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"Business Negotiation Redefined -how to create joint value and divide it fairly" - Negotiating beyond win-win
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business negotiation,
redefined
myth vs reality
myth negotiators are born “soft” skills ad hoc events complex individual skill sales tactical personality driven
reality negotiators are made analytical process 80% anticipated simple organization competency cross functional strategic data focused
no dialogue among bidders €1 increments can’t be first and second bidder high bidder gets the €20 for what
they bid 2nd highest pays and gets nothing
€20 auction
global negotiation peer benchmarking
external market forces market more professional buyers 92% increasing focus on price 91% increasing competitor irrationality 80% customer/competitor consolidation 90%/85% length of relationship longer term 89%
global negotiation peer benchmarking
internal strategy and tactics market extremely proactive planning for negotiation 11% informal or no negotiation strategy 83% centralized negotiation decision making 71% informal or no negotiation process 85% sales and negotiation integration 38% increased internal negotiation 81% not a high level of internal alignment 55% well defined competitive negotiation plan 9% not trading effectively for client demands 79% highly effective at negotiation 6.9%
redefining tactical negotiation
three things required to blueprint negotiation:
consequences of no agreementtradesanchors
blueprinting negotiation, a start
agreement zone
seller CNA
buyer CNA
common CNA tactics
“competition is better, faster,
cheaper…”
“you are way out of line with the
market”
what is being negotiated?
seller desire
d terms
buyer desire
d terms
common trade tactics
“i only want to talk about price”
“we need you to give us that option for free”
“sharpen your pencil”
blueprinting negotiation
seller CNA
buyer CNA
seller desire
d terms
buyer desire
d terms
tie it all together
seller CNA
buyer CNA
seller desire
d terms
buyer desire
d terms
anchor
seller CNA
buyer CNA
create joint value and divide it given concerns for the ongoing relationship
multiple equal offers (MEO)
we’re prepared to accept each titled to be meaningful to the customer
(CNA gap) custom built based on CNA/trades for
this deal result in a sensitivity analysis of their
interests
two or more bundled offers, approximately equal in value to us, but we believe they represent different value propositions to the other side
negotiation problem to be solved…
“I can get the same thing… from your competitor cheaper”
negotiation problem to be solved…
most negotiation problems are caused by one or both sides taking 1-2 aspects of
a very complicated business to business negotiation and focusing on them out of context
negotiation problem resolution
getting all aspects/facts of the deal on the table simultaneously
so more rational business decisions can be made
tactic process
negotiation tactics
rational response
anchor
CNA trade
the two key questions
what are the consequences to each
side if we do not reach agreement?
what items are likely to be included if
we do reach agreement?
key question #1
what are the consequences to each side if we do not reach agreement?
how we benefit… systematically take pressure of price compete rationally…value to value rational diagnosis of power fact based analysis
key question #2
how we benefit… systematically take pressure of price compete rationally…value to value trade vs. concede fact based analysis
what items are likely to be included for both sides if we do reach agreement?
redefining negotiation – tactics
three things required to blueprint negotiation:
consequences of no agreementtradesanchor on MEO
redefining negotiation - strategy
negotiation strategy:- what negotiation success looks like- what leads to negotiation success- trades and guardrails
world class negotiation standards
strategy and tactics target
extremely proactive planning for negotiation 75% formal negotiation strategy 75% centralized negotiation decision making 25% formal negotiation process 75% sales and negotiation integration 75% level of internal negotiation 25% high level of internal alignment 75% well defined competitive negotiation plan 75% trading effectively for client demands 75% highly effective at negotiation 75%
strategic negotiation alignment
strategic negotiation alignment
strategic negotiation alignment
strategic negotiation alignment
ryder align x-functionally on negotiation guidelines & outcome communicate to negotiators and use common process (+) (-) on key leading indicators measure lagging indicators
livingston align x-functionally on negotiation guidelines & outcome communicate to negotiators and use common process (+) (-) on key leading indicators measure lagging indicators
results
tie it all together
seller CNA
buyer CNA
seller desire
d terms
buyer desire
d terms
anchor
create joint value and divide it given concerns for the ongoing relationship