Every year millions of dollars change hands on mergers, acquisitions, joint ventures, alliances, management buyouts, share issues and financial restructuring.
The high stakes, extreme time pressure and psychological stress involved in these negotiations causes mistakes to happen. Misunderstandings kill potential deals, deadlocks stifle opportunities and money is left on the table.
'Mastering Financial Negotiations' aims to give you insights into the methods adopted by outstanding negotiators, so that the risks of failure are reduced and the chance of signing win/win agreements are greatly enhanced. Drawing on research from the fields of Social Psychology and Neuro Linguistic Programming (NLP), this highly practical three-day course will reveal the secrets of successful negotiation in financial markets.
Summary of course content
- Gain an insight into the key psychological principles involved in achieving win/win financial negotiations
- Discover a simple yet powerful seven-step method for planning a financial negotiation
- Learn how to use the power of suggestion to set a positive tone for a face to face meeting
- Acquire a 'toolbox' of tried and tested skills for breaking deadlocks
- Understand the 'dirty tricks' used by unscrupulous negotiators and how to deal with them
- Master an elegant four stage process for running a deal making session
The basis of the feedback is peer review based upon assessment using a BMC assessment checklist. Completing the BMC assessment checklist is not only valuable to the people involved in a given case study, it also helps those completing them to gain an in-depth understanding of the building blocks that make up an excellent negotiation meeting.
Who should attend this training course?
- Investment bankers, project financiers and syndicators
- Traders and sales directors/managers
- Board directors
- Heads of business divisions
- Business development executives
- M&A and strategic planning executives
- Lawyers, consultants, corporate financiers and other professionals advising on major deals
Values and integrity in a negotiation
Understanding how the parties' behaviour and actions during a deal is driven by their underlying patterns of motivation.
- The hierarchy of negotiation
- The 'zero sum' fallacy
- Values alignment, self confidence and psychological congruence
- 10 fundamental principles of effective negotiation
Pairs exercise: values alignment exercise
'Social compliance' is the ability to get our negotiation partner to agree to a proposal as a result of the way that it is presented or explained rather than on the basis of the content alone. Here we review the results of over thirty years of research into the art of persuasion and present a set of tools designed to influence the other side into saying 'yes' to our requests.
The power of friendship
People do things for people they like and who they believe are 'on their side'. By acting in a cooperative manner we can persuade people to make more concessions and to be more open to ideas than would otherwise be the case. Here we look at specific tools for generating this sense of trust and friendship.
- The three components of liking
- Interests versus positions to develop a win/win approach
- Hierarchy of ideas to generate understanding and cooperation
- Reading body language to assesses the other party's reactions
- Mirroring values (the power of empathy)
- Summarising to create rapport
- Bonding through 'small talk'
Pairs exercise: practising question skills to develop a hierarchy of ideas
The reciprocity principle
There is a strong in-built desire in human beings to repay a debt. This 'debt' can take the form of matching a concession that we make or reciprocating a 'favour' that we do for the other party.
- Valuing trades and the position perception model
- Formulating trades using conditional language
- The persuasion pattern
- Tag questions
- Advance and retreat proposals
- The power of 'because'
Pairs exercise: formulating and presenting possible trades
People want things that are rare or in short supply; as opposed to those things they think are easy to come by. This means that by focusing our negotiation partner on (i) what they might lose if they don't do a deal with us and/or (ii) what is unique about what we can offer, our chances of doing a deal greatly increases.
- Negative consequences pattern
- Contrastive analysis
- Unique sales propositions
Pairs exercise: developing negative consequences patterns
The power of expertise
This set of tools is concerned with demonstrating our technical authority in a particular area. This works because people are naturally inclined to believe what an expert tells them. The key is to establish ourselves as a credible and trustworthy source of information in the eyes of our negotiation partner. This also involves developing the ability to clearly say 'no' to suggestions that we don¡¦t like while using our expertise to make alternative proposals.
- The BMC self introduction template
- The refusal pattern
- Trust builder technique
Pairs exercise: conducting self-introduction and refusal pattern drills
Commitment and consistency
People act in a way that is logically consistent with their previously statements. By encouraging people to take steps in a particular direction we can lead them to agree to proposals that match those public commitments.
- Behaviour labelling
- Directional language
- Written records
Pairs exercise: gaining commitment with behaviour labelling
Our negotiation partner will feel inclined to accept our suggestions if they feel that our solutions are tried and tested.
The more that we can demonstrate that an option or proposal is something that many people have adopted (or would like to adopt if they could), then the greater the likelihood of them buying into it.
- BMC case study method
- 4 F's objection handling method
Pairs exercise: practising the 4 F's objection handling method
The seven step negotiation planning process
Successful deal making involves thinking through all the key issues before we get to the negotiation table. Forewarned is forearmed and proper planning and preparation in advance of the face-to-face meeting can make sure that we are ready, willing and able to handle each topic as it comes up for discussion. Here we adopt a simple yet powerful process for capturing the principal aspects of the planning; from goal setting through to identifying when we would walk away from the table.
- Setting clear outcomes
- Putting yourself in the other person's shoes
- The power of synergy
- Being in charge of your language and where it takes you both in planning and the actual negotiation session
- Batna's and their role in understanding who has the most power
- Identifying the settlement range
Case study: planning a fee negotiation between an investment banker and a client
Developing a team approach and agreeing the meeting format
Being aware of how to start the negotiation before arriving at the actual meeting.
- The three key team roles and how to assign them
- Developing credibility
- Setting the tone in advance of the meeting (understanding the power of suggestion)
- Getting the agenda approved
- Introducing our team to the other side
Case study: getting the agenda approved and setting the tone for a fee negotiation between an investment banker and a client
Running the face to face meeting
Using the information developed in the planning phase and the key persuasion strategies to manage the face-to-face session in a way that maintains momentum and control.
Case study: conducting a fee negotiation
Case study: putting it all together
Planning and running a meeting to deal with a negotiation concerning an acquisition
Handling 'tricks' and 'gambits'
Understanding some of the more common 'dirty tricks' that are used by unscrupulous negotiators. Assessing how the persuasion strategies can be used to defend against manipulation.
Group exercise: sharing scenarios and discussing solutions
Spotting the 'deal killers'
Realising the mistakes and behaviours that can destroy a deal and learning how to avoid them.
Case study: finding the deal killer and advising on the remedy
What to do if meeting pace becomes slow or grinds to a halt over a particular issue or concern.
Two ways to gain more time for thought and reflection
Three ways to change their mind
Two ways to alter the nature of the negotiation
Pairs exercise: discussing how to apply the tools to 'real life' investment banking issues
Case study: developing a deeper understanding of the process. Planning and running a meeting to deal with a negotiation concerning a rights issue