Posts Tagged ‘agreement’

Succeed By Bringing The Ghost Whisperer To The Negotiation

Thursday, January 1st, 2009

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Don't Look Now, But You're Negotiating With More People Than You Think You Are

Don't Look Now, But You're Negotiating With More People Than You Think You Are

So there you are, sitting across the the table from the other side starting a negotiation. If only you are able to use your considerable negotiating talents to convince them that what you want is best for them, then you’re sure to get what you want – right? Nope, it turns out that although you might think that it’s just you and the other side talking, it turns out that room is actually crowded with negotiating ghosts that you’re going to have to learn to talk to…

The other side of the table rarely represents just themselves. No matter if you are trying to buy a car from them or sell them a house, you are really talking with someone who is really part of a larger organization. This can be a whole company, a spouse, kids, a banker, etc.

What this means to you as a negotiator is that the other side is going to have to satisfy the demands of their extended team (upper management, sales, the union, the spouse, etc.). They are going to have make sure that everyone on their side has their needs met before they can reach an agreement with you.

Although there can be quite a mix of people whispering into the other side’s ear, there are four common characteristics that all of these impacted parties will share:

  1. Not All Will Agree: This means that there will be conflict among members of the same team. If they can’t agree, then this will impact the other side’s ability to agree to your proposals.
  2. Nobody Is The Same: All of the different individuals that the other side is representing have different needs and different priorities. This may be why the other side seems to be changing their direction so often.
  3. Not All Are Equal: Although there may be multiple parties whispering into the other side’s ear, not all of them have an equal role to play when it comes to making a final decision.
  4. Not All Benefit The Same: Just as all are not equal, so too not all will benefit the same amount from whatever deal you are negotiating.

All of these Ghost Whisperer issues lead you, my dear negotiator, to one simple conclusion: you need to come up with a way to deal with all of these “negotiation ghosts”. Here are four tips for doing so:

  1. You need to find out who is really making the decision on each issue in the negotiation. Keep in mind that it might be a different person for each issue.
  2. Make sure that you get commitments from the people behind the other side when it comes to the value of the thing that you are offering and the validity of your offer.
  3. Have the fundamental realization that the other side will be unable to give you the “yes” that you are looking for until his people allow him to give it. This means that your job is really to help him to get them to give him permission.
  4. Oh yeah, you’ve got the same issues – you are really negotiating on the behalf of many different parties. You need to be a good enough negotiator that you are able to get your people to approve your ability to reach an agreement with the other side.

When you negotiate, whom do you have whispering in your ear? Have you even negotiated with the other side when you didn’t know who they needed to please? How did you handle this? Has a deal ever been agreed to and then nixed because some outside party’s approval was not given? Leave me a comment and let  me know what you are thinking.

No Ha, Ha At Tata – Negotiation Over Land & A Car Plant

Tuesday, September 16th, 2008
The Tata Nano Auto Plant Needed To Be Negotiated

The Tata Nano Auto Plant Needed To Be Negotiated

Negotiation is a skill that is used everyday, all around the world. There’s a great example of just how careful one must be when negotiating – remember, as Yogi Berra said “It’s not over until it’s over”. Tata Motors thought that they had successfully negotiated a deal until it started to come undone. Let’s take a look at what happened and see if there are any lessons to be learned here.

Tata Motors Ltd is part of the enormous Indian Tata Group company. The eyes of the world are on Tata Motors right now because they have announced that they are going to be building a car called the Nano which is expected to be the world’s most inexpensive car priced at $2,500. The car is scheduled to be launched in October.

Tata Motors had decided to build their car in India’s state of West Bengal which is located in eastern India. West Bengal is a economically poor part of India and the arrival of a large car manufacturing operation was viewed by many as a very good thing. Tata Motors negotiated with the West Bengal government in order to obtain the 1,000 acres of land that was needed to build the plant and the shops for their suppliers. The local government obtained the land, signed a deal with Tata Motors and construction was started. End of story right? Nope, not by a long shot.

It turns out that the land for the auto plant used to be farmland. The West Bengal government says that they paid the affected farmers in most cases and legally seized the land in a few cases. The issue is that the farmers don’t see it that way! In fact about 400 of the 1,000 acres are in dispute. So what did the farmers do? Simple, they demonstrated and got violent. Construction on the auto plant came to a halt. As though this wasn’t bad enough, Tata Motors said that if the issue was not resolved, then they would move their auto plant to a different Indian state.

What’s a local government to do? The West Bengal Governor sat down with the leader of the protests (who also happens to be the head of a local political rival to the current West Bengal government) and started to negotiate. After three days of negotiation, a compromise was reached. The exact deals of the compromise have not been released yet; however, the government has stated that they will try to return some of the land that had been forcibly taken from the farmers.

So what is to be learned from all of these international events? Ultimately, you need to do your homework and make sure that the parties that you are negotiation with have the power to deliver what they are promising. In this case Tata Motors relied on the West Bengal government to deliver land and it turns out that the land was not theirs to give. What could Tata Motors have done differently? They could have split the negotiations into two parts: various permissions and incentives from the local government and buying the land directly from the farmers. This would have been more time consuming; however, it would have prevented the turmoil and the delays that resulted from assuming that the local government had the power to provide the land.

What would you have done if you were the CEO of Tata Motors and no compromise had been reached? Would you have moved the plant and lost the $100M that you had already invested or would you have done something different? Leave a comment and let me know what you think.