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STOP IT! Win:Win Does Not Exist!
The Weekly Walkway highlights negotiation in its ‘good’, ‘bad’ and sometimes ‘downright ugly’ forms. Newsletter Issue No. 7 (28th October 2022)
What to expect?
Slightly different this week, Negotiators. We’ve written a lengthy thought piece, so we have been considerate and cut back on some other content to not blow your minds.
Quote of the Week - Diplomacy is the art of letting them have your way.
Tactic of the Week - Splitting The Difference.
Thought of the Week - STOP! Win:Win Does Not Exist!
Remember: You are a negotiator!
You are always managing some form of conflict, a difference in opinion or interest.
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QUOTE OF THE WEEK
Daniele Vare - Italian Diplomat and Author (1880–1956)
“Diplomacy is the art of letting them have your way”
TACTIC OF THE WEEK
Splitting The Difference
What is a ‘fair’ deal? To many, it is a belief that they’ve met half- way, in the middle or have split the difference. To have given and received fairly. But considering ‘fairness’ isn’t even written in law who’s ideal of ‘fairness’ are they using. Fairness is just another value and its a value that can be used to manipulate you. If your counterpart has opened unfairly, extreme, then they will be along way from your expectation of what ‘half-way’ is! If they then said, “lets split the difference” you will ‘feel’ that you’re getting a fair deal but of course you’re not, you’ve been manipulated by your own sense of fairness.
So, if they split the difference either split the difference again on them or just stick to your plan. The ‘difference’ is obviously a move they are happy with so all you have to do is make your next move on your plan. Never split the difference, unless it is you manipulating them.
THOUGHT OF THE WEEK
STOP IT. Win:Win Does Not Exist!
We all want to be Win:Win negotiators, don’t we?
We want amicable, friendly relationships where we win and our counterparts walk away winners too. Don’t we?
But what happens if they don’t? What happens if ‘they’ have been told to go out there and smash you, smash the cost, the relationship and possibly everything you’ve held dear for the length of a great relationship?
What happens if ‘they’ don’t think like you or don’t have the same values as you?
What happens if you have been told, “Go out there and get ‘X’, and if you don’t, then don’t bother coming back!”?
Win Win does not exist, people. I’m sorry to have to be the bearer of bad tidings. You just can’t negotiate in one dimension. You can not expect ‘them’ to want the same as you. It just doesn’t happen!
To add to this... ‘They’ may be better trained than you! They may be making you ‘feel’ as if you have won, but they are winning much more!
Before training, negotiators misanalyse where they or their counterparts are before, during, and after their negotiations.
They fail to appreciate the art and science of negotiation. They leave value on the table as they wing it, hoping everything will be OK. Hoping they will get a deal by being nice and fair, this is what they believe is Win:Win! Or they rely on learned behaviours, argument, force of will, and base instinct. None of these are appropriate for a successful negotiation.
Have you been trained to negotiate? If not, are you getting played by savvy, well-trained counterparts who know that negotiation is the art of letting “you” have “their” way?
Every good negotiator has a tool
Every good negotiator has a tool. There is no winging it in a negotiation because, I can assure you, nothing ever happens by accident. This is The Kahvay tool for navigating negotiations, The Kahvay Negotiation Compass©.
What is the Kahvay Negotiation Compass?
The compass provides a framework for analysing a negotiation based on measurable circumstances. With a simple analysis of P.L.A.N.T you are guided towards a decision; where/how you should negotiate to maximise your deal.
P – Power: this is an overriding element…whoever has power has options!
L – Longevity: how long-term is your relationship, and how long do you want that relationship to be?
A – Advanced: how many issues, also known as variables, are you negotiating over? How many more, with a bit of creativity, could you add to the negotiation? Do you need to? How advanced is your counterpart? How senior are they?
N – Need: how much do you need them? How much do they need you? How much do you need their stuff? How much do they need your stuff?
T – Trust: how much do you trust them, and how much do they trust you? In fact, do you even need to trust each other?
You should also use the Negotiation Compass© to better understand ‘where’ on the compass your counterpart might negotiate and, therefore, ‘how’ they could negotiate, which is useful in determining the stance, tactics or positioning of your counterpart when you are preparing for your negotiation.
“Forewarned is Forearmed”
“Information is power.”
Advanced knowledge enables the Compass user to be more prepared, and preparation increases your power. This not only allows you to analyse your negotiations before you enter negotiations but also enables you to factor in any changes in circumstances when you are in negotiation.
This multi-dimensional approach to negotiation creates more considered and thought-out decisions that deliver better outcomes. Not Win:Win ideals.
When P.L.A.N.T. is calculated, the answer guides your ‘Compass Bearing’ to one of the four personae;
Each one has a different set of behaviours, tactics, planning tools and processes to aid your navigation of the deal.
We advise that once you’ve chosen a particular persona not to ignore the other personae but recognise which would be inappropriate given your specific circumstances. This goes both ways, so continue monitoring your counterpart's compass bearing to ensure you are alert to any of their changes. As circumstances change, so will the balance of Power, the over-rider! Constant awareness and high levels of emotional intelligence will help to inform any changes in compass bearing which will govern your decisions.
The compass is split from North to South; there is the Eastern side, where it is cold, hard and tough (blue), and there is the Western side, where it is warm, flexible, and pleasant (red). This has nothing to do with culture or country.
The Eastern Side
The Eastern side; cold, hard, tough and even arrogant, can be described as competitive, distributive or Win:Lose, where what I win, you lose and what you win, I lose. There is no or very little opportunity for value creation or mutual gain.
When navigating this type of negotiation, there might be little to no need for dependency, trust and/or longevity at all. Complexity is usually low, and Power can be used arrogantly to override the value scales because it doesn’t matter if you harm the relationship. You wouldn’t do that, would you? No? Would they do that to you? Have they been doing it to you all this time? What do you think the “Request For” (RFX) process is?
Let’s consider a very simplistic storyline. Let me emphasise it’s simple and may not be a true reflection of your circumstances, but it’s just an example. We will also keep it simple and only analyse four areas Longevity, Advanced, Need and Trust, leaving Power for another time.
Let’s say you’re a professional services firm. You are seeking a commercial relationship with a new client. You are asked to complete the RFX process. Your new client stakeholders have now gone quiet as procurement takes over.
Let’s analyse this;
L – Longevity, how long-term is your relationship, and how long do you want that relationship to continue? It’s a new relationship... there is no past; there is only a future possibility... so ‘Low’;
A – Advanced; how advanced is this? How complex is this? How advanced is your counterpart? How many issues, also known as variables, are you negotiating over, or how many more could you add to the negotiation with a bit of creativity? Do you need to? Well, this could be quite complex, but… much of this will come down to a beauty parade, and price will focus heavily. So ‘Low’.
N – Need, how much do you need them? How much do they need you? It’s a new client, so it could be ‘Low’.. they have BATNA’s, and so should you (BATNA – best alternative to a negotiated agreement – a term from Harvard PON)
T – Trust, how much do you trust them, and how much do they trust you? In fact, do you need to trust each other? Well, you may have built up a sales relationship with the client stakeholder, but how about with procurement? Do you trust them? Do they trust you? So ‘Low’;
All factors being low would suggest you could behave in a way that showed coldness, hardness even arrogant behaviours. ‘The Haggler’ persona, but would this be appropriate?
Unlikely, unless you don’t care for the business in the first place… but more importantly, how could procurement negotiate?
Yes, you’re getting the hang of this. Procurement could haggle with you, so you could expect cold hard, tough and even arrogant behaviours. Forewarned is forearmed!
Let’s continue with this story. Let’s suggest you win this business and are offered a short-term contract, delivering a small project into one country. You are now negotiating over this project's price and delivery time.
Let’s analyse this;
L – Longevity, It’s short so it could be Low, but we now have the idea of a contractual relationship with a delivery requirement so that we can set this to ‘medium’;
A – Advanced, not very complex, just price and time, so ‘low’.
N – Need? It’s a new client, so it still could be ‘low’, but you’ll want to impress to achieve more business and although they have BATNAs, others who could do this project they now are needing you to deliver, so let’s put this at ‘medium’.
T – Trust, you haven’t delivered yet, you’re in a short-term assignment, and although you want more business, you still don’t know them, and they don’t know you, so ‘low’;
All factors being medium and low would suggest exhibiting cold and hard behaviours, ‘The Dealer’ persona, but would this be appropriate?
Yes, perhaps! You can be cold, hard and tough inwardly but play a warm exterior.. can’t you. Don’t they? How could procurement and the client stakeholders negotiate? They could haggle over price, or they could be the dealer, but the price is still king, and it’s still a distributive negotiation, win:lose. How will you plan for this? How will you use the art and science of negotiation to ensure you win something and make them feel that they’ve won too?
So that’s the Eastern side of the Compass, ‘The Haggler’ and ‘The Dealer’. Now let’s have a look at the Western side.
The Western Side
The Western side, ‘The Engineer’ and ‘The Diplomat’, is warm, open and cooperative and can be described as collaborative, integrative, or, by some, Win:Win. The deals you navigate here have more issues and are more complex. You will be more dependent on each other, and trust levels will increase. More issues mean the possibility for creation through low-cost, high-value conditional trading, and more mutual value means longer relationships. But don’t forget, whatever value is created will have to be distributed (win:lose), not shared fairly; it just doesn’t happen!
So continuing the story, let’s suggest you have successfully delivered the last project and are discussing rolling it out across multiple countries with multiple stakeholders. The scope of the project has widened.
Let’s analyse this;
L – Longevity, It’s going to take longer to deliver, and you could be negotiating over a two or three-year contract, so let’s say this has increased to medium;
A – Advanced, Price, time, contract length, how many countries, payment terms, rebates, insurance.. we are definitely increasing the complexity, so let’s say medium;
N – Need, It’s not now a new client. You have become more dependent on each other, but you fear their BATNA’s, but you know you have what they want, so let’s say medium;
T – Trust, you now know the procurement team and have built trust. You know one country client stakeholder, but you don’t know the others.. this could be medium then;
All factors would suggest ‘The Engineer’ persona, and there is a major shift in behaviours needed and how we process this type of negotiation.
We shouldn’t exhibit cold, hard behaviours but warm and cooperative ones because there is a higher need for trust and collaboration. In fact, we will have to share information to get this project done, won’t we? Where do you think the client could be?
Finishing this story. Let’s now suggest you have successfully delivered globally and are now managing a client account that is worth multi-million $ in revenue. The client depends on your continuity for its own business growth and stability, and that multi-million revenue is your firm’s whale account; you’d feel it if you lost it!
Let’s analyse this;
L – Longevity, you have a long past relationship, and you are set for a long future one, too; so high,
A – Advanced, so many issues it’s becoming very difficult to manage, but you now have enough trust to be open and share problems, find solutions together and even have an open book policy where the margin is agreed with upfront; so high,
N – Need? It’s now high.. in fact, you have become interdependent;
T – Trust, trust is high, it’s now key, break trust, and this pyramid comes tumbling down
A diplomatic relationship. With that comes higher levels of negotiation planning, processing and behavioural control.. tough on issues and warm on people. Trust is ‘the’ important factor here; it’s a very fine balance! One wrong move and it could land both parties in a lot of difficulties and mutual loss.
Let’s throw a hand grenade into this story. Power.
Now… Let’s throw a hand grenade into this story… We have not analysed P for Power.
What happens if you have all the ‘power’? What happens if, from the beginning, they need you? They needed you more than you needed them. Would you have negotiated differently?
How would the Negotiation Compass have looked to you.. to haggle or not to haggle?
Go all out collaborative from the beginning… or not?
What happens if, right from the beginning, you never had any power? What happens if you were just another supplier offering the same service that multiple parties could deliver, and maybe, in fact, you were just invited to the RFX to be used? To be a sacrificial lamb.
You will always need to analyse power as a major part of the compass analysis.
Or, consider this
Or, consider this.. six years into a great relationship and the client’s shareholders cry out for stronger dividends. Who does the procurement team get told to go after, and how?
That’s right, ‘you’ and cost reductions.
You may find yourself moving from ‘The Engineer’ to ‘The Dealer’, with maybe a swing to ‘The Haggler’ but after.. back to ‘The Engineer’. How are you going to negotiate that appropriately?
How about this one.. and it’s a final thought, for now, contact us to discuss in more detail or share your stories, but recognise that circumstances change all the time.
What happens when the procurement team has changed after ten years, and a new CPO and CFO get together to test the market? To test if you are delivering the best price for service. They suddenly put a strategy in play that could see you, in an instant, move from ‘The Diplomat’ to ‘The Haggler’ back into the RFX process. What happens now? What if you stay ‘The Diplomat’ to their ‘Haggler’? Who is going to achieve more now? Who is Win:Winning and who is Win:Losing!
In summary, there is no such thing as Win:Win. It’s in your imagination; it is a ‘hope’, not a negotiation strategy. There is only well-thought-out and considered approaches to circumstances that offer you multiple dimensions and personae. As we’ve always stated Negotiators, you can’t negotiate effectively without a plan, and to plan effectively, you need a tool. A Compass that moves with and adapts to the changing circumstances you see, feel and experience. The Kahvay Negotiation Compass©. To learn more, contact us.
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