Welcome to MWI's Negotiation Newsletter, providing you with negotiation news you can use. Our goal is to bring you helpful tips and advice, along with up-to-date information about MWI's work in the world of negotiation.

In this issue:

> MWI Client Success Story

> Featured Negotiation Tip: Don't Prep Alone

> Meet an MWI Negotiation Instructor: Alan Price

> MWI's Director of Negotiation Programs featured in Chief Learning Officer Magazine

> About MWI's Negotiation Programs and Services
 

MWI Client Success Story

GLOBAL SEMICONDUCTOR COMPANY ACHIEVES WORLDWIDE NEGOTIATION SUCCESS

The following story illustrates the value achieved through the skills delivered and practiced in MWI’s Negotiation Skills Workshop for one of MWI’s semiconductor clients. Company names have been made fictitious to protect confidentiality.

THE PROBLEM

Semi-Con, Inc. (“Semi-Con”), a global semiconductor signal chip manufacturer, was struggling with their sales team’s capacity to negotiate effectively with key long-term and new accounts. Specifically, the sales team was:

• Portraying (by their own account) a sense of frustration in their perceived negotiating position;
• Quickly handing over value when faced with demands for substantial annual cost reductions;
• Struggling with internal collaboration during the sales process;
• Fearful that saying “no” would result in losing or putting at stake the current deal; and
• Infrequently holding their customers accountable for missed projections and other components of their previous agreements.

THE MWI SOLUTION

To address these and other issues, and to enhance the negotiated results of Semi-Con’s sales team, MWI designed and implemented a customized worldwide negotiation training and coaching program. This program consisted of modules tailored to meet Semi-Con’s needs, built off the interest-based model of negotiation developed at the Harvard Negotiation Project, and included custom cases, videos, and presentations rich in context and applicability.

THE RESULT

In mid-2007, a Semi-Con sales team met with a team from Global Acoustics, Inc. (“GA”), a worldwide heavy hitter in the auto sound industry, to renegotiate their contract and annual pricing. Similar to prior years, GA made an initial demand of 10% cost cuts across the board on all parts supplied by Semi-Con. However, unlike previous years, where Semi-Con pushed back contentiously, they utilized MWI’s Negotiation Prep Tool (introduced and practiced in MWI’s Negotiation Skills Workshops), and shifted the dynamics of the negotiation and, ultimately, the relationship to a collaborative endeavor.

Rather than assuming an adversarial stance and negatively impacting the relationship, after proper preparation, Semi-Con understood the underlying interests of GA and was prepared to discuss creative ways for both companies to meet each others’ needs. They also knew that GA did not have the alternatives (read: opportunities with Semi-Con’s competitors) Semi-Con was previously led to believe. Finally, Semi-Con understood how and where they could help GA in other industries, thereby also helping themselves win market share.

This was still no easy negotiation though, and GA’s Executives forced an impasse at the first meeting. But, again, due to proper preparation and analysis, Semi-Con knew they did not have to buckle under the threat of not reaching a deal. When the meeting adjourned without final agreement, GA threatened to revert to their opening offers and demands, assuming Semi-Con would balk based on the progress they had made. But Semi-Con didn’t flinch. In fact, they responded that they too would retract all offers made and start from their original proposals as well.

At the conclusion of the negotiation, Semi-Con negotiated a decreased price cut rate equal to an estimated $350,000 savings (on one negotiation alone), while also: winning new business opportunities, understanding the commitments necessary to hold their customer accountable for this year’s terms and agreements, opening the door for countless new business opportunities and market share and finally, establishing a precedent for reasonable, fair and mutually beneficial contract negotiations for years to come.
 

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Featured negotiation tip and article: "Leveraging Your Resources: Don't Prep Alone"
by Stephen Frenkel, Director of Negotiation Programs

When purchasing real estate, experts say that the three most important items to consider for a successful purchase are location, location, location.

Similarly, when negotiating we like to say the most important actions you can take to ensure success are preparation, preparation, preparation.

But most people, even when taking this advice to heart, go about the preparation process on their own. Rarely, however, can one person see all sides to a situation, consider all angles of a problem, develop all creative options for resolution, or realize all relevant objective standards on their own. I could go on, but you get the point – it’s to your benefit to ask for help and gain additional perspective.

For this reason, we go through a multi-step process in our 2-day negotiation trainings. In step 1, the participants prepare on their own or with a colleague, completing MWI's Seven Element Prep Sheet in as much detail as possible. In step 2, we gather the small groups and prep as one large group (one for each side of the case). In my experience, by the end of step 2, attendees have enhanced the information on their prep sheets 2-3 times over. Ideas from others are combined and built upon to help create a more exhaustive (though never fully exhaustive) list.

For this reason, I want to break the “preparation, preparation, preparation” advice into three distinct phases of preparation, rather than an abstract, though relevant suggestion:

Phase 1 – prepare as much as you can on your own. Take your time (as much as possible) and exhaust the entries for each element category. Take breaks and come back to the task. Ideas will come to you as you “sleep on it” and look at the world with your new “preparation lens.” You will enhance your own list with time.

Phase 2 – share your preparation with a friend or colleague. Look to someone with similar contextual experience to share your prep sheet with. Ask for their assistance – is there anything you haven’t considered? Does he or she have any creative ideas? Can they help you think of additional alternatives or objective standards you haven’t yet considered?

Phase 3 – bring the prep sheet to your management or team. Mimic the large group prep from the training. Commit to a brainstorm session and utilize the thought power of the group. Ask if they would help you role play so you can be comfortable in the negotiation itself.

Going through these phases and staying dedicated to a thorough preparation process will help you achieve your ultimate goal, which can probably be defined as comfort in the negotiation process as well as reaching a specific desired outcome.


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Outside the Classroom - Meet an MWI Negotiation Instructor
Featuring: Alan Price

Alan Price is a Senior Negotiation Instructor for MWI, based in Cambridge, Massachusetts.  Alan’s focus is on leadership development, the field in which he authored the book Ready to Lead? (Jossey-Bass, 2004). Alan holds a J.D. from Harvard Law School and has taught at the Harvard Business School and Harvard Graduate School of Education. For more information about Alan and his professional experience, please visit www.mwi.org/about/people.htm#Price.

Interview conducted by Stephen Frenkel, MWI’s Director of Negotiation Programs, on August 15, 2007.

SF: Alan, how long have you worked in the field of ADR?

AP: I started in January of 1990 when I took my first course in [Harvard] law school with Roger Fisher and Bruce Patton. I have apprenticed myself to them ever since in some way or another.

SF: Was it something in particular about the field? How did you steer in this direction from law school?

AP: Well, I just had a natural affinity for it, I think. I liked the thought process. I liked the application of the law to improving the relationships between people and not just [enabling] adversarial relationships.

SF: In what ways do you practice in this field?

AP: I do a lot of negotiation training and consulting – a lot of seminars, workshops, everything from basic negotiation to much more advanced workshops. I do a fair amount with valuation consultation, that is, negotiation around how much something is worth, which is related to fee negotiation (how much is charged and how to bargain for better fees). Also some work around licensing, like technology.

SF: How does your practice in the field, in terms of valuation consultation, and other services you provide, inform and influence your work as a negotiation instructor?

AP: They go back and forth – if I’m not consulting and I’m only training, then it starts to feel fairly theoretical. I feel like I can use some real world examples to inform the trainings so it’s much more impact-full. Similarly, you have the opportunity to keep up on theory, and inject that into current consulting cases.

SF: What do you like about being a negotiation instructor?

AP: I love creating value. I love improving relationships. I love the variety of situations – you know, company A is buying company B and there’s a disagreement about how much it's worth. B thinks they’re worth a lot and A wants to pay much less for it. How do you work that out? A typical finance or valuation model theory will come up with answers that they think are right. But negotiation tries to come up with answers that are persuasive, which may in fact be right, but more important, it gets through some of the human elements that are necessary. It’s not enough to just say “the formula says it’s right” – that doesn’t produce agreement very often, because of [negotiators’] own perceptions of the valuation.

SF: What do you do when you’re not instructing negotiation programs or working in the general field of ADR?

AP: Well I do a lot in the broader scope of leadership development. That’s where I wrote my book, Ready to Lead. I like the leadership journeys that people can go through in their Executive development. I like to help people accelerate that leadership journey, acquiring new skills of which negotiation is one. And then to add one other, I help people write what’s in their heads. Lots of people have great ideas, great wisdom, and they need a lot of encouragement to pass that on. They say “I think I have a book inside of me,” and they wait year after year and the books don’t get written. I like to push people to actually write those ideas, whether they become books or articles.

SF: So, are you a motivator or a muse?

AP: Ah, I think both.

SF: How about outside of work? Hobbies?

AP: So many hobbies – I love sailing, hiking, being outdoors in nature, cycling. And I’m a tournament chess player since a young age.

 

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MWI's Director of Negotiation featured in CLO magazine

In August 2007, Chief Learning Officer’s (CLO) Senior Editor, Kellye Whitney, interviewed Stephen Frenkel, MWI’s Director of Negotiation Programs, about the differences between collaborative and competitive negotiation styles. The interview was featured in CLO’s Executive Briefings section and distributed to Chief Learning Officers across the country. In the interview, Stephen focuses on the long term gains of a good working relationship and the consequences of taking a competitive stance, particularly when negotiating with internal players, for whom a long term collaborative working relationship is essential.  To read the CLO Executive Briefing, click here. For more information about MWI’s negotiation training and coaching programs, contact Stephen Frenkel, MWI’s Director of Negotiation Programs, at 800-348-4888 x24 or <sfrenkel@mwi.org>.

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MWI offers customized negotiation training and coaching services. Our work is built on the ideas of collaborative/interest-based negotiation, generated at the Harvard Negotiation Project and captured in the bestseller Getting to Yes by Roger Fisher and Bill Ury. The underlying goal of these programs is to maximize value for all parties while improving long-term working relationships. For more information about these services for you or your organization, please click here.


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Questions and comments should be sent to negotiation@mwi.org.

Copyright 2007 Mediation Works Incorporated.  All rights reserved.