Thursday, December 8, 2022

Drum Screen Control Panel Operation Summary

 

Drum Screen Control Panel Operation Summary :

1)      Panel door Switches : As mounted.

2)      Functional elements: All required MCB, Single Phase Preventer, Indicating lamps, PLC for variable data modification.

3)      Screen Operation :

1)      Manual Mode : After selecting the manual mode on selector switch , press the start/stop button (Green color) which will rotate the screen in Forward direction .Secondly after stopping the motor in forward direction, user can reverse the motor if required by pressing the Green Push Button(Reverse) , which will rotate the screen in reverse direction for 15-20 seconds which is settable on HMI.

**Note: If required the motor in the reverse direction is too stopped with the same start/stop button described above.

2)      Auto mode : The screen starts to rotate after confirming all safety devices like micro switch, emergency ,Overload relays, Supply Voltages, level sensor etc .It rotates till the water level decreases and the delay time is reached which has set on HMI for Auto mode.

3)      Also by some reason if the Water level sensor is not reached its upper level ,still the screen rotates after certain time interval  for the prescribed time set by the user on HMI.

4)      In Auto mode the screen will not reverse in any condition.

4)      Washing Operation:

1)      Manual mode : The washing motor with solenoid valve will start when the screen in manual mode is operated and stops as screen stops . The separate start stop button is given on panel to check the healthy condition of the washing motor. Same when screen rotates in reverse direction.

2)      Auto Mode : As soon as the Screen starts the washing motor starts and stops when screen stops .

3)      Note that washing motor is in synchronizing with the screen motor and works when screen works and stops when screen stops.

All the settable timing is to be set by the user as per the site conditions, operation manuals and safety norms for healthy operation.

Tuesday, August 9, 2022

What’s Your Negotiation Strategy?

 When we advise our clients on negotiations, we often ask them how they intend to formulate a negotiation strategy. Most reply that they’ll do some planning before engaging with their counterparts—for instance, by identifying each side’s best alternative to a negotiated agreement (BATNA) or by researching the other party’s key interests. But beyond that, they feel limited in how well they can prepare. What we hear most often is “It depends on what the other side does.”

Fair enough. For most routine negotiations, a reactive approach is sufficient. When the stakes are low, skilled negotiators can pivot with relative ease from one tactic to another as the opposite side makes moves, and often that’s enough to ensure that the final deal fully captures value for them. But from time to time dealmakers find themselves in complex negotiations with higher stakes. In those situations they require a much more robust approach. Just like business, political, and military leaders, negotiators need a strategic framework that illuminates the key choices they must make to achieve their ultimate objectives.

In the 30 years we’ve spent as advisers on hundreds of negotiations, ranging from agreements to resolve armed conflict to multibillion-dollar commercial deals, we have codified what makes negotiation strategies effective. Negotiators should start developing them well before the initiation of talks, but the process is dynamic and iterative and should continue until the final deal is inked—and in some cases beyond. With well-thought-out strategies, negotiators can suppress the urge to react to counterparts or to make preemptive moves that are based on fears about the other side’s intentions. They’ll be able to prepare for the worst but not trigger it—and to identify the actions most likely to have a significant impact on deal outcomes.

Here are the key strategic principles negotiators should apply to their next complex deal.

Rethink Counterparts

People tend to pursue deals with the obvious parties. If we’re sellers, we search for a buyer; if we’re borrowers, we search for a lender. But we often overlook many others in the ecosystem surrounding the negotiation: our competitors, suppliers, and customers—and their competitors, suppliers, and customers. We need an approach that encompasses all the parties that can and will help us fulfill our objectives.

To devise one, negotiators should answer the following questions:

  1. What business outcomes do we seek through this negotiation?
  2. Who cares about those outcomes?
  3. Who can do something to bring about those outcomes?
  4. How can we engage, directly or indirectly, with parties that share some of our interest in achieving those outcomes?

Consider how the holder of key patents necessary to play movies and music on DVDs sought to prevent low-cost manufacturers in China from infringing on its intellectual property (and competing unfairly with its duly licensed partners). Initially, it tried to negotiate with those manufacturers, but in most cases it was simply ignored. And even when the Chinese manufacturers were successfully challenged and subjected to a legal process, they would simply close shop and then reopen under a different name.

Working backward from the desired outcome (halting sales of infringing products in significant markets), the patent holder realized that although it couldn’t dissuade manufacturers from making unlicensed DVD players, it could persuade large importers and distributors to stop buying and selling those products. By helping the importers and distributors recognize the infringement and intellectual property issues, the patent owner got them on the same side of what would otherwise have been a steep uphill negotiation with the unauthorized manufacturers.

Analyze Counterparts’ Constituencies

In high-stakes negotiations, dealmakers tend to talk about how much power and leverage the other side has, what the other side will or won’t agree to, and how to influence its behavior. While viewing counterparts as if they were one monolithic entity is convenient, that attitude regularly leads to analytical and strategic missteps. (In the realm of international diplomacy, negotiators have traditionally been somewhat more attuned to thinking about how to influence multiple constituencies when forging deals—be it with the Taliban or the old Soviet Union.)

There are often opportunities to change a deal’s scope and achieve better results.

For example, a customer might perceive itself to be at a disadvantage in a negotiation with an important supplier because it represents only a small piece of that supplier’s overall business. A closer look, however, might reveal that it accounts for a fairly large percentage of the business at one of that supplier’s plants or in a specific geographic market for a particular unit. Though the supplier’s corporate leaders might view the customer as insignificant, the plant manager or unit head who depends on it would see it as critical. A corporation isn’t one uniform organization; it’s a federation of businesses. Most often, profits and losses are assessed not only at the enterprise level but by unit, geography, product, and plant. The authority to negotiate contracts is usually (though not always) delegated accordingly. Carefully parsing a counterpart’s constituencies is essential to understanding negotiation leverage.

The supply chain team at a large hospitality and entertainment company took that lesson to heart in negotiations with major beverage suppliers. The team members recognized that bargaining with their sales counterparts over volume discounts would achieve limited value. It was only by broadening the discussion well beyond discounts and the purview of sales that they learned that other stakeholders within their suppliers had much more value to contribute. There were also opportunities to discuss promotional sponsorships at the entertainment company’s venues and events, the strong relationships the beverage suppliers had with performers who could fill those venues, marketing events that the suppliers could host at the entertainment company’s hospitality properties, and more.

Rethink the Deal’s Scope

The vast majority of negotiators take the fundamental scope of a deal as a given. They may consider a limited set of choices—for instance, shorter- versus longer-term deals—but by and large their tactics are guided by a comparison between their BATNA and how close to some preferred outcome they think they can get. As the entertainment company’s example illustrates, however, there are often significant opportunities to change the scope of negotiations and achieve much better results.

Consider a health care firm that was seeking to renegotiate the terms of a major supply contract with a pharmaceutical company. The health care firm needed much more manufacturing capacity from a major plant owned and operated by the pharma company. The pharma company was loath to offer more capacity than the original contract specified, because it anticipated needing to make more of its own products at the same facility in the future. Many creative options were explored, including shared capital investments to increase the plant’s efficiency and output, altered financial terms, and the possibility of a “plant within a plant” operating model. Nonetheless, no solution appeared to meet both sides’ needs.

However, when the scope of the negotiation was increased beyond altering the existing agreement, and both sides stepped back to reevaluate (and share information on) their respective global operations (including plans for building new plants) and growth objectives (and associated capital investment needs), they were able to reach an agreement. The new contract rebalanced production and supply across multiple plants and delivered substantially more value to both parties. The negotiators didn’t expand just the pie; they expanded the entire menu.

Or take the financial services firm that was seeking to renew a contract with a company that owned proprietary data assets and was demanding a hefty price increase. An analysis of the annual report and earnings calls of the data company showed that it was focused on increasing revenue from other products and services—ones the financial services firm was purchasing from several other suppliers. While some of those current suppliers were highly valued partners, and it didn’t make sense to contemplate shifting business away from them, in other cases the financial firm could give the data provider an increase in business in the areas it wanted to build. The firm’s negotiating team offered to do that—but only if the provider agreed to more-reasonable terms on the data it enjoyed a de facto monopoly on.

It’s worth noting how counterintuitive this approach is. When confronted with opposing parties who seem to have more leverage, the natural tendency is to look for ways to weaken that leverage—to find walkaway alternatives and issue threats. Such attempts often come up short or undermine deal success. The lesson here is to offer the other side new opportunities instead of focusing just on the needs that only it can meet for you.

Think about how precedents a deal sets may create anchors in future negotiations.

Sometimes the right strategy is even to reduce the scope of the deal. A classic piece of negotiation advice is to carefully evaluate (and seek to improve) your BATNA. The problem is, in most high-stakes negotiations, there’s really no viable alternative to some deal with the other party. Digging deeper into BATNA analysis is vital in such scenarios. The key is not to simply consider wholesale alternatives to any agreement with a powerful counterpart but rather to explore alternatives to some elements of what you’re seeking through that deal.

About the art: Photographer Jeff Minton captured the salespeople at a car dealership in Levittown, New York, hustling to meet their monthly quotas.

Here’s how that approach worked for a medical device company that felt powerless in its negotiations with a distributor that dominated an important regional market. No other distributor had comparable coverage in the region. After considering expanding the scope of the deal, the device maker instead opted to narrow it. It identified alternative distribution channels for some of its products in some segments of the regional market. Bringing its products to market with a portfolio of smaller distributors would have been prohibitively complex and would have increased costs and reduced revenue. But once the device maker had defined a strategy to narrow the scope of the deal with the incumbent distributor, the negotiations moved to a considerably more even footing.

In fact, the distributor stopped making demands and threats and became willing to engage in a collaborative process. The two sides jointly evaluated where it was especially costly for the distributor to service the device maker (business the distributor was actually happy to give up) and where it would have been most difficult for the device maker to move to alternative distributors. The narrower scope made the distributor willing to reduce some of its requirements (meant to cover the costs of distributing low-margin products in expensive-to-service segments). For the device maker, the cost of agreeing to much of what the distributor was requesting dropped significantly.

Rethink the Nature of Leverage

All too often dealmakers conflate negotiation power with a strong BATNA and the concomitant ability to hurt the other party. Essentially, the message they send is: We don’t need a deal with you, and you need a deal with us, so we get to dictate the terms. Such a mindset leads to pressure tactics. It also makes negotiators who lack attractive walkaway alternatives conclude that they have no power, which in turn causes miscalculations and unwarranted concessions. Moreover, their sense of powerlessness can breed fear and resentment—negative emotions that hamper creative thinking about potential avenues to an optimal outcome.

The solution is think beyond walkaway alternatives and consider multiple sources of not only coercive leverage but also positive leverage. By positive leverage, we mean things negotiators can uniquely offer to make the other side desire a deal rather than fear the absence of one.

Many technology firms have IP teams that seek to persuade consumer electronics companies such as Apple, Sony, and LG to pay for licenses. The negotiation of IP rights in this market is dauntingly complex. Patent infringement is pervasive—though often unintentional. Legitimate efforts to collect royalties are vastly complicated by the well-known phenomenon of patent trolls. As a result, most IP licensing teams struggle to “move up in the queue” for simple consideration by underresourced in-licensing teams, who feel besieged by all the parties claiming the right to royalties—and offering little in return except an agreement not to sue.

The IP licensing team at one well-known tech firm had a strong claims portfolio and compelling market data about the rights that other companies were infringing. The team tried to be creative and flexible, offering to blend payments for past infringement, ongoing royalties, and cross-licenses. However, its BATNA—filing lawsuits against infringers that ignored it—wasn’t strong, because the ability to enforce patent rights and collect damages had been hampered in recent years in many jurisdictions around the world. The firm didn’t have a particularly good track record in court, either. To various consumer electronics companies, it made sense to rebuff the team’s demands. And so they did.

Thinking in binary terms is almost always counterproductive.

By researching the business models and strategies of the electronics companies, the team was able to pinpoint which of its firm’s patented technologies were complementary to important initiatives at each target licensee. Working with the firm’s tech and sales departments, the team then defined value propositions showing each target licensee how it could use the firm’s IP to generate new products or revenue streams. One electronics company, for example, could leverage the tech firm’s sound and imaging IP in elder-care offerings, and another could enhance its device with the firm’s virtual reality expertise. Those opportunities made it worthwhile for the electronics companies to engage in meaningful negotiations with the team. Though this strategy required a lot of time and effort, the payoff was worth it.

Look for Links Across Negotiations

Most negotiators focus exclusively on maximizing the value of the deal at hand. In doing so, they often undermine the success of future negotiations—their own and those of their colleagues. A strategic approach requires considering success beyond the current deal and, in particular, how the precedents it sets will create anchors and shape dynamics in future negotiations. After all, except with pure sales and purchases of assets, most high-stakes business negotiations are repeat transactions undertaken in the context of long-term relationships.

Analyzing links across multiple negotiations can unearth hidden forms of leverage. Consider the case of a global semiconductor company that felt continually squeezed by unreasonable price increases from OEM component suppliers. A major problem was that negotiations over initial licensing or codevelopment of technology for new products were conducted by one group, whereas subsequent contract negotiations (with the same suppliers, but occurring years later) were handled by another group, with relatively little coordination between the two. Meanwhile, negotiations with those suppliers and other third parties for maintenance and repair services and spare parts were handled by yet another group, and all three kinds of negotiations occurred on different timetables.

How to Pressure-Test Your Strategy

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By looking at these separate but related negotiations holistically, the semiconductor company was able to alter the power dynamics. Teams negotiating supply agreements acknowledged that they had little choice but to accept an incumbent supplier’s pricing and terms but were able to point to upcoming product introductions and warn that unreasonable positions held now would most likely exclude suppliers from being considered for next-generation products—and all associated downstream revenue. They also shared data about maintenance and repair revenue streams and their growing ability to redirect such business to partners who demonstrated reasonableness and good faith.

Threats and promises about future business had been made in the past by the company’s negotiators, but they weren’t specific and lacked credibility. Now the benefits of increased cooperation and the potential loss of opportunities were tangible to suppliers—and hence persuasive.

Consider the Impact of Timing and Sequencing

Many people seek to speed up or slow down negotiations to put pressure on the other side and extract concessions. But pressure tactics often backfire. Careful consideration of how the other side is likely to respond should guide when to accelerate, slow down, or pause a negotiation.

Several years ago a small technology company was in negotiations to renew a critical deal with an internet behemoth. The small company depended a lot on the revenue the deal produced, and the thought of going without it for even a short time was frightening. Seeking to pressure the small firm, the behemoth showed little urgency to complete the deal and signaled that it wasn’t sure the contract was worth renewing.

That turned out to be a major miscalculation. Recognizing that it could do little to get the other side to go faster, the small company’s negotiation team decided to make use of the time to build support within the firm’s ecosystem of customers and business partners for the possibility of partnering with one of the behemoth’s giant competitors instead. That time was well spent. As such an alternative went from unimaginable to conceivable to plausible, the smaller firm’s leverage grew. In the end the contract with the behemoth was renewed for a nine-figure value that represented a nearly five-fold increase over the expiring deal. While the passage of time did make the small firm nervous about its dwindling cash reserves, it also gave it the opportunity to substantially alter the landscape in which the negotiation took place.

Choreographing the sequence in which you address issues or engage different players is also important. Resolving some issues may reset the stakes or reframe the remainder of the negotiation.

A good example of strategically rethinking sequence in a negotiation comes from the oil and gas industry. As part of a joint venture deal with a national oil company, one large multinational had agreed that if a particular competitor wanted to add itself to the deal later, it could do so by paying its share of the capital plus interest for the time it hadn’t participated. A few years later that second multinational indeed triggered its option and sought to open negotiations on the rate of interest. Instead of discussing how many points above or below LIBOR would be appropriate, the multinational decided to go back to the oil company and negotiate what further terms should apply to the revised deal. The multinational proposed the principle that a later entrant shouldn’t earn a higher rate of return than the original partners, who had taken a greater risk before the project had proved its value. The oil company readily agreed.

With that matter settled, the multinational turned to the new partner-to-be and demonstrated, using the recently audited books for the joint venture, that the interest owed by an incoming partner would have to be 60% a year, not anything like LIBOR. After some initial shock, the incoming partner agreed.

Five questions can help negotiators strategically manage timing and sequencing:

  1. What changes in the external marketplace might increase or decrease the value or importance of the deal for each party?
  2. To what extent can we use additional time to strengthen our walkaway alternatives?
  3. To what extent can the other side use additional time to strengthen its walkaway alternatives?
  4. How might deals negotiated with other parties affect the scope of the negotiation or create precedents that influence the way we resolve key issues?
  5. What events or changes in the external marketplace might adversely affect the strength of our walkaway alternatives—and the other side’s—or create mutually beneficial opportunities?

Be Creative About the Process and Framing

When approaching a high-stakes deal with a powerful counterpart, many negotiators debate whether to start by issuing their own proposal or by asking the other side to do so. They also often wonder whether they should project strength by asking for aggressive terms in their first offer or counteroffer, or signal a desire for a win-win outcome through more-balanced and reasonable terms. But such binary thinking blinds us to the many ways we might shape the negotiation process to reduce risk and increase the likelihood of a great outcome.

Let’s look at a global health care company that depended on a single supplier to make one of its biggest revenue-generating products. The supplier held numerous patents essential to the manufacturing process, so switching to a different one would have taken years and major investments in redesign. But for many years the supplier had been unwilling to collaborate on improving quality and manufacturing efficiency. As the contract with it neared expiration, the health care company pondered how to open the negotiation for a renewal. Should it demand big price reductions and other improvements? Or should it begin with more-reasonable terms and hope that the supplier responded in kind?

After much debate about the trade-offs, the health care company developed a third approach. Rather than beginning by sending an initial term sheet, it invited the supplier to a prenegotiation summit—a joint discussion of what had worked well, and what hadn’t, for each side under the prior contract and of how the market and each side’s business objectives had changed. This was deemed a low-risk move. The supplier might well decline the offer, but so what? The health care company’s negotiation team would then simply revert to sending an opening term sheet.

How Reactive and Strategic Approaches to Negotiation Differ

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To the surprise of some on the team, the supplier accepted the invitation. During the summit the health care company’s team shared an analysis of the economics and evolving market position of the company’s product. It showed that unless the product’s price fell significantly, new competitive offerings would take substantial market share away from it. That would reduce not only the health care company’s revenue but also the supplier’s. The analysis triggered an animated discussion focused not on bargaining but on joint problem-solving. That in turn led to thinking about how to creatively restructure the way the companies worked together and to a set of principles for negotiating commercial terms in the new contract, including a framework for sharing risks and rewards. The ultimate deal saved the manufacturer tens of millions of dollars but was viewed by the supplier as more favorable than the earlier contract. Both sides agreed that a traditional “offer-counteroffer” negotiation process would at best have yielded a significantly less valuable deal for both—and could easily have resulted in no deal at all.

CONCLUSION

High-stakes negotiations tend to produce a lot of anxiety. This leads dealmakers to focus on (perceived) threats rather than identify all possible forms of leverage and think expansively about options. When that happens, negotiators are more likely to make poor tactical choices, either giving in to pressure from the other side or inadvertently causing their own worst fears to come to pass.

A strategic negotiation approach involves more than choosing a cooperative or competitive posture, and thinking in such binary terms is almost always counterproductive. Assessing connections between one negotiation and others with the same party over time (and even with other parties), taking a hard look at whether they’re negotiating about the right things, and focusing on when and how to most effectively engage with the other side will unlock far more value for dealmakers.

Monday, August 8, 2022

Control the Negotiation Before It Begins

 

Control the Negotiation Before It Begins

 

1. Negotiate Process Before Substance

A couple of years ago, two cofounders of a tech venture walked into a meeting with the CEO of a Fortune 100 company who had agreed to invest $10 million with them. A week earlier, the parties had hammered out the investment amount and valuation, so the meeting was supposed to be celebratory more than anything else. When the cofounders entered the room, they were surprised to see a team of lawyers and bankers. The CEO was also there, but it soon became clear that he was not going to actively participate.

As soon as the cofounders sat down, the bankers on the other side started to renegotiate the deal. The $10 million investment was still on the table, but now they demanded a much lower valuation; in other words, the cofounders would have to give up significantly more equity. Their attempts to explain that an agreement had already been reached were to no avail.

What was going on? Had the cofounders misunderstood the level of commitment in the previous meeting? Had they overlooked steps involved in finalizing the deal? Had the CEO intended to renege all along—or had his team convinced him that the deal could be sweetened?

Upset and confused, the cofounders quickly assessed their options. Accepting the new deal would hurt financially (and psychologically), but they’d get the $10 million in needed funds. On the other hand, doing so would significantly undervalue what they brought to the table. They decided to walk out without a deal. Before they left, they emphasized their strong desire to do a deal on the initial terms and explained that this was a matter of principle as well as economics. Within hours, they were on a plane, not knowing what would happen. A few days later, the CEO called and accepted the original deal.

The gutsy move worked out for the cofounders, but it would have been better not to let things go wrong in the first place. Their mistake was a common one: focusing too much on the substance of the deal and not enough on the process. Substance is the terms that make up the final agreement. Process is how you will get from where you are today to that agreement. My advice to deal makers: Negotiate process before substance.

Consider another scenario. You’ve been negotiating with someone for months. You have a few final concessions that you’ve been holding back—they’re costly but worth making if it will close the deal. With the finish line in sight, you make the concessions, and the other side responds: “This is great. I appreciate your flexibility on these issues. Let me share this with my boss to see what she thinks.” Unfortunately for you, you had no idea your counterpart even had a boss—you thought he was the final decision maker. The negotiations are clearly not over, and you have nothing left to give.

The more clarity and commitment you have regarding the process, the less likely you are to make mistakes on substance. Negotiating process entails discussing and influencing a range of factors that will affect the outcome of the deal. Ask the other party: How much time does your company need to close the deal? Who must be on board? What factors might slow down or speed up the process? Are there key milestones or dates we should be aware of? Remember to find out simple things such as, Who will be in the meeting tomorrow? What will the agenda be? Since we are not going to discuss the issues of importance to us in the next meeting, when will we address them?

Of course, you can’t always get clear answers to every question at the outset—and sometimes it is premature to ask certain questions. But you should seek to clarify and reach agreement on as many process elements as possible—and as early as is appropriate—to avoid stumbling on substance later.

2. Normalize the Process

A businessman who owns multiple manufacturing facilities in Asia once told me that he no longer does business with companies from the West unless their top managers are willing to first fly into his city to meet with him. My initial thoughts were: Is this about ego? Is it about building relationships? Is it a cultural norm or ritual of some sort? Actually, none of those had anything to do with his precondition to signing a contract.

Here’s how he explained it to me: “Until they have flown into my city and then driven to our manufacturing plants—which are located 20 kilometers from the airport but take almost three hours to reach—until they have experienced that, they simply don’t understand how things work around here. And if they don’t understand, we run into serious problems. Because the first time there is a delay or disruption, or if we need to renegotiate something, they will immediately assume we are either incompetent or stealing from them. Once they’ve seen how things actually work, we can have a more productive relationship.”

Unless business partners understand what is “normal” in a given context or culture, they are likely to misunderstand or overreact to adverse events. The same is true in negotiations of all kinds: It is important to normalize the process. If you’ve ever been involved in an ugly conflict that went into mediation, you may have seen this in action. When a good mediator sits down with parties who are in a bitter dispute, she might say something like, “You think you hate each other today? I can assure you, about three days into this process, you’re going to hate each other even more. And when that happens, I want you to remember something: That’s normal.”

Tell counterparts what to expect so they don’t overreact to bumps in the road.

If the mediator does not give this warning, the parties are much more likely to abandon the process when emotions heighten and things seem to be falling apart. But if she explains at the outset that it’s normal for things to get worse before they get better, the parties are more likely to keep at it. By normalizing the process, she effectively manages their expectations.

The same principle applies to any negotiation where there’s a risk that things will not go perfectly smoothly. If you anticipate delays or disruptions on your side, tell your counterparts. This allows you to shape how they will interpret a negative event should one occur and to ensure that they do not overweight its significance. You’ll have a much harder time trying to influence their perceptions or win back their trust after something goes wrong that they did not expect.

Normalizing the process entails discussing, in advance, any factors that might cause the other side to question your intentions or ability or to doubt the likelihood of a successful outcome. You might explain typical barriers that need to be overcome, moments during the process when it’s common for parties to feel anxious or pessimistic, events that might delay progress, and the difference between disruptions that are commonplace and easy to resolve and ones that are more serious.

Encourage the other side to do the same for you. People often hesitate to discuss “what might go wrong,” because they’re focused on presenting themselves and the merits of the deal in the best possible light. This is especially true in certain cultures and in contexts where competition is fierce. Your counterpart might be thinking, “Why should I talk about problems if my rivals are pretending things will be great?”

That’s understandable. If other parties think that mentioning a potential disruption could cost them the business, or that you’ll use it as a lever to extract greater concessions, they’re unlikely to be truthful. To encourage people to be open about problems, make it safe for them. Explain that you are experienced enough to know that every deal and relationship is likely to encounter difficulties and disruptions, and that you want to learn more about the specific risk factors that might play a role in this case. And if you can signal (or commit to) having no intention of holding those factors against them, you have a better chance of reaching an understanding that works for both sides.

3. Map Out the Negotiation Space

Some years ago, a client of mine was preparing to sell his stake in a company that was jointly owned by four entities. The owners had been squabbling for many years; it was clear that the asset would need to be consolidated under one party (or perhaps two who could get along). It was also clear that no one wanted to sell. However, there was little choice in the matter, because one of the owners—Company X—was a much larger company with the power and the clout to push people out. It announced that it would buy out the other three.

My client wanted to wait until Company X had bought out the other two owners before negotiating the sale of his shares. He figured that by being “the last piece of the puzzle,” he would be able to hold out for more money.

When we met to discuss his strategy, I asked him to step back and “map out the negotiation space.” This consists of every party that can affect the negotiation, along with any party that will be affected by the negotiation. In my experience, a strategy that makes perfect sense when you’re thinking bilaterally—that is, about the relationship between any two parties in the negotiation—can suddenly become ineffective or even disastrous when you take a multilateral perspective. I encouraged my client to evaluate the interests, constraints, alternatives, and perspective of all the relevant parties. One of the things we looked at was how much equity each party had and how much of the board each one controlled:

We then focused on the interests of each company: What exactly are their interests in this deal? How would you rank their priorities? The four parties had known one another a long time, and my client did not have any trouble identifying what mattered most to each. Company X, for example, was concerned about three things, and its priorities were as follows: (1) Reputation: It did not want ties with any organization that could hurt its reputation. (2) Control: It wanted ownership only in businesses where it had a majority of board seats, and (3) Money: It would want to pay as little as possible, but this was not as big a concern as reputation and control.

After delving into the perspectives of all parties, we unearthed one more important bit of information: Company A was the least interested in selling and was already putting up a fight that could drag things out.

When we put all these details together, it became clear that the “last piece of the puzzle” strategy would be unwise. Why?

For Company X, control was a higher priority than money. To get control, it needed to buy either my client or Company A—as soon as it made either purchase, it would control more than 50% of the board seats and hence the company (for most decisions). Therefore, if my client were the last to sell, he would be negotiating with Company X after it had control. At that time, my client would be able to get paid only for his 1/6 share of the firm’s equity. But if he were to sell first, at a time when Company A was refusing to sell and was making things difficult for Company X, he could monetize two assets: his shares and his board seat. In other words, the last party to negotiate would have the least leverage and limited opportunities to monetize its assets.

Make sure to consider the perspective of every party that can affect the deal.

In the real world, you’ll never have as complete a picture as you’d like, but you put yourself at further disadvantage if you focus too narrowly on the party on the other side of the table. You have to assess the perspective of all the parties that can influence or are influenced by the deal: Who has the ability to influence the person on the other side of the table? How might the strategy or actions of other parties change your alternatives, for better or worse? How does the deal affect the interests of those who are not at the table? How will this negotiation affect your leverage with future negotiation partners? If multiple parties are involved in the deal, does it make sense to negotiate with them simultaneously or in sequence, together or separately?

Your analysis might suggest a change of strategy—that you should negotiate with a different party first, delay the deal or speed it up, bring others into the room, expand or contract the scope of the deal, and so on.

4. Control the Frame

The outcome of a negotiation depends a great deal on each side’s leverage—the better your outside options are and the more ways you have to reward or coerce the other side, the more likely you are to achieve your objectives. But the psychology of the deal can be just as important.

In my experience, the frame, or psychological lens, through which the parties view the negotiation has a significant effect on where they end up. Are the parties treating the interaction as a problem-solving exercise or as a battle to be won? Are they looking at it as a meeting of equals, or do they perceive a difference in status? Are they focused on the long term or the short term? Are concessions expected, or are they seen as signs of weakness?

Effective negotiators will seek to control or adjust the frame early in the process—ideally, before the substance of the deal is even discussed. Here are three elements of framing that negotiators would be wise to consider.

Value versus price.

I’ve worked with many technology companies whose innovative products provide tremendous value for customers but are priced significantly higher than what their competitors are charging—or what customers are paying for their legacy systems. While the high price is justified by the value proposition, salespeople often face immediate resistance when a potential customer learns that the cost will be five or 10 times the amount he is currently paying. Too often, the salesperson will hear something like: “You are charging five times what others charge. No one pays that much for this kind of thing!”

From the outset, control the lens through which parties view the negotiation.

One of the most common mistakes salespeople make in those situations—without even realizing it—is to apologize for having a high price. They do this when they say “I understand it’s pricey, but…” or when they hastily signal a willingness to adjust the price. My advice: Always justify your offer, but never apologize for it. When you apologize, you signal that even you don’t think the price is appropriate, and you give the other side license to haggle. The entire frame of the negotiation becomes about price, when what you really want to discuss is value.

A better response would be, “What you seem to be asking is, How is it that despite a higher price, we still have a long and growing list of customers? We both know that no one will pay more for something than it’s worth, so let’s discuss the value we bring so that you can decide what’s best for you.”

In negotiations of all kinds, the sooner you can shift the discussion away from the cost to your counterpart and focus on the value you bring to the table, the more likely it is that you will be able to monetize that value.

Your alternatives versus theirs.

Research and experience suggest that people who walk into a negotiation consumed by the question “what will happen to me if there is no deal?” get worse outcomes than those who focus on what would happen to the other side if there’s no deal. When you are overly concerned with your own alternatives, and especially when your outside options are weak, you think in terms of “what will it take (at a minimum) to get them to say yes?” When you make the negotiation about what happens to them if there is no deal, you shift the frame to the unique value you offer, and it becomes easier to justify why you deserve a good deal.

Equality versus dominance.

Not so long ago I was consulting on a strategic deal in which our side was a small, early-stage company and the other was a large multinational. One of the most important things we did throughout the process—and especially at the outset—was make sure the difference in company size did not frame the negotiation. I told our team, “These folks negotiate with two kinds of companies—those they consider their equals and those they think should feel lucky just to be at the table with them. And they treat the two kinds very differently, regardless of what they bring to the table.” Over the years, I’ve seen many large organizations impose demands on their perceived inferiors that they’d never require from those they considered equals. In this negotiation, I wanted to make sure our counterpart treated us like equals.

To keep the dominance frame from taking hold, we started shaping expectations and perceptions at the very beginning, before we even considered the economics of the deal. For example, any time our counterpart made a procedural demand—however small—that we felt they would not have made of an equal, we respectfully pushed back on it. Any time they included a provision in the term sheet that seemed one-sided, even if it would not have been a costly concession, we redrafted it to be symmetrical. And throughout the negotiation, we made sure they understood that although our firm was much smaller, we were equals in this negotiation because of the tremendous value we offered. While I am not an advocate of nitpicking on minor issues, in this case we did so intentionally to help set the right frame.

Negotiators can shape the frame in countless other ways and on many other dimensions. At the very least, you want to ensure that the psychological lens that takes hold respects the value you bring to the table.

In The Art Of War, Sun Tzu posits that every war is won or lost before it even begins. There is truth to this sentiment in most strategic interactions. While it would be unwise for negotiators to minimize the importance of carefully managing the substance of a deal, they should make every effort to avoid the mistakes that can occur before anyone has even formulated an offer. By paying attention to the four factors discussed here, you increase your chances of creating more-productive interactions and achieving more-profitable outcomes.

Thursday, August 4, 2022

List of Developing Countries A Mandatory Reference for ADS Chapter 310

 List of Developing Countries A Mandatory Reference for ADS Chapter 310

                                                                

                                                                                                            New Edition: 02/06/2012

                                                                                                            Responsible Office: GC

                                                                                                            File Name: 310maa_020612

                                                                                                            02/06/2012New Edition


                                        Low income/lower middle income

Afghanistan

Gambia, The

Myanmar

Bangladesh

Guinea

Nepal

Benin

Guinea-Bisau

Niger

Burkina Faso

Haiti

Rwanda

Burundi

Kenya

Sierra Leone

Cambodia

Korea, Dem Rep.

Somalia

Central African Republic

Kyrgyz Republic

Tajikistan

Chad

Liberia

Tanzania

Comoros

Madagascar

Togo

Congo, Dem. Rep

Malawi

Uganda

Eritrea

Mali

Zimbabwe

Ethiopia

Mozambique

Angola

India

São Tomé and Principe

Armenia

Iraq

Senegal

Belize

Kiribati

Solomon Islands

Bhutan

Kosovo

Sri Lanka

Bolivia

Lao PDR

Sudan

Cameroon

Lesotho

Swaziland

Cape Verde

Marshall Islands

Syrian Arab Republic

Congo, Rep.

Mauritania

Timor-Leste

Côte d'Ivoire

Micronesia, Fed. Sts.

Tonga

Djibouti

Moldova

Turkmenistan

Egypt, Arab Rep.

Mongolia

Tuvalu

El Salvador

Morocco

Ukraine

Fiji

Nicaragua

Uzbekistan

Georgia

Nigeria

Vanuatu

Ghana

Pakistan

Vietnam

Guatemala

Papua New Guinea

West Bank and Gaza

Guyana

Paraguay

Yemen, Rep.

Honduras

Philippines

Zambia

Indonesia

Samoa


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