Idea in Brief The Problem Enterprise negotiations often fail to capture maximum value because negotiators fall into two structural traps: agency, where dealmakers’ incentives diverge from the enterprise’s, and alignment, where stakeholder preapprovals lock deals into rigid, lowest-common-denominator terms. The Solution Companies should redefine the negotiator’s role as problem-solver. That means replacing preset consensus with ongoing consultation and transforming deal review boards into deal value boards that give negotiators leverage and enable creative trade-offs. The Next Steps Executives can speed up transactions and produce stronger outcomes by clarifying which issues are worth negotiating, empowering negotiators to explore solutions rather than defend concessions, and creating cross-silo forums that support value creation. Complex negotiations in large organizations often fail—not because the negotiators are inexperienced or unskilled but because they’re constrained by two structural challenges, agency and alignment, and by the ways organizations manage those challenges. These problems consume scarce resources, drain value from promising deals, and leave even the most skilled dealmakers looking ineffective. The agency problem arises because negotiators act on behalf of their organizations yet their incentives and risk tolerance may not perfectly match those of the enterprise. Sales negotiators may prefer any deal to no deal because closing the sale boosts their commission or bonus; procurement leads juggling dozens of suppliers may settle quickly rather than push for better terms because they’re pressed for time. To guard against such subpar outcomes, many organizations narrowly restrict negotiators’ authority, forcing dealmakers to return repeatedly to higher-ups to seek approval for further concessions. That slows things down, undermines credibility, and strips negotiators of the ability to solve problems creatively at the table. Frontline negotiators often end up feeling more like couriers than dealmakers. As deals get more complex, the alignment problem compounds the challenge. In multiproduct, multiregion, or cross-functional deals, stakeholders want to protect their own priorities—on price, risk, timeline, or other areas. For instance, the sales chief cares primarily about pricing and revenue; the engineering vice president is focused on deadlines; the legal team wants to minimize risk. Putting together a deal that satisfies those stakeholders requires negotiating internally first. Getting them to reach pre-negotiation consensus usually requires agreement on the most conservative minimums acceptable to all. Once those thresholds are set, negotiators are left with little room to explore trade-offs or inventive solutions. If the counterparty won’t accept the preapproved terms, the negotiator must reopen internal debates about which stakeholders will make what kinds of accommodations, prolonging the process and eroding trust on both sides. Together, agency and alignment challenges leave many negotiators hamstrung. Unable to explore possibilities that could create value, they’re stuck trading lowest-common-denominator offers with equally constrained counterparties. The results are predictable: slower cycles, weaker deals, and lost opportunities. These are known challenges. The late Roger Fisher, the Harvard Law professor and founder of the Harvard Negotiation Project who helped define modern negotiation theory, proposed ways to address them decades ago in the context of international diplomacy. His advice was to integrate internal and external negotiations, treating internal alignment as part of the negotiation itself. In theory, this allows negotiators to surface creative options internally and build alignment around those options. In practice, however, alignment across silos often devolves into stakeholders’ padding minimum requirements to protect their own priorities, with the expectation that they will need to make further concessions later. That leaves enterprise negotiators boxed in by unrealistic demands. Organizations have tried to fix this problem, but many of their solutions have made matters worse. One global consulting firm, for example, adopted “guardrails” designed to give negotiators the authority to close deals quickly. These included preapproved concessions on specific terms—such as allowing data protection obligations to be increased if the client agreed to certain security undertakings. On paper this meant negotiators could move fast without running back to stakeholders for every change. In practice, though, the list of conditions grew so long and restrictive that the guardrails almost never matched the realities of a live negotiation. As one lead negotiator put it, winning a deal within the tight guardrails “never happens.” In competitive markets, negotiators inevitably return to the internal negotiation table—often multiple times. Indeed, nearly all the enterprise negotiators I’ve worked with have complained they spend more time negotiating internally than externally, damaging their credibility, straining relationships, and delaying results. Ryan Snook The same dynamic plays out at scale. To handle thousands of smaller negotiations, companies often double down on constraints, handing negotiators rigid playbooks and authorizing only preapproved concessions. Anything outside the playbook requires escalation, frustrating negotiators and counterparties alike (who may have their own standard forms to proffer). For high-stakes negotiations, instead of playbooks, some companies rely on deal review boards (DRBs), which simply replicate the process with more-senior participants who preapprove some terms and then parcel out incremental concessions. (To learn about a better approach, see “What Makes for an Effective Deal Review Process?”) What Makes for an Effective Deal Review Process? Typical deal review systems—often called deal review boards (DRBs)—evolved out of capital projects, not complex negotiations. But whereas a capital project can be approved or rejected on the basis of projected risks and returns, a potential deal requires guesswork about what a counterparty may be willing to accept, which inevitably leads to parceling out incremental authority. A better approach for commercial negotiations is to diagnose elements or perspectives that might be missing in a deal and explore internal side deals or enterprise-level trade-offs. Key process design principles Operative questions To prompt better value creation and buy-in, engage and consult with stakeholders early on. Who cares about this deal? Are there issues or parties that may significantly impact value at signing or beyond? To integrate insights and develop better solutions, encourage iterative consultations among representatives at the negotiation table and key stakeholders. What have we learned so far? What don’t we understand about our counterparty’s interests? What additional ideas should the negotiating team explore? Can we improve the deal’s outcome by managing any internal barriers that limit possible solutions? For efficiency, reduce the number of stakeholders involved in the process as the deal matures. What uncertainties remain? Who is most affected by those potential changes? The good news is that both the agency and alignment problems can be addressed—but only by rethinking what it means to conduct enterprise negotiations. First, organizations need to decide which deals and issues are even worth negotiating and take the rest off the table. Next, they need to bring in a new kind of negotiator: not an “agent” with limited authority but a problem-solver tasked with developing a business plan rather than making commitments. Finally, instead of relying on advance internal consensus, organizations should encourage active and ongoing deal shaping by empowered decision-makers. The following sections include practical steps organizations can take to negotiate deals in a holistic, creative, and timely fashion instead of working through slow, ineffective, and outdated delegation and review mechanisms. Don’t Negotiate Every Material Issue Negotiation orthodoxy holds that the more issues there are on the table, the more room negotiators have for creativity. (Single-issue negotiations, after all, are entirely zero-sum, giving dealmakers no possibility to discover and make valuable trade-offs.) This principle works in simple negotiations, but in large enterprises wrestling with agency and alignment challenges, it breaks down. Each change within the parameters of a negotiation consumes time and energy. Doing negotiation well at scale—across hundreds of deals—means being selective about where you spend those resources. Not every deal merits a major negotiation effort, and not every issue within a complex deal is worth fighting over. The key, then, is to understand which issues in which negotiations have the greatest impact. What matters is not how large the issue is or how much potential value or risk it represents, but how much of that value or risk is truly at stake in the negotiation. Negotiators should ask themselves: How much would the outcome really change if we negotiated hard rather than simply accepting a reasonable, market-based standard? If the variance is small, the return on a full-blown negotiation process is low. Indeed, in most contracts, the majority of terms can be resolved by agreeing to middle-of-the-road standards without sacrificing value or increasing risk. As one partner at a top-20 global law firm I regularly work with says: “I always tell my clients that if they want to save on legal fees with no real loss in value or extra risk exposure, let us start at ‘market-standard terms’ for the majority of the issues.” In mature transaction markets, such as the Eurobond market, such an approach is already the default, and deals often proceed on largely standardized terms, with some highly negotiated (but comparatively few) adjustments. Under Germany’s civil code, certain contractual protections automatically apply by law—and in some cases, these protections are actually stronger if the contract hasn’t been heavily negotiated. Most deals are essentially about administering a transaction—allocating responsibilities, defining timelines, and apportioning standard risks. If the possible solutions can be mapped in advance, human creativity and problem-solving aren’t needed. Indeed, technology can simply facilitate matching each side’s priorities. Increasingly companies like Walmart, Maersk, and others are relying on generative AI agents to work out multi-issue trades within set parameters. (See “How Companies Are Using Agentic AI to Negotiate.”) Even when the issues are zero-sum, if market norms largely determine the outcome, there’s little need to deploy skilled negotiators. What those deals need is speed: decide quickly whether a deal is possible, close it if it is, and move on. How Companies Are Using Agentic AI to Negotiate Generative AI’s role in contract negotiation is evolving rapidly—from a supporting tool into one that can, in some cases, autonomously negotiate full contracts with human counterparties or even other bots. For years, contract management systems have been able to analyze large volumes of agreements and flag issues needing attention—for example, customer contracts approaching renewal or clauses out of compliance with current policies. Today these systems go further. They don’t just analyze and report; they actively support negotiators, helping them prepare for specific deals, suggesting strategies, or revisiting drafts to bridge gaps between a company’s templates and a counterparty’s proposed changes. Fully autonomous negotiations are still limited to relatively low-value procurement agreements. But early adopters like Walmart and Maersk have shown what’s possible. By defining key parameters and trade-offs up front, these companies have used AI agents to successfully conclude thousands of negotiations with human counterparties. How fast this practice spreads—and how complex these AI-led negotiations can become—remains to be seen. In these initial cases, adoption was easier because many of these “tail-end” supplier contracts wouldn’t have been negotiated at all. Any negotiation, even automated, improved value by enabling trade-offs on payment terms, delivery schedules, termination clauses, and more. Meanwhile, in research settings, bots are already negotiating directly with one another. At MIT’s 2025 AI Negotiation Competition, more than 200 AI agents competed in multi-issue scenarios, testing different negotiation strategies in round-robin style. The results showed not only that bots can reach agreements on multiple issues but also that different strategies significantly affect both the likelihood of agreement and the amount of value created. As these capabilities advance, companies will increasingly rely on technology for negotiations where they would have tightly constrained human authority anyway—freeing up human negotiators to focus on the complex high-stakes deals where creativity and judgment matter most. One way to make these choices in a more disciplined fashion is for companies to look at their actual contracting history. By analyzing previous deals, organizations can see how much outcomes on any given issue have actually varied—and decide in advance which ones to negotiate vigorously and which to resolve quickly at market terms. That discipline frees up negotiation time and creativity for the few issues where negotiations can truly change the outcome. For example, I worked with a global technology company to benchmark key terms in its customer contracts and map those back to its actual experience with contract claims. The company reached two conclusions: First, its approach was indeed more risk averse than prevailing market terms. Second, negotiating for “better than market” terms came at too high a cost in time, energy, and goodwill relative to the value obtained. The company now manages risk at the portfolio level and has standardized aspects of project delivery, enabling it to take on contracts with more demanding terms without increasing overall exposure. Don’t Give Negotiators Decision Authority It may seem counterintuitive, but the way to empower negotiators to do better at the table is not to give them more authority but to give them none. Instead of trying to negotiate with each other through the narrow channel of agents who can make limited concessions, companies should bring the whole of the enterprise to the table through representatives playing a different role. In complex commercial organizations, it’s more useful for negotiators to understand the problem, explore possible solutions, and bring a proposed business plan back to the enterprise’s decision-makers. As a practical matter, this is not a radical change: Negotiators never really decide what deals a company will or won’t take; the real problem is that executives often decide how much authority negotiators have without first learning what creative solutions might emerge in dialogues with counterparties. To minimize agency risk, decision-makers set aspirational limits ahead of the negotiation and then incrementally reduce their aspirations through rounds of offers and counters. By stripping negotiators of commitment authority, you remove the risk that they will make self-interested concessions just to close a deal—directly addressing the agency problem. And because their job becomes exploring options rather than defending preapproved minimums, they can engage counterparties in creative problem-solving without triggering internal vetoes, which helps bypass the alignment problem. Final decisions are made only after all viable solutions are understood, giving decision-makers better information and more flexibility than they would have had if locked into an early consensus. Adding fluidity to the consultation process need not slow negotiations. Because of the agency problem, initial delegations of authority to negotiators, even in modestly complex commercial deals, are rarely sufficient to get to a yes. Negotiators inevitably have to come back for additional concession approvals, which they obtain only after further time-consuming internal bargaining. And by that point they are down the path of trading concessions with their counterparty and shrinking the pie. Instead, negotiators should start the external negotiation process exploring ways to create value and should bring back ideas and recommendations rather than requests for concessions. In this scenario, robust preparation on the part of the negotiators will take on even greater importance: Instead of simply knowing the limits of their authority, negotiators will need to be prepared to discuss the problem or opportunity in greater depth and to explore ways to address it. They will also need to understand what their walkaway alternatives to a deal might be so that they appreciate what kinds of solutions are unlikely to work. To be sure, dealmakers will need to shift their mindset. Many negotiators will initially push back when told they lack any authority to make commitments. But compared with the practical decisions they are truly free to make today, the authority to explore, create, and recommend is far more valuable and empowering. One example of how this approach works in practice comes from a medium-sized technology company that I advised, which was renewing a critical $180 million deal with a much larger partner—a contract so important that the C-suite negotiated it directly, though none of the executives had the authority to make binding commitments. Final approval rested with the board. The negotiators realized that asking the board for a traditional “What’s the least we’d accept?” mandate would set them up for a race to the bottom. Instead, they requested authority to explore several innovative structures with the incumbent and to open a second set of talks—without commitment—with a much-disliked alternative partner, which was in fact a rival of the firm. The board members initially balked at even speaking to this alternative partner, but when asked what they would do if the preferred partner refused to offer guaranteed revenue, they agreed they should at least explore the option, provided no commitments were made without their explicit approval. Over the next few months the alternative partner proved less of a threat and more of a viable option—offering flexible structures and putting substantial value on the table. The alternative partner was prepared to not just engage around revenue commitments but mend fences and collaborate on other kinds of products and technology. As the board’s perception shifted, the people on the negotiating team realized they had a viable walkaway alternative, and their confidence and credibility in dealing with the incumbent partner grew. Bolstered by the leverage of an attractive alternative in hand, the company successfully drove a much better deal with its incumbent partner, worth nearly $1 billion. Companies can also use this approach to manage a portfolio of negotiations. A leading global oil and gas company, which negotiates high-stakes deals around the world, requires its commercial negotiators—who don’t have any authority to make binding commitments—to draft their own mandates using a standard template. Each negotiator is expected to map the organization’s priorities, identify the walkaway alternatives, develop hypotheses to test with the counterparty, and sketch possible options worth exploring. Those who embrace the process find it empowering: They enter talks knowing exactly what problems they are trying to solve, why they favor certain solutions, and how proposed outcomes compare with realistic alternatives. In asset sales, for example, they have pursued deals with buyers offering a lower purchase price but greater certainty of risk transfer and long-term revenue streams. By tying mandates to a business plan for the negotiation rather than to a narrow set of preapproved positions, the company enables faster, more-effective trade-offs and more value-creating deals. Don’t Seek Consensus Limits Before the Negotiation A corollary to withholding commitment authority from negotiators is no longer requiring them to ask every key stakeholder to sign off on possible concessions before negotiations even begin. As you address agency problems, you also mitigate the alignment problem. As noted earlier, when people are asked to commit to their minimum acceptable terms in advance, they often inflate them to protect themselves. They figure they’ll be pressured to give ground later, so they start by claiming an exaggerated position is a necessity. This means the organization’s real fallback alternatives stay hidden, even from its own negotiators. Final decisions are then based on bad information, and deals that could have worked are sometimes rejected—or they go through but on worse terms than necessary. Early sign-offs also lock negotiators into rigid positions. If the preapproved terms don’t match what’s needed to make a promising deal work, the negotiator has to pause, go back to the stakeholders, and try to get new approvals. Again, this slows the process, frustrates the counterparty, and erodes the negotiator’s credibility. In private commercial negotiations this typically happens behind the scenes and is rarely shared in public. However, the entire world watched the UK struggle through three and a half years of negotiations with the EU as each side iterated through round after round of attempts to reach internal consensus (with 27 veto holders on the EU side), each time (but the last) finding that the aligned terms they could offer at the table were insufficient. Ryan Snook A better approach is to treat stakeholder engagement as an ongoing two-way conversation, in which negotiators apprise stakeholders of what they are learning even as they explore their needs and constraints. The goal is to continue to problem-solve, not to lock in instructions. Take a deal involving product deliveries and after-sales support. The conventional approach would be to lock in volume pricing tiers independently of minimum payment terms and separately from tech support service-level commitments. The better approach gives negotiators space to explore trade-offs across issues by consulting stakeholders early. They can test with business unit leaders how different volumes and delivery schedules might affect inventory turnover. They can discuss with finance whether an improvement in asset efficiency could justify accepting less attractive payment terms. And they can work with service operations to assess whether a particular delivery schedule would require adding service capacity and at what cost. Just as important, they can set expectations: Which stakeholders are invited to share their preferences? Are they sharing data? Offering potential solutions? Or do they expect a veto? Without that clarity, inviting people into the process only creates more friction. Handled well, this approach empowers negotiators and perhaps takes some of the sting out of removing their authority to make binding commitments. They’re free to explore a broad range of options with their counterparties, adapt as new information comes in, and bring back the most promising solutions without being trapped by premature commitments made with incomplete information about what might be possible. Stakeholders don’t make the final yes/no decision until the end, when the negotiators can lay out all the viable deals. A retail supply-chain team I worked with used this approach to meet a board directive to diversify away from a single powerful wholesaler without disrupting pricing or service. Initially, the team members tried to align everyone up front, but they ended up with more than a dozen pages of conflicting “must haves” and “must nots.” They shifted gears, explaining to the stakeholders that they would explore various collaborative arrangements with the supplier but make no promises until the board’s final review. They set a regular schedule for updates, which allowed them to test ideas, get feedback, and adjust along the way. At the table they considered creative moves—such as partnering with the supplier in more-profitable product lines to offset losses from shifting orders elsewhere—and concentrated changes in regions where the supplier had less interest. Behind the scenes the team members also prepared to walk away if needed, securing approval to significantly accelerate IT investments that would enable a multi-wholesaler model. This combination of creativity during negotiations and preparation outside them gave them leverage to secure a better deal and successfully diversify the company’s supply base—a strategy it has continued to build on in subsequent years. Don’t Rely on Reactive Deal Reviews The U.S. military has an annual procurement budget of around $170 billion. That money funds enormous deals across all the armed services, and even within a single service, different directorates often negotiate with many of the same powerful suppliers. Yet synergies are not always realized. Units often work in isolation, missing chances to combine purchasing power, coordinate terms, or set precedents that could improve leverage in future negotiations. Recognizing this, at least one service I have worked with has begun experimenting with ways to connect purchases across directorates—and even across sister services—over time. The goal is to enhance the ability to influence single-source suppliers that dominate key markets. When one service engages with another about purchasing similar weapon systems from the same manufacturer, they find ways to improve the deal for the government overall. One early lesson: Real leverage comes only when there is sustained cross-unit cooperation, supported by a proper forum for sharing information and by data and analysis that give negotiators a true enterprise view of the playing field. Private industry also has a forum for enabling whole-of-enterprise negotiations—the DRB. The DRB serves as a place where a negotiation team can meet its pre-negotiation-alignment obligations and seek incremental approvals, but it can be much more than that if it is reimagined as a deal value board (DVB): a body that is proactive, cross-silo, and focused on value creation. A DVB’s role is not just to approve deals but to help negotiators overcome two common structural disadvantages. Lack of visibility. In large organizations negotiators may not know that other parts of the company are negotiating with the same customer or supplier or about future opportunities that could be linked to current talks for greater leverage. Inadequate scope. Without support, negotiators can be forced into lowest-common-denominator deals that meet each stakeholder’s minimum demands but miss opportunities for making creative trade-offs or decisions about a deal’s risk in the context of a broader portfolio of similar deals. A well-run DVB can help on both fronts. Offering an enterprise view of the deal’s context ensures that negotiators see connections—current and future—that could strengthen their hand. And facilitating internal side deals that compensate parts of the organization that might otherwise block a proposal widens the range of viable solutions. This is the same principle that underpins global treaty negotiations: Compensating “losers” internally (that is, offsetting negative implications for coalition members whose priorities can’t easily be met by a deal that can garner overall approval) can free up negotiators to strike a better deal. Some structures already provide this kind of visibility and scope, though selectively. For example, many large enterprises use strategic supplier-relationship-management programs, assigning ultimate responsibility for a critical cross-enterprise supplier to a small team or even a single executive. That team can balance priorities across programs, investments, and joint undertakings. As a result, negotiators can get support in shaping deals with that supplier that rise above the tactical details of a specific purchase and capitalize on trade-offs across the narrower priorities of individual stakeholders in, for example, engineering, finance, and inventory management. One organization I worked with uses a DVB for high-profile customer engagements. As is often true in global outsourcing contracts, some service lines or regions may play only a small role in a global rollout but still be expected to make significant up-front compliance or service investments. Without internal compensation, they might refuse, even if the deal makes sense for the firm as a whole. The organization’s DVB steps in to solve that problem—finding ways to cover those up-front costs from the overall deal proceeds so that the company can move forward with a global solution. More professional services firms are also using some version of a DVB to underwrite across their portfolio the risk inherent in outcome-based deals. A DVB’s role should also evolve over the life of a deal. Early on it helps negotiators manage stakeholder expectations and design a “consultation funnel”: broad input at the start, tapering as the deal takes shape. During negotiations a DVB pushes dealmakers to explore multiple ways to create value, test ideas with both counterparties and internal stakeholders, and improve the company’s best alternative to a negotiated agreement (BATNA) in case the deal falls through. As talks progress, a DVB becomes a problem-solving partner, looking for ways to make the deal better: identifying cross-silo leverage points, enabling strategic trade-offs, and making internal adjustments that open up value. Finally, when the deal is nearly done, a DVB’s job is to help the organization decide: Should we take this deal or walk away to our BATNA? By that point the group of final decision-makers can be quite small because other stakeholders have already had a chance to shape the deal and address their concerns along the way. I have seen organizations take different paths to implementing some version of a DVB. Creating an additional layer of deal review that stands above other approval levels can add bureaucracy and delay without actually providing proactive, hands-on deal shaping and value. Enabling an existing DRB to evolve its mandate and put in place the necessary capabilities is a better path. Another is to entirely replace a DRB or create a purpose-built DVB for negotiations that most need cross-silo support and site it close to the action and the relevant stakeholders. . . . Moving away from the “negotiator-agent” model—where authority is constrained by consensus—demands a new approach. For complex negotiations that cut across organizational silos, that means redefining the negotiator’s role, rethinking when and how decision-makers approve terms, and staying engaged in the internal problem-solving that drives external success. Some organizations already take this approach for their most critical deals. Scaling it up requires knowing which deals and issues not to negotiate, restructuring preparation and review processes, and equipping negotiators for a problem-solving mandate. It’s not easy, but the payoff is substantial: faster cycles on routine matters, and better, more valuable outcomes on the deals that matter most.
