Can we avoid these disadvantages? Are our long- and short-term goals consistent with our tactics? Should we do anything different in this negotiation? Do we want to pay to create competition? A second source may cost more in the short run but less later. Should we split our requirement between suppliers? Or should we reduce our supplier count to one? How can we prevent being exploited later? How do we avoid being hampered by product or service changes later? How much information cost and other should we give them?
What information should we get from them? Target Setting Strategy What are the issues? What is our position on each issue? What are the pros and cons of each issue? What are our targets for each issue? What are our opening offers for each issue?
Are our targets high enough? What is our fallback plan if we must move from our opening position to our target position? What is our guess as to what they will settle for? How can we find out how wrong our above guess is? How can we, in management, help our negotiators to commit to higher targets and to reach them? In the next post, we will continue our discussion of the detailed planning points for the remaining blocks of the Pyramid of Planning.
If you are looking to take your negotiation skills to the next level from the comfort of your own home, check out our virtual negotiation programs Having looked at the negotiation process in a broader time frame, we are now in a position to consider the building blocks of planning in a systematic way. Our first step will be to look at the nine key building blocks of negotiation strategy: Power Sources and Limits Product and Market Strategy Win-Win Strategy Short- and Long-Term Relationships Setting Reachable Targets Selecting the Right Team and Negotiator Motivation Strategy Information Gathering Strategy Decision-Making Strategy It is well to note that each of these planning blocks applies as much to someone getting ready to buy or sell furniture or a boat as it does to negotiation a billion dollar contract.
While not yet an antique, the set is over 80 years old and in fine condition. The two of you decide that your friend will do the negotiation. Will the real target please stand up? What will you probably pay? My suggestion to buyers is that they stop talking about the most they are willing to pay.
Concentrate instead on your opening offer and your target: the price you intend to achieve or do better than. My advice to the sales manager we met earlier is similar. If you are put under pressure by the buyer, do not settle at a price below 98 cents until you speak to me. Even if none of the demands are won, the buyer is more likely to be satisfied with the 95 cent outcome, having worked harder to win it.
How we set targets in negotiation determines how we will settle. Once there was a business professor who was interested in marksmanship. He learned of a fantastic sharpshooter in the backwoods of Kentucky and decided to visit him to discover why he was successful. Upon arriving in the village, the professor was astounded to learn that the crack marksman was known as the village idiot. But you do want to leave some of the table stakes for the other party…intentionally!
We have found that the other side will not be satisfied with the deal unless they have been able to extract value from you during the negotiation. So, plan on giving them some value as part of your strategy. We need the other side to feel satisfaction with the outcome because we want them to deliver on their part of the agreement. More important, it lines us up for doing business with them again and again. Negotiators that know this create business deals that enable incredible growth for their companies.
Once you have determined your target, then everything you do planning for and executing on your negotiation is about hitting that target. In his book, No Limits, Michael Phelps tells an amazing story about how setting high aspiration targets made all the difference in him becoming an Olympic gold medalist. He described the target setting ritual that he and his coach, Bob Bowman, conducted before every swim season.
On one occasion, Bob asked Michael to go to lunch at his favorite restaurant. At that lunch meeting, Bob asked Michael what time he wanted to hit in the M fly. Michael replied with Then he was asked what time he wanted to hit in the Individual Medley. He replied with Then, unbelievably, Michael hit both those times to the fraction of a second that season. This gave coach Bowman an idea. As Michael was preparing for the Olympic Trials, he told Michael that he could swim the M fly in less than 2 minutes.
This would break the record in his category. And, as coach Bowman expected, Michael went Negotiators take note. The same thing happens consistently for negotiators that set targets with high aspirations! It turns out, that negotiators who establish targets actually work harder to get their desired outcome versus those negotiators that do not set specific targets. First, negotiators may resort to unethical methods to reach their goals, such as lying or making false promises to their counterparts.
Second, negotiators who fall short of their goals may misrepresent their performance to their employers and clients—by fudging sales numbers or misreporting on their timesheets, for example. Intense focus on narrow goals can keep negotiators from seeing the big picture. As a result, goals may distract them from absorbing broader lessons they could apply to future negotiations, research suggests. In addition, negotiators may be tempted to adopt competitive strategies rather than cooperative ones to meet challenging goals and, as a result, miss out on opportunities to create value for their organizations in the process.
To motivate, use goals sparingly given the many pitfalls of goals, managers would be wise to think long and hard before using them. The Table below lists several questions that Ordonez, Schweitzer, Galinsky, and Bazerman advise managers to answer before implementing goals, as well as steps you can take to address goal pitfalls.
Absolutely right on. I am seeing competitive internal behaviour between sales team to sell their product and not the others in the same company, the targets are driving uncooperative behaviour.
In addition large targets are causing unethical behaviour. This screws the customer in terms of value but also internal team members. When raised with management asking how they have calculated targets they say of course the quota is set from the top down and have no hard evidence to support. Online Procurement Negotiation Americas. Procurement faces the double challenge of getting the best value deals from vendors, while at the same time managing internal stakeholder relationships.
Cost savings initiative yields decreasing returns. Take your procurement career to the next level by learning how to consistently close the most complex of deals in less time while creating more value. Online Negotiation Cornerstones Americas. Whether you're aware of it or not, you've been negotiating your whole life.
We negotiate with our colleagues, customers, suppliers, bosses, family and friends. We negotiate for business agreements, higher pay, a better job, our home or car. We only get to choose whether we negotiate better or worse than others.
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