We all want to walk away from our negotiations with more value, but for that to happen we’ve got to rethink and reapply a kind of negotiation training that can get us there. Keld Jensen is at the forefront of a movement to rebuild negotiation training from the ground up, starting with a mindset that moves away from the Zero-Sum game that most of us have been taught and toward an approach that adds value to every negotiation for both parties. You will enjoy hearing Keld’s perspective and hearing why he believes that most negotiations can end with up to 40% more value being realized. Does that have your attention? Listen to this great conversation.
Outline of This Episode
- [2:01] Keld’s background in negotiation
- [4:05] Why today’s negotiation training is only providing hacks, not innovation
- [6:10] How to help others see that we need to improve when it comes to negotiation?
- [10:50] Smartnership: What is it?
- [12:48] We lose up to 40% of the value in any given negotiation.
- [17:59] “Getting to Yes” was a failure (says Keld)
- [19:40] Changing the mindset behind negotiation
- [22:48] What must be done to change the mindset behind negotiations broadly?
Couldn’t we negotiate in a better way?
The old school way most of us have been trained to negotiate is in what is known as a “Zero-Sum” approach. The questions being asked on both sides of the negotiation table are:
- How can I win?
- How can I walk away with more than the other side?
- How can I win faster?
It’s not that these questions are irrelevant, it’s that they are short-sighted. They focus only on the outcomes for one side of the equation. When this approach is taken, the subject of value is missed most of the time. In short, it’s an approach that is leaving money on the table — and has been for years.
Keld suggests that we need to rethink the way we negotiate, that we need to de-program ourselves so that we can move away from the “Zero-Sum” stalemate and engage in negotiations where both sides are rewarded. Listen to hear how he proposes we do that, and why it’s so important.
Sit down and discuss how you’re going to negotiate before you start negotiating
In most negotiations, we walk in blind, not sure what the other part is after, how they are attempt getting it, or how we are going to respond. But Keld says there’s no reason for such ignorance. His solution? Arrange a meeting with the opposing party before the negotiation where your stated purpose is to discuss how you’re going to negotiate. What are the issues you need to discuss? Who will go first? What are the concerns of both sides? Where is the value in the deal that can benefit both sides of the table? This pre-negotiation negotiation can open the door to trust and optimism about the negotiation process and make your negotiating sessions more profitable.
Are your agreements taking value or adding value?
Keld says that up to 40% of the value in most negotiations is being lost. Worse, it’s never even being discovered. He says this happens because negotiators approach the conversation with too few variables in mind. The common variables that are obvious in negotiations are time, price, delivery, right of return, and warranty. There is only so much you can do with those when in reality there may be from 15 to 25 variables that are relevant to that negotiation. Those “mystery” variables need to be identified and included in the conversation. When they are in the mix there is a great deal more flexibility and opportunity for both sides.
Next, identify your cost and value per variable, then — and here’s the unthinkable part — share that information with your counterpart as long as your counterpart is willing to do the same. This is what enables both sides to understand the needs on both sides of the table and address them in ways that make a different to the outcome.
A new mindset is needed if negotiation training is going to change
Keld proposes a new approach to negotiations, one where both parties can honestly say the following to each other…
“I’m here today to help you reduce costs, reduce liabilities, and improve your profit. Would you be interested in that? That’s great. In light of that, I see your role today as helping me reduce my costs, reduce my liabilities, and improve my profit. Neither of us is here to steal or take from the other, we’re here to help each other.”
For that approach to be a reality, trust must be built. Keld says that contrary to the opinion of some of his critics, that kind of trust can be built quickly if you have the foundation in order. What is that foundation?
- You have negotiated on how to negotiate
- You have defined a strategy with your counterpart
- You have a focus on trust and openness
- You have a focus on adding value, and
- You have an agreement with your counterpart about the rules of the game
Keld’s perspective will challenge you and make you rethink the negotiation training you’ve received, and that’s exactly what he wants. Listen to his approach with an open mind. He only wants you and those you negotiate with to experience all the value possible from your agreements.
Resources & People Mentioned
Attend ProcureConWest – Use PIW19NN to get 25% off your registration
- Thunderbird School of Global Management (at Arizona State University)
- BOOK: Getting To Yes
Connect with Keld Jensen
- Keld Jensen’s website
- www.SmartnershipNegotiation.com – Keld’s 90-hour program for negotiation training
- Keld’s Amazon Author page
- Follow Keld on LinkedIn
- Follow Keld on Twitter: @Keld_Jensen
Connect With Mark
- Follow Negotiations Ninja on Twitter: @NegotiationPod
- Connect with Mark on LinkedIn
- Follow Negotiations Ninja on LinkedIn
- Connect on Instagram: @NegotiationPod