TEN SPONSOR MEETINGNEGOTIATION WORKSHOP    JANUARY 15, 2013
AT-A-GLANCE SUMMARY                                          Established in 2002                                          ...
WHAT IS IT NEGOTIATIONCONFIDENTIAL © 2013 ALL RIGHTS RESERVED   3
WHAT IS NEGOTIATION?    Examples?    Best Experience?    Worst Experience?    What was the difference?CONFIDENTIAL © 2013 ...
WE NEGOTIATE WHEN     We decide which movie to see with our significant other     We decide which city to live in with our...
NEGOTIATION TIPS                                          Be Prepared“Lack of Preparation is perhapsour most serious handi...
HOW DO YOU GET PREPARED?    Negotiations have a structure, which is independent of the content    Most negotiations, large...
ULTIMATUM GAME Player 1 gets $100                       Who wins the Money? Player 1 proposes to share an amtPlaying to Wi...
WHAT HAPPENED? 50:50? Not Fair? Not Enough / Lowball Offer        Player 1 kept too much / Windfall Profit Player 2 got an...
ULTIMATUM GAME What was the currency involved in this deal? Scientific Study of the Brain during these kinds of deals     ...
ULTIMATUM GAME Analysis        Feelings of Fairness are Powerful        50:50 Splits are very often NOT the fair answer   ...
ULTIMATUM GAME                                                         100                                                ...
ULTIMATUM GAME Implications for our Negotiations at work It is critical to understand the currency involved in the deal   ...
LESSONS LEARNED Search for deal structures where your Supplier has shared goals and objectives and believes the split arra...
TRUST EQUITY GAME                                          Is Trust a Good Investment? Player 1 gets $100Playing to Win Pl...
EXAMPLESTrust Equity GameTeam          Player 1                Shared   3x Amt   Player 2   Returned1             Ray     ...
WHAT HAPPENED? Is there one answer? Did we all get the full value? Do we all evaluate trust equally? Is trust always a goo...
ANALYSIS BATNA                                    Defection        Player 1 - $100                      Claims Value      ...
SUPPLIER DILEMMA  Even when we as a Customer have shared  objectives with our Suppliers, it is still often  difficult to a...
NEGOTIATION TIPS   Ask, Don’t Tell          Making statements leads to positions          Asking questions builds common u...
NEGOTIATION TIPS   Know your BATNA          Best Alternative To a Negotiated Agreement          Not “bottom line”, more of...
NEGOTIATION TIPSKnow Thyself          When you go into a negotiation, take a personal inventory. How do you feel about    ...
NEGOTIATION TIPSBuild Trust          Negotiation is a highly sophisticated form of communication. Without trust, there won...
NEGOTIATION TIPSKnow Your Power          Don’t assume that because the other party has one type of power, e.g. position po...
GENERAL DISCUSSION ON NEGOTIATION    Does this resonate with your experiences    What are other areas of negotiation that ...
THANK YOU!                                              John Fisher                                              Chief Val...
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Negotiations workshop

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Presentation and Workshop on Negotiations Best Practices for the Technology Executives Network (TEN)

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Negotiations workshop

  1. 1. TEN SPONSOR MEETINGNEGOTIATION WORKSHOP JANUARY 15, 2013
  2. 2. AT-A-GLANCE SUMMARY Established in 2002 IT Optimization Firm 100% Client Advocacy Firm Completely Supplier Agnostic Many public and private references #1 Company in our Space Global Company (US, Europe, Latin America, Asia) 1500 Global Clients 15,000 Field Engagements Partner with major Private Equity Firms Work with Clients Big & Small $100 Billion+ of Client Value captured since 2002CONFIDENTIAL © 2013 ALL RIGHTS RESERVED 2
  3. 3. WHAT IS IT NEGOTIATIONCONFIDENTIAL © 2013 ALL RIGHTS RESERVED 3
  4. 4. WHAT IS NEGOTIATION? Examples? Best Experience? Worst Experience? What was the difference?CONFIDENTIAL © 2013 ALL RIGHTS RESERVED 4
  5. 5. WE NEGOTIATE WHEN We decide which movie to see with our significant other We decide which city to live in with our spouse We buy a car We try to get a raise We plea bargain a criminal charge We establish project priorities and timelines We establish boundaries between Israel and Egypt We determine protocol of Iraqi arms inspectorsCONFIDENTIAL © 2013 ALL RIGHTS RESERVED 5
  6. 6. NEGOTIATION TIPS Be Prepared“Lack of Preparation is perhapsour most serious handicap” Roger Fisher and Danny Ertel The Getting to Yes WorkbookCONFIDENTIAL © 2013 ALL RIGHTS RESERVED 6
  7. 7. HOW DO YOU GET PREPARED? Negotiations have a structure, which is independent of the content Most negotiations, large-small, commercial-personal, involve the same issues Let’s look at the structure of negotiationsCONFIDENTIAL © 2013 ALL RIGHTS RESERVED 7
  8. 8. ULTIMATUM GAME Player 1 gets $100 Who wins the Money? Player 1 proposes to share an amtPlaying to Win 2 w/ Player Player 2 either agrees to the shared amt, or not If Player 2 agrees, both get paid If not, neither get paid No Discussion Write offer on Card Make your DecisionCONFIDENTIAL © 2013 ALL RIGHTS RESERVED 8
  9. 9. WHAT HAPPENED? 50:50? Not Fair? Not Enough / Lowball Offer Player 1 kept too much / Windfall Profit Player 2 got an economic Improvement Even $1 is better off – so what’s your problem? Player 1 didn’t understand the Game Player 2 didn’t understand the GameCONFIDENTIAL © 2013 ALL RIGHTS RESERVED 9
  10. 10. ULTIMATUM GAME What was the currency involved in this deal? Scientific Study of the Brain during these kinds of deals The Neural Basis of Economic Decision-Making in the Ultimatum Game Alan G. Sanfey, James K. Rilling, Jessica A. Aronson, Leigh E. Nystrom and Jonathan D. Cohen , Science, New Series, Vol. 300, No. 5626 (Jun. 13, 2003), pp. 1755-1758CONFIDENTIAL © 2013 ALL RIGHTS RESERVED 10
  11. 11. ULTIMATUM GAME Analysis Feelings of Fairness are Powerful 50:50 Splits are very often NOT the fair answer At $20, 68% of Player 2s agree At $30, 80% of Player 2s agree At $50, 94% of Player 2s agree Determining the emotional response to fairness is a key consideration in deal structuringCONFIDENTIAL © 2013 ALL RIGHTS RESERVED 11
  12. 12. ULTIMATUM GAME 100 90 HumanDoes it matter who 80 Computer Acceptance Rates 70makes the offer? 60 Two kinds of 50 “Player 1” Human 40 30 and Computer 20Why the difference? 10 0 $5:$5 $7:$3 $8:$2 $9:$1 OfferCONFIDENTIAL © 2013 ALL RIGHTS RESERVED 12
  13. 13. ULTIMATUM GAME Implications for our Negotiations at work It is critical to understand the currency involved in the deal It is often not the obvious one It is critical to understand the sense of “Fairness”CONFIDENTIAL © 2013 ALL RIGHTS RESERVED 13
  14. 14. LESSONS LEARNED Search for deal structures where your Supplier has shared goals and objectives and believes the split arrangements are fair. If the Supplier benefit can be tied to yours, you stand a much better chance of achieving collective success and long term sustainability. If the deal can be structured in a way to enhance Supplier emotions – all the better.CONFIDENTIAL © 2013 ALL RIGHTS RESERVED 14
  15. 15. TRUST EQUITY GAME Is Trust a Good Investment? Player 1 gets $100Playing to Win Player 1 proposes an amount to Share with Player 2 That amount is tripled Player 2 will share back an amount with Player 1 The Selected team gets to keep their amountCONFIDENTIAL © 2013 ALL RIGHTS RESERVED 15
  16. 16. EXAMPLESTrust Equity GameTeam Player 1 Shared 3x Amt Player 2 Returned1 Ray $100 $300 Andrea $2002 Catherine $100 $300 Mike $1503 John $50 $150 Kimberly $754 Ginny $0 n/a Bob n/a5 Jeff $10 $30 Alison $3CONFIDENTIAL © 2013 ALL RIGHTS RESERVED 16
  17. 17. WHAT HAPPENED? Is there one answer? Did we all get the full value? Do we all evaluate trust equally? Is trust always a good investment? Can we create value by giving trust? What would you do differently?CONFIDENTIAL © 2013 ALL RIGHTS RESERVED 17
  18. 18. ANALYSIS BATNA Defection Player 1 - $100 Claims Value Player 2 - $0 Win/Lose Negotiations ZOPA Defines our slice of the Pie Player 1 - $0-$300 Cooperation Player 2 - $0-$300 Creates Value Win/Win Negotiations Increases the Pie for EveryoneCONFIDENTIAL © 2013 ALL RIGHTS RESERVED 18
  19. 19. SUPPLIER DILEMMA Even when we as a Customer have shared objectives with our Suppliers, it is still often difficult to achieve full optimization because our trust isn’t always a good investment. Customers need to evaluate Supplier relationships carefully to determine if Trust is a good investment.6/22/2010 © 2013 ALL RIGHTS RESERVED 2002-2010 NET(net), Inc. All Rights Reserved.CONFIDENTIAL Page 19 © 19
  20. 20. NEGOTIATION TIPS Ask, Don’t Tell Making statements leads to positions Asking questions builds common understanding Making statements creates agendas Asking questions builds trust and leads to Win-Win negotiationCONFIDENTIAL © 2013 ALL RIGHTS RESERVED 20
  21. 21. NEGOTIATION TIPS Know your BATNA Best Alternative To a Negotiated Agreement Not “bottom line”, more of a “what if” Know the other person’s BATNA Back to preparation Know their alternatives and you gain power at the tableCONFIDENTIAL © 2013 ALL RIGHTS RESERVED 21
  22. 22. NEGOTIATION TIPSKnow Thyself When you go into a negotiation, take a personal inventory. How do you feel about negotiation? Do you want to get it over fast? If so, you may give in too quickly, or give away too much. Or, do you want to win, no matter what the cost? If so, you may become adversarial and damage the relationship.Do Your Homework Know who you’re negotiating with before you begin. What’s his or her reputation as a negotiator? Win/Win model or Win/Lose model? Does the person want to negotiate with you (Oh Boy!), dread the negotiation (Oh No), or is this a neutral situation (Show Me)Prepare and Practice Lack of preparation is the number one stumbling block in a successful negotiation It s not enough to know what you want out of negotiation. You also need to anticipate what the other party wants.CONFIDENTIAL © 2013 ALL RIGHTS RESERVED 22
  23. 23. NEGOTIATION TIPSBuild Trust Negotiation is a highly sophisticated form of communication. Without trust, there won’t be communication. Instead you’ll have manipulation and suspicion masquerading as communication. Be trustworthy. Honor your commitments. Tell the truth. Respect confidences.Develop External Listening Most people carry on an inner dialogue with themselves. When you’re trying to communicate with someone else, this inner dialogue becomes a problem because you can’t listen internally and externally at the same time. When you negotiate, turn off your inner voice and only listen externally. You won’t miss important nonverbal messages, facial expressions of voice inflections, when you listen externally.Move Beyond Positions It’s risky to make yourself vulnerable to someone. That’s why in a negotiation you begin by stating your position. Later, when the trust has deepened, you and the other party can risk more honesty and identify your true interests. As a negotiator, it is your responsibility to ask questions that will uncover the needs or interests of the other party. If you’ve also done your job of creating a supportive climate, you’re more likely to get honest answers.CONFIDENTIAL © 2013 ALL RIGHTS RESERVED 23
  24. 24. NEGOTIATION TIPSKnow Your Power Don’t assume that because the other party has one type of power, e.g. position power, that he or she is all-powerful. That’s giving away your power! Balance power by assessing the other parties source(s) of power, and then your own. While there are many sources of power, they all break down into two categories; internal power and external power. The former no one can take away from you and includes your personal power, level of self-esteem, and self-confidence.Know Your BATNA Before you begin a negotiation, know what your options are. Can you walk away from the deal? What other choices do you have? What are the pros and cons of each choice? Dont stop here. Also consider the BATNA of the other party .Know What a Win Is What is your best case scenario? What is your worst case scenario? The area in between is called your settlement range. If you can reach an agreement within your settlement range, that’s a Win! Don’t drop below your bottom line; you’ll feel bad about yourself and the deal afterwards, and you may not follow-through on your commitments .CONFIDENTIAL © 2013 ALL RIGHTS RESERVED 24
  25. 25. GENERAL DISCUSSION ON NEGOTIATION Does this resonate with your experiences What are other areas of negotiation that can present difficulties/opportunities? Who is the best negotiator you know? Why?CONFIDENTIAL © 2013 ALL RIGHTS RESERVED 25
  26. 26. THANK YOU! John Fisher Chief Value Officer +1 (616) 546-3100 x689 (312) 953-0297 Mobile JFisher@netnetweb.comCONFIDENTIAL © 2013 ALL RIGHTS RESERVED 26
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