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A New Approach to Negotiation

As we ease our way into the post-pandemic period, we’re discovering the need to brush-up and/or acquire many different presentation skills in order to succeed in adapting to the changed world.   

When we launched Presentation Excellence over two decades ago, clients asked us to not only help them design and deliver winning investor, sales, marketing, and management presentations, but also with other interactions, including negotiations, job interviews, networking, and connections, and forging strategic partnerships.

For instance, the Great Resignation – a mass exodus of 48+ million employees – has created a need for workers to be more authentic when determining the lifestyle and type of work they want for the next few years before applying for jobs. Similarly, employers need to retool how they present their companies’ culture and career opportunities for both new candidates and existing staff to increase the odds of a fit for retention and future leadership.  Both sides are busy figuring out how to 

Negotiation skills is another area that’s taken on increased importance. Whether you’re moving to a new apartment or house, your business is trying to get out of a lease because workers are now virtual or hybrid; or your company is dealing with slower supply chains, inflationary cost increases, or workers who want virtual or hybrid work, you’re going to be negotiating.

Given the importance of negotiations, and my personal interest in it (e.g., teaching it at the MBA level), we offered individual and group negotiation training to interested clients.  You may already be familiar with classic books such as Getting to Yes by Harvard’s Fisher and Ury, You Can Negotiate Anything by Herb Cohen (as well as his many other books!), and Never Split the Difference by Chris Voss. My personal favorite, which I use in my courses, is Negotiation Genius by Malhotra and Bazerman.

A new approach to negotiation has been offered by Yale’s Barry Nalebuff and I thought I’d bring it to your attention. In Split the Pie: A Radical Way to Negotiate. While most negotiation approaches view the entire deal that’s to be negotiated as the “pie”, Nalebuff focuses the “pie” on what’s really at stake: the “Zone of Possible Agreement” (aka ZOPA). By doing so, he concentrates on the additional value created through an agreement to work together. The book is filled with examples in which his approach makes sense. He notes that he used the approach to negotiate the sale of Honest Tea, a company he co founded, to Coca-Cola. 

One example shows how two people (Alice and Bob) split a 12 piece pizza pie under interesting conditions set by the pizza shop owner. If they don’t reach an agreement, then they will only get half the pie (6 slices) with 4 slices going to Alice and 2 to He shares three alternative approaches that could be used. Power (Alice gets 4 vs.2 of the remaining 6, as she did with the first 6, giving her 8 vs. 4 at the end, Equality (both deserve half of the full pizza, so Bob gets 4 vs. 2 of the remaining 6 slices, so they both get 6 at the end, or his Split the Pie solution, they split the remaining 6, giving Alice a total of 7 vs. 5 for Bob.

The key to all successful preparations, regardless of which approach you use, is to be prepared. Understand what your real interests are, and what those of the other side are: what does each of you want and why. What is your BATNA – Best Alternative to a Negotiated Agreement?  In a fair, collaborative negotiation, focus on both sides’ interests as present and negotiate to an agreement. Don’t let the positions each side stakes out at the beginning, which often are designed to “anchor” the negotiation become the guiding star.

Good luck in your negotiations. May they all be successful.

The Key to All Communication is Listening

You’ve probably heard that since we have two ears and one mouth, our communications should follow the same proportion – spend twice as much time listening as speaking.

Presenters often ask if this applies to situations where information is delivered to an audience within a short time span, such as a 30 minute investor presentation or webinar.  The answer is yes, by using two time periods: one before and one after the presentation you actually deliver.

The first IS driven by the ADAP formula (i.e. Audience Driven, Authentic Presentations). Listening means understanding your audience’s interests before you even meet based on prior direct or indirect relationships. The more thoroughly you prepare to deliver the story with supportive facts and call to actions, the more effective you will be.

For instance: What does the audience want to know, how will they feel about it, and what resistances are there? How many other people have to be involved to make the decision? Etc.  Much of this can be gleaned from the context of the meeting and prior experiences. Today, most non-angel investors represent a group. Therefore she/he will not make a final decision based on that one presentation; instead she/he first has to present the information to others involved in the decision-process. (That means the presentation has to be one which she/he can communicate effectively on behalf of the original presenter! If there is too much jargon and not enough connections between the issues discussed, that might not be possible!)

Second, always leave time at the end for questions and comments – so you can listen to what’s really on the mind of the audience. For instance, at many investor and other conferences, speakers often are given 30 minute slots. Leave at least one-third of that time for questions and comments, with the goal of listening, learning and responding to the needs.

President Lincoln believed that we should spend more time sharpening our saw/hatchet before chopping trees; spend more time “listening” to the needs of your audience than delivering the content.

Power Your Presentations by Building Relationships

Today, many presentations are based on data – scientific, management, sales, marketing, etc. All too often, presenters focus on their “data dumps” and assume the audience will reach the conclusion that the presenter wants. Presenters properly take pride in identifying key data to make points. However, crafting a presentation that energizes the audience to take action is another matter.

For two decades, Presentation Excellence has taught thousands of presenters to use the ADAP formula: Audience-Driven, Authentic Presentations. Almost a century ago, Judge Jerome Frank noted that his decisions are not based solely on the “facts” of the case. It’s the emotional connections to the story that sets up the foundation for the decisions, and facts provide support to rationalize the judgment. 

Similarly, Ron Friedman, a psychologist, observed that every conversation operates on two levels: the task channel and the relationship channel.  The task channel is where data is presented; the relationship channel is where emotions are evoked. The best communication weaves the two together.

The story you craft evokes emotional responses that lead the buyer to act. Does it seem like a good business opportunity? Are the leaders trustworthy, experienced, and capable of leading an enterprise? Does the BizDev plan have a marketing component that gains customer attention, interest, and desire so she/he will buy? Will the sales component close the customer by evoking benefits with acceptable risk?

In sum, the presentation has to build an emotional relationship for the customer to feel comfortable with taking the desired action, and have the facts to back up the decision.

Leaders: Keep Your Culture True to Your Ethical Principles

Throughout my career, I’ve had the privilege of working with lots of high integrity leaders who are at the cutting edge of developing services and products, and transforming their organizations so they can do more for customers while enabling staff to grow personally and professionally. For instance, as a Master Chair with Vistage Worldwide, a 65+ year old leadership development organization which has serviced over 100,000 leaders, we deliver on our mission: “to help high-integrity leaders make great decisions that benefit their companies, families and communities.”

It therefore disappoints me when large, influential organizations ignore their own cultural values and tolerate unethical conduct. Unfortunately, it happened again.

Several years ago, I addressed this issue when it became clear to me that the injuries and deaths caused by General Motors’ continued use of defective ignition switches. I noted it in our Presentation Excellence blog just before traveling to China to teach a course there. One member of the business press tracked me down and interviewed me to find out why I pointed the finger at the company culture. I explained that too many people had to know about the fiasco since it lasted for several years before the company took responsibility for it. It clearly was not a rogue player.

Similarly, Wells Fargo culturally accepted the violation of its standards., when it engaged unethical sales practices that included opening around 3.5 million fake accounts without customer authorization. 

This week, the Securities and Exchange Commission charged EY (Ernst & Young) for a significant number of audit professionals cheating on the ethics component of the Certified Public Accountant (CPA) license exams and for withholding from the agency evidence of misconduct. EY admitted to cheating on CPA exams and continuing professional education courses required to maintain CPA licenses. The penalty price—$100 million – the largest penalty ever imposed against an audit firm by the SEC. In 2019, the SEC fined KPMG $50 million for cheating on internal training tests.

How did cheating become acceptable? Shane Goodwin, associate dean for Executive Education and Graduate Programs at the Cox School of Business at Southern Methodist University said that these issues at EY “largely stem from a ‘culture of tolerance,’” Goodwin says. It’s the responsibility of the board and the CEO to “set the tone of integrity,” he says. “An issue like this happens easily” when there’s room for the “classic ‘fraud triangle’— motive/pressure, opportunity, and rationalization,” Goodwin explains. “This is how you had a huge issue at Wells Fargo and others,” he says.

The motive/pressure was to get and stay certified, combined with an easy opportunity to cheat and “a simple rationalization that others do it, and ‘it’s not really a big deal,’” Goodwin says. “It’s just a check the box process.”

With our society continuing to tolerate such abuses, we all need to be more vigilant. As we move into the post-pandemic world – with increased virtual and hybrid workforces – and a larger number of independent workers handling gig assignments, the pressures to cut ethical corners is likely to increase. Leaders: hold fast to your ethical principles and empower others in your company to make sure the culture reinforces it, daily. Join organizations, like Vistage, where you can work with other high-integrity peers, who can provide input on how to identify potential challenges to your company’s ethical challenges and resolve them before they gain traction. And if you want additional support, feel free to contact us!

Reframing a Position Can Make All the Difference

As an executive coach (with Vistage Worldwide), I work with CEOs who are struggling with the “Great Resignation”. They feel like victims; they’re committed to helping employees grow personally and professionally by increasing sales and profits for all to share, but now have to deal with another challenge – hiring new people to get the work done. 

After many conversations, and an analysis of their workforce changes, we discover that they actually are losing fewer employees proportionally than many other companies. It led to a reframing, we call the “Great Exploration”. Many workers who left are new to the workforce or near retirement; unsure that they are in the right job, they are exploring options. 

Supporting this reframe is a recent study that found 20% already have remorse! And, some are discovering it even before they start, as noted by a Wall Street Journal article on “ghosting” by recruits who don’t show up on their first day!

As a recent Forbes article notes, using the exploration re-frame, allows companies and individuals to find the “gift and opportunity” in this pattern. It’s giving workers a chance to grow professionally by developing soft and hard skills to make more meaningful contributions in their companies and/or communities, now and even more in the future.

We know that using automation, digital transformation, RPA, etc. means we can significantly reduce the extent to which people do routine, data-related jobs that computers can do faster, 24/7, and without human fatigue errors. Estimates are 25-40%!  Engaging them in more strategic activities (e.g., client-facing, creative and/or collaborative), with a team-of-teams structure makes people more efficient and effective.

Now, imagine having high-potential recent recruits enrolled in a 2-years leader development program in to acquire the skills to be fast-tracked for future leadership positions.  Such employees stay and grow with the company; with faster and smarter growth, both company and employee experience the “Great Elevation”.

Indeed, Vistage’s new Emerging Leadership program does! When workers learn that you’re investing time and money over two years in their career development using expert workshops, mentoring with managers and accountability-pods, you’ve launched an “antidote” to the “Great Resignation! (See the Emerging Leader Program and the 12 Leadership Competencies for details.)

As a Vistage Chair, I’m launching one such group in NY; other Chairs are launching them in other states. Most are physical; some are virtual. Let’s help individuals elevate themselves and companies elevate their workforce’s ability to grow smarter and faster in the future! 

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