Entrepreneurship 101: Negotiations
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Transcript of Entrepreneurship 101: Negotiations
It’s Negotiable:It’s Negotiable:A Guide for EntrepreneursA Guide for Entrepreneurs
Michael Erdle,Managing Partner
IntroductionIntroduction
Negotiation Problems and OpportunitiesNegotiation Case Studies
Research Collaborations Business Partnerships Technology Licensing
Dispute Resolution
What is Negotiation?What is Negotiation?Everything is negotiated.
Family and personal • “Where should we go for lunch?”• “Can I borrow the car?”
Academic research• “Fund my project.” • “Publish my paper.”
Business ventures• “I want a raise.”• “Invest in my company.”• “Pay me a license fee or I’ll sue you.”
Negotiation GoalsNegotiation Goals
Distributing Value vs. Creating Value Opportunistic Problem-solving
Identify Issues Consider Interests
Mutual Complementary Conflicting
Negotiation StylesNegotiation Styles
Assertiveness vs. EmpathyThree common negotiation styles:
Competitive Accommodating Avoidance
Effective negotiator is both assertive and empathetic.
Effective NegotiationEffective Negotiation
Interests vs. Positions “Needs” vs. “wants”
“Separate the Person from the Problem.” Soft on the person Hard on the problem
Consider other Options
NegotiationNegotiation
Use Objective AlternativesLook for a “win-win” solutionDetermine BATNA
Best Alternative to Negotiated Agreement
Negotiation TrapsNegotiation Traps
Classic “Hard Bargaining” Ploys Extreme claims, small concessions “Take or leave it.” Unreciprocated offers Threats and warnings Attacking the alternatives Good cop, bad cop
Ways to Respond Ways to Respond
Extreme claims, small concessions Tit for Tat – make equally small concessions
“Take or leave it.” Make a counter offer Offer an alternative Don’t be afraid to walk away.
Ways to Respond Ways to Respond
Unreciprocated offers Don’t negotiate against yourself. Wait for a counter offer.
Threats and warnings Don’t make a counter-treat. Challenge the underlying assumptions .
Ways to Respond Ways to Respond
Attacking the alternatives Ask for an explanation. “Why do you have a problem with…?”
Good cop, bad cop Negotiate with the boss. Use the “good cop” to your advantage.
Case StudiesCase Studies
Research Projects
Business Partnerships
Technology Licensing
Research ProjectsResearch Projects
Academic Interests Publication
Collaboration
Increase knowledge
Obtain funding
Commercial Interests Confidentiality
Exclusivity
Develop product
Generate revenue and
profits
Business PartnershipsBusiness Partnerships
“Senior” partner Expand the business
Maintain reputation
Short-term focus
“Junior” partner Expand the business
Build reputation
Long-term focus
Technology LicensingTechnology Licensing
Licensor Access to markets
Guaranteed revenue
Minimum continuing
obligations
Low risk
Licensee Access to technology
Low up-front cost
Guaranteed continuing
support
Low risk
Negotiation SkillsNegotiation Skills
Listening Develop “active listening”.
Understanding Understand the other person’s perspective.
Flexibility Be open to other options.
Pragmatism Be ready to accept the best available option.
Dispute ResolutionDispute Resolution
Mediation
Negotiation
Arbitration or Litigation
MediationMediation
Interest-based Mediation Mediator is a facilitator Focus on interests, not legal rights or
obligations Options for creative solutions
Evaluative Mediation Neutral evaluation Based on legal rights & obligations
MediationMediation
Qualities of a successful mediator Negotiation & mediation process skills Subject area knowledge Lets parties make key decisions Creative approach to the problem Patience
ResourcesResources
Cohen: You Can Negotiate Anything, Bantam, 1980
Fischer, Ury and Patton: Getting to Yes, Penguin, 1991
Ury: Getting Past No, Bantam, 1993Mnookin, Peppet and Tulumello: Beyond
Winning, Harvard University Press, 2000
Questions?Questions?