It was only 6 years ago that we entered uncharted territory when the global trading system screeched to a halt. Pretty quickly a whole lot of traditional approaches to business negotiation were thrown out of the window as players across every supply chain realised that cooperation and flexibility were essential to survival - using power and taking a win/lose approach simply wasn't going to work when supply chains were fundamentally broken.
As the world started to open up during 2022-23, it was clear that some (or even many) of those crisis driven lessons were quickly forgotten and bad habits started to creep back into day to day negotiation behaviour. As world leaders in mutual gain, collaborative negotiation, we watched as that happened with some disappointment but continued to help our clients stay on the path of win/win, because that's always been, and will always be, the most effective approach to building value and maintaining goodwill in business relationships - in essence making deposits that can be redeemed when the going gets tough.
And so, here we are in early 2026, a mere 6 years on from the Covid shock. The world economy is again at a crisis point with geopolitical uncertainty, rapidly changing organisational risk exposures, economic volatility, inflation and critical supply chains again under threat. What's the right response when it comes to negotiation? In our view, smart organisations that have the ability and the will to deploy best practice collaborative, mutual gain negotiation approaches will ride out the volatility and uncertainty far better than those who've forgotten the lessons learned during Covid.
Two of those important lessons to heed right now:
- Don't panic, but be proactive - don't wait until the shocks work their way to your front door and then start to think about how to react. Talk today to your staff, key suppliers and customers honestly and openly about the impact of the Middle East oil and gas crisis on your ability to deliver products and services and comply with contractual obligations, and the effect on the economics of your business relationships. Naturally those conversations shouldn't be freewheeling and off the cuff, they need to be well thought through, disciplined and help to structure expectations about what might come in the short and medium term as contracts may need to be renegotiated.
- Remember that your customers and suppliers have their own set of customers and suppliers in their part of the value chain so the issues are systemic, not restricted to your organisation. That means it's vital to be curious and think more broadly than just the set of bilateral business inputs and outputs at the boundaries of your organisation. For example, being strategic and flexible in thinking about needs and interests may mean that you uncover the fact that the solution to your problem can be found in a supplier to your supplier and that you have the ability to trade "upstream" with them via your supplier to everyone's benefit.
Our advice? Keep calm, think strategically and be flexible. Now is not the time to adopt a negotiation strategy of '.......this looks complicated, I'll go and get a bigger hammer.'
If you're looking to move beyond the 'bigger hammer' and need a disciplined strategy for your upcoming contract renegotiations, let’s talk.