexibility.
The organizations that most effectively navigate these new

opportunities can expect to see expanded margins, enhanced
supply chain resiliency, improved supplier service levels, and
priority access to technology and innovation that is in high
demand.
To do so, it will be more important than ever for negotiators to

prioritize, conducting more scenario analysis to identify which
terms to focus on. They will also need to work more closely with
senior leaders: Last year CEOs and CFOs became more immersed
than ever in their biggest customer and supplier negotiations in a
bid to gain leverage. Negotiators should leverage the credibility
they built with these executive leaders to continue to pull them in
to the most critical negotiations.
Putting the New Tools to Work

Critically, today’s negotiators also need to use online tools
effectively to take advantage of this moment. Here is our advice
for enhancing your negotiation prowess in the digital domain:
Assemble a detailed agenda. Co-write your agenda with your

negotiating counterparty in the spirit of collaboration. Leave
time for both buyers and sellers to show how things have
changed for them as a result of the pandemic, presenting both a
current-state view and the challenges to their business,
supported by credible data. Also leave time for breaks, so teams
can caucus based on new information that emerges during the
negotiation, given how much has changed. Finally, as always,
schedule sufficient time at the end to fully align on agreements
and to clear next steps — we often see this item shortchanged.
Schedule shorter, more frequent meetings. It’s a lot easier to
get an hour on someone’s schedule — even if you have to do it
two or three times — than to get a half-day. Without travel as a
factor, you can schedule several shorter sessions in a short
timeframe, rather than a single mega-deal-making event.
Invite multiple stakeholders. Imagine a financial services
company negotiating to buy technology. Now the buyer can
invite multiple stakeholders to the same meeting — for
example, users in New York, a CIO in San Francisco, and
managers of a remote subsidiary in Brazil. This allows the
buyer’s staff to resolve cross-functional issues directly at the
meeting, such as the CIO’s requirements for better security or
service levels. This can prove critical: If a seller sees or hears
only from a company’s buying department, and nothing from
the key business stakeholder, they will most likely withhold
meaningful concessions.
Test-drive remote video technology. We strongly recommend
the use of video to catch important non-verbal cues or engender
trust. But if the technology being used for the negotiation is
different from your norm — whether it’s Microsoft Teams,
Zoom, Cisco Webex, or Google Meet — investigate any IT
approvals necessary and familiarize yourself with how to turn
cameras and microphones on and off, share documents or
presentations, and use the chat. Fiddling with technology not
only takes time away from substantive discussions and distracts
negotiators, it also erodes professional reputations.
Set up back-channel communication. Coordinate with your
team in advance to use a messaging system like Slack or texting
so that you and your fellow team members can compare
observations as the meeting progresses. That will give you the
ability to pivot the conversation, probe specific areas with
precision, or agree when it’s time to take a caucus break.
Beware using the messaging built into the videoconferencing
tool, though, because it’s far too easy to send your behind-the-
scenes message to your counterparty by mistake.
Start with a personal check-in. You can’t assume that
everyone is fine — people may be dealing with anything from a
sick relative to a factory shutdown. Make time up front to take
your counterparty’s temperature, so that you can begin with a
feeling of mutual concern and trust. This is especially
important when you don’t have access to a strong handshake or
the ability to look them in the eye in person.
Consider privacy. Be aware that whatever you say might be
recorded. Think this through before oversharing, using slang
terms that could be misinterpreted, or making unrealistic
promises. When screensharing, share particular windows
instead of your desktop to avoid showing confidential
information.
Create breakout rooms during breaks. Similar to the hallway
conversations of in-person negotiations, breakout rooms allow
your team to speak privately to let off steam or compare notes
before reconvening. Plan ahead so that your team doesn’t need
to scramble to create an alternate channel, losing precious time
before heading back into the negotiation.
Send a summary of the session. It’s easy to misinterpret or
misremember something in a virtual meeting. After it’s over,
send detailed summaries of what you discussed to your
counterparty and to your own team to document the
agreements, open questions, and next steps.
The next 12 months will be a restart of business after the challenge

of the year of Covid-19. This means that the agreements you strike
could make all the difference in whether you seize the potential
for new growth and new relationships, or get sideswiped by the
rapidity of change. Use these new negotiation techniques to make
the kind of deals that will create both financial and non-financial
value, and become the foundation of your prosperous post-
pandemic world.
MP
Milan Prilepok is partner and global leader of
the negotiation service line at McKinsey. He is a
former lecturer at The Wharton School and has
taught at industry conferences and roundtables
on negotiations at Harvard Business School,
London School of Economics, Women in
Negotiations (WIN), and the Conference Board,
among others.

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Negotiation Strategies

Creative Crop/Getty Images

Second, some negotiations will remain virtual even as the world

The organizations that most effectively navigate these new

To do so, it will be more important than ever for negotiators to

Putting the New Tools to Work

Assemble a detailed agenda. Co-write your agenda with your

The next 12 months will be a restart of business after the challenge

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