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: Negotiation is a Continuous Process

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

If you are skillful in building a good negotiation process, your negotiations with your client should never end because you’ll be doing repeat business.

If negotiations are a building block for successful relationships, then they must be seen as a form of interval training, not a single sprint. Since negotiation work can result in a long-term future (or no future), success in that work will create business relationships that make doing business easier and more rewarding for all parties. Read more

Shaping Your Value Argument

Shaping Your Value Argument: Know Your Internal Audiences on the Client Side and Close the Deal

Relentless and thorough preparation is where negotiators on the vendor side shortchange themselves. It’s a major point of focus during our negotiation training, and one of the most critical aspects of this is considering the various groups of stakeholders across the table that need to understand and buy your value argument. Crafting your value argument – the ultimate answer to the question, “What’s in it for us?” – can fall flat and jeopardize the deal if your argument is presented with only one kind of stakeholder in mind.

The diagram below shows the relationship between roles, motivations (measurement concerns) and relative numbers of people that are typical at many lines of business. Read more

Overcoming Negotiation "Dealbreakers": K&R’s MID Chart of Goals™

How often have you encountered a “must have,” a “need” or a “dealbreaker” in a negotiation? People on both sides of the table can be unnecessarily painted into a corner when these supposed “non-starter” positions are expressed.

But in reality, there are very few dealbreakers in negotiations. More often than not, the true problem is that people in negotiations have trouble breaking down the issues and organizing them in matter of importance. Either as partners in the negotiation process or during our negotiating seminars, we help our clients break down each issue on the table so they can identify and separate means (how we’ll get there) and ends (the desired destination). Once ends and means are untangled, it is amazing how many seemingly intractable issues are suddenly neutralized. Read more

Negotiation and Leadership

K&R Negotiations’ Mladen Kresic Pens Guest Piece on Negotiation and Leadership for the Hartford Business Journal

K&R Negotiations co-founder and CEO Mladen Kresic recently penned a guest column for the Hartford Business Journal’s Talking Points section. The guest post discusses Kresic’s recent encounter with Congressional Medal of Honor recipient Paul Bucha, who was a captain of the 101st Airborne Division during the Vietnam War and, later in life, a successful business leader and chief executive.

While accompanying his son’s Cub Scout troop to hear a talk given by Bucha, Kresic was struck by how the principles of leadership described by the speaker were indispensable qualities for a good negotiator. Read more

My Perspective on the U.S. Debt Ceiling Negotiation

After weeks of suspense and considerable acrimony, the U.S. debt ceiling negotiations were resolved (for now, at least) in the 11th hour on August 2. From the perspective of someone who makes a living showing private and public sector organizations how to negotiate to create win/win situations, I followed the proceedings with interest. And there is no doubt in my mind the players could have benefited from following a few of our basic negotiating principles.

Fortunately, most business negotiations are not exposed to the glaring spotlight of the press, nor do typical negotiating parties believe there is anything to gain by demonizing their opponents. We teach our clients that “winning together” is almost always better than creating a win/lose scenario that prevents better long-term outcomes for both parties.

One of the critical questions in this negotiation was: What did the time factor mean when both sides apparently had as much to lose by the failure to come to an agreement? That’s why we developed a way to help organizations forensically analyze the factors that drive the probability and timing of a deal closing, including the essential factors of business/economic needs and timing. Unless everyone agrees on the needs and deadline(s), a timely outcome to the negotiation is in jeopardy. And when it came to the possible default of U.S. financial obligations, the parties didn’t have the luxury of “agreeing to disagree” and walking away from the table. The irony here is that a looming deadline was very predictable a long time ago. The escalating deficit is not a secret. If this were a business with this kind of deadline, the right approach would have been to manage the timeline by examining each budgetary line item early in the process beginning a year ago.

As mentioned earlier, the fact that the negotiations were played out in public did not help the process. This is a dynamic unique to the political negotiation process, for nowhere else is the game of leverage played as much outside of the negotiating room as in it. To avoid this type of conflict, and help move the negotiation towards resolution earlier in the cycle, we formulated a tool called the MID Chart of Goals™. The MID helps dealmakers prioritize the issues and identify the true ends of a negotiating process, thereby reducing disagreement over the means.

MID stands for Mandatory, Important, and Desirable. Applying the MID analysis to the debt negotiation would have helped the democrats and republicans identify and compromise on conflicting outcomes that are not mandatory but which may be important or desirable to a particular constituency, thereby allowing everyone to focus on issues that are mandatory, such as overall deficit reduction.

These are just a couple of examples of how practices followed by many successful companies in the private sector could have been applied to this critical negotiation scenario. Hopefully, the parties involved learned some lessons that will make the process work more smoothly in the future, as the detailed negotiations will continue to tackle the deficit problem.

K&R Negotiation Associates’ Mladen Kresic Quoted in Stamford Advocate Story on the Washington Debt Deal

Mladen Kresic Quoted in Stamford Advocate

Through all the twists, turns and spin from both Republicans and Democrats, we have been musing on how the high-stakes budget negotiation game in Washington reflected some of the lessons of good negotiation strategy. We weren’t the only ones thinking about the business implications of the debt deal: The Stamford Advocate’s Richard Lee wrote a story about the negotiations’ potential impact on businesses, and included our perspective.

“With some foresight and a realization that the issue would be volatile, Congress should have started the review more than a year ago, with a line-by-line examination of spending and income to determine areas of agreement,” said Mladen Kresic of K&R Negotiation Associates in Ridgefield.

“There is a noble goal. The short-term perception of a political win will come at the expense of a long-term win,” he said, not surprised that the issue was not addressed sooner. “People don’t act until the pressure is on. It’s going to continue to be a political football.”

Thanks to Mr. Lee for letting us contribute. Here’s the full story; Debt limit crisis leaves corporations looking for answers.