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Decision making

Here is part 2 of a chapter from our new book, Negotiation and Decision Making. Our Turbocharge Your Career series has seven more books planned for publication. All of the eight books will be available on Amazon.com and in Barnes and Noble stores across the US. We will also host this class online or in-person at selected locations around the world. Email us at career@manhattanreview.com for more details.

5.1.5 Solving Their Problem

When you are researching, you will have to find out ways to solve the other side’s problem as well as your own.

Those include their values and the outcomes that they are looking for. Also discover some negatives in their business past.

1. All of those bits of information require asking them open-ended questions in the negotiation process. Ask things like “how will this help you” and “tell me more about that”.

Instead of getting an answer and moving on, keep asking to make sure you fully understand. That technique will also create a positive environment and show that you want to listen to their problems and needs.

2. In real life, often times there are no absolute distributive or integrative negotiations. Rather, they are a combination with varying degrees of each type. So you may always be able to find some ways to “enlarge the pie”:

- Gather as much information as possible
- Identify items of value
- Do not become competitive or force compromise. Compromising detracts from both sides
- Focus on the desired outcome for both sides

5.1.6 Let the Other Person Win

Identify Common Issues – Increase communication by showing how you are similar to the other person. It will increase trust and build a relationship

Maintain the Relationship – When something negative comes up, associate it with the terms of the deal and not the other person.

Show how the deal helps them – Be ready to prove that your deal will help their business. Be able to show them and not just tell them.

5.1.7 How to Derive Those Numbers

Many high-ranking business professionals quantify information and develop precise formulas to determine outcomes. If the other side does this, pay attention to the rationale and the formulas they have developed. Know how the other side reached their conclusions. Their method is likely to stay fixed, but the outcomes and numbers are not necessarily going to stay the same because they are more easily changed.

Rules to follow when trying to get at the final numbers:

- Know the guidelines, the goals and who is involved with the deal
- Strive for communication – Ask questions about items you understand
- Question numbers and assumptions – do not accept everything they give you
- Establish your uniqueness – Show why your product is better than the cheaper product and how it will help the other’s bottom line and business overall
- Focus on risks and benefits – Do not threaten or put pressure on the other side, but remind them of the risks of going with a competitor tactfully and through questioning rather than direct statements

5.1.8 Achieving Results

Several methods help to achieve the results you desire AND maintain or improve your relationship with the other party.

Find Objective Methods of Determining the Benefits of Solutions.
This will allow both parties to trust and value the terms to be agreed upon.

Concentrate on What You Want to Achieve, Not Where You Stand on an Issue.
This is a means of opening your mind to other options and modes of achievement. These would be less likely to automatically preclude the success of the other party.

Focus on Issues, Not Personality.
Avoid personal attacks. Your interest is in improving a relationship and achieving your desired results, not frustrating or offending the other party.

Posted on April 15, 2008 by Manhattan Review

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Manhattan Review is very excited to present a chapter from our new book, Negotiation and Decision Making, which is coming out in conjunction with a MBA training seminar in california. The book also serves as the base for our Negotiation and Decision making class which is taught by expert practioners who have had substantial experience with million-dollar deal negotiations . Our Turbocharge Your Career series has seven more books planned for publication. All of the eight books will be available on Amazon.com and in Barnes and Noble stores across the US. We will also host this class online or in-person at selected locations around the world. Email us at career@manhattanreview.com for more details.

5.1 Important Steps to a Good Deal

5.1.1 Understanding/Problem Solving

Prior to engaging in a negotiation, it is important to get to know the scenario and “the playing field”.

The scenario is composed of various elements

Time – The pressure created by time can cause negotiators to make mistakes. Therefore, if you know how to use your time wisely and plan well, you can achieve a better outcome from you negotiation.

Information – Having more information or access to more information can create the leverage you need for a successful negotiation. Information allows you to create more opportunities and alternatives.

Power – Power is in many ways purely the perception of the other side. You must appear to have power even if you really don’t

Passion – Passion will be the final factor that puts you ahead of your opponent. The more passion you have, the greater your ability will be to get the deal

There are certain facts that you must know about the other side to engage in a mutually successful negotiation.

- Their goals and objectives broadly
- What they want out of this particular negotiation
- Pressures on them
- Who makes the final decision
- Their possible bargaining zone

Please check with our Pre-Negotiation Assessment Chart to be sure that you cover all the elements.

The above will necessitate research on your part. You must have ample information available before you try and successful negotiate. There are many tools available.

- Internet
- Publications
- Vendors
- Employees
- Customers
- Public information (financial reports etc.)

Not only know what you are negotiating about, but know who you are negotiating with. Without proper research before hand you will not be successful in your negotiations. By having information, you will be able to test them on their level of honesty. You can ask questions about their situation and if you know the answer and are being lied to, you will be able to assess their negotiation style rather quickly.

5.1.2 Planning

Some authors recommend outlining some possible outcomes

- Best Possible Outcome
o This is the best possible, but not necessarily realistic outcome
- Worst Possible Outcome
o The worst and least acceptable outcome
- Expected Outcome
o A likely and somewhat acceptable outcome
- Resistance Point (Walk-away Point)
- BATNA (Best Alternative to a Negotiated Agreement)

5.1.3 Building Communication

- Share information: Hiding all of the details creates a negative environment
- Active Listening: Show that you want to know about their position and what are their needs and wants of the negotiation
- Acknowledge their Needs: Show them that your business can help them and give them what they want. If you don’t they will turn to someone else.
- Ask questions so you can discover their needs and decide whether or not you can meet them.

5.1.4 Controlling the Negotiation

The more control you have over certain aspects of the negotiation, the more likely you will be to gain an advantage. Here are some ways to gain control

1. Speak First In many instances, if you speak first you will control the tone and tempo of the rest of the negotiation
2. Ask Questions – By asking questions you will control the content of the negotiation. By asking questions, you are also finding ways to come to an agreement
3. Don’t Argue The key to negotiations is sharing information and not being combative.
4. Prepare to meet the other person’s needs fully understand the other side’s position, motivations and needs and be ready to meet them
5. Listen – The more you understand of the questions you ask, the more control you will have on the outcome of the negotiation

Posted on April 9, 2008 by Manhattan Review

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