How To Use Negotiation Skills To Ensure High Value IT Deals Don't Fail To Deliver Maximum Value
Formal research into business negotiations discovered that the top challenges faced by businesses and individuals are (a) the price/value trade off and (b) developing alternatives/generating options, respectively. A recent Fortune Magazine review in partnership with Miller Heiman (the complex selling methodology gurus) found that sales staff cited price as the number one cause they did not close transactions.
There has been much talk in the IT sector on both the buy- & sell side about 'partnering' to deliver solutions. Looking at the supporting data, it is doubtful whether this talk has translated into action.
Whilst most businesses would like to think that they are engaging both clients & suppliers in a 'solution based' format, the role of price still governs the landscape. This is due in large part to the failure of individuals to see the 'big picture' or to engage in creative thinking. Our research & experience demonstrates that one of the vital features of successful business negotiators is the ability to be creative & flexible.
Whilst many IT businesses have built their standing on the back of their market leading and creative technologies, it would seem that creativity is often restricted to the design & engineering departments. One of the main drivers of human behaviour is the tendency to avoid potential deficits. When assessing information about the future, managers are more interested in avoiding possible losses than attaining the exact same gains. This means that during negotiations that support difficult and high value IT transactions, the focus is more often on managing risk to avoid potential deficits, rather than on discovering innovative and creative ways to create additional value for all stakeholders.
The more complex the transaction, the more vital it becomes to manage risk. Rather than just trying to avoid deficits, we should actively focus on methods to invent alternatives for mutual benefit during negotiations.
To avoid falling into the price trap, ask yourself the following questions ahead of each negotiation and make this part of your negotiation strategy:
1. Vision
a. What are the key interests of all the parties to the deal that will be satisfied by achieving an agreement?
b. How critical will it be for each party to the deal to act in a mutually beneficial mode?
2. Value
a. What are the specific objectives of all the parties to the transaction?
b. What are the boundaries associated with each of the objectives for all stakeholders?
3. Process
a. What suppositions have you made that you could validate through questioning during disucssions?
b. How can you frame the negotiation so as to support a collaborative, partnership based approach rather than a price centred negotiation?
4. Relationships
a. Do all parties have the same desire for a lasting relationship?
b. How can you influence the 'climate' of the negotiation so as to assist in the achievement of a collaborative approach? ('Climate' pertains to non-verbal, physical and cultural aspects.)
Once you have included these simple elements of preparation you will have time to be initiative. Being creative is not something that comes easily to all of us but it is an important negotiation skill. Use one of the well known creativity methodologies such as De Bono's Six Thinking Hats, or the Disney Creativity Model to help you create alternatives.
If you want to really embrace a partnership approach that delivers optimal value, you should waste no time in getting the creative juices flowing.
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There has been much talk in the IT sector on both the buy- & sell side about 'partnering' to deliver solutions. Looking at the supporting data, it is doubtful whether this talk has translated into action.
Whilst most businesses would like to think that they are engaging both clients & suppliers in a 'solution based' format, the role of price still governs the landscape. This is due in large part to the failure of individuals to see the 'big picture' or to engage in creative thinking. Our research & experience demonstrates that one of the vital features of successful business negotiators is the ability to be creative & flexible.
Whilst many IT businesses have built their standing on the back of their market leading and creative technologies, it would seem that creativity is often restricted to the design & engineering departments. One of the main drivers of human behaviour is the tendency to avoid potential deficits. When assessing information about the future, managers are more interested in avoiding possible losses than attaining the exact same gains. This means that during negotiations that support difficult and high value IT transactions, the focus is more often on managing risk to avoid potential deficits, rather than on discovering innovative and creative ways to create additional value for all stakeholders.
The more complex the transaction, the more vital it becomes to manage risk. Rather than just trying to avoid deficits, we should actively focus on methods to invent alternatives for mutual benefit during negotiations.
To avoid falling into the price trap, ask yourself the following questions ahead of each negotiation and make this part of your negotiation strategy:
1. Vision
a. What are the key interests of all the parties to the deal that will be satisfied by achieving an agreement?
b. How critical will it be for each party to the deal to act in a mutually beneficial mode?
2. Value
a. What are the specific objectives of all the parties to the transaction?
b. What are the boundaries associated with each of the objectives for all stakeholders?
3. Process
a. What suppositions have you made that you could validate through questioning during disucssions?
b. How can you frame the negotiation so as to support a collaborative, partnership based approach rather than a price centred negotiation?
4. Relationships
a. Do all parties have the same desire for a lasting relationship?
b. How can you influence the 'climate' of the negotiation so as to assist in the achievement of a collaborative approach? ('Climate' pertains to non-verbal, physical and cultural aspects.)
Once you have included these simple elements of preparation you will have time to be initiative. Being creative is not something that comes easily to all of us but it is an important negotiation skill. Use one of the well known creativity methodologies such as De Bono's Six Thinking Hats, or the Disney Creativity Model to help you create alternatives.
If you want to really embrace a partnership approach that delivers optimal value, you should waste no time in getting the creative juices flowing.
The Essential Negotiation Skill Of Setting Efficient Goals For Your Commercial Negotiations.
How to prepare effectively for successful negotiations by carefully considering the key objectives that both you and your counterpart would like to achieve so as to see whether an agreement is possible or not.
Management Coaching - A Best Way To Train Your Manager To Make Him/Her More Skilled
A good management coaching trains the manager in such a way that they become highly skilled to manage large number of people and business processes. It's like providing a management toolbox for every day management tasks.
Plant Management Training: Why This Is Essential For All Managers?
Organizations have taken significant steps implementing project management training initiatives. Project management coaching refers to practical, hands-on experience for project managers in learning the principles and practices that lead to effective and successful project management.
Project Management - A Profitable Career
The major source for the standards and techniques of IT project management and all other project management methods is the Project Management Institute (PMI), the main certifying body for project management professionals and clearinghouse for training programs and information in the field.
This Type Of Management Toolbox Will Improve Productivity In Your Office
In the competitive job market it is important to make such an impression. With better credentials, better jobs are available. This is why you should familiarize yourself with the management toolbox cd set.
Administration Coaches Can Help You Stay Up To Date With The Latest Technologies
If you're struggling to understand and transition to the newest management technology, you are not alone. Studies suggest that up to 85 percent of managers feel overwhelmed or confused by technological change in their field.
Management Tools - An Effective Tool Box For Effectual Project Execution
Management tools are very essential for project managers in order to control and manage the project effectively. Tools from the management toolbox cd set will help by providing an easy way of project monitoring.
Management Trainers Are A Wonderful Management Solution: An Excellent Strategy To Climbing Up The Corporate Ladder
Another option many managers are choosing are employing the help of management coaches. Coaches are most often experienced managers with practical knowledge. Because these coaches are already successful in the business world, many of them have valuable contacts to utilize.
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