2. Introduction: Presentation Overview
• Goals
• Help an entrepreneur negotiate successfully with “big players”
• Think and act like a strong, conscientious negotiator without being big
• But, know how a big player thinks and acts
• Provide quick exposure to strategy components, process, and tactics
• Warning: very high and quick orbit; short presentation (there is much more)
• Content
My background
Typical entrepreneur’s view of negotiation
Strategy’s 3 Dynamic Parts
Sources of negotiation power
Tactics
Two strategy examples
Best practices: 5 traits, 5 dos, and 5 don’ts
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3. Introduction: RLW at a Glance
• At Cornell
– EII Executive Director; BR Suite, fellows program, events, other programming
– Johnson Faculty: entrepreneurship, venture capital, & negotiations
– Cornell Tech: Tech Enterprises course, executive educ’n center, + Technion Liaison
• At Google
– Strategic acquisition & development projects; Negotiated deals with PMs, CEOs
– Conducted negotiation training worldwide
• Pre- and Post-Google
– Entrepreneur, innovator, “dealaholic”
– Founded, co-founded: bulk mailing (Jr HS); DEALS® software (patent holder) &
DEALTEK consulting, data center, commercial bank, RE dev., commercial fish farming
– XM Satellite Radio, Orbital Sciences, Motorola, AOL, Oracle JV, & other deals
– Boards of Directors; C-level positions; bank COO; boards of advisors; mentor
– Consultant; former Big 4 director and national mgt. team; now, global consulting
– “Recovering attorney”; corporate, business, finance, and real estate transactions
– Presenter, author 3
7. Negotiation Strategy’s 3 Dynamic Parts: Time, Power, & Info
Information - 4 Types: Time
Known to all sides: Available time to each parties;
Internet/public -- industry, time constraints
market, or company info Timing strategy and tactics
Known only to your side
Power - 7 Types:
(YS) & can be disclosed to Time
Title
other side (OS); vice versa
Reward/Punishment
Known only to YS but
Consistency
cannot be disclosed to
Charisma
OS; vice versa
Expertise
Needed but not yet
Situation
possessed by one or
Information
more sides David vs. Goliath
Information Power
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8. Where does negotiating power comes from?
Perception, Knowing Process, Confidence,
Anticipation Having Strategy Ability to Act
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11. Reluctant Flinching Best offer
buyer/seller
Tactics: Uproar (we want Flinch; Grimace
Set the Stage The list it all)
Play dumb, act
Feel, felt, found First offer smart
Trade-off Funny money Set aside
Good cop, bad cop Splitting the Decoy
Tactics:
difference
Making the Deal Higher authority Red herring
Printed word
Squeeze Nibble
Fait accompli Withdrawn offer
Tactics: Set aside Hot potato
Closing the Deal Turn down, walk Throw away concession;
away So what?
Tactics: Entrepreneur can use them, too. And, they’re free! 11
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12. Two Entrepreneurial Strategy Examples --
Example 1: Frame Disadvantages as Opportunities
David’s Perceived Framed as
… Goliath’s Opportunities
Disadvantages …
Limited Capital Ready for Investment
Lack of Experience Open to New Ideas
No Sales Can Adapt/Modify Prototype
Entrepreneur’s framing can shape larger party’s strategy and
behavior for the negotiation’s duration.
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13. Strategy Example 2: Pit Big Players Against Each Other
SoBe
• Rivals can work against each other to their detriment and Entrepreneur’s benefit.
• Entrepreneur with strong “Plan B” pressures rivals to make concessions.
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14. Best Practices: 5 Traits of an Effective Negotiator
1. Understands and conducts negotiations as a process
• A multilateral, interactive, and often iterative process to accomplish the
goals of two or more parties
2. Does the homework on a regular basis
• Masters the issues & their interrelationships
• Masters information and adapts to changes in it
3. Maintains sensitivity and tolerance for interpersonal differences
• Personality types
• Nationalities, Cultures
• Communication styles, methods, and content; notice the changes
4. Emphasizes areas of agreement, not disagreement
• Explains and substantiates own points
5. Instills strong belief in OS that YS will uphold the deal
• Shows integrity, reliability, and credibility
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15. Best Practices: 5 Do’s
1. Know your stuff – be on top of all sides’ facts, interests, and issues
2. Be a great communicator ( = listener, not just talker)
• Keep your side informed of all key negotiation communications
• Communicate regularly but carefully with OS
3. Consider own enthusiasm’s affect on concessions, agreements
4. Be alert to pressure
• All sides are under pressure to deal, settle, compromise
• Generally, the side under the most real or perceived pressure "loses”
5. “Keep your eye on the ball”: focus on movement, measure progress
• Concessions and interim agreements
• Statements, sometimes silence
• Action, sometimes inaction
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16. Best Practices: 5 Don’ts
1. Don't assume money or price is the all-important deal point
• After all, it probably isn’t
2. Don't unnecessarily narrow your negotiating range or flexibility
• When possible, don’t be the first side to make an offer or name a price
3. Don't disclose your side's time constraints, deadlines, or pressures
• . . . unless there is a compelling reason to do so
4. Don't narrow the negotiation down to only one issue
• Negotiations are so much easier with at least two issues in play
5. Don't become emotionally involved or egotistical
• Don’t get personal
• It’s typically counterproductive, and it’s a lonely place
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17. Time/Timing
Power: 7 types
Information: 4 types
Strategies & Tactics
Best Practices: traits,
dos, & don’ts
Thoughts & Actions:
Know how Goliath thinks
but don’t act like Goliath
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