Viacom’s attempt to Position vs. Music Industry

On 02/16/2010, In Case Studies, Hard Bargaining, Negotiation Basics, Negotiation Strategy, By Andrew Boughton

February 12th Philippe Dauman, Viacmon’s president and CEO, issued the following statment:

As we go forward, we are continuing to focus more on software than hardware, looking to reduce the cost structure associated with Rock Band, being selective in the music titles that we choose for Rock Band based on their cost. The music industry will assist with this category to make sure that it can continue on a profitable basis in the future and then finally we think we have the best games in the category, we’ll continue to rollout exciting products.

An obvious signal to the Music Industry as he begins the negotiation by creating his position through the media.  It is even more effective when followed by a letter/email/phone call to each company with his offer.  Effective positioning helps to shift the frame of reference before the negotiation technically begins.  Philippe is preparing the industry to receive his demands. To truly shift their expectations you need to deliver an offer, effectively dropping an anchor.

The Music Industry would be wise to attempt to shift the focus back onto their position with a preemptive strike.  Instead of allowing Viacom to open the discussions with some ridiculous offer like 50%, they need to provide an anchor of their own to begin the discussions around their position.  By opening first the initial expectation is set.  This is definitely shaping up into a classic Hard Bargaining negotiation.  I’ll keep my eye on any developments.  What do you think?

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How to Negotiate Your Salary

On 01/15/2010, In Hard Bargaining, High Dependency, Negotiation Basics, By Andrew Boughton

Salary negotiations are a bit of an enigma.  They have all of the elements of a Hard Bargaining situation:

  1. Limited variables
  2. Price is the main focal point (Salary)
  3. There are usually multiple applicants vying for the same position

Yet a salary negotiation also consists of elements of a High Dependency situation:

  1. Focus is on long-term gain and results
  2. Both parties are dependent upon each other
  3. Trust and relationship play a critical role in the negotiation

There is no ONE way to negotiate a salary; each situation will vary depending upon the circumstance surrounding the negotiation.  I’m going to first look at a situation where the applicant is a new hire from outside the company.   Step one is to determine how much leverage you have in the negotiation.  To assess your leverage you’ll need answers to the following questions:

  1. How many other qualified applicants are in the final stages
  2. What are your alternatives to this position
  3. What is your breakpoint
  4. What is their breakpoint (you’ll have to guess unless you are able to question effectively to unlock this information)

If there aren’t any other applicants and you have multiple options, you have quite a bit of leverage and can effectively set the bar very high.   (more…)

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Characteristics and Behaviors of High Dependency Negotiations

On 01/15/2010, In High Dependency, Negotiation Basics, By Andrew Boughton

High Dependency negotiations are nothing more than a Collaborative Negotiation where the parties are mutually dependent upon each other.  The consequences of deadlock are often substantial.  Typical situations falling into this category are joint ventures, partnerships, union negotiations, strategic alliances, etc. (marriages if you count personal situations).  The difficulty with High Dependency situations is that information is transparent, the other side sees the P&L and knows how much each item costs.  Therefore discussions are often emotionally charged.  Even though it is emotion that generally creates potential impasses during the discussions.  It is paramount to manage the climate and take responsibility for how you say everything.  The danger is that emotionally heated discussions may cause the negotiation to devolve into a Hard Bargaining situation causing strikes, lockouts, dissolution, or legal action.  The words that you choose in delivering proposals and responding to proposals become more important than the meaning of the words.  You must eliminate all words that have a negative implication like “no, don’t, can’t or won’t”.  You must constantly think “under what circumstance could I accept that proposal” and even ask the other side that very question.

EXTERNAL CHARACTERISTICS: The balance of power is equal.  The deals are based on a mutual dependency.  All the characteristics of a Win Win negotiation are present with the added pressure that the parties cannot afford to deadlock.  Any alternative or substitute would be financially constrained.  Information is open to all parties.  Typical negotiations include Joint Ventures, Partnerships, Strategic Alliances, Labor Negotiations, etc.

BEHAVIORAL ELEMENTS: High Dependency requires a high level of trust as relationship plays a important role in shaping the business.  Satisfaction is received through understanding priorities, creating incremental value, and sharing value on primary issues.   (more…)

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