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2018-04-26T17:00:55.198Z
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Two frequently mentioned names in M&A news came up again today – T-Mobile and Sprint. I will share my perspective on the timing of this merger as well as the different positions of both parties.

This is the third time that talks between these two companies (whose merger would challenge the two largest mobile carriers, Verizon and AT&T) are taking place over the last four years years. In each of the previous discussions, the talks ended in no deal. Why?

And how much does history matter? Some may remember that AT&T entered into a deal to buy T-Mobile for $39B way back in 2011. That deal was quashed by regulators, afraid of creating a duopoly in wireless communications in the US. (Although many would have argued that the deal would have delivered value to both shareholders and customers, who would have gotten greater bandwidth on AT&T’s congested networks.)

In the 2014 talks between T-Mobile and Sprint, the idea was abandoned, again presumably because of regulatory concerns regarding the Obama administration’s antitrust enforcement activity. The most recent round of talks ended in early November 2017.

So, why now? Well, for one, the deal is perceived as delivering value for shareholders – just look at the immediate jump in share prices of both companies – T-Mobile up over 6% and Sprint over 20%. Where are these talks likely to go? If we assume that there is value in the deal for shareholders of both companies...

Negotations Touch Every Part of Your Life and Career

It doesn’t matter whether you’re buying a car or an enterprise software system: negotiations touch every part of your life, every part of your career, and will have a major impact on your personal success. Dealing with a regular client who, at the eleventh hour, wants a little extra outside the scope of what has been agreed upon? You’re in negotiations. Trying to get consensus on a critical marketing campaign? You’ve become a negotiator by default.

Then there are all the formally recognized situations where negotiation is explicit, highly formal and usually high-stakes: sales, procurement, mergers and acquisitions, partnerships and licensing arrangements, to name a few.

One of the fundamental principles we teach in the course of our business negotiation training is this: the concept of M.O.R.E., which stands for Motivations, Objectives, Requirements and Edge — Edge being the advantage you gain once you understand the other side’s unique motivations, objectives and requirements.

You are much more likely to succeed when you come to the negotiating table with not only a clear sense of your negotiation counterpart’s business realities at the organizational level, but also the individual drivers of those involved. And making assumptions at either level can be foolhardy.

That’s why we advocate for a methodical, patient and constructive approach to negotiation that stresses listening and learning as much as possible, and taking concrete steps to discover what passions or pressures really drive a request or demand.

Of course, this means understanding your own M.O.R.E. factors,...

Keynote speeches — like the ones that kick off a big sales drive or annual meeting — are fantastic opportunities…that aren’t always leveraged to their fullest.

Most executive leaders will take to the podium assured that the top-line strategic messaging of the day, a sprinkling of humor and a few perfunctory rallying cries for the troops will be in their notes.

But is that good enough?

While attendance is sometimes mandatory, every leader has the responsibility to do more than “check the boxes” with a speech so he or she can get on with their day. The speech must deliver value. This is central to everything we do at K&R Negotiations: analyzing the audience and goals to determine what impact an activity will make.

The “warm fuzzies” generated by even a great keynote speech will quickly subside with the event, but here is a central consideration that will make the activity more powerful: “What value will I deliver outside of the messaging, humor and applause lines?”

<img style=”float: left; margin: 0 35px 15px 0;” src=”https://www.negotiators.com/wp-content/images/CEO-sales-performance-3.jpg” alt=”Communication Credibility” width=”220″ height=”223″ />Show us a successful negotiator and we’ll show you someone who is highly conscious about how they communicate with others. It’s not about who can talk the fastest or prove that they know more than everybody else in the room—it’s about building credibility. This is crucial because credibility ultimately translates into leverage for getting the right deal done.

There are lots of ways to damage your credibility by communicating irresponsibly:
<div style=”margin: 0 50px 0 20px;”>
<ul>
<li>Addressing other people in terms of stereotypes rather than unique individuals. An example is treating an IT leader in the room like a geek who only cares about technology and assuming they won’t care about the strategic business value of your solution.</li>
<li style=”margin-top: 15px;”>Being dismissive of other people’s contributions, even if you immediately disagree with them. Being gracious when somebody offers an idea you disagree with keeps them engaged and thinking how they could offer more helpful ideas. Rather than “That’s a stupid idea!”, try “Thanks for your thoughts, Ben. I think that will be important to keep in mind going forward.”</li>
<li style=”margin-top: 15px;”>Using private facts as weapons against the other party. If you use something given to you in confidence as public ammunition, you can expect your ability to get this deal done—and all future deals with this party—to degrade considerably. And you will lose the respect of your own team in the process.</li>
<li style=”margin-top:...

Have you found yourself exasperated by a colleague or partner who won’t own his or her mistakes? The minute an error is discovered, they offer excuses and deflections instead of responsibility and solutions. This is not only a time-waster because you have to take extra steps getting to the heart of the problem, but your whole team loses credibility and the value of your business relationship is undermined.

At K&R, we use the term Negotiation Capital to illustrate the goodwill that is created through credibility, good relationships and successful delivery. Negotiation Capital is like “currency.” It translates into the other side’s willingness to move closer to your way of thinking. If you lose credibility or have to backtrack due to mistakes, then you use Negotiation Capital as if you were “burning” currency. The other side’s willingness to deal with you and to compromise is reduced.

There is no quicker way to burn through your Negotiation Capital than by mishandling mistakes. This impacts the other side’s perception of your integrity, which means you will have to work that much harder to earn back your currency. I say “mishandling mistakes” instead of “making mistakes” because at some point, we’re all going to make one. (Or several!) What happens after the fact separates the successful negotiator from the unsuccessful one.

The best way to maintain your integrity — and therefore, your...

K&R CEO Mladen Kresic Discusses Negotiation Know-it-Alls with Knowledge@Wharton Host Dan Loney (Complete Transcript)

On Friday, May 20 K&R CEO Mladen Kresic joined Knowledge@Wharton (Sirius XM Channel 111) host Dan Loney to talk about how negotiators can keep “know-it-alls” from ruining their next big deal. (Kresic wrote on the subject in his 2016 white paper, “Dealing with Negotiation Know-It-Alls: How to Keep Instructors, Intimidators and Impostors from Derailing Your Deal.”

During this segment, Loney and Kresic discussed the three major types of know-it-all (The Instructor, The Intimidator and The Impostor), the threats they represent to successful negotiations, and strategies negotiators can use to mitigate their negative influence and keep their deal discussions on track.

This content reproduced courtesy of Sirius XM and Knowledge@Wharton.

Loney: Have you ever been part of a negotiation and feel like you’re hitting your head on a brick wall because the person on the other side is the “know-it-all”? It can be one of the most frustrating things to deal with, but there may be some hope. Mladen Kresic returns to the show. He’s the president and Chief Executive Officer of K&R Negotiations. He’s recently published a white paper on the problem and how you can handle the situation — and maybe even make it work for you. Mladen, the author of Negotiate Wisely in Business and Technology, is joining us on the show right now. Great to catch up with you, Mladen. How have you been?

Kresic: Really, really good, Dan, thanks for having me on...


By Jim Hale, VP of Business Development, K&R Negotiations

In my work with sales teams all over the world, I am often asked about what is the most critical trait for a successful sales person. My answer is always the same: “Genuine curiosity.” Curiosity is like a Swiss Army knife with all the attachments. It gets the job done in nearly every situation and is easy to access once you’ve got it in your tool kit. Curiosity helps you:

  1. Build customer relationships. You will notice a different level of respect from your clients when you show an authentic level of interest in them as individuals and their company. Humans respond extremely well to this almost without exception.
  2. Increase your business acumen. Being curious about your own industry and the industries of your prospects drives you to learn more.  As you satisfy your curiosity, you augment your ability to add value to your customer’s business. Clients want to know that you have invested in learning about their ecosystem: industry, customer set, products, services and impact trends.
  3. Be believable and sincere. You ask questions that uncover needs because you are genuinely curious, not because it’s in the training manual. People can tell from your demeanor that you’re being natural and not formulaic.
  4. Solve customer problems. Sales reps who aren’t curious about what makes people tick and why technology works (or doesn’t) don’t solve customer problems; they just sell “stuff.” Curiosity enables you to create unique solutions to their unique issues.
  5. Negotiate successful contracts. Your ability to understand...

The “time factor” — how you manage it against other considerations and use the high-level (or macro) agenda to help create agreement has a huge impact on your success!

This was certainly the case during an engagement with one of our technology clients, whose customer was in the European auto segment. All of our client’s revenue with this automaker was in jeopardy when the automaker announced that a purchasing freeze would be in effect at the beginning of the coming year, due to deteriorating economic conditions and new IT management. Since it was October, these developments required immediate action and a clear agenda that would culminate in closure before end of year.

In our view, too much is made of “agenda control.” It’s nice to control the agenda, but both sides in a negotiation have issues that need to be addressed, so control is not as important as managing the agenda. So, agenda management was critical in this situation: getting bogged down in the automaker’s 90-day RFP processes would carry us over the “buying freeze” line and erase a €6.7M opportunity for our client!

We will discuss this example in context of the macro agenda — the high-level view of the entire negotiation process. This includes both external and internal discussions (the combined “we” – meaning K&R working with our client), the timing of document creation and exchange, and meetings.

In this case we were able to manage the macro agenda to establish credibility and a manageable timetable with the customer. So...

I recently noticed and greatly enjoyed Dave Stein’s LinkedIn Pulse post, “If I Have to Sit Through One More B.S. Sales Training Class…” Dave discusses the major pet peeves of a sales “heavy hitter” who bristles at the thought of sitting through sales training meetings conducted by people who have never sold, don’t know sales’ specific challenges or how to have sales people leave the session with clear steps that will help them sell more.

Stein identifies a number of root causes for why sales leaders bring in the wrong training at the wrong time. If you have ever had a hand in sales training procurement at your organization, I highly recommend reading the post to see if you are walking into any of the pitfalls that Stein illuminates.

As an organization that delivers sales and negotiation training, teaching people methodical ways to define and deliver value while closing bigger deals is a pillar of our practice. Our workshops must adhere to the same standard. If you are thinking of sourcing training for negotiation skills for your team, here are a few important pre-requisites for success. If your training organization isn’t delivering on these, then something important is missing!

Do your negotiation trainers understand the roles and objectives of your negotiators?

Negotiation is not a monolithic practice; your procurement team is going to need slightly different training than your business development team. In turn, the needs of each all these major roles can vary greatly by what business unit...

Recently our friend and colleague, Jim Hale, published a blog on territory management and the art/discipline of applying multiple resources and time to effectively generate sustainable sales. In the end, winning Territory Action Planning (TAP) results in increased customer satisfaction and relationships, higher win rates and overall better revenue and profit results. Because this is such an important subject, we reprise some of the best practices associated with TAP in this blog.

High performing sales teams manage territories like they are individual businesses to build strong sales pipelines, advance their sales opportunities and grow relationships with selected accounts. They have realized through experience that the sales territory is the superset of our sales assets, and that without the proper care and attention, we can put these assets at risk.

What is a sales territory? In our sales and negotiation training with clients we have seen practically every possible flavor and derivative of “the territory,” including geography-based territories, industry-focused territories, product-focused territories, named-account territories and even territories that consist of a single account.

Building a Territory Action Plan – the TAP!

Whether the territory is based on geography, industry or named accounts, most effective territory business plans include seven core components. In situations where strategic account management programs are utilized, named accounts are typically grown through the development and deployment of strategic account plans, a type of business plan for extending and expanding the relationship with an individual account (to be discussed in a...

Either through becoming emotionally invested, getting pressure from leadership or being unable to analyze key factors that should indicate retreat, business negotiators often find themselves spending long amounts of time on deals of diminishing — or even illusory — value.

One of the cornerstones of negotiation theory is BATNA (best alternative to a negotiated agreement), advanced by Roger Fisher and William Ury of the Harvard Program on Negotiation (PON) in their book, Getting to YES.

The wisdom of BATNA is that you cannot make wise decisions about continuing to negotiate unless you understand the available alternatives if you (or the other side) walk away. By looking at your perceived BATNA you should understand alternative courses of action in the event that a negotiation fails. It is intended to serve as a guidepost. If the outcome of the deal is likely to be worse than the BATNA scenario you have calculated, it may be time to walk away.

As Fisher and Ury recognized, “The reason you negotiate is to produce something better than the results you can obtain without negotiating.” That presumes at least four conditions:

You understand the results, i.e., value you will get from continuing to negotiate. You understand the alternatives and the value you can glean from them. You understand the alternatives available to the other side. There is some commonality regarding the value the other side puts on negotiating with you versus their alternatives.

This sets up the BATNA Traps.

Common BATNA Traps

We will discuss three common BATNA Traps — reasons that people...

Some concepts are better expressed using an example. Our client was at a crucial juncture with their customer — a European bank. In just three months, the time frame was expiring on an agreement to provision identity access management. That project had been running for three years, and had progressed substantially as forecasted. So a renewal to continue with the work was being discussed, plus, our client wanted to extend the scope of services for 24/7 identity and access management, which they believed the customer could use.

This project was extremely complex, and it was incumbent on our client to express the value delivered to that point. This is extremely important: Nobody owes you recognition of your value. You have to make the case!

Being successful in this situation meant deriving leverage from that value. The concept of leverage originally comes from physics – as Archimedes said “give me a lever long enough and… I will move the world.” In a pulley system; the more levers you have, the more easily you can move objects of heavier mass. In negotiation, it’s the ability to move people closer to your way of thinking – your value arguments are your levers. The more credible value arguments you have, the more easily you can move people closer to your point of view.

This is a far cry from the coercive connotations that some people attach to the term leverage. At K&R, we see leverage as a positive force towards mutually beneficial agreement. In this case,...

In January I penned this post about the new plateaus of opportunity that open up for both buyers and sellers when we make the mindset shift to becoming a true strategic partner, rather than just a “run and fetch” vendor that recites features and delivers quotes.

There is a fundamental problem (one that is not necessarily limited to contract negotiators): Even people who build long, otherwise successful careers in demanding positions don’t consider themselves professional negotiators — even though they do it every day! They do it internally with their colleagues, externally with clients and vendors, and even at home.

Why? The word “negotiation” itself can be intimidating. But to gain confidence, we must normalize this language in our lives. Negotiation is simply interaction between or among people to facilitate a positive outcome. (Nobody should do the deal otherwise!)

Not long ago we consulted with one of our clients, a vendor to financial services institutions who was on the brink of their biggest deal of the year, approximately $5 million. We enjoyed a unique situation: The customer agreed with our client’s value proposition. This granted our client positive leverage and gave the customer important capabilities that would help them comply with new government regulations in a timely fashion. After six months of discussions, proofs of concept and validation of the business case, both parties agreed to closing the deal by mid-December.

But on Dec. 3, the customer’s chief procurement officer sent a note to our chief sales officer (CSO): “We respectfully request...

 

When competition starts putting the pressure on you, it’s natural to look at price-cutting as the primary way to keep the business. But in the long run, this is a mistaken impulse, unless accompanied by a sound business rationale such as a reduction in scope, change in terms or outcome from the deal. One of our engagements with a client that served a European industrial (the customer) with technology solutions definitely illustrated the value of avoiding such “unprincipled concessions!”

Unprincipled concessions are “giveaways” not tied to a credible business rationale. Our research shows that this simple business negotiation mistake costs companies between 9 and 18% of gross revenue and significant profit. (See our infographic on the topic for a more detailed discussion of this vital principle and how it can be applied.)

Our client was bidding for four different stacks of technology services worth in excess of €100M over a number of years. They were incumbent and delivering successfully in two of the stacks — but heavily challenged by highly skilled competition.

The customer requested significant discounts off existing services and that our client pay for transition costs related to the area of services it was not yet providing. Our response? Why would we lower the price for services that are already being successfully delivered (given identified risks of change) and eat the costs on the transition to new services? After all, if the value proposition was not strong enough, the client would not go through the headache of change? Instead,...

There is a world of difference between being a vendor that takes orders and being a valued peer or co-strategist. The former defaults to a defensive or reactive position, missing opportunities to help their client, increase the value of an account and build a more durable, mutually profitable relationship.

Moving from the master/servant paradigm isn’t about gaining the upper hand in a brute power scenario, but rather about moving to a peer-to-peer relationship where mutual benefit flows from mutual respect and acknowledgment of exchanged value. From our experience, the master/servant trap is an easy one to fall into, even with some of the world’s top-tier service organizations. After all, if the customer orders, the vendor sells and delivers.

There are organizational factors that drive the master/servant mindset, but at the root of it, this springs from the type of personality that is natural to a sales and services role: a people-pleaser. But in learning to be responsive to requests and doing “whatever it takes” to keep an account happy, a salesperson defaults to a reactive and often subservient position —falling into reflexive activity even if going over and above is not necessary or even valued.

Over the years we have developed many tools for creating leverage through preparation, assessment, articulation of value and much more. But before exploring the mechanics of better deal-making, a shift in mindset must occur.

This shift is founded on the understanding that most high-value sales relationships will be peer-to-peer in nature. Sales representatives will reach...

Either through becoming emotionally invested, getting pressure from leadership or being unable to analyze key factors that should indicate retreat, business negotiators often find themselves spending long amounts of time on deals of diminishing — or even illusory — value.

One of the cornerstones of negotiation theory is BATNA (best alternative to a negotiated agreement), advanced by Roger Fisher and William Ury of the Harvard Program on Negotiation (PON) in their book, Getting to YES.

The wisdom of BATNA is that you cannot make wise decisions about continuing to negotiate unless you understand the available alternatives if you (or the other side) walk away. By looking at your perceived BATNA you should understand alternative courses of action in the event that a negotiation fails. It is intended to serve as a guidepost. If the outcome of the deal is likely to be worse than the BATNA scenario you have calculated, it may be time to walk away.

As Fisher and Ury recognized, “The reason you negotiate is to produce something better than the results you can obtain without negotiating.” That presumes at least four conditions:

1. You understand the results, i.e., value you will get from continuing to negotiate.

2. You understand the alternatives and the value you can glean from them.

3. You understand the alternatives available to the other side.

4. There...

Some concepts are better expressed using an example. Our client was at a crucial juncture with their customer — a European bank. In just three months, the time frame was expiring on an agreement to provision identity access management. That project had been running for three years, and had progressed substantially as forecasted. So a renewal to continue with the work was being discussed, plus, our client wanted to extend the scope of services for 24/7 identity and access management, which they believed the customer could use.

This project was extremely complex, and it was incumbent on our client to express the value delivered to that point. This is extremely important: Nobody owes you recognition of your value. You have to make the case!

Being successful in this situation meant deriving leverage from that value. The concept of leverage originally comes from physics – as Archimedes said “give me a lever long enough and… I will move the world.” In a pulley system; the more levers you have, the more easily you can move objects of heavier mass. In negotiation, it’s the ability to move people closer to your way of thinking – your value arguments are your levers. The more credible value arguments you have, the more easily you can move people closer to your point of view.

This is a far cry from the coercive connotations that some people attach to...


By Jim Hale, VP of Business Development, K&R Negotiations

In my work with sales teams all over the world, I am often asked about what is the most critical trait for a successful sales person. My answer is always the same: “Genuine curiosity.” Curiosity is like a Swiss Army knife with all the attachments. It gets the job done in nearly every situation and is easy to access once you’ve got it in your tool kit. Curiosity helps you:

  1. Build customer relationships. You will notice a different level of respect from your clients when you show an authentic level of interest in them as individuals and their company. Humans respond extremely well to this almost without exception.
  2. Increase your business acumen. Being curious about your own industry and the industries of your prospects drives you to learn more.  As you satisfy your curiosity, you augment your ability to add value to your customer’s business. Clients want to know that you have invested in learning about their ecosystem: industry, customer set, products, services and impact trends.
  3. Be believable and sincere. You ask questions that uncover needs because you are genuinely curious, not because it’s in the training manual. People can tell from your demeanor that you’re being natural and not formulaic.
  4. Solve customer problems. Sales reps who aren’t curious about what makes people tick and why technology works (or doesn’t) don’t solve customer problems; they just sell “stuff.” Curiosity enables you to create unique solutions to their unique issues.
  5. Negotiate successful contracts. Your ability to understand the positions of the other party is directly dependent upon your ability to be truly curious about them. If you’re not curious, you’ll end up arguing about issues that aren’t important.
  6. Correct sales errors. When a customer buys from somebody else (or doesn’t buy from anyone), if you’re not curious about what happened, you won’t bother to find out why — and therefore can’t learn to turn your failures into future successes.

In short, curiosity is at the core of truly successful business efforts.  If you don’t have curiosity, you can’t expect to be successful as an entrepreneur, a salesperson or even as an engineer. Period.

...

You may think arming yourself with facts and data will help you convert prospects into customers, but it’s more important that prospects believe you truly understand their business, the industry, the company, the LOB’s and the Individuals within the organization. This issue comes up time and time again in our interviews with clients, they want their solution provider to understand their business.

This is hardly surprising, since you can’t add value without having a clear picture of the business and the client’s position in the industry. Once you understand their business you can better understand the core business issue. The three critical components that drive the sale:

  1. Demonstrating that you truly understand what their business issue is, and how it negatively impacts the company’s performance (current state)
  2. Knowing what their desired outcome will be, and how that will improve their overall success (future state)
  3. Knowing the prospects “measurements for success” (not yours)

Understanding and clearly articulating these three key decision criteria with your prospect enables the “why buy”. The ROI is strictly “how” they will buy your solution, which is the “what” they will buy.

People buy based on emotion and justify with fact. You may resist this statement. You may want to shout – but the truth (truth that will help your business grow) is – your client rationalizes the purchase base on facts (ROI), but they make decisions based on emotion or feelings (can you eliminate my business problem and meet my measurement for success?).

The single biggest motivator in buying is not data, nor is it facts; it’s emotional response. Humans buy when they feel comfortable, when they feel they can trust you, when the process feels natural and reassuring, and when they come to believe that buying will make them feel good.

To succeed in selling, you’ve got to speak to the need your customer feels. There are a lot of good reasons, not to mention the entire history of successful selling, to back this up. As you can see from the DDI (Development Dimensions International) study below, ROI analysis is dead last in terms of what the client is looking for. In part, this is true because the ROI analysis is almost always slanted to the supplier’s point of view.

Of course, people have both logical and emotional buying motives. Some recent consumer surveys show that 20 percent of the decision to make a purchase is logical and 80 percent is emotional. What is logic? It’s reason supported by facts. What is emotion? It is a feeling that leads us to act and react.

So, what is more important when persuading people – facts or emotion? We don’t mean to imply that customers never want cold, hard facts. Of course they do. You should always have them prepared and available, and you should present them when the time is right. But it is not facts that convince customers to go with your company. It’s emotion – do I feel you can you solve my problem?

Customers need to feel that you really understand their business issue and how it is negatively impacting their organization. They also need to feel that you will deliver their desired outcome and that you will meet their measurement for success. That measurement may not be the traditional business case ROI but rather what they have established as success. They will then use the ROI facts to “pay for” or rationalize purchasing the solution.

...

Delineating how and when senior management will take part in negotiations is an important factor in maintaining position and outcome. When a member of senior management’s personal timeline or motivations clash with an already established value argument, money can be left on the table.

K&R Negotiations CEO Mladen Kresic used a deal from the firm’s client case files to illustrate just how this can happen in Negotiation Lessons: When CEO Meddling Degrades the Deal, a contributed article that was featured this October at ChiefExecutive.net.

“It’s easy to become emotionally invested in a deal, especially a complex one that requires a significant time and resource commitment from you and your team. Nobody wants to simply walk away from something they have cultivated for months—even when the value of the deal begins to degrade.”

Mladen offers several takeaways from the case study that serve as good counsel for CEOs whose teams have a big deal on the hook and may or may not need the chief’s “help.” We’d like to thank ChiefExecutive.net for accepting our contribution. We’re honored to be included.