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

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 2 nd highest pays and gets nothing €20 auction

no dialogue among bidders

€ 1 increments

can’t be first and second bidder

high bidder gets the €20 for what they bid

2 nd highest pays and gets nothing

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%

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%

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 agreement trades anchors

three things required to blueprint negotiation:

consequences of no agreement

trades

anchors

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”

“ competition is better, faster, cheaper…”

“ you are way out of line with the market”

what is being negotiated? seller desired terms buyer desired terms

common trade tactics “ i only want to talk about price” “ we need you to give us that option for free” “ sharpen your pencil”

“ 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 desired terms buyer desired terms

tie it all together c reate joint value and divide it given concerns for the ongoing relationship seller CNA buyer CNA seller desired terms buyer desired terms anchor seller CNA buyer CNA

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

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

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?

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

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?

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 agreement trades anchor on MEO

three things required to blueprint negotiation:

consequences of no agreement

trades

anchor on MEO

redefining negotiation - strategy negotiation strategy: what negotiation success looks like what leads to negotiation success trades and guardrails

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%

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

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

tie it all together c reate joint value and divide it given concerns for the ongoing relationship seller CNA buyer CNA seller desired terms buyer desired terms anchor