I remarked this book in a bookstore, it was on discount for 1 euro. When I read the title I thought it is pretentious to have such a title for a book “How to negotiate anything with anyone anywhere around the world”. Nonetheless, I was intrigued. I finally bought the book and frankly I am pleased I did so. I never thought I could come across this much of extensive information about global negotiations. This book certainly deserves its title and Frank Acuff deserves a lot of credit for writing it.
Negotiations take place everyday and everywhere. Our daily interactions with our family, friends, neighbors and colleagues are acts of negotiation. Frank Acuff defined negotiating as the act of persuading to get ahead into an aspect of your personal or professional life. It may be persuading a friend to withdraw from a risky situation or a boss to invest into a specific project. Whatever the situation, there are certain patterns that emerge during negotiations. There are also several steps and stages for negotiations. Taking notice of those steps, stages, patterns, clues and tricks can be of great advantage for any stakeholder in negotiations.
The last century has known some great inventions that have revolutionized the way we live, produce and travel. The most distant cities can now be reached within less than 24 hours of travel. Increased computational capacity and sophisticated operational systems enabled process automation and time optimization for several tasks. Internet and social media have helped to converge the world into one free and global market where we can exchange and share all sorts of data and services. As a result, we experience more than ever, a continuously increasing level of disparate interactions with our environment. Acquiring and developing the necessary skills to handle those disparate interactions is mandatory to prevail as an individual, organisation or as a nation.
As a global negotiator Frank Acuff gathered a large experience negotiating in the global market. During his years of practice he resumed his experience in a book that can be used to gain and profit from his insights and ideas. Frank stresses the importance of what he calls, interest-based negotiations where the interaction is framed inside a win-win model. The first objective of any negotiation is to set the stage for future negotiations by building a relationship with TOS based upon trust and respect. It goes without saying that the interest of TOS are strongly linked to its culture, habits, and way of doing. Thus, the need for preparation before negotiations.
According to Frank each negotiation respects the following stages :
Before any negotiation we need to do our homework. We need to gather maximum information regarding TOS. This stage includes, knowing about the culture, the people, the food, the way of addressing, political background, religious orientation, previous contracts, prices, market,… any element that can help understand TOS or that can be useful during the stages of negotiations. For example, while negotiating in Japan, we should be aware that Japanese give special care to the ritual of business card exchange. They use both hands to offer and accept the business cards as a sign of respect. They also take the time to examine meticulously the card before inserting it in their business cards case holder. Meanwhile in other regions of the globe, it is convenient to take the card and insert it into your pocket.
It is predictable to face resistance from TOS. Resistance shows seriousness and also genuine interest. Resistance can be backed up by several motives: Logical, Emotional, Organizational, Personal, Change rejection. During this stage of negotiation, it is necessary to fine tune your message and adapt it to TOS language. The best thing to do is to find common ground with TOS and to start from there.
As the negotiation unfold, you start to gain new insight and data about TOS. This is the stage when you start to use those new data to your advantage.
This is the part when we talk about really important issues like prices, terms, resources… It is important to concentrate on your key points thus the need for previous planning and use of strategies.
When all issues have been addressed and discussed, when all the key decision have been made. It is important to write down in a clear and concise way the agreement and to ratify it by both sides including their legal staff.
Most negotiators ignore this stage of the negotiations. It is not sufficient to seal an agreement, the idea behind a follow-up is to keep the relationship strong as an opportunity for future contracts.
Each of the previous stages requires proper planning and strategic thinking. In order to achieve this, you can use the following 4 steps framework to plan each of the several stages of a negotiation.
Find what are the key elements of the stage.
Give priority to each key element. Keep in mind that the priority of TOS differs from your priority.
For each stage, establish a range for each key element. Commit to those ranges and use them to leverage decision-making.
Along prioritization, the longer the negotiation unfold, the better you know TOS, use new acquired data to fine tune your strategy.
Example : Stage of the negotiation : Bargaining and Decision making
Identify issues :
TOS is showing resistance on three different issues : High price, contract not sufficiently defined, maintenance price for the product.
What is the issue with the most impact on my contract (is it the price ? is it the maintenance fees ?or over-restrictive clauses in the contract ?
I for example conclude that priority from high to low is the following
Maintenance fee’s > Restrictive clauses > Price (this is just an example)
Establishing a Range :
For each of the identified issues I need to establish a range in order to help me with the negotiation.
Case of the price, I can define three ranges of prices :
> Good deal : anything over $50 unit
> Acceptable deal : anything between 30 and $50.
> BottomLine : $25.
Case of the maintenance fee,
> Good Deal : 1 year guarantee, then $2M/year fee
> Acceptable deal : 1 to 3 years guarantee, then $1M/year fee
> Bottom line : 3 years guarantee, then $500K/year fee
Case of the restrictive clauses,
> Good deal: No exclusivity (with no selling to competition)
> Acceptable deal : 2 years exclusivity
> BottomLine : 4 years exclusivity
I state a golden rule that I shouldn’t hit more than 1 Bottom Line.
I can give a concession on a issue with less priority, for example price. But sustain HIDs on maintenance fees.
The negotiation is in fact a challenging process that requires proactive and adaptive actions before, along and after the negotiation. Proactive in the sense that it requires proper planning and investment. Adaptive in the sense that it requires to adjust to various inherent factors and parameters that affects the whole approach. Across different cultures, there are several aspects to be considered while negotiating an agreement as they may imply adjusting the strategies to TOS. Frank Acuff defined those factors as following :
The pace of the negotiation may change across cultures. The expression “lets get down to business” may be more convenient for occidental countries like United States, Germany and France than to Asian countries. Asian cultures like Japan give a lot of importance to building strong ties and long relationships with their business partners. In fact, it is usual to have some rituals and gifts exchanges before getting down to business.
In some countries like China the first offer can go as high as 1000% of the real asked price. While in other countries it is no more than 30% high. As a result adjusting the strategies to TOS is a key element in negotiation.
Occidental cultures give a lot of importance to their personal space (about 3 feet). Invading this space can create feelings of discomfort and irritability which is not advised during negotiations. At the contrary, Latinos and Arabs are very comfortable with close range exchanges, hugs and kisses. Adapting your behavior to TOS in personal relationship can increase your chances to close a deal.
Some cultures are characterized by individualism. They see competitive behavior as a mean for promoting effort and delivery. Other cultures seek conformity and promote collectivism across their organisation.
In occidental cultures, decision are always made on the top of the hierarchy. While in some cultures like Japan, they use processes like the “Ringi system”, which is a proposal document that is submitted to the whole company for ratification and approbation.
It goes without saying that the intervention of government into business is more likely to happen in some countries. Lack of digitalization and complexity of administrative processes can also complexify operations during negotiations. It is practical to hire a native partner to help with administrative and legal matters.
With respect to the previous material, it is clear that the negotiation process is a living process that evolves with respect to its environment and the parties engaging in it. Proper planning and methodological approaches are very encouraged. The 6 stages model and 4 steps framework presented by Frank Acuff can help you design and plan effective negotiations.
It is wise to consider that technology will have a big impact on negotiation and we are very likely to move gradually toward a more de-materialized form thanks to technologies like electronic signatures and holography. We can even consider in a near future instant material transfer using quantum teleportation. We will certainly and shortly witness and hold virtual meetings like we see in science-fiction movies. Wise is to learn the essentials of negotiations to keep pace with the advancement. This book can absolutely help you achieve that goal.
With this post, I tried to give you an “avant-gout” of what this book is all about. I really recommend to give it a look. It is full of explanations and clarifications. You can also use some blue prints given by Frank for your negotiations. I hope you liked this post. Please do not hesitate to give me your feedback.
“How to negotiate anything with anyone anywhere around the world by Frank L. Acuff”
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