Tag Archives: Legal

Business Tools for Designers – Mastering Negotiation

The following is a great summary of some classic negotiation skills from former lawyer and author Matthew Swyers. During the career f any designer in any market there will be a need to negotiate. Throughout the production, distribution, and sales process, making sure your needs are meet, along with the needs of your various stakeholders will be crucial to success.

Please note this post was first written on inc.com, published 26 July 2012.

Basic Skills

1. Listen

To negotiate, you must learn how to listen and apply what you hear to formulate your next move. Every word has a purpose. Every statement a hidden tell. If you listen carefully, I mean really carefully, you will be able to hear and understand what your opponent in the negotiation truly wants. Listening is the bare minimum skill you must have to start building your abilities as a good negotiator.

2.  Be Willing to Walk Away

When two sides are negotiating, one of the other most basic skills you must retain is the ability to walk away if the deal does not satisfy your requirements. Some may think this is axiomatic, but it is not.

Once I was assisting a friend in negotiating the purchase of a new car. At the end we were close, but the dealer refused to remove some extra charge that was just more fat on the bone for his sales price. After much back-and-forth over this item, we reached an impasse: The salesman would not take it out of the price, and I would not move on him taking it out. I stood up, politely thanked him for his time, and said to my friend, “Let’s go.”

To my surprise, my friend remained seated, turned his eyes toward me, his expression quickly changing to that of a child’s wanting a toy in a toy store, and said, “But I really want the car.” At that point, any chance of continuing to negotiate a better deal evaporated like a puddle on a hot Southern summer afternoon. If he would have stood and walked, we would have never made it to the door before that item was taken off the cost. But by not being willing to walk away, we gave the other side a critical advantage: He knew we would not walk. Always be willing to walk away from a deal, and let it be known in either a subtle or not so subtle manner, as the situation dictates.

Intermediate Skills

1.  Feign Indifference, Don’t be Indifferent

Obviously we care about the thing we are negotiating for, otherwise there would not be a negotiation. But just as we must be willing to walk away from the deal, equally as important is that you must never let the other party know how much you want or need to make the deal.

For example, for anyone who is familiar with my other writings you may recall that I am a trial attorney who has tried hundreds of cases in my career and litigated thousands more. At some juncture during the course of litigation, the parties will discuss settlement. Irrespective of my client’s concerns and directives, I always feign indifference during settlement discussion. Why? Because if the other side ever gets a whiff that you are not willing to try the case, it will have a decided advantage over you in the negotiation process.

So no matter if my client is ready to take the case to the mat or can’t afford or does not want to move forward anymore, opposing counsel gets the same routine from me every time: “We can try to settle the case or just go to trial. I’m good with whatever.” The goal in feigning indifference is to be as difficult to read as a blank page. In the end, however, it is a valuable skill to have in any negotiation. So you may not be indifferent, but never let them know.

2.  Have the Ammunition You Need

In litigation, this is about having your case ready to go to trial if it does not settle and making sure the other party knows you are ready. In other negotiations, such as in real estate, it’s about letting a prospective purchaser know you have another buyer on the line and that if he does not meet your terms, you’ll just sell it to the other guy. In any negotiation that involves an alternative action if the terms are not met, you must let the other party know you can, and will, do a specific act it does not want you to do in the event terms are not met. In short, let the other party know that you have your ammo and are willing to use it.

Many years ago, my then firm represented a man who had been horrifically injured by a product. Our firm was brought in to represent his interests against the manufacturer. Because of certain confidentiality provisions, I cannot mention the product or even the type of product it was. Suffice to say, however, it was the first case of its kind and had significant national exposure on not only a media level but political as well. Well, as in any litigation case, the parties are required to exchange documents whether they are detrimental or not to your case.

We knew that the defendants were holding out on us and saying that these specific very damaging reports did not exist despite the fact we had witnesses that testified to the contrary. We knew if we got our hands on these reports, they would be shaking in their boots. Well, to make a long story short while referencing a great episode from Seinfeld,we employed a special team of people to “retrieve” the reports for us, and “yadda yadda yadda,” we appeared at pretrial with these ultra-damaging reports in hand. The case, one of the most contentious and longest I had ever been involved in, settled minutes later. Why? Because we had the ammo.

So it does not matter if it is litigation, real estate sales with an alternative buyer, or otherwise, always have the ammo—or appearance thereof—to support your side in the negotiation.

Advanced Skills

1.  What Motivates the Other Party? Use It

As a prerequisite, you must always listen. Listening, as stated above, is critical to hearing what the other side wants. But on a higher level, you must strive to understandwhy. What is motivating the why? If you can listen between the lines to understand that which truly motivates the other party, you will gain a decided advantage in the negotiation of the deal.

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Starting Out

I recently caught up with a young model looking to develop his personal brand with a line of mens underwear in Australia. with the product, packaging, distribution, and first shoots all done and everything ready to roll out, what was left was the finances, and the management thereof, for the business.
Thinking about our conversation I thought that it would be worth sharing some points discussed for anyone out there looking to add some entrepreneurial zeal to design talents. The points below are simply my thoughts on where to start. The very foundation of your finances and business operations / admin. They are by no means exclusive and may vary depending on the legal requirements of certain geographies.
So here they are:
1) What functionality you need from your finances?
Don’t need to know 100%, but have a think. Will you have employees, do you need iphone syncing from your records, cloud based etc… What do you want from them? From there you can look at the type of system that matches your requirements – i.e. Xero vs. MYOB vs. another bookkeeping system.
2) Test.
Play with the software. Both MYOB and Xero will have demo versions you can trial. Check out the look and feel. You need something that makes sense to you. Your Accountant will understand whatever you give them. Importantly you need to know whats going on. Like driving a car you need instruments and dials that talk to you about whats happening at the high level so you can make decisions.
3) Your Account List. 
Your Accounts List is the list of assets, liabilities, income, expenses, and equity within the business. This is the foundation of your finances and like any foundation if you get this solid from the start you’ll be kicking goals. Your Bookkeeper, Accountant, and of course yourself will be able to inform this. Your chosen bookkeeping software should be able to build this account list for you during the setup process. You can then send it to your Bookkeeper/Accountant for feedback and build something tight.
4) Filling in the details. 
This will be everything from your business details, supplier details, customer details, inventory items, setting up the details in the books etc… to your requirements. I would think most of this you could sort out yourself. It’s fairly simple, but of course White Sky or I could help here. This will be a pure data entry exercise. Takes a bit, but if done right it will make your books and business admin simple, efficient and effective.
5) Business Planning
Looking at the income and expenses in the business and analysing cash flow over a period (say the first 12 months) to see what happens if X, Y, and/or Z occurs. What you’re looking for here is choke points. We’re worried about the downsides. See what they could be ahead of time. Know what they are, then monitor via your books to see how your tracking. This way you can see ahead of time whats going on. This can be as simple or as in depth as you like. If you’re starting out it may just be a high level analysis saying ‘OK I’ll need to sell X units to break even in Y months’ etc…
6) Processing, Reporting, and Admin
How will you monitor, process, and report on your business activity going forward. At the very least you’ll need to cover all your legal, tax, and other compliance obligations. You may not need to know how you’re tracking in ‘real time’, but at the very least having tight control over a) who owes you money, b) who you owe money, c) your cash flow, and d) your profitability.
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A Lesson in Strategy

A basic strategic principle, using deceptive plots to distract the other party and wisely choosing the time to bring something forth in order to preserve the element of surprise, can be applied with success in military, sports, business and most other competitive environments.

An example of the principle’s application in business appears in the approach Apple adopts for the development and release of its products. The recent release of iPhone 4S brought this to my thoughts again. Since Apple introduced the first iPhone to the market, the company built around its development process a sense of mystery and excitement by releasing products only in certain times of the year and making the overall development processes a tightly kept secret.

While proper surveillance of Apple’s patenting activity can reveal its development focus – to the average customer, Apple keeps the element of surprise – nurturing the company’s reputation as an innovator and leader in the field with every new product presented to the market.

Is this a two edge sword though? I believe so. Secrecy can fuel rumors that will in turn affect the perceptions and expectations of the market – falling short of these expectations consistently can be dangerous. Reputation is more easily lost than gained.

On the positive side, Apple can largely influence those rumors. On the negative side, without concrete intervention, the voice of the market will have the most influence (common desires of customers based on needs and also expectations based on the past experience of outstanding offerings).

Did the latest “Let’s talk iPhone” event match the high expectations of the client base? I don’t believe so. The strong rumors about a potential iPhone 5 release might have left some iPhone fans disappointed by what they got. The introduction of the voice command system and iCloud features is a good response to competitive threats within the industry but does not really match the expectation of the customer base – expressed in numerous online blogs (increased battery life, larger display, better antenna, design improvements, etc.). Moreover, historic experience with the voice command still leaves some skepticism and doubts concerning its actual functionality. Will people still buy the product? Most likely…

Will the same stand for another company? I am not sure. Apple still benefits from a large ‘fan base’ and strong reputation brought partly by historical experience and partly by the iconic leadership given by the late Steve Jobs. Still, to keep the perception of trends setters in the industry and surpass the tragic loss of its leader, Apple will require not only a sustained PR and branding effort but also more aggressive strategies for product cycle times and licensing/buying in add-on technologies – making future releases prove that the outstanding innovator tradition is kept.

The following article first appeared on the blog for intellectual property strategy firm Think IP, and is written by Ana from their Goteberg (Sweden) office. The original article can be view here.

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Why the hell T&Cs matter?

When it comes to things that are universally treated with the utmost of distain Terms and Conditions must be up there with dodgy used car salesmen, telemarketers at dinner time, and someone openly copying your latest season designs.

Yes, T&Cs can be a pain in the rear, but they can also save you a world of pain or (in this case) embarrassment. A shinning example was a recent Slurpee promotion by 7-11 in Australia. 7-11 recently invited customers to bring their ‘own cup’ in a one-off promotional event. Never underestimate the ingenuity of people to cheat the system…

Admittedly 7-11 have not lost in this circumstance. You could actually play to it quite cleverly to score traditional media coverage for the price of a gallon of Slurpee juice… It is however a classic case of why T&Cs need to be given the attention they deserve.

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