Fear (to lose the deal, to damage a relationship, to spend more time on the negotiations table) can be the biggest enemy. When you negotiate:
- Spend time thinking of the scenarios and what you would say.
- Visualize success and negotiate with yourself beforehand. Play both roles in the negotiation, by yourself or with your team members. This will help you better value what you bring to the table. The exercise will also highlight your strengths and weaknesses.
- Know that you are the owner of your time. Creating artificial deadlines is one of the most used negotiation tactics. When facing time constraints, always evaluate if you can ask for a longer deadline, do a counter offer or break the bluff by walking away expressing openness to re-engage.
- Remember that…
- business is always business. No matter what happens or how much time you spend in a negotiation, you can always walk away.
- there’s always a right way to say things. Learn and practice how to say no, how to say yes, how to diffuse aggressive behavior and how to walk away in a calm and professional way.
- trustworthiness has to be at the center of your every action.
Beyond personality and negotiations experience, successful deal-makers excel in preparing. Diligence is paramount, when you negotiate:
- Do your research (a LOT of research).
- Know what you want and what the other party wants.
- Know the person you are negotiating with.
- Be aware of your venue setting and its impact on the negotiation.
- Understand yours and your counterparts’ corporate and country culture.
- Choose the right type of interaction (in writing, in person, over the phone, with or without a translator).
- Know your BATNA (best alternative to non-agreement), it will tell you when is right to walk away.
- Have a plan. The plan shall include a purpose (what do you want to get out of the negotiation?), an agenda (what items are you going to cover?) and a pace (how long is it pertinent to negotiate?).
- Find the right framing. It is different to say “I am looking for a mini-van for my family of five” than saying “I have a family of five and I want to see if I can afford a mini-van”.
- Know and understand the legal terms that are important to you and your counterpart.
An ideal negotiation is not one where all parties get what they want today. It is a negotiation where all parties get the long term value of their assets.
When negotiating, make sure that your side of the equation is calculated correctly. A win is getting what your assets are worth to the market, even if those assets are less valuable to your organization. Certainly, sometimes the right choice is to settle at lower than market value. This usually happens when the asset is valuable for a niche segment (that includes your counterpart), or when the asset’s demand potential is still in development. On those situations, negotiate clauses to creatively get back in the future the value given away today.
Back in 2004, I came across the paper “Change in the Presence of Fit: The Rise, the Fall, and the Renaissance of Liz Claiborne” by Nicolaj Siggelkow (it is long, however, reading about the fashion industry was so interesting!). Based on the author’s concept of “Fit”, to anticipate the need of change we must (caveat: I am adding my own spin here):
- Look inside: Does the organization have internal fit? (Do all the functions of the company work seamlessly and efficiently?)
- Look around: Does the organization have external fit? (Do the products, services, strategy and structure of the organization interact effectively and efficiently with customers, suppliers, competitors, government and other environmental factors?)
- Look ahead: Is the current internal fit an asset for the company’s future external fit (which can be different from the current definition of external fit)? Responding this question requires an analysis of the short term and long term risks and opportunities the organization has.
If the answer to any of the questions is “No”, change is needed soon, or within a few years. Such change could be disruptive and inclusive of apparently perfect processes and models.
Below I pasted a chart from the article. It illustrates the fit concept (using Ford as an example).
Performance drops when the internal fit is no longer an asset for the external fit of the organization. Article excerpt.
Starting from a status of perfect internal and external fit, shifts in internal or external fit impact organizational performance. Article excerpt.
Yes? No?… Maybe? An article in the Forbes magazine headlines “Why Sucessful People Never Bring Smartphones into Meetings”. Aside of the title (never bring? that sounds extreme), the survey information is interesting. As bad as smartphones are, many times the issue is the meeting itself: Its duration, relevance, pace, productivity and politics. Culture and staffing also influence behavior. The person could be swamped, always in meetings she cannot decline, demanded or could get in trouble if she doesn’t check.
Simple, yet so true. There is even a book that pairs the fables with real business stories!
The original fables are all available in Google books. Below I post one of the classics, “The Tortoise and Blockbuster”. Sorry, I meant “The Tortoise and the Hare”. Netflix was not exactly “plodding”, but oh well! there is only so much Aesop can include in the story:
The Hare was once boasting of his speed before the other animals. “I have never yet been beaten,” said he, “when I put forth my full speed. I challenge any one here to race with me.”
The Tortoise said quietly, “I accept your challenge.”
“That is a good joke,” said the Hare; “I could dance round you all the way.”
“Keep your boasting till you’ve beaten,” answered the Tortoise. “Shall we race?”
So a course was fixed and a start was made. The Hare darted almost out of sight at once, but soon stopped and, to show his contempt for the Tortoise, lay down to have a nap. The Tortoise plodded on and plodded on, and when the Hare awoke from his nap, he saw the Tortoise just near the winning-post and could not run up in time to save the race. Then said the Tortoise: “Plodding wins the race”.
The cartoon is a classic. I didn’t know there was a site devoted to different versions of it. Click here to link.
Loved the article, a leader who doesn’t manage is like an orchestra conductor that suddenly forgets to give the tempo.
From the HBR Tip of the Day (Nov 11) by Robert I. Sutton:
Don’t Forget to Manage When You’re Leading
The distinction between leading and managing is a subject of ongoing debate. Leading is often characterized as the more glamorous job: leaders guide, influence, and inspire their people while managers implement ideas and get things done. But leaders who focus exclusively on coming up with big, vague ideas for others to implement can become disconnected from their team or organization. Avoid being a “big-picture only” leader. Make decisions and develop strategies that take into account the real-world constraints of cost and time. Stay involved with the details of implementation. Sure it’s easier to come up with ideas and tell others to make them so, but you also need to roll up your sleeves and understand what it takes to make those ideas a reality.
More at: blogs.hbr.org
When I talk about the “marketing mix” (the name that describes the elements to have in mind when doing marketing) I cannot stop thinking about marketing as a cake. I imagine a myriad of marketing chefs baking all sorts of marketing cakes until Jerome McCarthy won the International Cake Competition and shared his secret mix.
McCarthy’s marketing mix, known as the “Four Ps of Marketing” says that good marketers consider four key ingredients:
- Product. What are you selling? What is your product or service positioning? What makes your product or service desirable? Who is the product or service for?
- Price. How much are individuals going to pay for your product or service?
- Placement. Which channels of distribution are you going to use? Where are you selling your product or service?
- Promotion. How are you getting the word out? Where does it make sense to advertise? What are you doing to make your communications meaningful? What are you giving consumers to make them act (an offer, a sweepstake)?
I like McCarthy’s mix, however, many rightfully criticize it because it is too supply centered. To solve that, Robert F. Lauterborn created a new set of ingredients. He didn’t discredit McCarthy’s work, he just added a consumer spin. Below his mix (known as the “Four Cs of Marketing”):
- Consumer. Who are you selling to? What consumer need is your product satisfying?
- Cost. How much will it cost the consumer to have the product while it is functional? How much is the cost to dispose your product when it is no longer functional? In other words, it is not only about the price, but about the total cost of ownership. For example, it is not the same to buy a car with a one year guarantee than one with a three year guarantee.
- Convenience. If the consumer wants it, can he get it? Is it easy for him to buy it?
- Communication. How do you advertise? Do you do PR? Do you have a relationship with your customers? What is said in the news about you?
There are books and books and books that talk about all the ingredients or just one ingredient at a time. It is amazing how everything marketing can fit in those eight words. Lovely isn’t it? You just take the “marketing mix”, stir and voila! You can have a marketing cake. There is no guarantee it will be a good cake, however, it will definitively be a marketing one.
Source:Peter, J.P. and Donnelly, J.H. (2004). A Preface to Marketing Management. McGraw Hill. Pg.18; ”Let’s Talk Business”.