A recent study into business negotiations found that the biggest challenges faced by organisations and individuals are (a) the price/value trade off and (b) developing alternatives/generating options, respectively. A recent Fortune Magazine survey in affiliation with Miller Heiman (the complex selling methodology gurus) found that sales staff quoted price as the number one reason why they lost deals.
There has been much talk in the IT industry on both the buy- & sell side about 'partnering' to produce solutions. The supporting data shows, it is doubtful whether this talk has converted into action.
Whilst most organisations would like to think that they are interacting with both clients & suppliers in a 'solution based' format, the role of price still dominates the process. This is due in large part to the inability of individuals to see the 'big picture' or to get involved in creative thinking. Our research & experience tells us that one of the critical characteristics of successful business negotiators is the skill to be creative & flexible.
Whilst many IT businesses have built their reputations on the back of their innovative and creative technologies, it would seem that creativity is often limited to the design & engineering departments. One of the strongest drivers of human conduct is the tendency to avoid potential losses. When assessing information about the future, managers are more interested in avoiding potential deficits than attaining the same gains. This means that during negotiations that support complex and high value IT agreements, the focus is more often on managing risk to avoid potential losses, rather than on creating innovative and creative ways to create additional value for all parties.
The more complex the transaction, the more important it becomes to control risk. Rather than just trying to avoid deficits, we should concentrate on ways to create options for common gain during negotiations.
To avoid falling into the price trap, ask yourself the following questions ahead of each negotiation and make this part of your negotiation strategy:
1. Vision
a. What are the key motivators of all the stakeholders to the deal that will be satisfied by reaching a settlement?
b. How important will it be for each party to the transaction to perform in a partnership mode?
2. Value
a. What are the specific purposes of all the parties to the deal?
b. What are the boundaries associated with each of the objectives for all parties?
3. Process
a. What assumptions have you made that you could confirm through questioning during the negotiation?
b. How can you frame the negotiation so as to contribute to a collaborative, partnership based approach rather than a price centred negotiation?
4. Relationships
a. Do all parties have a similar desire for a long term relationship?
b. How can you impact the 'climate' of the negotiation so as to assist in the achievement of a collaborative approach? ('Climate' pertains to non-verbal, physical and cultural aspects.)
Once you have covered these basic elements of preparation you will have time left to be creative. Being innovative is not something that comes naturally to all of us but it is an essential negotiation skill. Use one of the recognised creativity methodologies such as De Bono's Six Thinking Hats, or the Disney Creativity Model to help you create options.
If you want to truly embrace a partnership method that delivers optimal value, you should waste no time at all in getting the creative juices flowing.
The Critical Negotiation Skill Of Setting Efficient Goals For Your Commercial Negotiations.
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Do you often find it hard to understand all the issues & interests of the participants involved your commercial negotiations? A lot has been written about how to handle complex negotiation scenarios - unfortunately most content is generically focused and does not address the needs of business negotiators.
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There has been much talk in the IT industry on both the buy- & sell side about 'partnering' to produce solutions. The supporting data shows, it is doubtful whether this talk has converted into action.
Whilst most organisations would like to think that they are interacting with both clients & suppliers in a 'solution based' format, the role of price still dominates the process. This is due in large part to the inability of individuals to see the 'big picture' or to get involved in creative thinking. Our research & experience tells us that one of the critical characteristics of successful business negotiators is the skill to be creative & flexible.
Whilst many IT businesses have built their reputations on the back of their innovative and creative technologies, it would seem that creativity is often limited to the design & engineering departments. One of the strongest drivers of human conduct is the tendency to avoid potential losses. When assessing information about the future, managers are more interested in avoiding potential deficits than attaining the same gains. This means that during negotiations that support complex and high value IT agreements, the focus is more often on managing risk to avoid potential losses, rather than on creating innovative and creative ways to create additional value for all parties.
The more complex the transaction, the more important it becomes to control risk. Rather than just trying to avoid deficits, we should concentrate on ways to create options for common gain during negotiations.
To avoid falling into the price trap, ask yourself the following questions ahead of each negotiation and make this part of your negotiation strategy:
1. Vision
a. What are the key motivators of all the stakeholders to the deal that will be satisfied by reaching a settlement?
b. How important will it be for each party to the transaction to perform in a partnership mode?
2. Value
a. What are the specific purposes of all the parties to the deal?
b. What are the boundaries associated with each of the objectives for all parties?
3. Process
a. What assumptions have you made that you could confirm through questioning during the negotiation?
b. How can you frame the negotiation so as to contribute to a collaborative, partnership based approach rather than a price centred negotiation?
4. Relationships
a. Do all parties have a similar desire for a long term relationship?
b. How can you impact the 'climate' of the negotiation so as to assist in the achievement of a collaborative approach? ('Climate' pertains to non-verbal, physical and cultural aspects.)
Once you have covered these basic elements of preparation you will have time left to be creative. Being innovative is not something that comes naturally to all of us but it is an essential negotiation skill. Use one of the recognised creativity methodologies such as De Bono's Six Thinking Hats, or the Disney Creativity Model to help you create options.
If you want to truly embrace a partnership method that delivers optimal value, you should waste no time at all in getting the creative juices flowing.
The Critical Negotiation Skill Of Setting Efficient Goals For Your Commercial Negotiations.
How to prepare effectively for successful negotiations by carefully considering the key objectives that both you and your counterpart would like to achieve so as to see whether an agreement is possible or not.
Negotiation Skills Training: Getting Ready For And Engaging In Complicated Negotiations Using Best Practice Preparation Techniques
Do you often find it hard to understand all the issues & interests of the participants involved your commercial negotiations? A lot has been written about how to handle complex negotiation scenarios - unfortunately most content is generically focused and does not address the needs of business negotiators.
Executive Coaching Training Will Steer Your Enterprise Onto Results
There is substantial evidence to prove that the productivity of many businesses has increased considerably due to proper executive coaching training programs.
The Management Toolbox Is Going To Improve Productiveness In Your Office
In the competitive job market it is important to make such an impression. With better credentials, better jobs are available. This is why you should familiarize yourself with the management toolbox cd set.
A Guide To The Project Management Body Of Knowledge: Important And Component For Every Business Owner !
A guide to the project management body of knowledge puts everything into perspective, with almost any business fitting the tools and processes offered. Any business will essentially hinge on the basics of initiating or start up, planning, implementing, monitoring or controlling, and finally the final closing of the processes.