One of the fundamental rules of negotiating is to ensure that you know the real value of your concession before offering it conditionally. So before making a proposal, it is wise to know all the values in play, know all the priorities that need to be addressed, and sensitive to those of one's partners. Additionally, know the level of risk. If it can go wrong it will! If you are going to make a generous offer, then make sure that the conditions match it.
The problem in today's highly dangerous climate is that there are so many “unknowns” to consider; so much that we know that we don't know - that it is high risk to throw one's money around without a clear grasp of how complexity works and what might be the consequences of a hasty gesture. You only get to spend your money once – spend it wisely – but only when you know all the risks and have a very clear – crystal clear – view of the impact of the investment. Will it really have the affect you anticipate? Does the market share your opinion and your analysis?
This is no time for grand gestures. There is nothing new about today's problems, it is just a bigger mess than usual.
This blog provides tips and commentary on negotiations and negotiating issues. Please feel welcome to add your own comments.
Friday, October 10, 2008
Tuesday, October 07, 2008
Strategy defeats Objective.
“We will do whatever is necessary?”
The objective of these words is probably to calm the worries of all of us with deposits in banks. It is also to be heard as a sign that someone is on the case - appearing to be in action. The reality of the phrase is to signal that there is not a clear idea of what needs to be done at this point in time. Blanket phrases often deliver the opposite message to the one intended. Instead of confidence, it develops worry. Instead of calm it generates genuine concern. It demonstrates that something has to be done, but not sure what. Worse, there is a message of knee jerk responses – reactive not proactive – not thought through – waiting for someone else to take a lead.
But the problem of strategy clouding objective is one reason why the current economic situation has developed. The Banks wanted to grow their profits, the Directors of Banks wanted to see their share prices rise and their own ability to earn bonuses be certain. However, the real objective of a bank is to offer a secure and safe deposit for other people’s money. Allow the bank to use it in a responsible way in return for reasonable interest and security. The covenant between the banks and the community they serve is one of security – it appears they have forgotten this, blinded by greed.
The opportunity for considerable profit from financial instruments developed by mathematical wiz kids proved too much. This is the very old – age old – problem of being deal struck and greed struck. The salesman already spending his bonus before the deal is done. The deal being done for personal gain – never mind implementation and delivery (that’s someone else’s problem). No management control, no focus on critical objectives (security) and a belief that someone will bail me out. No responsibility – no integrity. "I was only following orders."
The objective of these words is probably to calm the worries of all of us with deposits in banks. It is also to be heard as a sign that someone is on the case - appearing to be in action. The reality of the phrase is to signal that there is not a clear idea of what needs to be done at this point in time. Blanket phrases often deliver the opposite message to the one intended. Instead of confidence, it develops worry. Instead of calm it generates genuine concern. It demonstrates that something has to be done, but not sure what. Worse, there is a message of knee jerk responses – reactive not proactive – not thought through – waiting for someone else to take a lead.
But the problem of strategy clouding objective is one reason why the current economic situation has developed. The Banks wanted to grow their profits, the Directors of Banks wanted to see their share prices rise and their own ability to earn bonuses be certain. However, the real objective of a bank is to offer a secure and safe deposit for other people’s money. Allow the bank to use it in a responsible way in return for reasonable interest and security. The covenant between the banks and the community they serve is one of security – it appears they have forgotten this, blinded by greed.
The opportunity for considerable profit from financial instruments developed by mathematical wiz kids proved too much. This is the very old – age old – problem of being deal struck and greed struck. The salesman already spending his bonus before the deal is done. The deal being done for personal gain – never mind implementation and delivery (that’s someone else’s problem). No management control, no focus on critical objectives (security) and a belief that someone will bail me out. No responsibility – no integrity. "I was only following orders."
Monday, May 12, 2008
Welcome to Scott Roberts Negotiating
Hello and welcome to all of you who are interested in professional negotiating.
The intention of this site is for us to be able to exchange views and ideas amongst our growing community of negotiators. It is also a good medium through which to update members about developments and events at ScottRoberts Negotiating
As a group of interested practitioners, we will also comment about some of the more significant negotiations on-going in the world; negotiations which will or might impact on us all.
Feel free to use this site, and to build it into your own personal development schedule.
Best Wishes and Good Negotiating
Mike Roberts
Founder & Partner - ScottRoberts & Associates
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