creating value for leaders is the creating valuation for leadership goal .leader are unique there is lot more leaders in the universe but all of them have some of the speacial qualities which differ them more intelligent and more professional.we know what is the meaning of the value delivering value is more then the prise of anything if you have more valuation of the anything you almost understand that you have more valuation of the product as well as the cost of the service
the lovely town of Sequim, Washington in the Pacific Northwest.
Population about 5000 people.
When Walmart wanted to erect a 575 thousand square
foot shopping complex the city argued that the big concrete footprint
would create a traffic nightmare, unsafe driving conditions, and
storm water runoff that would put toxins in the city's rivers and streams.
The community group Sequim First attempted to block the city planning director from
allowing the complex to be built, estimating a 280-500% increase in traffic.
Bottom line.
Squib first wanted Walmart to pay 100 million to fix the roads.
Walmart viewed these protests as a thinly veiled attempt to squeeze
deep pockets to pay for the city's neglect of their roads.
Walmart's own analysis predicted only a 7% traffic increase.
There was a fierce bargaining stand off until Mayor Walt Schubert
proposed a break through solution to the problem.
In his proposal, an independent body would conduct an analysis of possible
traffic impacts and Walmart would give the city up to a hundred thousand dollars
if substantial traffic impacts were proven through the study, what happened?
A document prepared by the Superior Court of Clallum County, Washington stated
studies prepared insist that the level of service on the county's system
will not be serious affected by the increase in traffic i.e.
that the roads have sufficient capacity to handle the increased loads.
What can we learn from the story of Squim and Walmart?
Sometimes negotiations break down because parties have fundamentally different views
concerning future events that cannot be resolved with existing data,
and therefore, need to be put to test.
This type of negotiated agreement is known as a contingent contract
because the parties involved will gain or lose as a result of an unknown outcome.
A contingent contract is essentially a bet between parties
who have different beliefs That can only be tested with more time, more data.
Let me give you some more warnings so you can make the best of this strategy.
First and foremost, check your over-confidence.
Your data should be better than theirs.
In the Squim Walmart negotiation Walmart appeared to have better data than Squim.
Second, make sure the incentives are aligned.
For example, you don't want to create an incentive for
the other party to create a traffic nightmare.
Third, be clear about what data will be used.
Decide this up front.
Finally, remember, one party will win the bet and the other party will lose.
Make sure you can pay off the bet if you lose.
Let's talk about three more sophisticated win-win strategies.
Each with their own cute acronym.
First, MIOs, multi-issue offers.
Often negotiators discuss each issue in a vacuum.
It is far better to negotiate packages or bundles of issues
using a strategy known as MIOs, multi issue offers.
Professor Jeanne Brett found that negotiators who use MIOs
we're always able to reach deals and avoid costly impasse.
In contrast, negotiators who discussed each issue
in an agenda-like fashion reached an impasse one-third of the time
when negotiating with an individualistic negotiator.
Two, MESOs, Multiple Equivalent Simultaneous Offers.
Suppose you're preparing for a negotiation.
You've identified several issues, in addition to price, and
you have prioritized your interests.
You are in an ideal position to prepare two or
more multi-issue proposals that are of equal value to yourself.
You can present these to the other party.
Kind of like a dessert tray, and ask the other party to choose.
By doing so you appear flexible.
Warning do not tell the other party the monetary value of these proposals.
Rather, explain that you are indifferent between these.
If the other party rejects both or
all of your options, ask him of her to rank order them.
Set aside questions of accept and reject and instead focus on rank ordering.
By analyzing what the counter-party says, you can start to discern their interests.
Three, PSS, or post-settlement settlements.
A post-settlement settlement works like this.
After negotiators reach a deal both parties brainstorm for
a mutually better outcome, with the understanding that the current deal
is a commitment unless both parties are willing to change.
Sounds strange, right?
Explain to the counter-party that the process is mutual value creation.
And neither party has unilateral veto power.
Question for you, what does your initial
agreement with the counter-party represent when you go back to the negotiation table?
New starting point.
Yes.
Safety net, yes.
Correct answer, this is your new BATNA.
Note, three considerations should guide your use of
the post-settlement settlement strategy.
First and foremost,
there needs to be enough trust to have this post-deal conversation.
Second, you need to consider your opportunity cost.
What are you giving up by spending more time with this negotiation?
Third, if you are dangerously close to your reservation price,
a post-settlement settlement might create a lot more value.
Okay, let's sum up.
First, refusing to share any information severely reduces win-win potential.
Second, make multi issue proposals.
Third, invite counter proposals.
Fourth, once you reach agreement, search for post settlement settlements.
Finally, solve differences of belief.
By crafting
contingent contracts.
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