HND UNIT 44 - unit 44 pitching and negotiation skills PDF

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unit 44 pitching and negotiation skills ...

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“Introduction - In this unit I am going to be giving a comprehensive overview of the essential pitching and negotiation skills required to win new contracts on agreeable terms. The skills needed to do this are essential for managing and running a small business or being part of a dynamic and innovative workforce. By having good pitching skills for new products or services, it will allow you to generate sales and networking opportunities, while also being able to negotiate with different people and in different business transactions that will secure more favourable deals” P1 - determine what negotiation is and why it occurs and who the stakeholders are during a negotiation process. Negotiation “Negotiation is an activity between two or more parties who face divergence in interest and understanding that they are interdependent, look for an alternative arrangement aiming at eliminating their divergence and thus creating. It is known to be a positive process which helps to resolve conflicts between people in an organisation (Ting Toomey, 2015). Being able to negotiate will allow both parties to reach a final agreement. Once a final agreement is made, the duty and roles of each party would be allocated to them. An individual must have enough knowledge and skills in order to carry out a negotiation between parties ”. In the context of business organisations, “this process is imperative to be creative in any business process, especially the selling process. Business negotiations are often done for the purpose of deal making, corporate team building, entering into contracts, business acquisitions, vendor pricing and sales, real estate leases etc. A successful business negotiation was carried out between the Walt Disney Company and Lucasfilms where after negotiating and bargaining for one and a half years, Disney finally acquired Lucasfilms ”. “Business negotiations are often carried out with the objective of resolving points of difference and to gain competitive advantage for individuals or collective relevance. Also, it is conducted to derive successful outcomes for the interest of parties involved in the negotiation. This process is often carried out when one party puts forward an opinion relating to the importance of collaboration and then offering a position and making concessions to arrive at the achievement of agreement. The extent to which the negotiation parties put trust and believe in each other to execute the negotiation process defines whether the negotiation is successful or not”. “The acquisition of Lucas films by DISNEY made the company a leader in animation and superhero films, they were also able to generate huge revenue from already lucrative star wars media and merchandising empire of lucas films. To carry out a successful negotiation, there are various skills that should be present in a negotiator”. “Effective negotiators must have analytical skills to understand a problem and determine the interest of each party. Successful negotiators p0sses good

listening skills to hear the other party during a debate also it is imperative that a negotiator keeps control over their emotions as sometimes negotiation may not yield the desired outcomes”. “In the context of acquisition by Disney, the company gave Lucas films a period of 1.5 years so that Lucas films can gain trust within Disney. Robert IGER, chairman of Walt Disney possessed tactical skills which resulted in bolstering the status of enterprise as the leader of animation and superhero films” Stakeholders “are known to be individuals, groups or institutions who possess an interest or are directly/indirectly affected by the outcome of any event. Key stakeholders are those who can significantly influence or are important for the success of an event”. “During negotiation, key stakeholders are the parties involved in the process of bargaining and then mutually coming together to an agreement. They are the people who are responsible for carrying out the process of negotiation by communicating needs of entering into an agreement and the probable outcomes that are expected to take place as a result of negotiation”. P2 - evaluate the key steps and information for negotiation and generating deal

“When a negotiation is carried out between two or more parties, they have to make certain choices in order to directly affect the outcome of the negotiation process. To derive a favourable outcome, it is important to ascertain and understand the process of negotiation”. “The success of negotiation depends upon the planning and preparations done for the process. These may involve well defined strategies and tactics to execute the process from the stages involved beginning from planning to closure”.

The 5 stages of negotiation are mentioned and explained below: -

Prepare : “negotiation preparation is a vital first stage of the negotiating process. To prepare, both sides of the discussion, identify any possible trade offs, determine your most desired and least desired possible outcomes. Then you will have to make a list of what concessions you are willing to put on the bargaining table, understand who in your organisation has the decision making power, know the relationship that you want to build or maintain with the other party and prepare your BATNA. (best alternative to a negotiated agreement). Preparation can also include the definition of the ground rules such as determining where, when, with whom and under what time constraints the negotiations will take place”.

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Exchange information : “both parties will then exchange their initial positions. Each side should be allowed to share their underlying interests and concerns uninterrupted, including what they aim to receive at the end of the negotiation and why they feel the way they do ”.

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Clarify : “During the clarification step, both sides continue the discussion that they began when exchanging information by justifying and bolstering their claims. If one side disagrees with something the other side is saying, they should discuss that disagreement in calm terms to reach a point of understanding”.

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Bargain and problem solve : “This step is the meat of the process of negotiation, during which both sides begin a give-and-take. After the initial first offer, each negotiating party should propose different counteroffers for the problem, all the while making and managing their concessions”. “During the bargaining process, keep your emotions in check; the best negotiators use strong verbal communication skills (active listening and calm feedback; in face-to-face negotiation, this also includes body language). The goal of this step is to emerge with a win-win outcome—a positive course of action”

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Conclude and implement : “Once an acceptable solution has been agreed upon, both sides should thank each other for the discussion, no matter the outcome of the negotiation; successful negotiations are all about creating and maintaining good long-term relationships. Then they should outline the expectations of each party and ensure that the compromise will be implemented effectively. This step often includes a written contract and a follow-up to confirm the implementation is going smoothly”

The importance of key individuals in a negotiation and their roles and responsibilities: Leader : “the leader has to coordinate the actions of the team and provide the main face of the negotiating team. The leader may be a senior person who has

the authority to make decisions. There can be a risk in this, however when the person is not experienced in team negotiation and may make elementary mistakes, that could cost their organisation a great deal”. Critic : “the critic is known to be the bad cop of the team. They are always looking for flaws and problems. The role is helpful for avoiding problems like complacency and antagonism where the team moves away from an effective way of working together or with the opposing team. A verbal critic in a negotiation room can be useful for giving a focus for the opposing team's frustration. It also frees up the leader or related to build relationships without having to cope with criticism”. Relater : “the relater is known to be the friendly face of the team. They build relationships with individuals in the opposing team and may gain useful information through this. They also act to intervene when there is conflict between personalities and can act as mediator or another supporting role. The relater mainly focuses on relationships, however they may use the relationship bridge to talk about aspects of the deal”. Expert : “experts may be rolled in and out of the negotiation to provide particular evidence or assessments in key areas, for example, technology or law etc. typically they do not do any direct negotiation but they give information and answer questions. When they are not there permanently, they need to be briefed before they enter the negotiating room so their comments can be adjusted to align with the position of their team” Recorder : “the recorder takes notes of what is said. In particular they note what people are requesting and what offers are made. While they may occasionally ask questions to ensure they take accurate notes, they are mostly silent. This can let them act as another observer and they may make side notes they can bring up with the leader or team later” Builder : “the builder is the person who creates the deals, putting together packages of the things to exchange for other packages to return. They may also have a financial role where they assess the cost and value of items being exchanged. Often in negotiations, people overvalue what they offer and undervalue what they might receive. The builder seeks the truth of such positions and provides the leader with facts to enable a sound decision”

RFP explanation and its steps: “An RFP is known to be a formal request in which the issuer asks vendors to submit proposals demonstrating how a product or service they offer can address one or more of the issuers key business needs. RFP’s have played a crucial role in businesses for many years” “It is a proposal plan or is a type of bidding solicitation in which companies

announce their funding available for a particular program or a project” 1. Gathering RFP requirements “A successful RFP leads to a partnership. With the goal of finding the best partner in mind, it’s important to provide vendors the background and context to understand the business’s needs. This ensures vendors develop an understanding and are empowered to respond appropriately” “The RFP should inform vendors about the problems the issuer hopes to address. Certainly, it’s in the issuer’s best interest to make this document as clear as possible. The more information provided, the more accurate and useful the proposals will be” 2. Crafting your RFP “Every RFP has questions. While some have a dozen questions, others may have hundreds. To simplify evaluation, it is helpful to keep the number of RFP questions as low as possible. Not only do shorter RFPs make selecting the right vendor much more simple, it will also increase the on-time completion and prevent helpful vendors from declining to respond” “Using the information you gathered from stakeholders, begin crafting questions. For essential requirements, phrasing questions in a yes or no format can help quickly eliminate unqualified or underqualified suppliers. On the other hand, if you’re seeking a partner with a deep understanding of your industry and needs, open text answers can encourage suppliers to share their creativity and vision” 3. Conducting the initial evaluation “After vendors have submitted their proposals, the RFP issuer can begin a preliminary evaluation. During this stage, the issuer will identify a subset of vendors who are most qualified to address their needs. This subset is known as a shortlist” 3 steps to select your shortlist: ● “Compare critical factors to vendor strengths” ● “Eliminate vendors who are not qualified or cannot compete” ● “Identify differentiation factors for an in-depth comparison”

4. Following up with shortlisted vendors “Once the RFP issuer has determined which vendors made the shortlist, they can begin a more in-depth evaluation. Vendors should be able to show how their offerings differ from the rest of the competition. By this point, the issuers’ needs

and concerns should be clear, providing an opportunity for targeted messaging” 5. Making your final selection “At this stage, the RFP issuer should have a thorough understanding of what each vendor has to offer. Now, it’s time to decide which solution will best address their needs. To properly evaluate vendors, the issuer should compare each vendor side by side. This often involves a strategic scoring process, where sections or individual questions which represent the areas of biggest concern are valued most heavily”

6. Creating and completing the contract “Once the issuer selects a vendor, it’s time to document the decision, as well as the go-forward process”. This should include: ● “Providing the RFP results to the legal department” ● “Drafting a statement of work (SOW) from responses gathered” ● “Including performance metrics and review process in the contract” “The SOW should be as detailed as possible as it defines how the RFP issuer and selected vendor will work together. This is why it’s important to include performance metrics and the method of review. These key elements ultimately inform the vendor of what’s expected of them and protect the RFP issuer in the event that the agreed upon expectations are not met” The contracting process : “All business agreements should be finalised with a contract. To mitigate any risk in those agreements and create strategic relationships, contracts should be managed through seven steps”. “Contract management has taken a bigger role in day to day tasks as businesses work towards increasing productivity without increasing their employee numbers. As the amount of contracts in business transactions grow, it is imperative that contracts save time, not consume more of it. By having a comprehensive understanding of the contract management process, it can minimize time spent working on administrative tasks and maximize strategy to accelerate and automate the deal”. Stage one : contract preparation : -

“It is important to be organised and prepared with the right resources. Properly identifying the needs, reasons and ultimate goals that require a contract makes any decision down the line much easier. Contracts should

seek to define and mitigate risk in a relationship” For example - “the terms of an agreement within a contract should address what happens if the client flies for bankruptcy, goes out of business or sells the company, along with any other contingencies that may arise”. “Once the reasons for creating a contract are fully established, it is then time to begin drafting the contract” -

Stage two : author the contract : “When authoring the terms of a contract, it is important to pay attention to specific wording. Any ambiguity leaves contracts up for interpretation. State and country laws will need to be taken into consideration especially if the two parties are in different locations” Stage three : negotiate the contract : “Negotiation should begin with transparency and trust. Anticipating and researching the other party’s needs before the conversation simplifies the process and creates a strong foundation for a lasting relationship” “It is easier to use a contract management platform so that both parties can view the working document to make changes and collaborate in real time. Email and offline documents can be confusing and cause costly mistakes, but by using a single source of trust for conversations and contracts will result in quicker negotiations and a contract that provides visibility for both sides” Stage four : approval before finalising : “After negotiations are complete and both parties agree, next comes approval. In larger companies that need manager approval or have audit procedures, all the requirements for approval will need to be met before finalizing the deal. For example, if a company has specific procurement policies, they will need to be met prior to gaining approval for the contract. In a contract management platform, this is as simple as setting up an approval workflow so that whoever needs to approve the contract receives a notification and can view, edit, and comment on the contract in real time” Stage five : execute the contract : “Signing the contract should be the simplest part. At this stage, both parties agree, the wording is right, and the next step is making it official. However many businesses make agreements across the globe, and getting signatures isn't as straightforward as meeting in person. Especially if deadlines are tight and time zones and incompatible, overnight mail or even mail may not be the best way to get signatures faster. A legally binding online signature can solve all these problems and allow both businesses to move faster”...