Negotiation for Mutual Gain

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Negotiation for Mutual Gain

  1. 1. Negotiation Workshop Steven A. Gedeon, PhD, MBA, PEng [email_address]
  2. 2. 18 Core CEO Competencies <ul><li>Personal Leadership </li></ul><ul><ul><li>Goal-Setting & Time Management </li></ul></ul><ul><ul><li>Creative & Critical Thinking </li></ul></ul><ul><ul><li>Stress Mgt & Work-Life Balance </li></ul></ul><ul><li>Corporate Leadership </li></ul><ul><ul><li>Strategy & Business Planning </li></ul></ul><ul><ul><li>Innovation & Value Creation </li></ul></ul><ul><ul><li>Corporate Governance </li></ul></ul><ul><li>Communication Skills </li></ul><ul><ul><li>Persuasive Writing and Presenting </li></ul></ul><ul><ul><li>Networking Skills </li></ul></ul><ul><ul><li>Negotiating Skills </li></ul></ul><ul><li>Team Building Skills </li></ul><ul><ul><li>Interpersonal Skills </li></ul></ul><ul><ul><li>Motivational Skills </li></ul></ul><ul><ul><li>Conflict Resolution Skills </li></ul></ul><ul><li>Operational Skills </li></ul><ul><ul><li>IT & Management Systems </li></ul></ul><ul><ul><li>Human Resources </li></ul></ul><ul><ul><li>IP and Asset Management </li></ul></ul><ul><li>Functional Skills </li></ul><ul><ul><li>Sales & Marketing </li></ul></ul><ul><ul><li>Finance and Raising Money </li></ul></ul><ul><ul><li>Legal </li></ul></ul>
  3. 3. Negotiation Workshop                                                                                        
  4. 4. Today’s Agenda <ul><li>Position Based Negotiation </li></ul><ul><li>Principle Based Negotiation </li></ul><ul><li>Basic Strategy </li></ul><ul><li>Single-Issue Example </li></ul><ul><li>Tactics </li></ul><ul><li>Multiple-Issue Example </li></ul>
  5. 5. Position Based Negotiation <ul><li>“ Hard” vs. “Soft” </li></ul><ul><li>Tendency to Lock into a Position </li></ul><ul><ul><li>The more you try to convince the other side of your position, the harder it is to change it </li></ul></ul><ul><ul><li>Ego becomes identified with the position </li></ul></ul><ul><li>Tactics make Negotiation Take Longer </li></ul><ul><li>Win-Lose Damages the Relationship </li></ul><ul><li>Poor Outcomes (Lose-Lose) </li></ul>
  6. 6. Principle Based Negotiation <ul><li>Separate the People from the Problem </li></ul><ul><li>Focus on Interests, Not Positions </li></ul><ul><li>Invent Options for Mutual Gain </li></ul><ul><li>Insist on Using Objective Criteria </li></ul>Based on “Getting to Yes” Fisher & Ury
  7. 7. Separate the People from the Problem <ul><li>Negotiators are People First </li></ul><ul><li>Negotiators’ Interest in both Substance and Relationship </li></ul><ul><li>Separate Relationship From Substance </li></ul><ul><ul><li>Perception </li></ul></ul><ul><ul><li>Emotion </li></ul></ul><ul><ul><li>Communication </li></ul></ul>
  8. 8. Focus on Interests, Not Positions <ul><li>Two Sisters and the Orange </li></ul><ul><li>Ask “Why?” </li></ul><ul><li>Put the Problem before your Answer </li></ul><ul><li>Be Hard on the Problem and Soft on the People </li></ul>
  9. 9. Invent Options for Mutual Gain <ul><li>Diagnosis </li></ul><ul><ul><li>Premature Judgment </li></ul></ul><ul><ul><li>Searching for a Single Answer </li></ul></ul><ul><ul><li>Assuming a Fixed Pie </li></ul></ul><ul><ul><li>Solving Their Problem is Their Problem </li></ul></ul><ul><li>Prescription </li></ul><ul><ul><li>Separate Brainstorming from Judging </li></ul></ul><ul><ul><li>Broaden the Number of Options </li></ul></ul><ul><ul><li>Search for Mutual Gain </li></ul></ul>
  10. 10. Insist on Using Objective Criteria <ul><li>Fair Standards </li></ul><ul><li>Fair Procedures </li></ul><ul><ul><li>I Divide You Decide </li></ul></ul><ul><ul><li>Last Best Offer </li></ul></ul><ul><li>Agree on Principles </li></ul>
  11. 11. Basic Strategy <ul><li>Create Gains (Assess Range) then Capture Gains </li></ul>
  12. 12. Basic Analysis <ul><li>Determine Your BATNA (Best Alternative to a Negotiated Agreement – your “Walk Away” Position) </li></ul><ul><li>Determine Their BATNA </li></ul><ul><li>Assess the True Issues in the Negotiation </li></ul><ul><li>Determine Important Issues to You </li></ul><ul><li>Determine Important Issues to Them </li></ul>
  13. 13. Single-Issue Workshop Steven A. Gedeon , PhD, MBA, PEng [email_address] Acquisition Price Acquisition Agreement
  14. 14. Strategy <ul><li>Determine the Bargaining Zone </li></ul><ul><ul><li>Seek to Determine Your Opponent’s Price but Conceal Your Price </li></ul></ul><ul><li>Capture Gains </li></ul><ul><ul><li>Drop the Anchor if you “know” their Price </li></ul></ul><ul><ul><li>Get them to Drop the Anchor if you Don’t “know” their Price </li></ul></ul><ul><li>Protect the Relationship </li></ul>
  15. 15. Tactics <ul><li>Always be Reluctant, Never Enthusiastic </li></ul><ul><li>Flinch, Show Disbelief </li></ul><ul><li>Always Ask for More than you Expect </li></ul><ul><li>Never Accept the First Offer </li></ul><ul><li>Importance of Time </li></ul><ul><li>Importance of Anchors </li></ul><ul><li>Sunk Costs, Escalation </li></ul><ul><li>Critical Role of Information </li></ul><ul><li>Don’t Proceed Issue-by-Issue </li></ul><ul><li>Be Predictable, Explicit, Never Lie </li></ul>
  16. 16. Tactics <ul><li>The Power of Silence </li></ul><ul><li>Let Your Minions Negotiate, then Push for Later Concessions </li></ul><ul><li>Advance your Interests Outside of Negotiation </li></ul><ul><li>Sometimes you Need to Walk Away </li></ul><ul><li>Firm on Interests, Flexible on Position </li></ul>
  17. 17. Getting Information <ul><li>Trial Balloons </li></ul><ul><li>Ask Questions </li></ul><ul><li>Give Info to Get Info </li></ul><ul><li>Put out Tentative Offers or Multiple Offers </li></ul><ul><li>Powerful Technique </li></ul><ul><ul><li>Post Settlement Settlement </li></ul></ul>
  18. 18. Multiple-Issue Workshop Steven A. Gedeon , PhD, MBA, PEng [email_address] Investment Term Sheet

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