keld jensen, marketwatch - the dna of negotiation

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24. May 2010

IACCM

©2010 MarketWatch Centre for Negotiation A/S

2©2008 MarketWatch Management A/S

We write what inspires the others…

Management

book of

the yearManagement

book of

the year

Management

book of

the yearManagement

book of

the year

16 books in more than 34 countries

in 14 languages

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The new agenda…After the financial crisis, scandals and recession

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The world seems to be turned upside down…

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Issues

Topics

Mega trends

Back to basicsBack to basics

RecessionRecession

ResponsibilityResponsibilityResponsibility

Cash flowCash flowClimateClimate RegulationRegulation

CredibilityCredibilityCredibility

Financial responsibility

Financial responsibility

IT Factory

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NEGOTIATION

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IRRATIONALITY

NEGOTIATION

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TRUSTIRRATIONALITY

NEGOTIATION

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The lost trust

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©2010 MarketWatch Management A/S 14 14

SellerSeller

PurchaserPurchaser

UnutilisedUnutilised

1/3 of all negotiations fails!

The difficult art of negotiation

©2008 MarketWatch Management A/S 15 15

The true potential - Denmark

€€65.000.000.000.65.000.000.000.--

©2010 MarketWatch Management A/S 16

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Annual negotiations

The price must bereduced from

33 dkk. to 25 dkk!

I can maintain the priceat 33 dkk. per board!

©2010 MarketWatch Management A/S 17

Annual negotiations

What is your total costand how do you use the

board? This is not important!

©2010 MarketWatch Management A/S 18

An installed plaster board costs totally 180 dkk.

The customer knows that the price is 30 dkk.

He does not know how the 150,- are used.

Process

©2010 MarketWatch Management A/S 19

PriceAn installed plaster board costs DKK 180

WasteLarge number of boards are ruined by handling - 40% waste

Working hoursIt demands two workmen to move the boards

HandlingSize makes it more difficult to move them

©2010 MarketWatch Management A/S 20

Board construction in smaller size

Now one worker can handle the board

Solution

Logistic and planning are optimized

Savings pr. board Dkk. 50,00

©2010 MarketWatch Management A/S 21

Buyers max 150.000,-NBA or budget

The sales reps limit 120.000,-

The traditionalNegotiation space

The real negotiation space is veryoften bigger and consists of thetraditional space plus all the added value.

Ca. 42% remainsunused

Identify the real negotiation space

30.000,-

©2010 MarketWatch Management A/S 22

22Den nye rolle som kommunikator, showmaster og leder©2004 MarketWatch Management A/S

”Poor negotiations skills are probably the biggest single cause of major costs and lost

opportunities to any organisation.

And what´s more – most companies do not even see it!”

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Up to 42 % is lost in negotiations due to lack of trust and bad communications!

6 billion € – is the cost of lacking trust between management and employees – annually just in DK!

Agreements based on trust providea 20-40% better income!*

65 billion € are potentially lost every year due to among others lacking trust!

Mistrust doubles the costs by doing business!

Higher trust provides lower unemployment

*Columbias Business School

Cash settlement

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The NaiveThe Naive The confusedThe confused

The AnalysingThe Analysing The SuspiciousThe Suspicious

4 types of trust

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Warning:Be aware of the submissive supplier

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Be humble

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PricebergWhere the true value is hidden

The creation of the potentiel 42 % occurs ”under the surface”

Visible

Invisible

Cost of extra specs

Purchasingadmin.

Specifications

Damaged goods/warranties

Inventory carrying costs

Guarantee and bonds

Renewal

Purchase price

Impact on productivity

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Integrate and implementation

Create the learning culture in the organisation

Secure succesIdentify challenges and posibilities

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BE  POSI IVE

”No pessimists ever discovered the secret of the stars, or sailed to an unchartered land, or opened a new heaven to the human spirit”

Helen Keller