Wolf&Grayson EditorialWhy short-term thinking can be the most strategic move
John J. McNamara has spent his career on both sides of the negotiating table, where the stakes range from a single vendor contract to the rules that govern entire markets. As Chief Growth Officer at Avtal, an early-stage collections technology company, and a former Principal Assistant Director of Markets at the Consumer Financial Protection Bureau, McNamara has seen how contracts can either unlock strategic momentum or bake in unforeseen constraints.
The difference comes down to whether the agreement is built around how the business actually operates. “Too frequently the attorneys from one side work with the attorneys from another side to establish the contract,” McNamara says. “They don’t include enough stakeholders.” Legal teams do what they are meant to do: reduce risk. But when risk reduction becomes the only objective, the contract can end up protecting both parties from the very outcomes the deal was supposed to produce.
A contract that works is not the same as one that creates value
Many agreements “nearly work,” McNamara says, because they are legally sound but disconnected from how the business actually operates. They spell out responsibilities while failing to reflect the practical realities of execution. The fix starts with a deliberate shift in who is in the room and when.
The people who “live and die by the terms of the contract” need to shape it from the beginning. In most business-to-business agreements, that means operators, product owners, IT leaders, customer-facing teams, and any internal group that will be measured against outcomes tied to the vendor relationship. “In the world of CRM, it is going to be the software providers, the internal teams in IT, and the actual users who are engaging with customers,” McNamara says. Their context determines whether a contract supports adoption, performance, and long-term flexibility, or simply documents a purchase.
“The enterprise salespeople on the vendor side, they want the contract,” he says. “And then once they agree to something, it’s generally tossed over to legal on both sides to write it.” That handoff is where value often gets lost, because the contract begins to reflect what can be defended rather than what must work.
Start with a term sheet that a non-lawyer can understand
Before anyone argues over clauses, McNamara insists on a clear term sheet that translates intent into concrete expectations. “I don’t think I’ve ever seen a successful contract start without a very clear common sense layperson’s understandable term sheet,” he says. “We wanted to do these six specific things.”
This is the anchor for every later discussion, including the ones that usually introduce risk. “Anything that’s not on the term sheet is suspect and sketchy,” he says. It is also a discipline that protects executives from the common trap of mistaking momentum for alignment. When teams skip a shared, plain-English framing and jump straight into contract language, they increase the chances that assumptions stay unspoken until they appear as constraints.
Surface red flags early by naming the failures you have seen before
McNamara’s most practical negotiating habit is to bring likely points of friction into the open before they occur. “Every contract I’ve negotiated I’ve accused the vendor of the sins before they committed them,” he says. He will call out patterns that tend to emerge after signature: lock-in without reciprocal commitments, attempts to downgrade service standards, or reinterpretations of what “minimum” really means.
The goal here is to reduce the distance between what both parties believe they are buying and what they will deliver. When that distance is large, the negotiation might feel smoother, but the partnership becomes brittle. It can also help surface early warning signs that are easy to dismiss in the moment.
McNamara recalls accepting a “very, very generous job offer” but hesitating after hearing concerns about the CEO. When the written contract arrived, it departed from what had been agreed verbally. “I remember actually being relieved, because it validated that this wasn’t going to be a good move.” The small changes clarified the real issue, revealing how decisions would be made.
Negotiate for usable outcomes, not controlled access
McNamara’s time at the CFPB, the federal agency responsible for overseeing consumer financial services markets, offers a window into negotiations where the product is data and, its use can carry political sensitivity. He often negotiated “data access” and “permissible use of the data,” where vendors wanted final approval over how government could apply what it purchased. The tension is familiar in private-sector contracts too, where a buyer pays but the seller keeps a gate on usage.
The answer in these contexts is to put permissible use “front and center right off the bat.” Otherwise, “you’re not buying something that you can use” because the agreement requires “ongoing permission from the seller.” In practice, that means spelling out use cases early, defining boundaries in clear terms, and resisting structures that allow one side to unilaterally narrow value after signature.
Even with strong drafting, some gray areas remain. “Wherever there’s room for some interpretation or judgment,” McNamara says, the contract cannot carry the whole burden. Leaders need trust, plus continuously engage to keep commitments alive. Seldom do complex contracts involve a static anything; you’re buying access to an evolving good or service.
“Someone once told me, if someone does you a favor, get the payback immediately, because with each passing day people feel like they don’t owe you anything, and the value of the favor diminishes,” McNamara says. In contract terms, flexibility degrades when it is not reinforced.
Design SLAs that let the buyer enforce performance
For McNamara, service level agreements separate serious contracts from expensive hopes. “SLAs need to be absolutely tight with big contracts,” he says, because after a provider “gets the $100 million,” incentives can shift. The structure must give the buyer leverage. “The deal needs to build the ability to inflict pain if the SLAs are not consistently met,” he says.
That is not just about penalties. It is about designing metrics that reflect how a service can fail, which again requires a broad group of stakeholders. When SLAs are set by the wrong people or written generically, the business ends up managing disappointment rather than enforcing outcomes.
Why short-term thinking can be the most strategic move
There are real risks embedded in long-term contracts. For example, even “safe” long-term deals, like leases, proved fragile after COVID reshaped office demand. McNamara describes it as “horizon risk,” the simple fact that strategy, technology, and leadership often evolve faster than a five-year agreement can keep up with. Unless leaders can predict the future, long commitments need to deliver outsized economic value to justify the uncertainty.
It is a reality that demands rigor, and more than a few uncomfortable questions. Does the company need this long term? Is that need guaranteed? Does the net present value justify the horizon risk? Does this contract include minimum spends or other handcuffs that box me in or box out other innovative vendors? If those questions are uncomfortable, that is the point.
His last piece of advice? “Never sign a contract after flying a red eye,” he says. “Give it a couple of days. I wouldn’t marry anyone, divorce anyone, or make a big purchase or sign a contract after a red eye.” Good contracts are built with clear minds, aligned incentives, and the humility to assume the future will surprise you.
Follow McNamara on LinkedIn or visit his website for more insights.
