Using Your “Incumbency” to Create Positive Leverage in Negotiation

Some concepts are better expressed using an example. Our client was at a crucial juncture with their customer — a European bank. In just three months, the time frame was expiring on an agreement to provision identity access management. That project had been running for three years, and had progressed substantially as forecasted. So a renewal to continue with the work was being discussed, plus, our client wanted to extend the scope of services for 24/7 identity and access management, which they believed the customer could use.

This project was extremely complex, and it was incumbent on our client to express the value delivered to that point. This is extremely important: Nobody owes you recognition of your value. You have to make the case!

Being successful in this situation meant Read more

International Negotiation: Using the MID™ to Cut Confusion

“We must have a 10-day shipment guarantee.”
“This functionality is a must.”
“A price reduction is mandatory.”

How often have you heard conditions like these during a negotiation? Sometimes negotiators make every request sound as if it were mandatory. But what are the real deal-breakers? K&R’s MID™ is designed to help you identify and prioritize the issues in any negotiation. Using the MID, you can separate and deal with the truly mandatory goals (or ends) while reducing conflict over issues that may not be mandatory. The MID approach makes deals easier to close. Read more

Negotiation Examples: Managing Internal Conflict

negotiation examples managing internal conflict
Not all books on negotiation skills cover how to handle internal dissension or conflict during important negotiations. There’s a reason we included it as the third of K&R’s Six Principles™ of Negotiation: A team divided is a costly team.

Here is an example of how one of our seasoned negotiation consultants, “Hank,” handled a very difficult situation with a member of his own team before joining us at K&R.

Hank’s client had put together a strong team to negotiate a deal with an Israeli company. This was one of his client’s biggest deals ever in the country; huge commissions were riding on it. Read more

International Negotiation: More About Preparing to Win

In our previous post on international negotiations, we discussed the critical importance of preparation and gathering facts. You can’t control all the factors, but you can control your knowledge base. The bigger that base is, the higher the chances for success.

As noted before, your charge as an international negotiator is to conduct thorough background work on everything that could impact your potential deal. This includes trying to account for cultural influence on business behaviors, regulations unique to that country, and more. Here we will suggest information sources that will widen your knowledge base and make you a more credible negotiator. In some cases, access to these sources may be limited due to considerations of distance or protocol. Read more

International Negotiation: The Facts and The Culture

We once assisted a Japanese client company (we can call them “Friendly”) in negotiating a strategic alliance with an American company (whom we will call “Abrasive”) that had a reputation for being challenging. Prior to our meeting, we contacted a colleague who had done business with Abrasive. Our friend warned us that the lead negotiator would be very confrontational.

Understanding that our clients at Friendly were inclined to maintain harmony, we discussed the potential problem with them beforehand. We asked them to let us handle any adversarial moments.

Not long after negotiations began, the lead negotiator for Adversarial announced, “We are going to use our contract, and if you don’t like it, you can leave!” Read more

Six Principles Every International Negotiator Should Know: Terms Cost Money; Someone Pays the Tab

This is the ninth post in a series entitled: The Principles of International Negotiation: Finding Universal Value in a Complex World

Every term in contracts and negotiations should be of some value. And each term has an associated cost. As a negotiator, knowing the rationale for a term enables you to articulate the value and identify its cost. The value of the total deal is the aggregate impact of all the terms. If you don’t understand the rationale behind the terms, not only is your credibility impacted, but so is your leverage.

Suppose you are negotiating a private label distribution OEM (original equipment manufacturer) deal, representing the seller. The seller’s standard agreement has a term in the contract that states: “In the event any part fails within the warranty period, the customer may return the part at customer’s expense and supplier will send a replacement part within three business days.” Read more

Six Principles Every International Negotiator Must Know: Concessions Easily Given Appear of Little Value

This is the seventh post in a series entitled: The Principles of International Negotiation: Finding Universal Value in a Complex World

It’s a worldwide phenomenon: You’re on vacation in a foreign country and decide to buy a souvenir. You know you shouldn’t pay the price they’re asking, so you make a lower offer on that “locally produced” carving. The vendor takes it. As your purchase is being wrapped, you’re thinking, “That was too easy. I could have bought it for less.”

We’re not trying to teach you to deprive starving artists of their living. But whenever someone asks for and easily gets a concession, Read more

Six Principles Every International Negotiator Must Know: A Divided Team is a Costly Team

This is the sixth post in a series entitled: The Principles of International Negotiation: Finding Universal Value in a Complex World

As many have learned, cracking the united front of a negotiation team can yield prized concessions. As with a teenager who knows how to play one parent against another to get permissions and privileges, the party across the negotiation table will pick your team apart if given a chance. Even if it’s an opportunity they don’t take, disunity can severely damage your credibility, and prolong or sometimes cripple negotiations. In an international environment, where team members can often be in different time zones, keeping a unified voice is a particular challenge.

A Negotiation Example

In a key negotiation meeting with a Japanese buyer, our team firmly held that the product we were selling had to be clearly differentiated by the Japanese before it was resold. Read more

The Six Principles Every International Negotiator Must Know – Protect Your Weaknesses, Utilize Theirs

This is the fifth post in a series entitled: The Principles of International Negotiation: Finding Universal Value in a Complex World

Employing this principle begins with a clear-eyed assessment of your negotiation team’s weaknesses. Be brutally honest with yourself in evaluating how critical factors like tight deadlines, lack of patience, insufficient alternatives, lack of understanding of the customer, poor cash flow, or product credibility issues might affect your position. Poor teamwork is another weakness, making a team susceptible to divide-and-conquer tactics by the other side. Teamwork is so important that it is the subject of our third principle of negotiation. We will discuss that in detail in our next post.

When assessing a negotiation team’s strengths, the three most important considerations should be: Read more

Negotiation Examples: The Power of “Face”

 

“Face” is a person’s standing in the eyes of others. In negotiations, that means looking good to each negotiation side, peers, management, spouse and family. It avoids putting someone in an awkward position that could humiliate or embarrass them, particular with a direct confrontation. When confronted negatively, negotiations can quickly deteriorate. However, giving someone “face” makes them feel good and helps form good business relationships.

A Business Negotiation Example – Saving “Face”

At K&R Negotiations, we have extensive experience in business negotiations. We’ve collected numerous negotiation skills examples from a wide variety of business negotiations. Here’s an illustration of saving face from our collection of negotiation examples.

We were representing a buyer of equipment from a Chinese company. We were buying, not selling. Harvey was in the second seat, sitting across from the most senior negotiation on the opposing team. We’ll call him “Lu Jiang”. He was serving as a mentor for a much younger team member, Chang Lee, who was the lead negotiator for the Chinese team. As the mentor, Lu Jiang had a lot of face riding on this negotiation. Read more