Ab negday2
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  • Now let’s apply it. Download the spreadsheetUnits30 minutes

Ab negday2 Ab negday2 Presentation Transcript

  • Negotiation in Practice TerriGriffith The Plugged-In Manager ThePluggedInManager.com
  • Review • Focus on Preparation – Plan, Execute, Review, Adjust – Stakeholders, Issues, Outcomes, Values • BUILDER, BATNA, & ZOPA – The better to develop issues, understand other parties’ perspectives, assess value of outcomes – Make first offer, go for target, but not crazy (but do consider norms) • Stay Creative: Focus on $$ or Innovative Trawling • Problem Solving, Not Battle Fighting • Dynamics: Positions vs Needs
  • Conflict Management Broad Definition…. Broad Use…. Thoughts from Overnight?
  • Negotiation… It’s not just for deals:
  • Most Groups Have Problems With This Case. Most Groups Don’t Have Your Experience or Time on Task.
  • BATNA & BUILDER
  • Business objectives Universe (context, history) Information needs Laws (policies, required procedures, regulations) Dynamics (timeframe, sequencing) Events (milestones) Reach (magnitude)
  • Preparation Stakeholder1 Issue 1 Outcome 1 Outcome 2 Outcome 3 Issue 2 Outcome 1 Outcome 2 Outcome 3 Issue 2 Outcome 1 Outcome 2 Outcome 3 Stakeholder2 Stakeholder3 Stakeholdr4
  • -10 -9….-1 0 +1….+9 +10
  • Preparation Stakeholder1 Issue 1 Outcome 1 Outcome 2 Outcome 3 Issue 2 Outcome 1 Outcome 2 Outcome 3 Issue 2 Outcome 1 Outcome 2 Outcome 3 Stakeholder2 Stakeholder3 Stakeholdr4
  • Organizational Change “Negotiated Change” Meeting Agendas Social Situations Social Media Use Decisions
  • You Have to Ask
  • http://www.atozsolutions.com/putting-win-win-relationships-practice/
  • In 1991, I interviewed with Sam Walton regarding a position as the Produce Director for the Supercenter Division at Wal-Mart Stores, Inc. During that interview, Sam said that in 10 years, Wal-Mart would be the largest retailer of food in the world! Now keep in mind that in 1991, Wal-Mart had 6 Supercenters. So “rapid growth” was going to take on a whole new meaning. Also, in 1991, Wal-Mart’s reputation in the produce industry was based on the experience with Sam’s Wholesale Clubs. Unlike today, that reputation was frankly not very good. In fact, it was so bad, that many prominent produce suppliers did not want to do business with Wal-Mart, based on their experiences with Sam’s. Finally, I came to learn that WalMart was a sales driven, EDLP (Everyday Low Price) company. http://www.atozsolutions.com/putting-win-win-relationships-practice/
  • So in 1991, as the Produce Director of Wal-Mart Supercenters, a “win” for me meant 3 things: 1. I had to develop a supplier base that would support our growth 2. I had to develop a reputation within the produce industry that would encourage collaboration and support our development (co-managed replenishment, contract purchases, RPC’s, and RFID to name just a few!) 3. I had to be able to drive double-digit comp store sales, and do so within an EDLP environment. This meant no feature, price off advertising! http://www.atozsolutions.com/putting-win-win-relationships-practice/
  • Having over 20 years experience in the produce industry at the time, I knew that a “win” for our suppliers would be: 1. Never negotiating a contract for less than the cost of production 2. Allowing suppliers total transparency to POS data so they could become a part of managing our growth 3. Being able to pass along cost savings to our customers by lowing the retail on specific commodities, to move short term spikes in commodity supply though the supply chain http://www.atozsolutions.com/putting-win-win-relationships-practice/
  • Said very simply, it was a beautiful thing: Total “win-win-win” (the 3rd “win” was our customers!). Wal-Mart had a growth rate in food that could not be duplicated. Our suppliers made a good profit, could reinvest in their business, and knew exactly what they were accountable for. We had an unprecedented comp store growth rate, we became a very desirable receiver, and our suppliers achieved things that they never dreamed possible. It all happened because we “began with the end in mind.” Our suppliers knew exactly what we were trying to accomplish and I knew exactly what our suppliers needed to participate with us.
  • If you look at Wal-Mart in 2013, those goals have evolved. 1. They are diversifying their supplier base. “Local purchases,” “sustainability,” and a host of other reputational issues have taken center stage 2. Co managed replenishment is far less important. In fact, the “buyer” today is only interested in negotiation of the lowest price. Hence, contracts are put out to “bid” 3. As comp store sales have flattened out (and have even gone negative), GROSS MARGIN has become the driving financial element. I am not suggesting that this is a good or a bad thing. It is merely the evolution of a large, publically held company. So a “win-win” for the buyer-seller looks very different today. That is not to say you can’t achieve them, but the definition of a “win” for a supplier must take place within the context of a “win” for the buyer. http://www.atozsolutions.com/putting-win-win-relationships-practice/