The field of business-to-business negotiation can be very complex indeed, and without a navigational tool to assist you in managing this complexity, you could miss opportunities and cost yourself and your organisation dearly.The key to unlocking optimal value from your complex negotiation situations is for you to identify and understand the interests of all the parties impacted by or participating in the negotiation. In some cases, it can be easy for you to understand both the positions & interests of stakeholders in the negotiation. In most cases, however, it is not only difficult for you to identify the interests of stakeholders; it is also difficult for you to identify all the stakeholders.What then are the most critical strategies and skills you need to successfully deal with complex, multi-party negotiations?
1. Identify all the stakeholders in the negotiation.
This may be stating the obvious but in practice, it can be difficult for you to spot and track all the stakeholders in a negotiation. In a business environment, you should at minimum try to identify the following stakeholders:
a. The financial stakeholders
These are the individuals or groups that will finance, underwrite or lend authorisation to conclude an agreement based on the financial terms proposed. It is key that you identify all potential individuals that may have an interest in the financial aspects of the negotiation.
b. The user/consumer stakeholders
These are the individuals or groups that will implement and support the outcome of the agreement that is reached. Typically these are the stakeholders that will live and work with the outcome of the negotiations on a day to day basis.
c. The technical & legal stakeholders
These are the individuals or groups that will sign off and approve the technical and contractual dimensions of the negotiations.
d. Guides/Gurus & other Influencers
These are the individuals or groups that hold significant influence over the decision makers involved in the negotiation.
2. Identify the interests of each stakeholder in the negotiation
There are basically two ways for you to identify an individual or group's interest in a negotiation. The first way is to put yourself in that individual or group's position and to try and see things from his/her/their perspective. What supporting data would you require? What precedents would apply? What assumptions can you make, and test?
The second way is to ask the individual or group a series of questions to help you (and them) to accurately identify their key interests. The best question to ask is "Why?" "Why is this negotiation important to you? Why are you assuming this position? Why is this option being explored?"
3. Create a frame that is appropriate for each stakeholder.
Once you have identified the interests of each stakeholder, you should now create the appropriate frame. Different people take decisions for different reasons. It is not appropriate to highlight the same points to support decision making to all stakeholders. You should focus on communicating the most appropriate frame to each stakeholder or potential stakeholder.
A decision, or part of a decision, can be significantly impacted by the frame that you create for the stakeholder.
4. Create an effective management structure for the negotiation
It is of critical importance to think about how you will manage the various stakeholders in the negotiation. In complex transactions, you will need various resources to support the negotiations. It is critical that you identify a clear role for each participant and that you create an environment within which you present your counterparts with a consistent message.
If your counterparties experiences you and your team to be rational, the odds are greatly enhanced that they will also respond to you in a rational fashion.
You can only present a unified and rational 'front' if you have considered the roles & responsibilities within your negotiation team.
Split the focus in the team between those that will manage the relationship aspects, and those that will manage or be involved in the task related activities. Remember to create an agenda that addresses the interests of all potential stakeholders.
A successful way for you to simplify complex negotiations is to add structure. You need to focus on the process elements to ensure that you make progress at every level of the negotiation.
You will find that complexity can be more easily managed with the use of an appropriate supporting structure.
Salary Negotiation Tip 1 – As we stated on top of, discuss salary solely when the provide is made.
Never negotiate unless you’ve got an offer and that they want you. Why would an employer raise about salary early? To eliminate you from the process. Before the supply, you must be talking about what you can do for the interviewer. Once an offer is created, you can talk regarding what the employer can do for you in terms of salary, advantages, etc. When asked about salary too early, you would possibly respond with “I would like to postpone talking about salary till I totally understand the character of the work we are talking about.” Or you would possibly state, “Well, I am probably not the most affordable, but I’m positive that you pay a truthful salary, do not you?” Which brings us to the next step…
Salary Negotiation Tip two – They are going first.
Let the interviewer tell you the salary vary of the position before you state your salary requirements. Once the interviewer’s salary vary is given, repeat the high figure and pause before responding. Think regarding the supply, compare it to what you recognize the market is paying, contrast it to other similar positions and then respond. What response? The truth – sounds great, sounds acceptable or sounds disappointing.
Salary Negotiation Tip 3
– Once you’ve got given your initial response, let the employer know what you found after you researched the market for the position.
A researched response pays off. The employer is aware of what the market is paying for the position and is alert to whether they pay above or below that market rate. Your researched response will hold credibility with the employer. To find the market rate of your position, the net is a nice analysis tool. Websites embody: jobstar.org; salary.com; careerjournal.com. Use any alternative resource you can access to be told once you enter the negotiation. Do you know others in that field or that position who can tell you what their company pays for the identical position?
Salary Negotiation Tip four – Once you have negotiated the salary, do not be afraid to deal some more.
Determine ahead what else, besides salary, could be a benefit to you. Can you negotiate a flexible work schedule or more vacation? Can you negotiate any expenses (i.e., company automobile, relocation, telephone, parking,
training, etc.)?
Salary negotiation may be a dance. Pay close attention to the signals from prospective employers and your gut reactions throughout interviews and negotiations. They’re reliable predictors of the employment relationship. Salary negotiation tips can help you manage your career and reach the goal of monetary independence. Creatively negotiate from the outset and you’ll be able to do it!
Are you behind on your taxes, worried that the letters are getting more threatening and the penalties are mounting, paying more attention to the tax relief ads on TV, losing sleep at night? It may be time to talk with the IRS.A taxpayer must meet one of two basic requirements to be able to negotiate with the IRS. To qualify you must be able to prove financial conditions such that you cannot pay your obligations in full or that you have a reasonable reason for not filing or filing late.If you qualify under either of these scenarios consider the following insights on what to expect when negotiating with the IRS.
Poor Financial Situation
If you believe you qualify under the poor financial situation qualification there are two common strategies to consider when making a proposal to settle your account:
1. Compromise Settlement - Formally called an Offer in Compromise this is a filing that allows the taxpayer to make an offer to the IRS for an amount that approximates what IRS could reasonably anticipate collecting from you. This is rarely accepted by the IRS except from people who truly cannot pay.
2. Full Payment Under An Installment Agreement - If you can get your penalties and interest waived, you may be able to reach an agreement by which you would repay the actual tax liability in monthly installments. This makes catching up with the IRS financial more bearable but does not actually reduce the liability.
Reasonable or Legitimate Reason
If you were out of the country, incapacitated or otherwise prevented from filing promptly you may have a reasonable argument as to why you were late and can request consideration. Penalties and interest for not filing promptly or failure to pay your taxes on time are substantial. If you have a legitimate excuse for not filing on time or being unable to pay your taxes when due you may be able to get waivers of the penalties and taxes.These penalties are a scare tactic to encourage prompt payment. The penalties and interest can be waived if you have a legitimate reason. If so, you may request either or both be waived.
Be Proactive - Don't Ignore the Problem
What you do not want to do is ignore the situation. You will eventually have to work things out with the IRS. The longer you wait the greater the penalties, the more the interest, and the less likely you will find an auditor or IRS agent willing to consider your pleas.
Get Help
Once you decide to file either a reduction in taxes or request for waiver of penalties and/or interest make sure you find out precisely what you have to do to file. Errors in the filings are probably the biggest reason for rejection of the requests.
There are times when getting help makes sense. Negotiating with the IRS may be one of those times. The intent of the penalties, process, and forms is to intimidate you, the taxpayer. Enlisting someone to help you through the process is a good idea to lower your anxiety and accelerate the process if for no other reason than the fact that they know the process.If your problem is large enough to warrant getting help make sure you get a qualified professional to assist you.
If you consistently apply this technique, you will be rewarded with a significant improvement in the quality of the deals that you close. Much has been written about the power that can be found in negotiations. Here are some examples of the things that might provide you with some power:Status & position (you or your position may be held in high regard).hysical appearance (you may be very big physically or be deemed to be physically attrractive).Organisational position (your organisation may be considered powerful).Whilst the aforementioned are examples of some of the things that may confer power on you or your counterpart in negotiations, without a shadow of a doubt, the single most effective way to create power for yourself in negotiation is to create alternatives.
You will never have as much power in a negotiation as you will have if you are not restricted to one option only. If you can place yourself in a position where all you have to do is choose between options, then you will always ensure that you have both power and leverage in negotiations. The funny thing is that whilst we do think of other options when we negotiate we tend to make 2 key mistakes:We think about the alternative options too late in the negotiation process. Typically, we only start think about alternatives when we realise that we are in a deadlock or in a difficult position.
The problem with thinking about alternatives late in the negotiation process is that we might find ourselves in a position where we have no time left and then we may be forced to accept an outcome we would have preferred to avoid. The key to successfully developing alternatives is to do so even before you start negotiating.We do not really invest ourselves in creating alternatives. Whilst we may think about alternatives, often we do not put in place specific actions to develop these alternatives. It is very important that once we've identified possible alternatives that we actually actively engage in exploring these alternatives.
If you want both power and leverage in your negotiations, then you will have no option but to explore fully all the alternatives available to you. As a matter of fact, you may even have to invent some alternatives if there seems to be no alternatives available.Remember that successful negotiations and creativity go hand in hand. Here's a word of warning though. You should carefully think about whether you should let your counterparty know about the alternatives that you at your disposal. If you are in a very competitve negotiation environment then there is not much harm in letting your counterpart know that you have many alternatives available. However, if you are in a collaborative environment, it may be best to not openly reveal the alternatives available to you as this may have a counterproductive impact on your relationships.
If credit card firms are passing through a bad phase, this does not mean that you will be offered the best package without making any efforts. You need to bargain about each and everything. Mostly customers argue about the payment period and the installment size with the money granting company. If they get more time, the installment size is large.Key debt negotiation tips to handle your creditorLet’s look at some important factors required to handle the creditor.
· Do not sound desperate at any stage. If you do then the money granting company will try to convince you for a low percentage. Be firm and show that you deserve a good deal. If an experienced consultant is representing you, you don’t have to take these pressures.
· Money granting companies are quite rigid if the customer hides a point from his consultant. Do not hide any kind of information from the firm which is representing you. If you have been a defaulter in the past, your consultant should be aware of this fact.
· Generally financial companies are going through a lean patch but all of them are not facing the same kinds of troubles. Some firms offering settlements but they are in a strong financial situation. Hence, you cannot expect them to offer large reductions. On the other hand, if the financial firm is in a weak situation, it will accept anything. You can even get a reduction of eighty percent in that situation. This is because the firm will be desperate to get money. As a customer, you should analyze the condition of your credit card company before you take any kind of a decision. Using the right negotiation tips is really important.
Getting out of debt through a debt settlement process is currently very popular but you need to know where to locate the best performing programs in order to get the best deals.
1. An appreciation & understanding of the ’big picture’ and the ability to plumb the detail.
Probably the most critical characteristic of world class negotiators is their ability to understand what it is that all parties to the negotiation want. The ability to see past the ‘demands’ of your counterparties and really understanding why it is that they are negotiating with you is an essential element that will help you to understand what common ground exists between parties. Equally important is to understand all the individual elements that will ensure the adoption and implementation of an agreement by all the parties. The key tool at your disposal to facilitate an understanding of both the big picture and the supporting detail is the effective use of questioning.
2. The ability to generate creative options.
What a lot of people would like to describe as business negotiation is often no more than one dimensional haggling about price. Our research suggests that more than 50% of negotiators struggle to create or uncover options outside of this one dimension. The ability to think creatively is not something that comes naturally to all of us but fortunately there are some tools that exist to assist us in generating creative options such as the Disney Creativity Model or De Bono’s Six Thinking Hats.
3. Treating others with dignity & respect at all times – occupying the ‘high moral ground’.
A common misconception is that in order to be a tough negotiator one has to be a rude negotiator. Both Mahatma Gandhi & Nelson Mandela are shining examples of how to occupy the moral high ground . One can be tough on the issues whilst treating the people involved with dignity at all times. The rule of reciprocity states that we will return to others the form of behaviour exhibited towards us. It is folly to think that we can run roughshod over others without them attempting to reclaim their dignity.
Remember that very often victims become aggressors…..
4. Devoting time to structured preparation.
The success of your negotiations will depend in large part on the quality of your preparation. We often make the mistake of thinking that we don’t have enough time to spend on preparing for negotiations. Our research indicates that the primary contributor to eliminating misunderstandings & shortening the negotiation cycle – therefore saving you time – is the quality of your preparation. You will most definitely benefit significantly from your upfront investment in preparation – try to spend at least as much time preparing for negotiations as you expect to be involved in actual negotiation – ideally spend as much as twice more time in preparation as you expect to be involved in actual negotiation.
5. Know and understand your own negotiation strengths & weaknesses.
Continuously develop your skills. Not unlike world class performers in professional sport, world class negotiators spend significant time analysing the way that they negotiate – particularly under pressure. It is only once you have built an understanding of your own weaknesses & strengths that you can implement measures to improve your negotiated outcomes. World class negotiators never stop refining their skills because they realise that one can never reach perfection.
The world within which we negotiate today can often seem much more complex than the largely monocultural and closed societies of yesteryear. Times change and so do the key skills required to be a world class negotiator.
If you are able to do nothing else but devote time to the above 5 key characteristics you will almost certainly improve the quality of your negotiated outcomes. Remember, like Dr Karrass said, in business you don’t get what you deserve, you get what you negotiate.
Barterers focus on the exchange of specific commodities based on their intrinsic value. Negotiators look at all of the aspects of a negotiation and seek to identify potential ancillary incentives or concessions that can be combined with the primary commodities to leverage perceived value and thereby create incremental value.It is important to know when to barter and when to negotiate. Consider the differences.By creating perceived value negotiators are able to motivate others to do what they otherwise would be reluctant to do. Introducing other incentives is also a viable negotiating tactic to counter a power play. Without ancillary issues to thwart a frontal attack there will be little reason for the party with the most power or strength to compromise, AKA negotiate.Bartering exposes one to power plays. Everyone knows that he who has the gold makes the rules.
The basic concept of negotiation is to expand the conversation from a direct exchange of two commodities, assets or services by offering something of modest value to you which may be perceived as very valuable to the other person. In return for obtaining this ancillary commodity or service the other person should devalue their position on the original item. In agreement, both parties come away with more value than expected thus creating incremental value.Rule 1 of Negotiating: The objective of negotiating is NOT to win the negotiation. It is to achieve your goal or objective. Giving something of marginal value to achieve a important objective is prudent use of your assets.Rule 1 of Bartering: The objective of bartering is NOT to win the exchange.
It is to exchange your commodity, asset or service for something of comparable value with a minimum of effort and time. Getting a needed commodity or service without having to expend your time and effort is prudent management of your calendar.In most negotiations we assume that the prime motivators are avarice and greed. It is the use of other, less obvious motivators that makes the difference between those who barter and those who negotiate. Negotiating has the potential of creating value from the process. It is like making 1+1=11 rather than 2. In your discussions you should always be on the lookout for what might be of value to the other person. This is best accomplished by taking the time to understand the needs and wants of the other party in addition to your own goals and objectives.
Simple bartering is appropriate in many situations where time and convenience trump the effort to try to negotiate a better price. At the grocery, for example, you simply exchange money for a can of asparagus. There is no negotiation because you are dealing with an intermediary who gains his or her benefit from very slim margins. They value you as a customer but only marginally. They hope to keep you as a customer by providing reasonable service, good products, competitive pricing and convenience. Your decision to purchase from them depends on how you rate the grocery compared to the competition; not based on how much you hope to negotiate off the price of a can of asparagus.
