Management Tools: A Need Formula or How Are We Squeezed?

A week ago, my colleagues and I finally published the free course “Negotiations in Schemes” (available after registration), so today we decided to talk about negotiation tools, not so much management ones. Moreover, things are more than related.

After the article “Management tools: 4-phase algorithm for solving problems with people or“ What do you want if you are such a worthless manager? ” they wrote to us: they say, well, it doesn’t happen that with all people and in all cases this algorithm works? It's true - this algorithm does not work very well when the other person does not see a common future with you. And / or wants to squeeze you out of the ordinary for something.

One of the most useful managerial experiences in my life I received from the management of the repair of my own apartment. At that time, I had been working as a manager for 4 years - first I led the team for testing Java on mobile devices (we worked with Sun), then I headed the team at Intel. I read Tom Demarco. Joela Spolsky has completed several management trainings. In general, I felt like a very cool manager. But that did not save me.

Managing apartment renovation requires a few other skills, especially when an experienced foreman confronts you. My foreman at the very beginning of cooperation used the Negotiation Formula negotiation tool, which ensured for himself a definite and unconditional victory.

The tool itself is often used in negotiations with customers - first of all, they use it. So, what the Formula of Need looks like:

Need = 1 * t + 2 * E + 3 * $ + 4 * Em

We first heard this formula from our colleague Dmitry Kotkin, the head of the St. Petersburg school of negotiators of ShiP, after which we asked Dima to outline the science of negotiations in schemes. But back to the formula:

1 * t = Time

The first factor is the time we spent preparing and holding this meeting or meetings. The more time we spend on the negotiation process, on interacting with a person, the more addiction we get.

Household example. Two people, a married couple - scandals, abuse, live unhappily. But to her question: “Why don’t you divorce him?” - we get a brilliant answer: "Well, I lived with him for three years, I feel sorry for this time." Now, the need has formed, the dependence has formed - first of all, in the head of a person.

2 * E = Volume of already applied efforts

The second factor that plays to increase the need is the amount of effort that we put in to do something in this situation. For example, if for negotiations you need to go up to the hundredth floor on foot and you spent an hour and a half on this, then returning without a result will be very difficult for you. The more efforts we have made, the we are sorry to refuse any results as such. It makes us vulnerable.

An example from the work of the sales department. The sales manager is asked: “Do you have customers who do not buy anything. Why are you calling them? Why are you wasting your time working with a client who has already said fifty-four times that he will not buy anything? ” Answer: “Well, I spent so much effort on it. I wrote a very long commercial proposal, I redid it several times, I went with him to meet. I feel sorry for the effort ”

It’s a pity not time, but efforts as such. This is the formation of need.

3 * $ = Money

The third factor is lost or lost profits. If we are promised the golden mountains and we believe in these mountains, then we become dependent on the result, and vice versa.

Famous experiment conducted by American sociologists. They took a student group and offered them the following task: “You have been allocated one hundred thousand dollars to develop a new Boeing. You have already invested ninety thousand in this project. A month before the end of the project, you will find out that your competitors have released a cheaper aircraft, more economical, more competitive. ” Question: Will you invest the remaining ten thousand in the project? ” Most of the participants in the experiment said: "Yes, we will invest." To the question why: "Well, we have already ninety thousand invested, we feel sorry for the money that we thumped there." The third trap of consciousness.

4 * Em = Emotions

The last factor that binds us to the situation is emotions. Why do men "love" tantrums? Why do they begin to interact with tantrums and cannot get rid of them? Because the hysteric is not predictable and unpredictable, she is constantly in different emotions: then she is sad, then she is funny, then she admires you, then she hates you. And all this binds to a person, emotions bind to a person, both negative and positive.

An example from life. The story was told to us by Dmitry Kotkin, from whom we learned about the formula of need. Further almost verbatim:

In 2008, we were invited by the company Honda Maximum, this is a Honda dealer in St. Petersburg.

The question was very simple: there were renegotiations of annual contracts for various services, starting with staff recruitment and ending with IP-telephony, and the task was set to reduce prices for the supply of services. That is, it was necessary to push suppliers to other numbers. We then took the needs formula as a basis and developed an action plan for how department heads had to act in order to get a lower price than in the previous year.

The first fact - they began to work with time. Our wonderful counterparty, with whom we interacted, had a large number of meetings, and the meetings were insignificant, in order to clarify some issues. And now, a man from his office goes to the office of the potential client for an hour, I ask him something, they say "thank you very much for coming, we will think further," he goes back. Here he had two hours of time at least from his working day. And if there are two, three, four such meetings, then even more time falls out. We begin to tie the counterparty to time.

The second factor is effort. They asked people to remake the offer several times, give it in the Excel table, make a presentation of the service in PowerPoint, change everything, give some kind of schedule. And our wonderful manager began to plow.

The third factor is money. It is clear that people began to constantly lure with big money. That is, they said to the manager: “Look, if everything will be fine, ... we are building three more dealerships, and there everything will be there without any tenders. If we have a tender now and we are choosing a supplier, then we’ll definitely buy from you and immediately conclude an annual contract for these three dealerships. ” About dealerships - they really were built, but the promise of large profits - this, of course, was the manipulation of clean water.

The fourth factor is emotional. The managers who came to negotiate with the center began to constantly download emotions. The so-called psychological or emotional pendulum (also known as the “wave rule”) was used.

A man arrives, they say to him: “It's great that you arrived, we are so glad to see you. It's great that you agree to work with us. ” A man blossoms in a smile, he is shaken in a positive. And right there they shake him in the other direction: “You know, we looked at your commercial proposal - it’s mediocrely done: some mistakes in the Russian language, this is shame, it’s impossible. You are a serious company. ” Man shakes the other way. “But we liked your prices that you give us, and in principle they allow you to continue talking with you further. But the fact that you are five minutes late certainly doesn’t color you. ” Here is such a five-minute buildup that throws a person in different directions. And after five minutes, the logic turns off, some emotions turn on, and then the increase in requirements begins.

Two weeks were spent on all tenders. Before that, it usually took a month. We saved the company time by saying that we don’t have to stretch it for a month, let's do it in two weeks. The amount of savings compared to the previous year for individual contracts reached 20%, they achieved discounts on services. They were even able to squeeze some bank on short-term deposits. It is almost impossible to change the terms of cooperation on bank interest, but thanks to this scheme, they have achieved this.

When I heard all this, I slapped my forehead, remembering the story of apartment renovation. At that time, I felt like a very experienced manager - it somehow worked pretty well with IT teams and engineers. :) And then it did not work out. What is the essence of the story.

An example from the life of how an IT manager managed repairs. We started the repair in 2006. Familiar mother-in-law and father-in-law - lieutenant colonel of one of our special services, recommended the foreman. Volodya. 40 years. Met, discussed, all is well:

- What, I say, the conditions for prepayment?
- Alexander Mikhalych, standard: 50% prepayment immediately. 50% upon completion of work. By terms - a month and a half. Will you buy materials yourself or will we buy and report to you on checks?
- Volodya, I need less hemorrhoids. Let you do this.
- Well, then another $ N for materials.
- No problem.

Volodya is given 50% + $ N of money, after which two more workers come to the apartment and repair begins.

A week later, I stop by to see how you are doing. Volodya recalls to the side:

- Alexander Mikhalych, this is the case ... In short, my wife was diagnosed with spinal cancer. She needed an emergency operation. Here is an x-ray [holds out some pictures] In general, I paid all the money to the hospital.
- ...
- In general, there is no more money.
- And what shall we do?
- Well, we’ll finish it somehow.

It turned out further that Volodya had five more children (true). Workers left without money. Children somehow need to be fed, Volodya got a job on two more parallel jobs. Repair got up.

Then we tried to work for another year. Volodya was given a little extra money to hire new workers, some employees from Central Asia came, intermediaries with money disappeared, in general - there was a funny mess.

We parted only after a year. I could not part with the foreman. Firstly, because I didn’t have this in my managerial experience, and Demarco, Brooks and Spolsky, bastards, forgot to warn :) And secondly, it was a pity for the money, time, effort and it was absolutely awkward to put pressure on a person who wife with death and 5 children on the shelves. Formula of need in pure form.

What conclusion can we draw from this article?

Negotiations with different people need to be conducted in different ways. Sometimes very different. And in many respects it depends on whether you have a common future with a person or not. Moreover, on the other hand, there may be a person who owns the topic of negotiations or hired specialists who help him achieve a 20% discount.

And in case you feel pressure from a person, it is worth considering whether it creates a need for you? And in what exactly.

If now you come up with examples from your own negotiations with customers, management or not from working practice, where you fell into the needs formula, we will be grateful if you share in the comments.

And we are thinking about how to deal with the formula of need in the next article. Or a video. If, of course, the topic is interesting to you.

PS The Stratoplan blog has moved to a separate site: http://blog.stratoplan.ru - see you there!