Thursday, March 1, 2012

Breaking The Habit Of Only Thinking About Me

Yuppies were called the “me” generation for only thinking about themselves. In negotiations if you only think about it from your company’s perspective you will not get the most you can get.
You need to consider every issue from both perspectives. You need to think about what every point is worth to both sides, as each side will put a different worth on an issue depending upon their circumstances and their view of the cost or impact to them. Something that you may think of as minimal value to you may have significant value to them and vice versa. If you agree to something they consider as minimal yet you feel is important, they will view it as a minor concession and you should set the expectation that it was a minimal concession to you. Most books on negotiation highlight this point and want you to think about what value each party will place on a point. In the Field Guide to Negotiation Galvin Kennedy provides the simple explanation: “it is not what something is worth to you that counts, but what it is worth to the person who wants it.”

What differences in value you need to be concern about?

What are the differences between the parties for the cost of money, value of money, or cost of inventory?

Are there differences in needs for cash or cash flow?

What is the cost impact to both parties on the issue?

Are there differences in each company’s needs?

Differences in operational structures. Will their model fit your needs and vice versa?

Investments needed to provide the item. What is each party investing by the relationship?

What are the risks or costs if either party fails to live up to the requested commitment?

Differences in business models. How easy or difficult and at what cost will it be to provide the other party what they want?

Impact of risks on company. What are the risks of each party in the relationship?

Values placed on the business by each party. Who needs the agreement more?

What will be the impact to each of the parties if agreement is not reached?

What has each party invested to date? What will they lose if agreement is not reached?

As you set and manage expectations throughout the negotiation process expect that the other party will be downplaying the savings or value to them of a concession. Downplay the value of any savings or value to you of a concession they give to you, especially when the other party wouldn’t consider it to be a significant concession.

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