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Brett’s story says a lot about how dealmaking skills can make or break negotiations. Here’s how he tells it:
“Let’s make a deal.” As the purchasing manager for a large, global company, I’ve heard it many times (and I’ve probably said it even more).
I’m pretty good at negotiating, but when the stakes are high I wonder if I could be better. The other day I was at the car dealership discussing the terms of my new lease. I got them to drop the interest rate by 2%, which was a minor victory. But I left with the nagging feeling that I could have saved more if I knew the right tactics.
And the pressure is even higher at work. I’m a manager at a large aerospace company and one of my main responsibilities is sourcing materials for commercial and military aircraft, satellites, and defense systems. In every business deal I make, there’s a lot on the line.
I’ve had a lot of wins, but I’ve also had some losses like a contract dispute between my company and one of our long-time manufacturers that’s been nagging me for months.
It’s gotten so contentious that we even brought in a mediator. But after dozens of talks (with dozens of people) we haven’t gotten any closer to a resolution.
At my wit’s end, I started searching the internet for a solution. And what I discovered was Dealmaking: Secrets of Successful Business Negotiations, the free special report from the Program on Negotiation at Harvard Law School.
In it’s pages, I learned the secrets to handling complicated disputes like mine:
– Focus on a problem-solving approach – Keep lawyers and technical experts out of the room to simplify the mediation and take a creative, interest-based approach.
– Limit mediation to key decision makers – When the room gets too crowded, the conversation tends to be less productive; instead, build trust in negotiation and facilitate candid conversation with a small group
– Take a step back – Take an outsider’s look at the business deal or “step back, collect my wits, and see the situation objectively”
– Evaluate Your BATNA – By knowing your “best alternative to a negotiated agreement” (BATNA), you can gain the confidence you need to walk away from a subpar agreement
– Widen your ZOPA – Explore using contingent contracts where you and your counterpart “bet” on different predictions to expand your “zone of possible agreement” (ZOPA)
– Form a connection – Sometimes the little things, like small talk, can build trust in a negotiation and advance a business deal
Armed with the knowledge in Dealmaking: Secrets of Successful Dealmaking in Business Negotiations and a confident smile, I returned to the bargaining table.
First of all, I started with a little talk to lighten the mood. I acknowledged that we’d been doing this dance for a while now and reiterated my commitment to closing the deal.
Next, I asked my counterpart if he would object to asking the mediator to sit this round out so we could talk “man-to-man.” He agreed.
Finally, I took a step back, evaluated the situation, and floated the idea of a contingent contract. My counterpart was floored by my newfound flexibility and inspired to make concessions of his own.
That meeting was a turning point for us and we succeeded in closing the deal. I breathed a sigh of relief – secure in the knowledge that I have the tools I need to knock the next business deal out of the ballpark.
At the Program on Negotiation (PON) at Harvard Law School, we hear stories like Brett’s time and again. Dealmaking is a delicate art and we’re dedicated to helping business professionals excel at it.
Whether you’re negotiating your next promotion or brokering a multi-million dollar sale, closing the deal matters. At PON, we help professionals negotiated successfully in a variety of industries and around the world.
Our popular, new report – Dealmaking: Secrets of Successful Dealmaking in Business Negotiations – reveals ways to make the most of every deal you encounter like:
– How to weight the costs and benefits of making a bet
– What every negotiator should know about contract and agency law
– How to pull ahead of the pack with a negoti-auction
Learn from a Master Dealmaker
Dealmaking: Secrets of Successful Dealmaking in Business Negotiations is written by Guhan Subramanian – the first person in the history of Harvard University to hold tenured appointments at both Harvard Law School and Harvard Business School.
In addition to teaching and researching dealmaking strategies, Professor Subramanian has extensive experience “in the field.” He has been involved in major public company deals such as Oracle’s $10 billion hostile takeover bid for PeopleSoft, Cox Enterprises’ $9 billion freeze-out of the minority shareholders in Cox Communications, and Exelon’s $8 billion hostile takeover bid for NRG – to name a few.
Professor Subramanian advises boards of directors and management teams on dealmaking issues…and he’s ready to share his guidance with you in this free special report curated from Harvard’s Negotiation Briefings newsletter.
Are You Ready for a Negotiauction?
First of all, you may be wondering: What is a negotiauction and how can I use it to my advantage?
A negotiauction has several features, including:
1. One-on-one negotiations – At some stage during a negotiauction, the seller engages one or more buyers in private discussions about the asset on the table
2. One or more rounds of bidding – At a certain point during a negotiauction, the sellers pits the potential buyers against one another in an auction
3. A group of potential buyers – Typically, between three and ten potential buyers are needed for a negotiauction
4. Information disparity – In a negotiauction, the seller usualyl knows more about the situation and the asset at stake than potential buyers do; therefore, buyers face the challenge of overcoming this information asymmetry
5. Process ambiguity – In a negotiauction, the dealmaking process is up for grabs, and savvy buyers seize opportunities to change the process to their advantage
Whether you’re shopping for a car on the internet or making a business deal, knowing how to successfully navigate a negotiauction is critical. Gain the tips and tricks you need by reading Dealmaking: Secrets of Successful Dealmaking in Business Negotiations.
As a seller, you’ll learn how to:
– Profile potential bidders
– Assess the characteristics of your asset
– Understand the broader context
If you’re a buyer, you’ll learn how to:
– Make the smartest setup moves
– Rearrange the assets to add value to the business deal
– Execute shutdown moves to cut off the competition
As you’ll soon see, most complex business deals can be transformed into value-creating negotiauctions.
Take Your Business Negotiations to the Next Level
If your current negotiation reaches an impasse, what do you do? If you can’t quickly answer that question, then you need to consult Dealmaking: Secrets of Successful Dealmaking in Business Negotiations.
This free special report details the keys to truly understanding your best alternative to a negotiated agreement (BATNA). Equipped with this information, you’ll gain a critical advantage in your upcoming business deals.
1. Translate your BATNA to the current business deal: Rather than assuming the deal on the table matches your BATNA point by point, translate your BATNA to fully understand what it means for your current negotiation.
2. Manage your full range of BATNAs: Examine all of your possibilities if the dealmaking process fails. Consider using a decision tree to look at all your options.
3. Assess their BATNA with care: When you’re focused on your own BATNA, it’s easy to forget about the other party’s BATNA. Simply ask yourself: “What would the other party do without a deal?”
4. Think through two-level BATNAs: In most business deals, you face two counterparts – the individual across the table and the organization he represents. Make sure you think through the BATNAs of both.
Your Dealmaking Questions – Answered
If you’ve ever wondered:
– How do I make a good deal?
– Is small talk necessary before making a business deal?
– Is it a good idea to leave the lawyers out of the room during high-stakes mediation?
– When should I walk away from a subpar agreement?
– How do I make a deal with the devil (otherwise known as a hard bargainer)?
– When the going gets tough, when do I “kick it upstairs” to the boss?
Then read Dealmaking: Secrets of Successful Dealmaking in Business Negotiations. Professor Subramanian answers these questions and many more. With these secrets in your arsenal, you’ll be ready for even the most complex negotiations.
An expert in negotiation, corporate dealmaking, and deal process design, Professor Subramanian has shared this advice with CEOs, CFOs, and other business leaders. Now you can read it for yourself in this free special report curated from articles published in Negotiation Briefings. See what a difference it can make in your next negotiation.
Director of Marketing
Program on Negotiation at Harvard Law School
P.S. Closing the deal just got simpler. Download your free copy of Dealmaking: Secrets of Successful Dealmaking in Business Negotiations today and start making the best business deals time and again.