Edward J. Hansen brings more than 20 years of experience representing clients in technology transactions that involve significant business change. If you’ve attended a SIG Summit, then you are likely familiar with Ed and his work. In addition to being an active speaker at industry conferences, he has authored and presents the “terms and conditions” module of the SIG University certification program, regularly conducts contracting master classes (including for SIG’s Executive Immersion Program), serves on the advisory board of the Shared Services and Outsourcing Network, and is a regular guest lecturer at New York University’s Executive Master of Business Administration program.
You have a lot of experience representing clients in technology transactions. What are some examples of how technology has changed or impacted the way you approach your job?
The technology in place at any given time actually has little impact on how I approach my job. What does impact my job is the fact that the technology landscape when the deal is two years old may not be the same as it was when we went out to RFx.
I started working in the technology space in 1993 and spent almost a decade working with companies who were undertaking reengineering efforts. What I learned, mostly through trial and error, is that the process you go through in procuring and contracting for transformational technology is at least as important as the contract that emerges. Because of the velocity of change, the relationship you form during the process is often what carries the deal, and the contract has to reflect that.
This requires what I think is a unique set of hard and soft skills that allow you to be able to influence the overall deal (think schedules to the contract), secure the protection that your client requires if the relationship doesn’t work out, and be a good actor who actually contributes and, in some cases, promulgates a strong relationship between the parties and a culture of collaboration. If you can form a good relationship and base your contract on that, your deal has a much better chance of success.
The Morgan Lewis team is covering contracts drafting and negotiations at the New York City Executive Immersion Program--why is this such an important topic?
This is important because studies show that roughly two-thirds of the value of transformational relationships is locked up in bad deals.
This isn’t just a presentation — this is a masterclass — and there’s a huge difference. This class is about complex negotiations and contracting. This means that we will be discussing the strategic thinking and techniques for holistically working deals where the parties are interdependent after the contract is signed. This is very different from a contract where every last detail of what a customer is buying can be described in the contract.
We present this as a masterclass because we will get into controversial topics where members of the audience may very well have experience that will add to the discussion. It’s not unusual in these classes for us to get into very lively discussions.
What can attendees expect to learn in these sessions?
First of all, this is not a program where you’re going to walk away with all the terms you need to handle whatever the trend of the day is. This is about principles and the skills required to make those principles work. However, it is not theoretical. I’ve designed this so that anyone sitting in the audience will be able to take away what they’ve learned and start applying it immediately.
This year we are going to break the program into two parts. The first part will discuss the principles — incomplete contracting, risk allocation versus mitigation, structural versus dynamic risk, some tips on drafting, deal financials versus deal economics, transaction costs and the real value of the contract.
The second part will dive deeply into how to negotiate a transformational deal. We’ll cover topics such as how to get speed, cost and quality, alignment, collaborative negotiating — which is powerful when you know how to do it and a disaster when you don’t. We will also be addressing deal fatigue, core teams, accountability, and the use of language and humor. And we’ll do this against a backdrop of interesting deal types.
What advice do you have for navigating clients through complex negotiations?
The first is to have some humility and really make sure you know what you’re talking about. The first thing I do when I get into a complex deal is go back and make sure that I really know what the deal is about. I look up the technology, look up the buzzwords and don’t rely on just what I “think.” The next thing I do is get on blogs and look for the success stories and the horror stories. This grounds me when I talk with the SMEs about what we’re trying to accomplish.
The second is not to let the deal process get ahead of the deal. What I mean by that is that sometimes you need to take the time to digest and understand where you are. Pre-RFx you may not know what you want, but you’ll have objectives. Make sure you understand them. Once the engagement starts to happen, make sure you allow yourself to be thoughtful. This will cut down on deal fatigue.
The next is to listen to that little voice. If your gut says something that doesn’t make sense, don’t feel that you’re a dinosaur for asking questions. In complex deals, the language people use isn’t always consistently defined. You may have that feeling because something really doesn’t make sense.
We will get into many more of these in the class.
What are the core skills professionals should develop to be successful in high-stakes negotiations?
This is going to sound odd, but I really think the core skill to develop is to learn to relax and have fun. High-stakes negotiations often represent the pinnacle of someone’s career (at least to that point). You’re transforming an organization, will have lasting impact, may invent a method or process along the way, could come up with innovative pricing, you name it. If you’re a change agent or a deal guy this is what gets you up in the morning. You’ll be more effective this way.
The other thing is to remember that transformative negotiations require space. You need to take the space you need to think and react, and you need to give the other side the space they need to do the same. This cuts the base tension at the table and will encourage the problem-solving that is necessary to do this right.
Want to join this masterclass? Register for the Executive Immersion Program on February 7 in New York City. This masterclass will help you become a better negotiator, develop your core skills and spark lively discussions with your peers in the field.
Stacy Mendoza is a Digital Marketing Specialist with Sourcing Industry Group (SIG). Stacy began her career in market research as an editor for Hart Research Associates in Washington, D.C. Since moving back to Florida in 2014, she has worked in marketing and public relations, specializing in content creation, media relations and crisis communications. Stacy is a passionate volunteer who donates her time to help nonprofits develop marketing strategies and awareness campaigns. Stacy holds a Bachelor of Arts degree in English from The Florida State University in Tallahassee, Florida. Follow her on Twitter and tweet at @SIG_Stacy.