Posts tagged "emotions"

Negotiation Strategy

5 Steps to Better Negotiations

0 Comment read

“Any business arrangement that is not profitable to the other person will in the end prove unprofitable for you. The bargain that yields mutual satisfaction is the only one that is apt to be repeated.” B. C. Forbes

Most of us take part in some form of negotiation everyday. In life, skilled negotiators are able to close better deals, and reach mutually acceptable agreements faster. Ever since I undertook this entrepreneurial journey, negotiations seem to have become common place. I have come a long way from my early negotiations, at that time, very often I did not get the best deal possible . Experience however is a great teacher, and although I have made many mistakes in the past, I have also learnt much, which has honed my negotiation skills . Listed below are some key steps to be undertaken during negotiations, to ensure that a mutually acceptable agreement is reached quickly, fairly and efficiently.

1. Motivations & Interests: At the heart of every negotiation, each side has a set of motivations and interests which enable them to take  certain positions on issues. Before beginning the negotiations, identify  your personal motivations and interests for resolving the issue at hand. Internal clarity helps greatly to communicate your message. Next, we need to understand the other side’s position, as also why they have taken it. What are their motivations and interests on the particular issue? The initial round or rounds of negotiation need to include candid discussion to ensure as clear a picture as possible. To read specific examples please click here.

2. Focus on the Problem: The entire objective of negotiating is to find a mutually acceptable consensus. To ensure that this objective is achieved, we need to keep the process as simple as possible. This requires us to understand each other’s perceptions to ensure that we are on the same page. It also requires us to keep emotional baggage off the table. Lastly, we need to ensure that during the negotiation process both parties communicate clearly, and listen attentively. At the same time, we need to be aware of non verbal communications as well. Being focused on the issue and not deviating ,greatly improves the speed at which to reach an agreement. To read more specific examples please click here.

3. Develop Options: The objective of the option development phase is to arrive at a set of mutually viable and beneficial options. To reach this objective much collaborative work is required. We need to have several candid sessions whose sole purpose is to chart out maximum number of options. Each side has to ensure that its position’s and interests are clearly communicated, with the entire focus on how to maximize expectations by working together on a macro level. To read more specific examples of developing options please click here.

4. Alternatives: These are options which form our backup options if negotiations break down and agreement cannot be reached. Before the negotiation process, one should clearly list down all the available alternatives related to the issue at hand. Then list down possible alternatives that the other side may have. This gives a better understanding of how much room there is to negotiate. Alternatives are vital negotiation tools and need to be used tactfully to ensure that a fair agreement is reached. To read more specific examples of alternatives please click here.

5. Objective Criterion: These are benchmarks which provide a fair assessment to rate particular options against. Negotiations which use objective criterion’s usually result in fairer agreements. Therefore it is important that before one begins negotiations, criterions are researched and decided upon. Whether it is for purchasing a business or negotiating a salary increase, one needs to identify quantifiable metrics which can help make the decision making process easier and fairer.To read more specific examples please click here.

Negotiations are usually not very straight forward. Much of the time, emotions get in the way which complicates matters dramatically and frankly confuses both sides on procedural matters. To say that we need to keep all emotion out of the picture is not possible. What we need to do is to exercise a great deal of self control, and constantly put ourselves in the shoes of the other side. Only once we begin to see negotiations as a two-sided process will we be able to progress to becoming a more skilled negotiator. I wish you the best of luck in all your future negotiations.

Negotiation Strategy

Objective Criterions

0 Comment read

“Here’s the rule for bargains: ”Do other men, for they would do you.” That’s the true business precept.” Charles Dickens

Most of us have at some time, played the high-lowball game during negotiations. For example, a while ago I was attempting to buy a domain I wanted. The seller had a listed price of $500, I put in a lowball offer of a $100 dollars straight off the bat. The $100 I offered, had no actual basis and was nearer to the $200 or so I wanted to actually pay for the domain. The seller and I had a number of correspondences back and forth, and a deal was struck around $230. Did I get a good price? Was my reservation price, one that had a logic basis? Unfortunately I could not answer any of these questions.

It therefore got me thinking, that having objective criterions are necessary to ensure that both sides get an optimal deal. In the case of the above example, companies such as Sedo are able to calculate the true worth of a domain through several established criterions that include, estimate of the domain name’s value, list of recent comparable sales, search engine friendliness, branding potential, legal situation and even, possible buyers. This estimation establishes the true worth of a domain. If the had seller relied and gone with such a report from a trusted authority, stating the domain estimate at $500, I would have had very little room to negotiate a price which was substantially lower. We can therefore see, that by adding objective criterion’s to negotiations, we can optimize the value created on the whole.

It is therefore recommended, that whenever you enter into a negotiation, be it changing terms of payments with your supplier, a salary increase for your staff or the sale of your business to a private equity firm, do research regarding the metrics that can be used fairly, to add objectivity to the negotiations. It is important that the criterions proposed are acceptable to both sides. A key characteristic of skilled negotiators is, they are always prepared. They know their underlying interests, the options available,  available alternatives, and a list of objective criterions to reach an optimal agreement for both sides.

Negotiation Strategy

What are your Alternatives?

0 Comment read

“The hardest thing to learn in life is which bridge to cross and which to burn.” ~David Russell

How does one assess whether one is really getting a good deal or not? To answer this question one needs to have a deeper understanding of the alternatives available. Lets say for example, we are negotiating a salary increase with our employer. We want an increase from $50k to $60k. We bring up the topic with our employer, who immediately refuses the suggestion blaming the current economic climate. We could be an extremely valuable resource for the company, but without any available alternative we have very little leverage in this negotiation. However if we do some research about market rates for our profession and may even float our resume around to get an idea what our market worth is we could arrive at a figure which gives us a better understanding of our market worth. With this figure we now have a foot to stand on during negotiation.

Alternatives however are rarely as straight forward in complicated deals where one is negotiating the sale of a business or better terms of payment from suppliers. They do however give us an important edge to see how far we can actually push during negotiations. Lets say for example I am selling my car and my reserve price is $20k I meet a seller whose maximum limit is $30k. In this case any price above my $20k reservation price will be a positive outcome for myself and likewise any price below $30k will be a positive outcome for the seller. This brings out the objective of negotiations which is to achieve a better deal than not negotiating at all. Revealing your alternatives during negotiation is usually not a good strategy unless it strengthens your position at the negotiation table. It is important to remember that alternatives should not be used to apply pressure or force the other side into a particular decision. They are markers to help us make an optimal choice.

Before the negotiation process, one should clearly list down all the available choices related to the issue at hand. I then list down possible alternatives that the other side may have. This gives a better understanding of how much room there is to negotiate. It is important to not use ones alternatives to apply pressure tactics to induce the other side to give in. Such tactics may work in the short term, however repeated use of such strategies will hurt your future chances of getting a better deal. One needs to be fair and ensure that each side is benefiting from the agreement to ensure better long term results.

Negotiation Strategy

Options Development

0 Comment read

“Everything is something you decide to do, and there is nothing you have to do.” Denis Waitley

Often in negotiations, each side promotes their optimal outcome without taking into account mutually beneficial options. We often only concentrate on how we can get the most out of a particular predicament, rather than creatively coming up with alternatives for mutual gain. Other common problems leading to stalemates, is when each side looks for a single answer to resolve the issue, or views the pie as fixed, and looks for ways to increase their own share. These road blocks lead to slow negotiations, and can be frustrating for both sides. Below are a couple of ways I follow for option development:

1. Separate Brainstorming & Decision Making: The option development phase is an important one, and needs to be handled independently. If we mix the option development phase, with the decision making one, it could potentially lead to premature judgments. This phase needs to focus on the creativity of both sides, to develop options which cater to the bigger picture. At this stage there is no option which is too crazy, and both sides must feel comfortable in expressing their point of views and opinions. The end result of these sessions should be a developed list of potential options which cater to both sides and are mutually beneficial.

2. Cater to Interests: As mentioned in earlier posts it is important to focus on interests rather than positions during the negotiation process. This has great significance in the option development phase. For example, if we negotiate a larger equity stake in the business with one of the founders, it is important to let the partners know why you want 10% instead of the 6% offered. Is it because the 10% signifies the actual opportunity cost that you are foregoing to join the business? Explore the reason of the founders interests  and why they had offered 6%. Without this, the discussion is polarized to very hard positions, its either 10%, or I will not be joining. Such an attitude is not conducive to developing viable options.

3. Focus on Increasing the Pie: On a micro level when you look at an issue there are a couple of possible options available. For instance, if you are negotiating terms of payment with a vendor there are a limited number of options available to reach an agreement. However, if we take a 3 dimensional view of the issue at hand and take into account macro level factors to improve the situation, a number of options will become available. In the same negotiation with the vendor, if we zoom out and brainstorm new ways to increase the volume of business with the vendor through shared activities, maybe the vendor would be more inclined to negotiate more favorable terms. Broadening the scope of the issue is an essential trait of the skilled negotiator.

The objective of the option development phase is to arrive at a set of mutually viable and beneficial options. To reach this objective much collaborative work is required. Many individuals shy away from talking through options and stating their interests, only because they fear they may be giving too much away and may appear vulnerable. Such a stance will most likely lead to a limited set of options, most of which do not cater to the interests of the involved sides.  We must therefore introduce candor into our negotiation process to yield optimal results.

Negotiation Strategy

Focus on the Problem

0 Comment read

“When dealing with people, remember you are not dealing with creatures of logic, but creatures of emotion.” Dale Carnegie

Dale Carnegie’s quote, eloquently summarizes a major challenge we face at the negotiating table. Negotiations tend to get complicated due to the fact, that as human beings we bring a lot of baggage to the process. In the seminal book “Getting to Yes” by Roger Fisher and William Ury, they have a dedicated section devoted to separating the personal element as much as possible, from the negotiation process. They identify three main segments which tend to complicate matters repeatedly, they are perceptions, emotions and communications. Listed below are a few tips on dealing with each segment.

1. Perceptions: As stated in yesterday’s blog post, if we do not look adequately into the other sides position and interests, our perceptions will be skewed. We may perceive an issue in a certain manner because of a particular reason, whereas, it could be due to something completely different. We need to open up candid discussions on both sides. Unless this is done, both sides will blame the other and point fingers. Each side needs to be part of negotiation process, as also clear on each other’s positions, to reach a mutually agreeable decision.

2. Emotions: This area tends to complicate matters during the negotiation process as a routine. To become an adept negotiator, one needs to become emotionally aware of ourselves and others. Emotions tend to play either a positive or negative role in negotiations. It is only when negative emotions such as anger, fear and distrust come into play, that reaching a consensus becomes very challenging. As skilled negotiators it is important to keep a constant check on our own emotional levels, as well as that of the other person. When we sense a boiling point it is important to diffuse the situation by either changing our stance or by temporarily leaving the scene. It is important to focus on the issue at hand and not take personal jabs at the other person.

3. Communication: During the negotiating process if the involved individuals are not able to communicate properly, chances of reaching any sort of agreement is minimal. We need to ensure that during the negotiation process both parties communicate clearly and listen actively. At the same time, we need to be aware of non verbal communication as well. Key factors such as eye contact, facial expressions and body posture are continuously communicating messages to the other side. We also need to be aware of the non verbal cues we may be receiving from the other side as well. Miscommunication is one of the primary reasons why negotiations break down, we must ensure that the focus on keeping channels of communication clear at all times is maintained.

The entire objective of negotiating is to find a mutually acceptable consensus. To ensure that this objective is achieved, we need to keep the process as simple as possible. If we complicate the process by bringing external baggage into the equation, chances of reaching a consensus become slim. We need to ensure focus on the issue at hand at all times. This will undoubtedly be challenging, and there will be moments when our emotions will get the better of us. However, if we always remind ourselves of the core issue and make a concentrated effort to reach a consensus, both sides will benefit.

Strategy

5 Strategy Based Games

0 Comment read

“What do you want to achieve or avoid? The answers to this questions are objectives. How will you go about achieving your desired results? The answer to this you can call strategy.” William E Rothschild.

This week we have talked about ways to flex analytical thinking capabilities so as to become more adept at developing and executing strategic directives. One of the ways which has contributed substantially to my personal growth in strategic based thinking, has been its application in a variety of strategic games I have played. Most of these games have simple rules, and can be played by a broad spectrum of individuals ranging from children to adults. When we begin to scratch the surface of these rules, we notice more complexities. Strategy development follows similar lines. To develop and deploy an effective strategy is a challenging task. Listed below are five strategy based games through which I have learnt many valuable lessons.

1. Chess: This game teaches several fundamental concepts, such as preparation, patience and sacrifice, key proponents in development of strategic planning. Chess provides an ideal playing ground to practice, and hone skills needed in these particular segments. It teaches us to see patterns, which may lead to future positions, and how to take advantage of them. At the same time it forces us to continue looking at the bigger picture, to ensure that we are aware of all positions on the board, so as to take advantage of them. To read more about the parallels between chess and strategy please click here.

2. Bridge: Is a game which helps develop skills to work with others, communication, learning to trust instinct and, actual ‘table’ play. As a partnership based game, effective communication with your partner is critical so as to read and understand the partner’s hand. Developing and deploying strategic directives works in the same way. We have to learn to work together to formulate them, at the same time we have to communicate them effectively to the rest of the team, to ensure smooth deployment or play. To read more about parallels between bridge and strategy please click here.

3. Poker: Among the many things which can be learnt from this game are aggression, controlling emotions and attention to detail. Most of these qualities are also required to ensure successful deployment of any strategy. Without them, we see poor execution and unravelling of plans midway, due to the inability to master these factors. It is essential that we develop and be adept at understanding our own thresholds and abilities to find success. To read more about the parallels between poker and strategy please click here.

4. Monopoly: An all time favorite strategy based game, this gives players insights into negotiating, deal making and situational analysis. There are several strategies which players take to win at this game, unfortunately they are often short sighted. This is due primarily because we develop strategies based solely on the short term . These could be in the form of hitting quarterly targets or maintaining specific share price. Most of these strategies do not take into account long term implications of these decisions, which have the potential to be detrimental to the company’s future. To read more about parallels between monopoly and strategy please click here.

5. Risk: A game with an end goal of, world domination. It teaches players several principles relating to allocation of resources, partnerships and aggression. Most of these principles form the basis of successful strategies. The ability to fully utilize in-hand resources in the most efficient manner is a challenging task. Furthermore, to progress as an organization,  strategic alliances need to be formed to accelerate the rate of growth. These principles are covered in the game, in a simple yet effective manner. To learn more about parallels between risk and strategy please click here.

On the journey as an entrepreneur, learning has to be an ongoing factor. Using creative methods to exercise analytical and thinking capabilities helps to see situations from different angles. This equips us with the ability to make better decisions, be more productive and reach our goals faster. 

Strategy

Risk

0 Comment read

“Move not unless you see an advantage; use not your troops unless there is something to be gained; fight not unless the position is critical. If it is to your advantage, make a forward move; if not, stay where you are.” Sun Tzu

Competing for world domination is what the game of Risk is all about. This is a military based game, where players put their respective armies against each other. The game provides each player with the ability to be involved in strategic maneuvering, brings in an element of luck with the dice and gives ample opportunities to form and break alliances. In a way, it simplifies all the complexities of war, into a simple game where the player with the greatest foresight and a little luck, usually emerges victorious. Unlike Monopoly, this game allows for more creativity and imagination due to the movements allowed on the board. Playing straightforward strategies leaves you exposed, and vulnerable to attacks. 

This interesting game has quite a few parallels to the world of business and strategy:

1. Allocation of Resources: Each player has a finite amount of resources allocated to them. The placement of these resources is a critical aspect of the game. One may choose to have loosely scattered armies all over the board, they may decide to fortify certain key positions with the bulk of their resources, or they may aim to use their resources collectively and be aggressive. Each strategy has its advantages and disadvantages, a similar predicament occurs in the real world when we develop strategies. The deployment of limited resources is critical to whether the overall strategy will be successful or not.

2. Partnerships: Conquering the whole world, even in a game, is an arduous task, one that can rarely be done alone. The game calls for players to partner together, to improve their chances of winning and become a more feared adversary. Without these partnerships one is usually outflanked or outnumbered, and an early exit in the the game is imminent. The same principles apply in the real world. In order to reach goals and objectives, partnerships are an essential component. Choosing partners carefully and correctly is vital to ensure the success of any campaign.

3. Aggression: In my experience of playing this game, the opponent who chooses to fortify a small portion of the board heavily, usually faces eventual defeat. Opponents who choose a defensive style of play, lack the creativity or willingness to go out of their comfort zones, fearing the unknown. Unfortunately such behavior is punished heavily in this game as well as in the real world. When pursuing goals and dreams, being aggressive is often vital to acheive them . Focusing efforts on offensive strategies instead of defensive ones will bring a greater share of victories, rather than defeats in my opinion. 

In the game of Risk there is an element of luck, due to the requirement of rolling a dice. Once the dice is rolled, nothing can be done to change what was rolled. What we do have control over, is how we react to what we may have rolled. In life we have the same choice. We cannot change the hand that we have been dealt. What we can change is how we choose to play it. Remember to keep your end goal in mind, and formulate short term tactics to reach it.

 

Strategy

Monopoly

0 Comment read

“Monopoly is a game which calls for long term strategic planning in order to succeed. “ Anonymous

There were very few games as exciting as Monopoly when I was growing up. It was by far one of my favorite board games, I still enjoying playing it today. There was something about the game, which drew me to it, maybe it was the immense satisfaction I got from figuring out how to convince my opponent to make a deal, the thrill of watching my opponents land on my hotels or just plain winning. I do believe that playing this game from such a young age was, to an extent, instrumental in developing my passion for business and deal making. As I grew older I began to notice the parallels between the board game and business. 

Listed below are some prominent parallels:

1. Negotiation: Monopoly requires players to make deals for swapping properties or other concessions during the course of the game. Very rarely do players want to give up something which they know will put them at a disadvantage in the game. It all comes down to how convincingly you negotiate and structure deals, so that they fit into your plan and appear to be favorable to your opponents as well. Individuals act in similar ways in the real world, and an ability to close a deal comes down to your negotiation and persuasion skills. 

2. Situation Analysis: In the game of Monopoly, it is critical that you adjust strategy according to the number of opponents as well as the nature of their behaviour patterns. Going ahead blindly and acquiring every piece of property you land on without a set objective, will place you at a definitive disadvantage. When developing business strategy, the same concerns have to be taken into account. Not paying attention to these factors, creates exploitable vulnerabilities in your plan. 

3. Integrity: Sometimes individuals will say just about anything to close a deal. In Monopoly this could be, “I will let you off three times on my hotels”, “We can share profits on this property” or “I will never charge you on this square”. However, I have seen these promises broken many  a time and a friendly game turn sour. In a game revolving around dealmaking, one’s word is really all there is. If no one trusts you or your word does not carry weight, no one will want to make a deal with you. The same rule applies in all aspects of life as well. Keeping true to your word will give your team reason to believe in you, will give investors the confidence to invest in you and will allow you to sleep well at night. 

Looking ahead and adjusting strategy according to forecasts is essential in the game of Monopoly and the game of life. One has to learn to trust gut instincts, and be confident in how to move forward. Keeping your word and honoring deals is mandatory. Understand your opponents and learn what drives them. At the end of the game of Monopoly there can only be one winner, make sure you have the drive and ambition to be that person. 

Strategy

Poker

0 Comment read

“The most common mistake in history is underestimating your opponent; it happens at the poker table all the time.” David Shoup

Poker is a game associated with luck and random chance by most people. The immense media attention has contributed to a large extent, to the explosion in the number of poker players during recent years. The rules of the game are fairly straightforward, any amateur can be taught the game in no time. Due to this low learning curve, this game has witnessed a massive influx of players who just want to “try” their luck at it , so to speak.  Admittedly, there is an element of luck to this game, as there is with most card games. However, this element of luck creates a deceptive illusion, and beginners finds themselves losing rapidly to the more seasoned players. The fact of the matter is,  understanding probability stakes and an innate skill for reading people’s faces provides stronger players, with a huge advantage in this game. 

There are a few parallels that can be drawn from the game of poker to strategy and business. Some key elements I drew from the game are:

1. Aggression: Calculated aggression in the game of poker, forces other players at the table to react to your style of playing. Done correctly, this enables stronger players to manipulate many situations to their advantage. In business, and specially strategic development, the same theory applies. If one remains passive in outlook and allows external factors to disrupt the game plan, progress will be slow. One has to be an instigator to bring change, and one needs to pursue goals aggressively to reach them. Sitting back and expecting things to happen is a flawed strategy.

2. Controlling Emotions: The players at a poker table who allow their emotions to override logic and rationale, are the first to lose their chips. There are very few games I have played, in which controlling emotions plays such a vital role. It has taught me a great deal about patience and keeping a level head even when things become terribly long. Developing such patience can help greatly in all aspects of life, and provide a distinct advantage over those who lose their cool too quickly.

3. Attention to Detail: The game of poker is about gathering as much information about other players as possible. This could be their betting patterns, gestures or even the way they talk. Poker, does to a large extent boil down to how well you can read your opponents. Players who are able to identify patterns earlier in the game, can win, regardless of what others may be holding in their hands. In business and strategic development the same rules apply. The inability to understand your competition and identify trends leaves your organization at a great disadvantage. 

Developing keen insights about your opponents, and understanding your own personal threshold limits can be extremely valuable assets. By the same token, knowing when to accept defeat and when to keep your calm is equally important. This game punishes those with large egos, and rewards those who are able to keep their emotions and egos in check. Life works in very similar ways, the sooner we get adept at understanding these intricacies, the sooner we can reach our goals.

Advice Inspiration Sales

5 Steps to Close Your First Sale

1 Comment read

“Victory is sweetest when you’ve known defeat.” Malcom Forbes

Closing your first sale is one of the greatest highs you experience in your journey as an entrepreneur. It is a validation of your skills, passion and commitment to achieving something more than just the ordinary in life. There is no doubt that the journey to this milestone is a challenging one, it will test to the max and you will be able to gauge whether you have it in you to actually persevere and reach your goal. Having been through this exercise, I am now part of other teams on this leg of their journey I have put together a list of five concepts which have helped me .

1. Envision it: Before starting this journey, clearly identify where you want to go, how you want to get there and by when. Establish a picture of the entire process to enable you to visualize how you want everything to work. Once you have this image deeply embedded in your subconscious, you are ready to begin your journey. To read more about envisioning the sales process please click here.

2. Be Proactive: To be able to reach any goal in life you have to take action. Without it you will not be able to gather the momentum that is required to close that first deal and then successive deals after that. There is a need to be continuously proactive if you want to have success in any part of your life. If you want to achieve your goals and close that sale, you need to start taking responsibility for your success and action, today. To read tips on becoming more proactive please click here.

3. Ask: If you have hit a point where you are meeting a lot of people, pitching your idea and getting some interest but no sales then you are not asking for the sale correctly. Subconsciously we do not want to be the pushy salesperson . We begin to let this thought influence the sales pitch process and what happens is that the prospect is never really posed the question to buy. You need to start asking for the sale much more proactively to start closing deals. To read more about asking for the sale please click here.

4. Patience: There will be times during this journey where you will get frustrated, irritated and sometimes quite angry because you are unable to hit your targets and goals. This impacts detrimentally on the entire sales process as it decreases productivity, efficiency and your positivity. Having patience during this journey will be critical in your progress, remember, research shows that we usually quit just before we are about to hit something really big. To read more about this critical success factor please click here.

5. Learn from Failures: There is no failure only feedback. When times are tough, patience is low and we face setbacks, an entrepreneur starts to question everything. We begin to start blaming external factors, our team, our product or the economy. However this stance will not change the outcome or increase the probability of your closing the sale. You need to take the failures that you face and convert them into feedback to help you succeed. To read about strategies to convert failures into feedback please click here.

I sincerely believe that by following these steps coupled with hard work, determination and belief in your capabilities you will achieve your goals. We have to stop making excuses for ourselves and playing the blame game. If we truly want to succeed we have to do whatever it takes. Believe in yourself, your product/service and the your ability to successfully sell. No hurdle will be too high and when you finally get there, embrace the moment. Be thankful that you have been given the opportunity to prove yourself because, believe me, the journey is just starting, and it doesn’t become any easier!

I wish all of you the best of luck!