Bangkok Dangerous

Posted December 3, 2013 by davelim8850
Categories: negotiation tactics

Bangkok Dangerous: Just returned from Bangkok where I witnessed up close a large sit-down demonstration in the heart of the shopping district. There are some insoluble issues in what is essentially a class divide, and will provide some interesting negotiation notes in the weeks ahead http://lnkd.in/bbK2zva

Advertisements

Negotiation Myths – Busted

Posted November 14, 2013 by davelim8850
Categories: Uncategorized

Negotiation Myths – Busted

The photo above shows the group of mainly professional content experts who speak, train and consult to deliver their expertise. Included were dealmakers, and business owners used to dealing with millions of their own and other people’s money. It was a great day of fun, learning and sobering self-discovery. The little blue books lifted high are the Quick Reference Guides that summarise key points in the 2-day programme. More pertinently, the workshop gave me some time to think about several negotation myths that need busting – if you want to succeed in 2013.

So here they are:

1) You have to be ‘tough’ in negotiations to ‘win’

Busted – you can be ‘tough’ , and win, but it is unlikely you will do business with the same people ever again. Companies who have come in from a strong bargaining position and ‘squeezed’ their suppliers, have found this principle out to their cost. So, in a negotiation, factors like the deal design and the set up come into play; including issues like – will the deal be repeatable? And are you dealing with the right party in the right circumstances? If you do the set-up perfectly, and deal allows both parties to gain great value, you don’t have to be anywhere near ‘tough’ to do well

2) women aren’t really good at negotiations

Really? Once negotiations begin, there are not many differences in gender. However, research ( see Babcock) show that the big issue is that many women don’t even choose to negotiate many times. When asked to describe a metaphor for negotiations, most men in a study said ” It’s like a ball game” – while most women said” Like going to the dentist”……..But when they do negotiate, they impart greater interaction to the situation (International Studies Quarterly 2009);and often bring value to a negotiation

3) We should always aim at getting a “win-win” solution

Nope – not necessarily so if you do not think the relationship is worth preserving, or if there will be a need to repeat the negotiation. In such cases, there could be justification to go for a win-lose situation, taking most of the value in a negotiation for oneself. That being said, most businesses are interdependent, and regular use of such an approach will likely be counterproductive. I always teach how to look for a “mostly-win-mostly-win” scenario. if parties cam be imaginative, bith might walk away with more than what they had expected.

DAVID LIM IS A LEADERSHIP AND NEGOTIATION COACH- contact him david@everestmotivation.com

https://www.facebook.com/everestmotivation
 

 

Negotiating to Win™ Workshop, March 30th, 2012

Posted January 20, 2012 by davelim8850
Categories: asian negotiation styles, negotiation tactics

Tags:

 

 

 

 

Just a short note to inform you that our signature programme on negotiation skills – Negotiating to Win™, is being held once more in Singapore on Friday, March 30th, 2012. This is our content-rich 1-day programme, absolutely packed with tips, practical exercises, negotiating simulations, and many techniques to help sell-side professionals close better deals. And it will also help buy-side professionals make thousands of dollars in savings.

Register today for the early bird special ( up to Feb 20th)

The Set-up – the all important negotiation approach

Posted December 23, 2011 by davelim8850
Categories: asian negotiation styles, power factors

Tags: ,

With 2012 coming round the corner, just bear in mind as you launch into new deals, that a much overlooked aspect of negotiating in Asia is the deal “set-up”. The set-up is particularly important because if you don’t get this part of it right , no matter  what tactics or strategy you use – you won’t be able to make much headway. Here’s an example of a set-up that went wrong:

A local company here wants to negotiate a buy-side deal with a supplier. the local company sends their top procurement officer to make the purchase. A deal is struck. Sometime later, a similar procurement exercise is done, but the vendor sends a  another member of their staff to cut the deal with the top guy in the buyer’s company. The buyer doesn’t know the vendor’s staff very well and initiates a casual conversation.  In the conversation, the vendor lets on that he’s leaving the company. The deal goes less well as the procurement pro realises that the the vendor’s staff isn’t fully motivated to get the best possible deal for his company as he is leaving his employer in a matter of weeks.  He caves in, and makes too many concessions.

Lesson: The practice of initiating seemingly innocent chit-chat prior to business in Asia is often a great practice in unearthing nuggets of information that can help you make a better deal. In this case, the set-up was all wrong. The vendor should  have sent someone with a greater vested interest in the eventual outcome of the sale

The Biggest Decision You Will Make

Posted July 13, 2011 by davelim8850
Categories: negotiation tactics, positioning, power factors

The Biggest Decision You Will Make…

….in a leadership negotiation is simply this: Whether you will negotiate or not. If you want to negotiate, then you had better be 1) prepared 2) equipped with more than just a few negotiation ploys, and 3) have your BATNA prepared.

Right now, our company is engaged in a negotiation to purchase a commercial property. Here are some things we’ve applied so far from our own Negotiating to Win™ programme:

First, we’ve scouted the marketplace and caveats of past sales and valuations of similar properties and that the purchase meets our goals.

Second, in negotiating, we found the buyer has already rejected a prior offer from a 3rd party. Rather than upping the offer, we’ve decided to tease out from them a price that they want, and then base our offer on what we think is a price we want based on their ‘offer’ price. By doing so, we avoid a classic mistake – being the first to make a major concession. The negotiations haven’t concluded, but we are living by the principle that you shouldn’t want something too badly. Many small and large corporate transactions have seen losses because they paid too much for something because they simply ‘had to have it’. Call in corporate “sunk cost; factor perhaps. A well -known case is the takeover of Cadbury by Kraft. Nearly 70% of the Wall Street Journal readers think Kraft paid too much. So did Warren Buffett.

Third, we have a BATNA – or Best Alternative to a Negotiated Agreement – and that is to simply take our money elsewhere to invest or expand; bearing in mind both costs of acquisition and yields.

The trick lies in wanting what you bid for, but not that much

David Lim
Chief Motivation Officer
PS: Interested to read past features on negotiating? Check out these articles from Life Without Limits and my Asian Negotiator blog or take part in our LinkedIn global survey on what constitutes the Most Common Negotiating Mistakes Made.

Context in Asian Negotiations

 

Register for the Negotiating to Win™ workshop, Aug 1, 2011

In 2010 I managed to quadruple my sales target and this was definitely helped by using the techniques I learnt in David’s workshop. I have been in sales for ten years and was quite confident about my style before attending David’s workshop. I learnt very quickly in his course however that I was using only a few techniques and there were many more available especially in terms of negotiating tactics.

Grant Rawlinson
Sales Manager, Subsea
KONGSBERG MARITIME PTE LTD

Most buy/sell side professionals are failing to get what they deserve simply because of a poor understanding of how to negotiate fees and terms effectively. Applying just ONE of the skills you will learn here successfully in your next negotiation could pay for your investment in this seminar, and more!

Learn how to

* Negotiate more effectively immediately
* Improve negotiation skills in probing and listening
* Improve your negotiating style through a validated psychometric tool
* Avoid common negotiation mistakes
* Use up to 15 strategies and tactics
* Ask for, and give concessions effectively
* Negotiate with real case studies and exercises

Register before the closing date July 25th. Details here

“I attended David’s workshop “Negotiating To Win” and found it very insightful. The techniques that he taught are very useful in “real business world”.Check out the programme. You will not regret it.”

Richard Gavriel
Director
Releve Singapore

Context in Asian Negotiations

Posted April 1, 2011 by davelim8850
Categories: asian negotiation styles, partnerships

What's behind an Asian smile?

We do business with people that we like. It doesn’t mean we won’t do business with slimeballs, but all things being equal, we award contracts, work with and – especially in the area of return-on-investment type of intangible – people we like. In Asia, a common mistake is assuming that we, across from the Big Lakes or far from Anglo-centric powers, are just one big group of people who think and behave alike. I can tell you right-away that a Chinese business person from Malaysia, Singapore, China or HongKong will have enough cultural and national biases to make even dealing with ONE Asian race – say Han chinese – pretty tricky at times.

Let’s focus on less obvious aspects of doing better in negotiations for example. One of the first things we normally do is to build rapport. This is a complex mix of reaching out through language, gestures, actions, words and protocols designed to bring ourselves closer to another person – even if it’s someone we have some misgivings about. In Asian cultures where the Chinese race dominates, certain threads and cultural underpinnings are key in understanding how rapport works. However, in this article, I want to move away from the more conventional information about do-s and don’ts which are  based on more obvious customs and business etiquette.

Instead, let’s go deeper into the Asian psyche.

HIGH /LOW CONTEXT: Small things, signs gestures mean a lot in a societies which place hierarchy and respect for rank. First time meetings where you bring a small token or gift that represents your nation or company are welcomed and often a sign of courtesy . We tend to be a bit more higher context than in industrialised Anglo-centric cultures

FACE: Enough said. You create rapport by giving appropriate face to all staff present. Going over the head of someone in a negotiation process may lead to loss of face and you will not win that person’s support or influence in the future. Here’s an extreme example when it can go wrong. An acquaintance of mine was once assigned to close a multi-million-dollar deal in China. For three days, he had to wine , dine and entertain the buyers. When he fell ill on the fourth days, he excused himself from the evening sessions. Upon his return to Paris, his boss told him that the Chinese feedback included a retort that the harried executive had not shown them enough ‘face’ when in China. They lost the deal.

POWER-DISTANCE:  Geert Hoftstede’s studies in the concept of power distance in culture continues to fascinate me. For many years he measured and studied employye values across cultures. The term “low” and “high” power distance refers to the relative inequality of the distribution of power within a society, culture or organizations. Many Sacndinavian countries for examples have a ‘low’ power distance  culture, with fewer layers between the boss and the shopfloor worker. Culturally speaking, Scandinavian countries are also egalitarian in terms of wages, and standards of living.  These countries score hovers around 30 on Hofstede’s scale

India has Power Distance (PDI) as the highest Hofstede Dimension for the culture, with a ranking of 77 compared to a world average of 56.5. This Power Distance score for India indicates a high level of inequality of power and wealth within the society. This condition is, to some extent accepted by the population as a cultural norm. India has Power Distance (PDI) as the highest Hofstede Dimension for the culture, with a ranking of 77 compared to a world average of 56.5. China by comparison is also high at 80, and Singapore is not very far behind too; and reflect’s the countries distribution of power both political and wealth.

So in this context in an everyday negotiation, understand that in high-power distance countries, there are likely to be many more gatekeepers with who you may need to win over before you actually get to negotiating with the economic buyer. In a low-power distance context, far less rapport-building energy may be required. The higher hierarchy in Indian and many East Asian cultures also suggest that approaches to negotiation may require the unpeeling of the proverbial onion – discerning just who is the economic buyer mad who are the influencers involved in the process.

CONFUCIAN PRINCIPLES: Though not explicit, many East Asian companies are still run with the ethics and thinking of the ancient Chinese philosopher  from more than 2000 years ago – who outlined how we should live, run governments ,and lead a household. These include principles that championed respect for elders, filial piety, a strong work ethic, and effective governance of the state. You can’t effectively negotiate any Chinese who has some Confucian exposure, and not realise its influence. So in the context of a negotiation – respect your elders, though you may diplomatically disagree with their position.

And when it comes to filial piety –that’s a phrase that’s almost NEVER used in Anglo-centric societies. When you get broken homes, a culture which focuses on individual freedoms over collective interests, when you call your father by his first name (and he’s OK with it) – you get a society far divergent from Chinese cultures where filial piety reigns. It extends to taking care of your parents even if you don’t get along with them.

In a family run business (and many of the largest Asian busineses are still family-owned), understand the power dynamic of the matriarch or patriarch, and ask if the Harvard-educated eldest son will really ride roughshod over his father…no matter what he says

So if you wish to get of on the right foot, think about these when building rapport with Asian decision makers – show some respect, be open, listen when the oldest/eldest at the table speaks, understand the context of the familial situation. You’ll be mutually respected in liked. It  makes a good impression.

These are just some of the lovely complexities that make up negotiating in Asia

 

DAVID LIM IS A LEADERSHIP AND NEGOTIATION COACH AND CAN BE FOUND ON HIS BLOG http://theasiannegotiator.wordpress.com, OR subscribe to his free e-newsletter at david@everestmotivation.com

 

 

To Negotiate or Not to Negotiate

Posted February 1, 2011 by davelim8850
Categories: Uncategorized

Tags:


Many buy side and sell side professionals lose clarity in pursuit of the deal. When deciding on whether or not to negotiate, plan ahead as to what you walk-way fee or price would be or what package would clinch a deal. Poor negotiators begin a negotiation even if the money discussed falls into the negative fee range. What do we mean by negative fee range. Assume you charge $10000 for a service or product, and you know you will profit when you sell it at any price over $7000. Your cost price is $6000. And between $6000- and $7000 is your breakeven price after factoring some other costs. When offered $5000, you should not even consider negotiating as the price offered is in the ‘negative’ zone ie you will lose money no matter how you negotiate this amount; unless you can get it to $6000+.

Now at $7500 for example, the price offered is in the ‘positive’ zone. This means even if you accept the first offer as a seller, you will make a profit; and it is likely you might be able to get a higher price.

So, when negotiating, consider if you are in the positive or negative zones even before entering a negotiation