Seems like negotiation week for me. I published this post about Seth Godin’s take on business development, and then another on how win-win is the only win in business negotiations. That leaves me thinking about negotiations I’ve been involved in, things that have worked, and things that haven’t worked. And I end up wanting to post the three rules here, because it seems like they always work.
Disclosure: I’ve never taken a negotiation course; not the ones they advertise in magazines, and not one in business school either. These rules are things I learned the hard way.
1. How does it feel to be them?
Call it empathy. “Walk a mile in their shoes” is a good old-fashioned saying. I know a lady who would say “see it through my eyes.” There’s no substitute for understanding the other side of the negotiation. What are they thinking? And, by far the most important, what do they want?
2. Find the win-win
There are no zero-sum games in long-term business deals. You have two winners or two losers, never just one winner and one loser. Sure, you might be able to get that kind of a victory (we win, you lose) in a negotiation sometimes, if you make that a goal … but that won’t last. Businesses wise up. Relationships that aren’t good for both sides don’t last.
So look for that in every negotiation. How can they get what they want, and you get what you want? Maybe both sides get slightly less, but both win. That’s the goal.
3. Negotiate before the contract, not with the contract
The most common mistake in negotiation is dealing with the legal contract. First, you have to realize that only a tiny minority of legal contracts ever determine anything. You have to sue for breach of contract to make a contract really matter, and if it comes to that, you already have a disaster. The vast majority of disputes are dealt with by discussion, revision, and, for the really hard ones, mediation.
I’m not an attorney, so don’t take this as legal advice. In practical experience, though, what I’ve seen that works is that you get all your terms straight first in simple memos (yes, definitely, written; just not legalese) and then do the contract. The contract is the last step.
(Photo credit: Dmitriy Shironosov/Shutterstock)
http://timberry.bplans.com/2009/09/three-simple-but-powerful-rules-for-negotiation.html
Monday, October 5, 2009
Planning is not Accounting
The picture here represents the legendary Stargate, a science fictional gateway between two dimensions. There was a 1994 film starring James Spader and Kurt Russell.
I often use it to illustrate the difference between planning and accounting. Planning begins today and goes forward into the future. Accounting ends today and goes backward into the past. Planning is for making decisions, setting priorities, and management. Accounting is also for information and management, of course, but there are legal obligations related to taxes. Accounting must necessarily go very deep into detail. Planning requires a balance between detail and concept, because there are times when too much detail is not productive.
The catch that causes many misunderstandings is that the statements look very similar. Your accounting system produces an Income statement (alias Profit or Loss), a Balance Sheet, and a Cash Flow statement. A good business plan has at least the same three statements as "pro-forma" (meaning projected) statements. The form, presentation, and order of appearance of these financial statements are almost identical, but their information content is quite different.
Accounting should zoom into ever-increasing detail. Planning should summarize and aggregate.
Accounting can never be wrong. Business plans are always wrong (not that they aren’t useful — it’s like walking or steering, the value is in the correction and the management of where and why they’re wrong, but that’s a different post.)
-Tim Berry-
http://timberry.bplans.com/2006/02/planning_is_not.html
Zen and Business Planning
They seem like opposites. Zen’s about mindful acceptance of the present moment. Planning is about managing the future. Seems like Zen business planning is oxymoronic. I hope not.
Why do you care? Maybe because real business planning aligns your business with your self and the world around you. Maybe as a response to business plan bashing, which happens when people confuse the plan (ugh, big document, hard, formal, not necessary) with planning (focus, prioritizing, envisioning the future, setting directions, dealing with change, managing).
Why do I care? I respect Zen. Maybe it’s the coolness factor, as I posted recently, Zen and the Art of Copying. Guy Kawasaki has a good post called the Zen of Business Planning. Maybe it’s Gil Fronsdal, and his zencast.org podcasts, to which I listen frequently.
Maybe it’s my new book, The Plan-As-You-Go Business Plan, 
So, reflecting on Zen and Business Planning, I suggest four key points:
- Accept change as constant. The value of the plan isn’t mindless implementation in a guessed-at future. The value of the plan is the planning process, the management of change it creates. Planning enhances vision and understanding of past, present, and future.
- Use planning to remain mindful of which direction you want to move. Towards which horizon. Stay mindful of your own definition of success.
- Understand how, as you move through business time, where you are is always different from where you thought you’d be. You do that by leaving tracks (the plan) which you can use to trace changed assumptions (plan vs. actual).
- Correct your course as your assumptions change, remaining mindful of long-term direction and short-term necessity.
http://timberry.bplans.com/2008/06/zen-and-busines.html
Success vs. doing what you like vs. people vs. community.
Did I miss something critical here? The chart at right is from my Choose your own world view post on here Tuesday. I was trying to relate choices to results and highlight tradeoffs; but I wasn’t sure whether these three factors pulled away from each other, or did they in fact work together if you find the sweet spot in the middle.
In a thoughtful email later that day, Kate Putnam said I missed something critical:
Work you like should lead to business success (however you define that). The third piece should be what you give back to your community.
I asked her permission (I think it’s rude not to, with an email) to publish her comments here. She explained:
You are not teaching your children much if you don’t do that. You are not sharing the fruits of your success if you don’t do that. Plus, if you do it right, you meet new friends who share your values and whom you would not stumble across in your regular day-to-day existence. I have learned a lot for my business from my non-profit board work and the people I met through it.
And the question remains: do these factors pull apart, from center outwards? Or do they come together in the middle. I can argue that either way. I think it depends on your world view, your experience, and choices you make.
Kate added this as well:
I tell my children that “to whom much is given, much is expected.”
After reading that email, I also wandered off to her website, and found her business called Package Machinery, focusing on sustainable practices in packaging. And Kate is on Twitter as wrapsustainably. So I like discovering that she is obviously not just saying it, or writing it in email; she’s doing it too. That makes her comments that much more interesting.
http://timberry.bplans.com/2009/10/success-vs-doing-what-you-like-vs-people-vs-community.html
Boomer Business Blogger Part 3: Is It Good Business?
A nice person almost apologized to me for not having her business on Facebook. I said: “but why?”
Blogs, Twitter, Facebook, and all the rest of that “social media stuff” may or may not be good business. But not just for its own sake. It has to be part of a strategy.
Otherwise, it may or may not be fun, depending on who you are and what you like to do; but it’s not good business without a related plan for how it’s supposed to help. Does it generate leads? Page views? Validation? Or is it just a rationalization for spending time doing something you like, like keeping up with friends, being clever.
My blogging has a business strategy. I don’t sell anything, but I do talk about business planning and business management. It relates to my books, my software authorship, and the company I founded. It generates page views in the Bplans.com domain. It validates.
So it’s fun, but it’s good business too. In this case, at least. It relates directly to validation of product, to page views, and to marketing objectives.
What is it for you? What’s the business objective? How to you measure achievement of that objective? Do you have metrics to review? Do you remember to review them?
http://timberry.bplans.com/2009/05/boomer-business-blogger-part-3-is-it-good-business.html
Are You a Good Manager? How Can You Tell?
What makes a good manager? Is it something you’re born with, or something you learn? Is there management instinct? I don’t know for sure. I’ve been in business for more than 30 years now, and I still don’t know.
A few years ago I was trapped on a plane with nothing to read but The One-Minute Manager, by Kenneth Blanchard and Spencer Johnson. It was written in 1982, and still sells very well today, according to Amazon.com ranking, even 26 years later. It’s in the top 2,000 books.
It was a short plane trip, and an easy book to read. It seemed about like this:
Make expectations specific. Tell people what’s expected. Follow up. Track results. Tell people afterwards how they did.
Several things struck me about that:
- Completely obvious, but
- still very valuable.
- Some things that seem completely obvious, once said (or written) still needed to be said (or written).
- Authors deserve special credit for keeping a simple book short. This one was easy to read in a one-hour flight.
I’ve never been much of a manager myself. That’s no big deal, of course; lots of people aren’t managers. In my case, though, people expected me to be, because I’ve had a lifetime of successful entrepreneurship. But entrepreneurship and management are different things.
I don’t think I’m alone. I’ve just been browsing the Amazon.com site. Small and simple books like that one sell lots of copies to lots of people. Who Moved My Cheese?, another that fits that description, sells phenomenally well. It’s in the top 300 at Amazon.com
What makes a good manager? Is it confidence, relative certainty, good communications skills, comfort with authority? I just read How to Be a Great Boss on a blog ironically named “Dumb Little Man.” And it’s a good list, too, but not surprising. Standard stuff: listen, communicate, say “Thank You.” And this one: bring food and arrange treats. What is this, kids’ soccer?
Thinking about it, I want to ask the experts some questions back: what makes a good manager?
- Is it getting things done?
- Getting other people to get things done?
- Is it doing the company’s bidding?
- Being well liked?
- Advancing your own career?
- Inspiring people, or leading them?
- Coordinating a team?
- Is a good manager able to do the work instead?
- Do you have to know how to code to manage programmers?
And some really fundamental questions: is a good manager liked, hated, respected, feared, or all or none of these? Is it possible to lead people to higher productivity and the greater good of the business while being disliked? Is it possible to do that while being universally liked? Does a good manager have friends, allies, enemies, bosses, underlings, followers, or minions?
Is it about carrots and sticks, or both?
Confessions of a Hypocritical Business Planner
Irony: I’m a business planner, and I have been for 30 years now; but the biggest decisions of my real life have been remarkably unplanned.
I could rewrite my own history backwards to make it all seem like it had been planned, but it wasn’t. Going from hippy to business planner to entrepreneur, I tripped over the most important right decisions, accidentally. It was a lot like a shiny metal ball bouncing around in a pinball machine, hitting obstacles and changing directions. Sometimes I made the wrong decisions and got the right results. Go figure.
For example, in college I studied what interested me: Literature. I wasn’t making a career choice, I was taking the path of least resistance. It was an easy step from Literature to Journalism, and — after 10 years with UPI and McGraw-Hill and others — from there to the MBA. And in 30-some years of business I keep meeting people whose careers seem to reconfirm the basic wisdom of studying what interests you. These are people who followed that path of interest and found, later, that it led to the right place.
All of which could end up as dangerously bad advice, I suppose: if taking the downhill path leads only downhill. Sometimes you have to buckle down and work; but at least, if you’re doing something that interests you, the work feels better. That was certainly my case. I got my first job in journalism in Mexico City, by mail plus a plane trip from Oregon, because I was happy to work cheap and they guessed that since my wife is Mexican I probably spoke Spanish (which wasn’t true until a few months later). There was no planning there; it was a job, in 1971, when jobs were scarce (as they are now). It seemed to prove the wisdom of taking that pinball-like change of direction.
The next time I changed direction it was for the money. I switched to business writing from regular wire-service news journalism after three years of it because my wife and I had two kids by then and with kids, money became an issue. Before that, neither one of us cared that much. Journalism had enjoyed an aura of save the world for a while, but that gets old. That change doubled my income (from very little to a little bit more). I waded slowly and fearfully into business writing with about as much enthusiasm as an ophidiophobe (fear of snakes) wading into a jungle swamp. At first, it was just a sellout; but then it got interesting. I took business classes at night school. I really wanted to know what was going on underneath the press releases, in the numbers, where the truth hides.
So it took me 10 years to get from undergrad studies to business school, but that wasn’t a bad thing. By the time I got there I was — notice the theme here — once again interested in what I was supposed to be studying. I’d had enough of business journalism to want to actually know what I had been writing about (novel idea) and that made business school fascinating. And my years as journalist helped me get through business school while working full-time in consulting. I could write fast, and that’s a good thing in school.
I made some very bad decisions that created very good outcomes. In some circles, we call that luck. Later I quit a good job to go on my own writing computer books, but with the help of my wife and my favorite former client, that became business plan consulting. And that — again with the help of my wife and some clients — became business plan software. It seemed like a natural progression. Just as it was critical to write for readers in Journalism, it was even more critical to write for users in software. And all of this changing directions meant that it wasn’t until 1994, 20 years after switching to business writing, 11 years after leaving that good job, that Business Plan Pro was first released.
And, while we’re on the general subject of unanalyzed decisions with good outcomes, doing what you want, in 1969 I asked a girl to marry me after knowing her about two weeks. Next January we’ll have a 40th anniversary. (And we both agree we were lucky. Don’t try this at home. Wait longer.) And at every key moment from literature to journalism to business to entrepreneurship, it was always two of us, never just me. When things were really dicey — like when we realized we had three mortgages and $65K credit card debt in developing Palo Alto Software — it was never “you idiot, what have you done,” but rather “we’ll take the risk together, and if we fail, we’ll fail together.” Knowing that you’re not going to lose a marriage over it makes it a lot easier to change directions.
http://timberry.bplans.com/2009/09/confessions-of-a-hypocritical-business-planner.html
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