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Unlocking a Successful Negotiation Strategy

Thursday, June 24th, 2010
Jan Potgieter asked:




Are you approaching all your commercial negotiations with a standard approach? Should you only use a win/win approach to negotiations?

Traditionally, negotiated outcomes can be classified into one of the following categories:

Lose/Lose (all parties lose) Win/Lose (I win and you lose) Lose/Win (I lose and you win) Win/Win (we both win – could also be described as compromise) Win More/Win More (we unlock synergies – could also be described as being collaborative)

Whilst I agree with the notion that a win/win approach is the only sustainable way to gain competitive advantage in the marketplace, it is well worth considering the practical application of this approach in today’s global marketplace. It would be short sighted to conclude that all negotiations are made equally and should therefore be approached in the same way.

It would be similar to say that one nation’s culture & beliefs are the appropriate culture and therefore the standards that apply to that culture should be applied in interacting with people across the world, irrespective of their background.

Guns OR Butter

There is another dimension within the context of commercial negotiations that should be considered – the old economic dilemma of ‘guns or butter’. The ‘guns or butter’ story illustrates that with limited resources, organisations and individuals are forced to make choices. In order to have more butter, one must sacrifice guns and vice versa.

In a practical sense this means that resources can only be allocated in relation to the relative strategic importance of the activity at issue. In the case of negotiations that are considered strategic in importance to the organisation, we are more likely to pursue a collaborative or compromising approach.

Conversely, when we deem the outcome of certain negotiations to have a limited impact or no impact at all on the achievement of strategic organisational objectives we could decide to be competitive in our approach or even to avoid negotiation completely. We would not be responsible stewards of corporate resources if we were to approach all negotiations in a similar fashion.

Collaborative Approach

There is also a philosophical dimension to the approach to negotiation pursued by many organisations. Some organisations are renowned for their collaborative approach to doing business whilst others have a reputation for a mercenary approach to conducting business. Some players in the retail sector have reputations of dealing ruthlessly with suppliers – they rationalise the approach by arguing that it is in the interest of the consumer.

Whilst I agree that this approach is short sighted and probably not sustainable in the long run, it would be na?ve not to recognise the fact that, at least commercially speaking, a lot of organisations have little interest in collaborative or compromising type negotiations within certain departments.

It is interesting to note that whilst most organisations pride themselves on providing ‘solutions’ to the issues confronting their clients, a significant proportion of their so called negotiations actually revolve around haggling about price. I have no doubt that there is a sincere intention to engage on a solution based principle it just seems that this is much easier said than done where the rubber hits the road. A lot of the time companies’ stated intentions to engage on a win/win based principle is similar to the new year’s resolutions so many of us make every year.

Negotiation Strategy

There is scant chance of us achieving our resolutions without putting in place a supporting plan and taking action to achieve our goals. Many organisations lack a clear organisational negotiation strategy & process which exposes them to the risks associated with a huge variance in the results of their negotiated agreements.

Organisations and individuals should recognise that collaborative negotiation demands the investment of significant resources. In order for us to be truly collaborative, we have to spend much time getting to know each other. In a commercial context, this plainly does not make sense in some cases. Consider the purchase of a pure commodity such as paper for a small or medium sized organisation – if there are no value added services presented or required, it would be sub optimal to pursue a collaborative relationship with the provider of such a commodity. It would make more sense to pursue a competitive approach to the procurement of paper than a collaborative or even compromising approach.

In practise, many organisations would approach the purchase of paper or stationery in a way where they would request multiple quotations and award the business to the lowest bidder. As a matter of fact, in some cases no negotiation at all would take place. An interesting note here is that this does not mean that the paper supplier has lost as a result of this transaction – they have won the order, but the telling thing is that we were not really interested in their interests at all; we were only focused on our desired objectives. So pursuing a win/lose strategy in this example has not really resulted in a loss for the supplier, but it does mean that we were not really interested in their desired outcomes.

The flip side of this example is that if you are selling commodity type products, you have to realise that before you will be in a position to negotiate, you must create for yourself a base to do this from – hence the move towards providing solutions.

5 EFFECTIVE NEGOTIATION STRATEGIES

How then do we decide which negotiation strategy to follow? Within a commercial context, the following negotiation strategy options are available to us:

Avoiding negotiation altogether. Engaging in a competitive negotiation where we seek to achieve our goals aggressively. Engaging in an accommodating negotiation where we seek to satisfy only the needs of our counterparty to the exclusion of our own needs Using a compromising approach where we seek to satisfy some of our needs and interests and some of the needs and interests of our counterparty. Deploying a collaborative negotiation approach where we seek to satisfy all our needs and interests in addition to satisfying all the needs and interests of our counterparty.

The negotiation strategy that is appropriate will be determined by your answers to the following two questions:

How strong are my alternatives to this particular negotiation? How important is a long term relationship in the context of this negotiation?

It follows that in many cases, buyers would be pursuing an approach where they are avoiding negotiation or being competitive and sellers would like to be compromising or collaborative. How then to deal with this situation?

A key part of the negotiation preparation process should be focused on trying to understand your counterparties needs, interests and objectives. This will assist you in identifying the likely negotiation strategy that they will be pursuing. If your counterparty is avoiding a negotiation, you can be sure that your organisation is not being viewed as a contributor of competitive advantage to your counterparty’s organisation.

Your challenge would in the 1st instance be to reconsider the way that your products and services are packaged. The aim should be to add to the achievement of the strategic business objectives of your counterparty by identifying the components of your offering that matches their strategic needs.

If you find yourself at the wrong end of a competitive negotiation, it would serve you well to be familiar with the most often used negotiation tactics as you will most certainly be confronted with a tactical approach. Unless you are well versed in negotiation tactics, it will be difficult for you to maximise the value that you will be able to extract from the negotiation as there is no sincere interest on the part of your counterparty to satisfy any of your needs or interests.

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Talent Acquisition in the Global Bio-Pharma and CRO Sector

Monday, December 14th, 2009
Ash Butt asked:




CONTENTS

Introduction

1. What do we mean by Selling? Why should you sell?

a. Issues of Form and Presentation

i. Emotional Drivers

a. Title

b. Rapport with existing staff

c. Ease of relocation

d. Salary Negotiations

e. Presentation of company

ii. Intellectual Drivers

a. Clear understanding of position and its challenges

b. Location

c. Salary and benefits

2. What is “selling” in this context?

a. Creating an Employee Value Proposition (EVP)

3. Sales Methods

i. Sales Theories

a. Maslow’s Hierarchy of Needs

b. “Spin Selling”

ii. Sales Process

a. Interviews – Point of White Heat

4. Conclusion

Introduction

The concept of an organisation marketing itself in order to attract top tier talent is one which has entered corporate consciousness over the last 15 years. However, in general, the reasons why this is done and how it should be done is often poorly understood.

This article sets out to provide an insight into why a company should, in today’s competitive market space, ensure that it communicates clearly and effectively with its potential candidate pool.

1. What do we mean by “selling”? Why should you sell?

The last twenty years have seen a shift in the power balance between corporations and potential Upper Quartile Individuals (UQIs) in the labour market across a range of industries.

Essentially, this change can be seen as recognition that corporations can no longer look at recruiting as a function akin to purchasing. In today’s business world recruiting needs to be handled with the same creativity, energy and vigour as marketing and business development.

UQIs are no longer passively leaving themselves open for the consideration of potential employers. There has been a collective epiphany amongst the world’s skilled labour force, a realisation that “the price of talent is rising” and that “the differential value of highly talented people continues to mount”.

The result of this has been that it is “no longer about selecting the best person from a long line of candidates; it’s about going out and finding great candidates”.

Therefore any “sales” approach regarding recruitment needs to be built around this new reality.

Hence “selling” in this context can be defined as the actions taken to ensure that an organisation is able to attract, retain and develop market leading UQIs which result in the company gaining a competitive advantage over its rivals.

McKinsey’s seminal work “War for Talent” (2001, WFT) states clearly that in order for companies to “woo people in today’s talent market they need to sell, sell, sell”.

Additionally, this shift in approach needs to be driven by the understanding that “talent is now a critical driver of corporate performance and that a company’s ability to attract, develop, and retain talent will be a major competitive advantage far into the future”.

This then leaves open the question – how should a company “sell” itself to the leading players within the talent market?

The answer to this can be broken down into the following areas:

i. Issues of form and presentation

ii. Issues of process

a. Issues of Form and Presentation

There are various actions that an organisation can take to ensure that it sends out an attractive message to those it wishes to attract. Essentially, there needs to be a focus on the fact that people operate on the basis of several “drivers” or “hot buttons” and in order to excite and enthuse someone to leave a safe and secure position (potentially to relocate, change their children’s school, leave behind friends and family) as many of these “hot buttons” need to be hit as possible.

Most individuals have a twin response to any given situation: emotional and intellectual. Therefore we need to ensure that both of those responses produce a positive result – only then will a candidate become viable.

i. Emotional Drivers

a. Title

Whilst often intellectually we can say that the title of a position should and does not affect our perception of it, emotionally we are not so controlled.

Candidates will want some recognition of their growth and development. If that can be reflected in the titles prescribed to functions then all the better.

b. Rapport with existing staff

Positions need to be made “real” for candidates. They need to feel comfortable in their surroundings – they need to be able to envision themselves working with the people they meet. Hence every effort should be made to ensure that all those involved in any interview process do what they can to make any visitors feel welcome.

They need to feel that they will be able to manage those below them (if required) as well as being managed by their superiors.

c. Ease of relocation

Relocation can be a stressful and distressing process. Not only are you leaving behind everything that is familiar but then you have added into this emotional mix the responsibility of ensuring a smooth and safe move.

This is particularly of concern to those with families to consider.

Hence the client needs to assume as much of the responsibility of this process – not only that but they need to ensure at the same time that the candidate is kept in the loop and provided with clear channels of information.

d. Salary Negotiations

Salary negotiations in our experience have often been the reason why individuals leave companies two or even three years down the line. Here the emphasis from the client side should always be on successful hire of those that will add value.

It is clear that salary structures etc are required but as highlighted in WFT – if required rules should be broken. The aim is always a WIN-WIN outcome.

HR units have often been tested and assessed by how much they can lower the cost of recruitment. That needs to be left behind – the real test must be the quality of recruitment.

Additionally, the actual negotiations need to be through an intermediary.

This lessons any negative impressions and lessens the opportunity for high ball/low ball situation to develop. This also requires some trust in us – we are here to ensure the best possible hire for our clients whilst ensuring that our candidates take on a position which will allow them to develop. Often companies in our situation have been accused of artificially forcing down candidate/raising client expectations in order to complete a deal. We have always stated that this is NOT our method and we will represent all parties fairly.

If required we will endeavour to highlight discrepancies on both sides to ensure a mutually beneficial outcome – only through this method can sustainable relationships be established.

It must be accepted by all involved in the recruiting process that talent acquisition is a form of investment not an “expense”.

Extend your best offer the first time – negotiating games create uncertainty and mistrust.

b. Presentation of company

It is fundamentally important that the client put across the best possible impression of their operation. That includes:

- Arranging interviews in an organised and timely manner

- Ensuring that any interview days are held in accordance with stated timelines.

- Late variation in schedules needs to be avoided, if possible.

- The number of interviews needs to be kept to a minimum and the process highlighted and clarified from the outset.

- Additionally, quality standards need to be maintained through out the process.

Additionally, away from those factors that can cause emotional reactions there are others which can trigger us to rationalise and logically assess any potential role.

i. Intellectual Drivers

a. Clear understanding of position and its challenges

Any new role needs to offer a potential candidate a chance to impact upon the company/team. They need to feel that the position is worthwhile and that their efforts will not only be rewarded but also appreciated. This is vital.

Moreover, a candidate must be shown that the position that they are going forward for will not be a static one but rather it will be a first step on a road which will allow them to develop and grow.

The developmental potential of any position needs to be clarified from the outset – in the “War for Talent” a position is defined not as a job but rather a step on a career ladder.

b. Location

When involved in relocating an individual to a new location the company must not present the advantages of employment with them. They must also research and present any advantages for the candidate of moving to that particular area – the selling must not be confined to the position or company but must encompass selling the proposition holistically.

Help must be provided with finding suitable accommodation and assessing locations.

The aim of this process is to make the whole process “real” for any potential candidate – helping potential incumbents imagine not only working in a new location but also “living” there.

c. Salary and benefits

Whilst it is vital that candidates need to understand and reciprocate our focus on making sure that the role in question is right, it is equally true that wealth creation opportunities must exist.

Hence remuneration packages need to take into consideration:

o Current package

o Cost of living differential factors

o Market rates for any given role

o Building in an uplift for those roles which will move candidates forward

If the client is positioning themselves as a global player, attracting global talent, they must be able to compete in the global labour market.

2. What is “selling” in this context?

a. Creating an Employee Value Proposition (EVP)

WFT highlights that a company looking to develop its talent pool must start the process of “selling” themselves at the very outset.

One way to do this is to establish Employee Value Proposition (EVPs) for each role.

This is defined as the:

“Holistic sum of everything people experience and receive while they are part of a company-everything from the intrinsic satisfaction of the work to the environment, leadership, colleagues, compensation and more”.

The question an EVP developer needs to ask themselves is “Why would a highly talented person choose to work here?”

McKinsey’s research indicated that talented individuals will look for the following elements in any answer to that question:

o Challenging positions that inspire passion

o Working for great companies who will develop them

o Wealth creation opportunities

o Creating a Work/Life balance

Additionally, having the answers is not enough – those answers must be readily communicable. The earlier that this holistic vision of a role can be built the better it will be.

This will help to build enthusiasm across all areas for the role and will mean that the power balance shifts yet again – headhunted candidates are notorious for sitting and waiting for a company to present themselves. However, if during initial communications the candidate can be enthused to the point where they realise that an exceptional EVP is being offered to them – they will start to fight for the right to take it on.

3. Sales Methods

There are a number of methods that can be employed by the Client to ensure a positive impression is left on the candidate.

The most important of these is to communicate effectively – there is no use having an industry leading EVP if the candidate does not understand it.

The company must use a “benefit-sell” technique in this situation: the question any interviewer or HR professional needs to ask themselves is “What will be the benefit to the potential incumbent of joining us?”

The answer to this question must form the central section of any “pitch” to potential candidates.

i. Sales Theories

a. Maslow’s Hierarchy of Needs

One of the best known theories explaining the actions of people is that of Dr. Abraham Maslow (“Motivation and Personality”, 1954).

Dr. Maslow hypothesized that people are motivated by a hierarchy of needs. The hierarchy he described may be drawn as follows:

Maslow’s theory requires that:

o Each individuals needs must be satisfied at the lower levels before they progress to the higher, more complex levels.

o When low-level needs are satisfied, individuals are no longer motivated by them.

o As each level of needs is met, individual’s will progress to higher level motivators.

o All the needs are always present.

Maslow highlights that Knowledge Workers must be looking for motivation from the highest levels of the triangle – Self-Actualisation.

Maslow described the characteristics of the Self-Actualized Person as follows:

o Are realistically oriented

o Accept other people for what they are

o Are spontaneous in thinking, emotions, and behaviour

o Are problem-centred rather than self-centred

o Need privacy and are autonomous, independent, and able to remain true to themselves in the face of rejection or unpopularity

o Have a continuous freshness of appreciation

o Have mystic or oceanic experiences although not necessarily religious

o Identify with mankind

o Have deep meaningful relationships with a few people

o Have a democratic structure and judge people as individuals

o Have highly developed ethics

o Resist total conformity to culture

These characteristics, coupled with the motivational needs described by Maslow, provide some tools for understanding how to motivate Knowledge Workers.

Most Knowledge Workers have no need to worry about their physiological, security, and safety needs, so these basic, low-level needs no longer motivate their actions, although the needs are always present. Many people are today motivated primarily by social, esteem, and self-actualizing needs.

b. Spin Selling

This approach is based upon the research carried out by Neil Rackham for his book “Spin Selling”.

SPIN is a method of asking questions that allows you to identify needs and develop an urgency to address those needs.

A number of different types of questions are employed in this process.

For effectiveness, the questions fall into a particular order, as follows:

Situation questions focus on facts, or the current situation. For example, “Tell me about your current position.”

Problem questions begin to identify the areas of dissatisfaction. For example, “Are you satisfied with opportunities for career growth with your current employer?”

Implication questions focus on the effect if the problem goes unresolved. In recruiter speak, “What effect has this had on your ability to advance professionally?”

Need/pay-off questions focus on the outcome if the problem were resolved. For example, “Suppose you had regular opportunities for skill development, what could that do for your career growth?”

You can see clearly that through this process what we have done is to highlight implicit needs, turned them into explicit needs and have then provided a solution to those needs through effective presentation of our EVP.

ii. Sales Process

Whilst there are specific sales theories that can be supplanted into recruitment it is often worth remembering that procedural changes can ensure that the impact of the application of these approaches is intensified.

a. Interviews – Point of Maximum Motivation

The “Point of Maximum Motivation” can be defined as the point in the recruitment process when the enthusiasm of the candidate in question is at its greatest.

At each stage of the process the candidate’s enthusiasm will rise, however, there will also be a significant fall after the end of each stage.

What this tells us is that we need to ensure that the TIME lag between each interview is minimised and additionally, the process needs to be defined at the outset so that the candidate is aware of what they need to do in order to achieve their aim.

If an offer is to be extended it should be done as soon after the final interview as possible – hence if a candidate looks likely to reach that stage the client should ensure that details such as contracts and package information are ready. That way the process can be closed off quickly – rather than allowing indecision to enter into the equation.

4. Conclusion

In conclusion we can see that there are real and definite reasons why a company looking to garner long term growth and development in today’s competitive market space needs to focus on strengthening its “talent pool”.

As stated in WFT “excellent talent management has become a crucial source of competitive advantage”, and that “companies that do a better job of attracting, developing, exciting and retaining their talent will gain more than their fair share of this critical and scarce resource and will boost their performance dramatically”.

Once this assumption is built into the fabric of any company the next step must be its execution.

Creation of a communicable and attractive EVP is highly advantageous but this must then be coupled with candidate contact which is centred around attracting talent and managing the recruitment process effectively.

Everyone involved in the process must be clear that in a market where UQIs are being sought and constantly tempted the proposition offered must be effectively delivered and the candidate enthused. With this approach you will be able to ensure control of the process.

Suggested reading:

The War for Talent – McKinsey and Company, 2001

Motivation and Personality – Abraham Maslow, 1954

The Fast Forward MBA in Selling – Joy Baldridge, 2000

SPIN Selling – Neil Rackham, 1988

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Top Ten Negotiation Traps and How to Avoid Them

Tuesday, October 20th, 2009
Clive Illenden asked:




Negotiation Tactics are more than just having a set of tools. The great negotiator is aware of the negotiation tactics being employed by the other party. Sometimes the person you are dealing with will use a number of Negotiation Traps, the purpose of which is to trip you up and make you concede more than you had intended.

Here are my Top Ten Negotiation Traps and how to avoid or deal with them.

1. Hot and Cold

This is where the person you are negotiating with suddenly seems to lose interest in the deal. They blows hot and cold. There is a marked change from their initial enthusiasm. They have started to go quiet on you. You start stressing, and feel the emotion is creeping in. Are you losing them? You ask yourself. Should you offer another concession to grab their attention retrieve their enthusiasm? When negotiating with people who are hard to judge it is difficult. This type of negotiator is deemed a low reactors.

As ever, remain calm, and do not panic. Keep asking open ended questions so it forces them to talk and respond, and restricts their opportunity to play the silent card. But also do not forget, do not be afraid of the silence.

2. Rolling Concession or “Eleventh Hour” request

So you are at the point where you think the deal is about to close. You are keen to close, it is within touching distance, when, all of a sudden the other party just says “actually, could I just get one more point.” Then if you concede just to close this damn deal, they say, “Oh yes… and another thing”. And then another. You get the picture. Your emotions will be high as you want to close the deal, and your cool judgement maybe impaired, by the emotion and adrenaline of thinking the deal is about to be done. Research has shown that more concessions are conceded in the final few minutes than at any other time during the negotiation.

It pays to list all the points that need addressing at the beginning of the deal, so there are no surprises.

3. Heavy Investments

When you have spent a lot of time on the deal, there is a real eagerness to close. You have invested heavily in terms of time and emotion, and this investment heightens your want to close the deal. The other party, knowing this keenness on your part, may spot a weakness, and start to ask you to do more and more, and jump through an ever increasing amount of hoops. These could be in the form of more documents, tenders, presentations, feasibility studies etc. You maybe emotionally drained, and more likely to concede these requests. All of these requests may make you think you are failing, and in a desperate attempt to get the deal back on the course where you think it was, the more likely you are to drop the price. You have invested so much time and energy you may start thinking that you might as well drop the price to save that investment.

Remember, they want to do a deal as well, so a little bit more work here and there is fine. Stick to the key elements of the deal proposal and do not waiver. Do not let emotion fog your thought process and ultimate goal.

4. “If you throw in…. then it is a deal”

This plays along the similar lines to the Heavy Investment approach. Again, it relies on you being close to the end, maybe emotionally exhausted and champing at the bit to close the deal. Then at the final moment, just as you are about to seal that deal, the other side asks for one last offer. Maybe they suggest it a favour, or a sweetener for the deal. If you are not careful, at this stage of the deal you are likely to concede too easily, and what they ask may have a heavy price. This trap is all about the timing, you are so close to the end, and they seemingly move the goal posts at the last second.

Do not forget, that both parties have invested a lot of time and energy in this deal. They want this deal as much as you do (maybe even more). They are more than likely just trying it on. Stay focused and keep firm. They are probably just trying their luck.

5. “Not Having the Mandate”

All of a sudden the other party suddenly says it does not have the authority or mandate to agree the deal. They have gone a head and accepted all your concessions, but needs to ask line manager. The line manager then of course objects to one of the third party’s concessions, and so the third party has to withdraw that concession for the deal to go through.

Establish at the outset that the third party you are dealing with has the mandate and the authority, or whether they have to confirm the deal with anyone else.

6. Changing of the guard

Suddenly you negotiator you were dealing with changes to someone else. This new negotiator denies all knowledge of the concessions that were made by their predecessor.

You have a couple of choices here. You can insist that the previous commitments made are honoured, and if you keep notes when you negotiate, and have been clarifying and establish the key deal points as you go, this should be easier. Alternatively, start the negotiation again. Wipe the slate clean and start a fresh.

7. Dutch Auction

Have you ever been in a situation where you have been played off against a competitor. If you are not careful you can find yourself being used as a pawn in a an attempt by the third party to push the price or value of the deal lower and lower. They tell you that a competitor can offer the same thing for X% less. So you offer a reduced price. What do they do? They just go to the competitor and tell them they have been offered a better price, in the hope that the competitor offers them a revised, lower price. Then they come back to you and say the competitor has reduced their price again. And so on, and so on. Before you know it you are in a Dutch Auction, where the price goes down and down.

If you have any inkling that you are being played like this, you need to be tough. Here the bull negotiator needs to come to play. Stay firm and tough, and stick to your price.

8. The Unknown Competitor

Like the Dutch Auction outlined above. The other negotiator refuses to inform you who the competitor is. They state they have an NDA in place and for ethical reasons they cannot. The point here is, that without knowing who this so called competitor is, you cannot judge effectively whether what they are offering is inferior to what you are offering.

You should ask questions about this so called offer from the unknown competitor. What sort of terms they offer? Such as delivery terms, payment structures, etc. You will soon be able to ascertain whether your opposite number is bluffing or telling the truth. Remember to have faith in your product or service. If it is not a fair comparison with this unknown competitor, then demonstrate why what you have to offer is far better.

9. The High Baller

You have a figure in mind, and then the third party comes in with a really high (or low) figure. This completely knocks you for six, and you start adjusting your figures and prices accordingly. You have begun doubting whether your original figures were right. Here the negotiator you are facing has made you change your game plan. They have taken control of the negotiation.

Remember, if you have done your planning, you will know why your price is a realistic price, and any high balling on their part is just posturing. Do not be put off, and justify your position and why what they are suggesting is not realistic. If you challenge their figures and the third party can not back up their original offer you will undermine their credibility in the negotiation. You will be able take control of the negotiation.

10. The Spontaneous Negotiation

There are many occasions when we find ourselves in a negotiation we were not expecting. You are walking down the corridor, when all of a sudden you meet a colleague your are negotiating with internally, or say the phone goes and you are in the middle of something and it is a third party who wants to negotiate with you. There is no time to prepare and so the potential exists for an agreement that may not be best for you in the long term.

As an experienced negotiator you need to decide whether you should engage or not. The other party may be using this negotiation tactic of surprise to gain advantage. It may well be better to negotiate later or avoid negotiation all together, until you can prepare more fully. Be pro-active in agreeing a time and place to re-engage.

As negotiators we can sometimes all be guilty of laying some of these traps ourselves when applying our negotiation tactics. I know I have done in the past, without really thinking. If you are aware of these traps, or use them your self, you will be more aware of when they are used against you. Look out for them, keep focused on the prize, and try to avoid being too emotionally tied up in the deal. Many of these negotiation tactics play on your emotion. So keep cool.

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GM’s Plans to Offshore – Patriotism Vs Profitability

Tuesday, September 22nd, 2009
Ann All asked:




When times are good, it’s easy for Americans to love the global economy. Prices for consumer goods drop when companies move manufacturing overseas, which increases spending power. If companies can reduce operational expenses by offshoring, their stock prices rise, which boosts the value of 401ks and other investments. But globalization looks a lot less appealing with the economy on a downward slide. Multinational companies trying to meet earnings targets are cutting jobs in the U.S., not in lower-cost overseas markets.

This is certainly true now, with the U.S. jobless rate at a 26-year high. In particular, many folks have problems with companies continuing to offshore while accepting federal funds to improve their economic prospects. Such political considerations recently led student loan company Sallie Mae to announce it will move 2,000 offshore jobs back to the U.S., in a move observers say is designed to win favor with the Obama administration. Obama positioned his own move to end tax breaks for U.S. multinationals as an incentive for companies to keep jobs in the U.S.

If a Washington Post report is true, the Obama administration may find itself trying to walk a fine line between patriotism and protectionism. The Post reports that General Motors, in a 12-page report it presented to legislators, outlined plans to increase the proportion of cars it manufactures overseas and sells in the U.S. from the current 15 percent to 23 percent. The Obama administration apparently will face a tough choice: Let GM move more jobs overseas to lower its costs and (hopefully) return to profitability, or make it harder for GM to dig itself out of its current financial hole by requiring the company to keep jobs in the U.S.

Former labor secretary Robert B. Reich, now a professor at the University of California-Berkeley, calls it “an almost impossible dilemma,” noting that bailing out a global company like GM doesn’t necessarily help American workers. And, he said:

“More significantly, it raises fundamental questions about the purpose of bailing out these big companies. If GM is going to do more of its production overseas, then why exactly are we saving GM?”

Of course, one can make the case that it’s better to preserve some of GM’s U.S. automaking jobs rather than lose them all, which would then lead to huge financial repercussions. (The more former auto workers who end up unemployed, the less they have to spend, creating a negative impact on many, many other industries.) But unless GM can further reduce the cost of employing workers in the U.S., chances are it’ll find it needs to boost its overseas production even more.

The issue will be a flashpoint in GM’s negotiations with the United Auto Workers. In any case, GM’s plan is apparently not set in stone. CEO Fritz Henderson assured legislators that the company hopes to win further financial concessions from the UAW. This story makes me wonder: Is it a coincidence that Toyota, Honda and other Japanese automakers, who at this point are in better shape than their U.S. competitors, have located their U.S. manufacturing facilities in non-union states?

Kansieo.com

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Career Advice – Are You Passionate About Your Work?

Wednesday, June 10th, 2009
April McCallum asked:




The acronym S.W.O.T. stands for Strengths, Weaknesses, Opportunities, and Threats. It is a simple method of identification and analysis. Most people are familiar with using S.W.O.T. in the workplace in reference to business, but this same technique can be applied as career advice as a guide for a personal check-up.

Are you passionate about your work? Are you living your dream?

If not, maybe it’s time to “S.W.O.T. yourself!” Use this simple method of identification and analysis to challenge yourself to become the best you can be today, and start moving toward the future you want tomorrow. Write the letters S W O T on a piece of paper. Take a mental inventory of yourself, what you have to offer, where you might like to improve, what you’d like to do, and what is standing in your way.

Strengths

Take a minute to think about your personal strengths. Oftentimes we box ourselves into a much more limited space than we deserve. For example, just because your last two jobs were in sales, doesn’t mean that you don’t have other skills or qualifications that you use on a regular basis. It’s likely that those skills could transfer into another role or job title quite nicely.

As an example, your main job may be as a sales person, but within your position, you spend a lot of time negotiating contracts, building rapport with customers and vendors, marketing and promoting your company or brand. To apply that to your S.W.O.T. analysis, in the category of “Strengths”, you may write down “Relationship Builder”, “Negotiator”, “Cross-Functional Communicator”, or “Marketing & Promotions”.

Don’t overlook or minimize the significance of non-functional qualities. Someone may have a stellar educational degree or years of experience, but be miserably lacking in people skills, creativity or the ability to think out-of-the-box. These might well be noted in your “Strengths” category and on someone else’s “Weaknesses” category!

If you think you might be ready for a change, take a serious look at your strengths. Would they be a good fit for another department, a different job title or function, or even another industry that you have an interest in? Have you updated your resume lately to reflect your strengths? Consider asking colleagues, customers or industry partners for referrals that highlight those strengths. Sometimes asking a trusted source for input helps. Oftentimes they are quick to point out strengths that are obvious to them, but not so much to you.

Weaknesses

Sometimes what we view or label as a weakness is really an opportunity in disguise. An opportunity to learn, upgrade or advance. We may already have 75% of the puzzle and just need to focus on enhancing the other 25%. That’s why the analysis is so helpful. It serves to clarify opportunities possibly hidden as weaknesses, as well as highlight areas that may be ripe for improvement.

If you are uncomfortable with new technology or giving presentations, for example, you can always improve through learning and practice. Take classes, get a mentor, study and practice. The best career advice is to get intentional and take responsibility for your future success.

On the other hand, if you consistently have a bad attitude, are late for appointments, or lack integrity, you just need to get with the program. Those are areas well within your control. In which case, you just need a good swat! Don’t self-sabotage your own potential.

If you have a legitimate weakness that can’t be helped, just focus on the areas you can improve, along with your legitimate strengths and opportunities.

Opportunities

Look at this category beyond “job opportunities”, or merely functions or duties. Try to expand your brainstorming into personal areas of opportunity. Do you long for relevancy, to have a voice, to express your creativity or to make a difference? What are you passionate about?

What do you want your opportunities to be – To make more money? Take on more responsibility, increase or change your job scope? Become more knowledgeable in order to add greater value in the workplace? Release your innovative passions? Become self-employed?

Now connect the dots. How can you position yourself to turn your opportunities into reality – Get more education? Work harder or smarter? Start being more intentional about networking, volunteering or getting your name out there? If you have a dream, nurture it. If you need coaching, find a mentor. If you have a goal, do what it takes to reach it. Be your own best advocate. It’s your ticket – find a way to write on it what you want it to read.

Threats

This is an interesting category. Some threats are out of our control, but not all. Threats might be things like “the economy”, “downturn in the industry, or the need for our products or services”, or “competitor has a superior product”. In a business scenario, these are things that threaten our success and there’s not a lot we can do about them other than take a good hard look at them and address the parts we may have minimal control over.

But when it comes to stepping back and taking a good long look in the mirror, what are your personal threats? What is keeping you from becoming the best you can be? Do you lack self-motivation, self-esteem or personal vision? Do you ignore known faults and repeat the same mistakes or negative behaviors? Do you need an attitude adjustment? Do you sabotage your own success? Are you able to identify fears that may be holding you back?

It all comes down to how much you really want to succeed; and, it all comes back to you personally. No one is going to hand you a golden ticket – you have to want it, and you have to go out and earn it. The good news is, whatever your personal threats are, you can take the reigns and pave a new and better path any time you are ready and willing.

Use your personal S.W.O.T. analysis as a challenge to let go of the things that are holding you back and hampering your success, and to embrace opportunities that will take you to the places you want to be. You don’t have to go anywhere today… but think about the possibility of tomorrow.

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The Textile Industry – Part III

Thursday, February 19th, 2009
Andy Smith Dicosta asked:




Investment in Indian Textile Industry

The introduction of the special ‘Textile Package’ during the 2003-2004 budgets became the turning point in the history of the Indian Textile Industry. The proposals made in the budget spoke of reforms to be undertaken to attract investment in this industry. The outcome of the budget being: setting up of a fund in accordance with the recommendations of the aforesaid budget with an initial principal amount of Rs.3000 crores. The fund was especially meant for restructuring the textile sector.

Reasons responsible for attracting investors in Indian Textile Industry

• The size of the Indian textile industry is enormous.

• The industry has been doing good since the start of this century

• India’s cheap labor force has been one of the prime drivers of the industry.

• India’s foreign direct investment policies are flexible in comparison to all developing countries.

• 100 percent foreign direct investment permitted in the textile industry

FDI is permitted via automatic route, hence offering a trouble-free way of investment. The investment does not call for approval from the government, or apex body of India. The foreign capitalists, however, have to make a notification to the regional office of the apex body after receiving the receipt of the remittance.

The Ministry of Textiles has launched a special cell for attracting FDI in this sector. Objectives of the special cell for attracting FDI include:

• This cell attempts to help foreign companies find partners intending to float a joint venture company to produce textile products.

• FDI special cell acts as a negotiator between the foreign investors and different organizations for setting up and structuring the textile industry. The cell offers both advisory support and assistance.

• A textile industry set up with the help of a foreign investor might probably lead to some problems in the future. These problems are solved by the FDI cell.

Also FDI cell maintains data with total production of the textile sector. The cell also maintains classified data of production by both domestic as well as by the foreign investor. The sector is targeting US$ 6 billion foreign direct investment (FDI) by 2015 to be invested in textiles machinery, fabric and garment manufacturing, as well as technical textiles.

One of the most remarkable developments took place in the month of July 2007 when Blackstone, an investment management company of USA bought 50.1 stakes of Gokaldas Exports- a local manufacturing company. The stake transfer left the promoters of Gokaldas Exports, the Hindujas with a share amounting to 20 percent.

Even Indian companies are spreading their wings and making investments in a monumental manner. Arvind Mills is constructing two new industrial set ups in Bangalore and Ahmedabad

Globally renowned terry towel producing company called Welspun India Ltd is building a textile plant in the state of Gujarat with the initial capital investment of US$220 million.

The investment climate is becoming better and better day by day, the only hindrance being the constant appreciation of the Indian rupee against the US dollar. As a result the textile industry’s profit margin has considerably plummeted since large quantity of textile product is basically export-oriented.

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Think Local, Act Global

Thursday, January 22nd, 2009
Ange Teo asked:




Any observant professional would have now been aware of the Hong Kong and Shanghai Bank’s advertisements that touted it as “the world’s local bank”. The pictorial display of intimate knowledge of local customs of countries where they operate is very impressive.

Organizations with subsidiaries around the globe know the pitfalls of not observing appropriate behaviour when dealing with the locals of their various markets. Losing their market share without implementing effective measures is one of the unfortunate consequences.

Moreover, it is a common fallacy to presume that all Asians share exact same mentality, practices and religion because they all look the same. Anyone who never interacts with people other than their own naturally makes such assumptions, which will lead to unnecessary stereotyping and prejudices.

Henceforth, it is a company’s responsibility to ensure that their expatriate staff acquire the sensitivity, understanding, knowledge and intelligence before they are tasked to liaise with or work directly with the locals – be they employees, business associates or customers.

It cannot be denied though that there are a few common threads that the various Asian societies share. For example, the hierarchical structure of a typical Asian management which defers to the head of the company – who has the final say in a decision or may be a mere figurehead. Or, the theory of Feng Shui that [almost] every ethnic Chinese and subcontinent North Indian – and increasingly Western – businessman takes to heart.

Thus, it is imperative to know not only what motivates the Asian person from a particular society at work; but also the how’s, why’s and when’s to make an approach to a negotiation. Or even a commitment to honour a contract that may take months to conclude.

Besides the obvious competitive advantage that ultimately leads to market leadership; the Returns on Investments benefit the company in the long run too if they make the effort to recognise and adapt accordingly to different Asian environments.

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Letterheads Change the Complexion of Your Business

Friday, December 5th, 2008
Muqtada Khalid asked:




Today custom size letterhead printing is considered as the best tool for your business or company. It is exercised as an officially authorized document of your company and your business. Therefore, it presents your business identity development worldwide in a cost-effective manner. You will only need to catch a good printing company to accomplish your modern day printing needs in style.

In this modern era of business communication and marketing, they are being broadly utilized by masses of actors including business tycoons, leather industries, printing companies, NGOs, charitable groups, corporate sectors, fashion industries, media hypes, sports industries, film hypes and many more. These organizations are making use of personalized letterheads printing for a wide variety of purposes, such as business proposals, quotations, HR related issues and organizational purchases.

A lot of things are included in these simple types of papers like company’s logo, organization’s name, contact information, phone number, street address, websites address and email address. Therefore, they are considered as lawful documents for your company and your business. Besides, they play a very vital role to provide your business a competitive edge all over the place. Furthermore, they are the cheapest source for perfectly affordable promotion.

It is absolutely vital for all types of businesses as well as companies. It is an instant negotiator of your organization for external world. However you will need to make perfect and eye-catching letterheads printing designs from a reputed printing company so that you might be able to fulfill your modern day business needs in style. Moreover, your chosen printing company will provide you free designing services along with free unlimited revisions according to your requirements.

Last of all, you can get the best quality products due to Full Color CMYK/PMS printing process. In addition, you can go for two types of lamination including glossy as well as matte finishing, and hence you will be able to attain the finest quality products. Then you can decide on linen stock in order to get done your printing requirements in style.

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The Importance Criteria of UNCTAD

Saturday, November 8th, 2008
Kh. Atiar Rahman asked:




There is no denying the fact that, as UNCTAD’s mandate has become multidimensional, so its achievements have therefore been of different kinds. The most significant achievements included. a) the agreement on Generalized System of Preferences(GSP)1971; b) the setting up of the Global System of Trade Preferences among developing Countries(1989); c) negotiation of International Commodity Agreements; d) the establishment of transparent market mechanisms in the form of intergovernmental commodity expert and study groups, involving consumers and producers; e) the negotiation of the Common Fund for Commodities(1989); f) the adoption of the resolution on the retroactive adjustment of terms of Official Development Assistance debt of low-income developing countries; g) the establishment of guidelines for international action in the area of debt rescheduling(1980); h) the Programme of Action for Least Developed Countries for the 1990s and I) the negotiation of convention in the area of maritime transport. In addition to above UNCTAD made some contributions on matters for implementation in other forums. For example, it has contribution in the improvement of the Implementation compensatory facility for export earnings shortfalls of developing countries; the creation of the Special Drawing Rights by IMF; the reduction of commercial bank debt for the highly indebted countries promoted by the World Bank. UNCTAD had also some contribution in the area of code of conduct for the transfer of technology, computerized systems in the area of customs and debt management.

Although for many limitations as I mentioned earlier UNCTAD could not fulfil all expectations but it has tried and still trying with its limited resources to do its work. For the cause of the developing countries the role of UNCTAD should be strengthen. To make it more dynamic and effective some measures should be taken like as follows:

a) The Third World countries should minimize their differences and have to sacrifice their own interest for the sake of other developing countries. It will be easier for UNCTAD to work in a co-operative atmosphere than of conflict.

b) UNCTAD should give emphasis those issues in which it possesses considerable expertise. Here the proposal is not to alter its earlier position, but to focus more strongly on specific matters which are covered little if at all by other organizations. In trade field UNCTAD should give importance on consensus building. As UNCTAD provides a universal forum for policy analysis, so for consensus on trade policy issue it can help to prepare ground for later negotiations within WTO. UNCTAD and WTO should co-operate with each other in the field of international trade. It is encouraging that two organization has already started their co-operation. In their joint meeting held in 8th Oct. 1996 WTO Director General said “the convergence between WTO and UNCTAD was evidenced in regular meetings between the heads of the two organizations, joint research projects, co-ordinated technical assistance and generally a more intense working relationship at all levels of the organizations.” As the main functions of WTO are the implementation and negotiation of contractual trading rules and discipline, there is considerable scope for complementarity between WTO and UNCTAD.The policy analysis and consensus building functions of UNCTAD can make essential contribution to the intergovernmental consideration of trade issues to the point where they can be fruitfully negotiated in WTO.

d) In post cold war economic environment, the need for collective action by the Third World countries to meet the evolving challenges is more important than ever. UNCTAD is the only body in the UN which has some scope to deal with global economic issues from a development perspective. UNCTAD should be equipped for that purpose.

e) UNCTAD’s monitoring and analytical capacities should be increased sufficiently.

f) Its efficiency in the area of foreign investment, technology transfer, competition policy regarding Multinational Corporation should be strengthening.

g) UNCTAD should prepare its answer for Third World country regarding liberalization and regional groupings.

Since it has been reorganized to make it more efficient there is no need to dismantle it. Because it still serves a primary purpose to achieve international co-operation in solving international problems of an economic nature. And UNCTAD is the only organization in the world which gives the impression of being trade and development in an integrated way which is very important.

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Five Clicks Reveal a Best-In-Class Leader is Aboard

Friday, September 12th, 2008
Dr. Gary S. Goodman asked:




Scan my articles and you’ll see I am an ardent baseball fan, and a former player with a highlight reel emblazoned in my memory.

So, I’m especially attuned to noting the impacts changes in team leadership can have on a club, starting with ownership and moving down to the general manager, managerial, and coaching levels.

Typically, I’ve noticed that when a “best in class” leader is introduced and given broad latitude to do-his-or-her-thing, the franchise quickly ascends into a golden era.

We’re witnessing that with the 2009 Los Angeles Dodgers, under skipper Joe Torre.

If there is a Dean of contemporary big-league managers, it’s Mr. Torre. Having led the Yankees to post-season berths 12 years in a row, in 2008, he took a ragtag bag of oldies-but-moldies and newbees, the Dodgers, not to the World Series, but close, losing the National League title to the ultimate global champs, the Philadelphia Phillies.

This year, the Dodgers could go wire-to-wire, occupying first place for nearly an entire season, mostly with the same crew, with some notable veteran improvements.

Torre has had to manage through a reputedly weak pitching staff, the 50 game suspension and scandal surrounding super-hitter Manny Ramirez, and an assortment of early season injuries. Nonetheless, he and his club are cohesive and find ways to win, often in gritty, gutty, 11th hour mini-technics, also known as “small ball.”

Torre helped to turn around a team that had learned to accept defeat and had a fairly unbroken track record of losing for 20 years, since 1988.

How did he do it? He mentions “trust” quite a bit. He compliments his seasoned and talented coaches, and of course he says this club is something special. They’re having fun, but they’re not succumbing to the bi-polar evils that plague most teams: over-confidence and self-downing.

My theory is that you can hear several clicks when we are in a best-in-class leader’s presence, over a protracted period:

(1) We elevate our aspiration level, aiming higher than ever before.
(2) Our self-esteem gets a boost by association. If we’re good enough for him or her, we’re good enough for anyone.
(3) Without our own track record of winning, we have his to lean on. He did it before, and we’ll do it again.
(4) Everything feels different, but in subtle ways. Winning provides a “high,” but celebrating is brief. Losing is unfortunate, but there’s always another game, so let’s look forward.
(5) Optimism is the pervasive outlook. No loss, setback or challenge is ever viewed as permanent, pervasive, and personal, which according to psychologist Martin Seligman, is the signature emotional outlook of losers and pessimists.

My professor, famed management guru Peter F. Drucker, himself a best-in-class thinker, used to say when he walked into a well-run organization it was typically, “dull.” No one was panicking, hastily completing tasks, missing deadlines, distracted or harrowed.

It didn’t have any of the nervous, gee-golly-gosh “start-up” vibrations.

There may be loud music playing in the Dodger clubhouse.

But under that din, you’ll hear those important “clicks” that are the signs that a best-in-class leader is aboard.

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