Negotiation II

I have been dragging this post for too long, too long that I felt that if I don't start and finish it by now I'll forget about it sometime.

Ok to answer the 3 questions I have brought up earlier:

I. What is negotiation?

II. What are the criteria of effective (and successful) negotiation?

III. What are the factors that affect decision?


First I would like mention the 3 key concepts of negotiation：

1. BATNA: Best Alternative To Negotiated Agreement -- what you will get if no deal or agreement is arrived, or say, the opportunity cost of this negotiation

2. Reservation Price: the value (both maximum and minimum) at which it will be indifferent for you to enter or not enter into the agreement, or in other words, your bottom line

3. ZOPA: Zone Of Possible Agreement -- the (known and unknown) range between the parties' reservation prices, or the bargaining range

To arrive at effective negotiation, one can never leave out these 3 concepts. Your BATNA determines where your bottom line is, and your bottom lines determine the range of your bargaining power. Another thing to keep in mind is that, do not ever assume zero-sum game. Many people tend to think that whatever gained by you would be my loss and vice versa. That is not true. As long as the final deal falls between your bottom line and that of the other party, both of you are benefiting from the agreement.

What negotiation is really about, I would like to refer it as a Mutual Gain Approach (MGA) for the negotiation parties. It is important for both parties to clarify their interests and at the same time, create mutual value instead of distributing (if possible), that is to say, enlarge the pie before dividing it.

the Mutual Gain Approach has been summarized to the following points:

1. Always come prepared --analyze your own and other party's BATNA

2. Negotiate totality of agreement instead of one issue at a time

3. Clarify interests

4. Identify opportunities from the differences --relative value, risks, expectations etc

5. Attempt to CREATE mutual value before DISTRIBUTION

6. Present ALTERNATIVE PACKAGES

It's pretty simple to list down these points as one's checklist or so, however what is most crucial is to keep them in mind while negotiating. and that usually is the most difficult part. The first trap of negotiation is COMPROMISE. When you start to consider lowering your price, have you thought of offering an alternative or something in extra for the other party? If you can provide an alternative package, it might create much more value and incentive for the other party and at the same time make your offer more attractive.

Other than that, it should be noted that most negotiations are not a one-time off deals. Thus one should try not to push the negotiating party to their very bottom line. Sustainable cooperation is the key.


So what are the factors that affect decision in a negotiation?

(to be continued next time)

消失

我想找个地方躲起来
没有烟味 没有是非
没有肥皂剧里的封白
我想找个地方躲起来
没有Guitar 没有依赖
没有约会时的等待
离开我熟悉的城市 忘记我自己的名字
说没有结局的故事
你不想听 我就消失
离开我熟悉的桌子 拔掉我身上的电池
点掉我脸上的黑痣
在地平线上 消失
离开我熟悉的城市 忘记我自己的名字
说没有结局的故事
你不想听 我就消失
离开我熟悉的桌子 拔掉我身上的电池
点掉我脸上的黑痣
在地平线上 消失
我想找个地方躲起来
没有电话 没有灾害
没有那么多的电视台
我想找个地方躲起来
冲了马桶看著水流
我躲在厕所 不想出来
不想出来 不想出来

altruistic

Don't act like an altruist if you are not one.

危机感

心中的危机感突然变得如此强烈
之前内心所希望肯定的那些东西
自己却不由自主的开始怀疑起来

至少现在的自己
很难想象下一步会走成什么样子
曾经执著于的那些东西
又会变成什么呢


也许
我们真的都还太年轻

big company vs startup -risks

It was just not long ago when I was interviewing one of our founders, he told me:

It's an illusion that working for big companies is more secured and entrepreneurship is risky. There are so many departments in a big company and if yours is not working well, the management could slash it down any moment and you would be fired. On the other hand, if you start your own company, you actually learn a lot during the process which lowers your risk.

想想这般如此就被见证了呢。


是自己心里突然开始不踏实了么...昨晚突然做到关于找工作的梦。为什么放弃那么多别的options跑去一个IT startup... 因为好像是刚开始面试人家就说我们认定你了来吧，于是就被忽悠了么... = =|||

Nightmare on Wall Street - Everyone's talking about it

就好像某人说的一样："Bear is dead, Lehman is dying, Merrill is a prostitute now." Whatever is happening out there can't be controlled.

亲爱的挤破了头进银行的同学们，what is your next step?

from http://www.economist.com/

EVEN by the standards of the worst financial crisis for at least a generation, the events of Sunday September 14th and the day before were extraordinary. The weekend began with hopes that a deal could be struck, with or without government backing, to save Lehman Brothers, America’s fourth-largest investment bank. It ended with Lehman’s set for Chapter 11 bankruptcy protection and the bank preparing to wind itself up after those efforts failed. Other vulnerable financial giants scrambled to sell themselves or raise enough capital to stave off a similar fate. Merrill Lynch, the third-biggest investment bank, sold itself to Bank of America (BofA), an erstwhile Lehman suitor, in a $50 billion all-stock deal. American International Group (AIG) brought forward a potentially life-saving overhaul and went cap-in-hand to the Federal Reserve.

On Sunday night the situation was still fluid, with bankers and regulators working to limit the fallout. They were girding themselves for a dreadful Monday in the markets. Australia’s stockmarket opened sharply lower on Monday (most other Asian bourses were closed). American stock futures were deep in the red too, and the dollar weaker. Spreads on risky credit, already elevated, widened further.

With these developments the crisis is entering a new and extremely dangerous phase. If Lehman's assets are dumped in a liquidation, prices of like assets on other firms' books will also have to be marked down, eroding their capital bases. The government's refusal to help with a bail-out of Lehman will strip many firms of the benefit of being thought too big to fail, raising their borrowing costs. Lehman’s demise highlights the industry’s inability, or unwillingness, to rescue the sick, even when the consequences of inaction are potentially dire.

The biggest worry is the effect on derivatives markets, particularly the giant one for credit-default swaps. Lehman is a top-ten counterparty in CDS, holding contracts with a notional value of almost $800 billion. If it were to cease trading, chaos could ensue. On Sunday, banks called in their derivatives traders to assess their exposures to Lehman and work on mitigating risks. In a highly unusual, hastily convened weekend trading session, the market’s main players sought to reduce the risk hanging over Lehman’s outstanding trades by matching buyers of its swaps directly with sellers, thus cutting Lehman out of the equation. But only $1 billion-2 billion of trades were executed. The Securities and Exchange Commission, Lehman’s main regulator, said it is working with the bank to protect clients and trading partners and to “maintain orderly markets”.

Government officials believed they had persuaded a consortium of Wall Street firms to back a new vehicle that would take $40 billion-70 billion of dodgy assets off Lehman’s books, thereby facilitating a takeover of the remainder. But the deal died when the main suitors, BofA and Barclays, a British bank, walked away on Sunday afternoon. Both were unwilling to buy the firm, even shorn of the worst bits, without some sort of government backstop.

But Hank Paulson, the treasury secretary, decided to draw a line and refuse such help. After the Fed had bailed out Bear Stearns in March and the Treasury had taken over Fannie Mae and Freddie Mac last weekend, expectations were high that they would do the same for Lehman. And that was precisely the problem: it would have confirmed that the federal government stood behind all risk-taking in the financial system, creating moral hazard that would take years to undo and expanding taxpayers’ liability almost without limit. Conceivably, Congress could have denied Mr Paulson the money he needed even if he had been inclined to bail Lehman out.

This left Lehman with no option but to prepare for bankruptcy. Though the bank has access to a Fed lending facility, introduced after Bear’s takeover by JP Morgan Chase, the collapse of its share price left it unable to raise new equity and facing crippling downgrades from rating agencies. Moreover, rival firms that had continued to trade with it in recent weeks—at the urging of regulators—had begun to pull away in the past few days. The inability to find a buyer is a huge blow to Lehman’s 25,000 employees, who own a third of the company’s now-worthless stock; in such a difficult environment, most will struggle to find work at other financial firms. It also makes for an ignominious end to the career of Dick Fuld, Lehman’s boss since 1994, who until last year was viewed as one of Wall Street’s smartest managers.

Merrill’s rush to sell itself was motivated by fear that it might be next to be caught in the stampede. Despite selling a big dollop of its most rotten assets recently, the market continued to question its viability. Its shares fell by 36% last week, and hedge funds had started to move their business elsewhere. Its boss, John Thain, concluded that it needed to strike a deal before markets reopened. It approached several firms, including BofA and Morgan Stanley, but only BofA felt able to conduct the necessary due diligence in time.

Not only has Mr Thain managed to shelter his firm from the storm, but he has also secured a price well above its closing price last Friday, $29 per share compared with $17. How he managed that in such an ugly market is not yet clear. Ken Lewis, BofA’s boss, is no fan of investment banking, but he is a consummate opportunist, and he has coveted Merrill’s formidable retail brokerage. Still, the deal carries risks. It will be a logistical challenge, all the more so since BofA is in the middle of digesting Countrywide, a big mortgage lender. Commercial-bank takeovers of investment banks have a horrible history because of the stark cultural differences. And it is not clear if BofA has a clear picture of Merrill’s remaining troubled assets.

The takeover of Merrill leaves just two large independent investment banks in America, Morgan Stanley and Goldman Sachs. Both are in better shape than their erstwhile rivals. But this weekend’s events cast a shadow over the standalone model, with its reliance on leverage and skittish wholesale funding.

Wall Street has company in its misery. Washington Mutual, a big thrift, is fighting for survival under a new boss. Even more worryingly, so is AIG, America’s largest insurer, thanks to a reckless foray into CDS of mortgage-linked collateralised-debt obligations. Investors have fled, fearing the firm will need a lot more new capital than the $20 billion raised so far. Prompted by the weekend bloodletting, AIG brought forward to Monday a restructuring that was to have been unveiled on September 25th. This was expected to include the sale of its aircraft-leasing arm and other businesses. It is also reported to be seeking a $40 billion in bridge loan from the Fed, to be repaid once the sales go through, in the hope that this will attract new capital, possibly from private-equity firms.

With Lehman left dangling, official attention is now turning to putting more safeguards in place to soften the coming shock to markets and the economy. The first step has been to encourage Lehman’s counterparties to get together and try to net out as many contracts as possible. On Sunday the Fed also expanded the list of collateral it will accept for loans at its discount window, to include even equities; and dealers may lend any investment-grade security, not just triple-A rated, to the Fed in exchange for Treasury bonds.

Markets are also pricing in some possibility that the Fed will cut its short-term interest rate target from 2% when it meets for a regularly scheduled meeting on Tuesday. That would be an abrupt turnaround from August, when officials figured their next move would be to raise rates, not lower them.

In a sign of how bad things are, even straitened banks are stumping up cash to help the stabilisation efforts. On Sunday, a group of ten banks and securities firms set up a $70 billion loan facility that any of the founding members can tap if it finds itself short of cash.

Even if markets can be stabilised this week, the pain is far from over—and could yet spread. Worldwide credit-related losses by financial institutions now top $500 billion, of which only $350 billion of equity has been replenished. This $150 billion gap, leveraged 14.5 times (the average gearing for the industry), translates to a $2 trillion reduction in liquidity. Hence the severe shortage of credit and predictions of worse to come.

Indeed, most analysts think that the deleveraging still has far to go. Some question how much has taken place. Bianco Research notes that while the credit positions of the 20 largest banks have fallen by $300 billion, to $1.3 trillion, since the Fed started its special lending facilities, the same amount has been financed by the Fed itself through these windows. In other words, instead of deleveraging, the banks have just shifted a chunk of their risk to the central bank. As spectacular as this weekend was, more drama is on the way.

Negotiation I

What is negotiation?

What are the criteria of effective (and successful) negotiation?

What are the factors that affect decision?


Came back from a workshop that costs me 2 precious days of this busy weekend. But indeed one of the most valuable weekends I have had in life. Won some money from the games and made a $5M deal (yeah, only a business simulation unfortunately), well the learning is pretty much more valuable.

Life is never about zero-sum game. That's what negotiation is for.


Leave the 3 questions above open-ended if anyone is interested to discuss.

(TBC)

keep learning

最近三天内大起大跌无数次，前天因为做不完的case整个抓狂，昨天成功的pitching和收到的prof的让人实在是开心的email，到今天早上接到大公司sales manager的call，紧张的对话之后老板说我不该说的话...

Oh shit!! I screwed it up.

于是又一次跌入低谷


但是其间学到很多东西。这里概括性的总结一下。

1. Pitching is not just about confidence. You may think you know how to pitch, but you need to know better how to answer questions.

2. The best way to buy and to sell, is to know you own product/production WELL.

3. Even if others do not believe in your idea, keep working on it. Do your best to convince them, and you are already half way there.

4. Keep learning and do not be afraid of challenges. Go ahead with it even you could totally screw it.

5. Spend your time wisely. 24 hours a day is too short if you keep wasting it.

6. Be motivated all the time. If you feel that you can't motivate yourself, talk to someone who can.


Well regarding the 3 business idea I am having now and previously, among them one has the most complete business plan, one is most workable, and I love the last idea most. It will be a long process to implement, but at least now, I feel so motivated to move on--which to me is the best thing, as I know how dead I could become when I lack the motivation, and how different I could be when it has come back to me.

So be it!

fall

It has become darker, colder, gloomier.

Longer nights.
Less sun.

It is just so DEPRESSING.

full power on

here it comes
another wave of inspiration and motivation

hang on!!!!

100% 火力全开
XD

唉

要上课了好烦

不想去不想去不想去

business case
不想做不想做不想做

T_________________T

诡异

昨晚做了个好奇怪好诡异的梦 >_< 

开始就是我一个人在很黑暗很阴森的森林中走着（也不知道是要去哪里），然后就奇怪的突然 出现了好多人，都拿着好像是很科技的武器什么激光枪啊原子枪啊之类的...然后又有类似彗星撞地球的情景出现 = =||| 总之好像是某飞船和某个像是一束激光的东西相遇了大家逃的逃窜的窜，我不知怎么到了谁家房子里（好大的房子貌似是豪门），但是房子的主人又好似是危险人物 所以我又要继续逃... 

下一个场景就变成我和几个人，好像是有lolo jade jing等等，在房顶上和一个美丽的巫婆在打仗...美丽的巫婆好厉害我们四个人都打不过她...之后发生的就是在故事的后半部一直keep haunting我们几个人的情景....lolo同学抱着巫婆一起从房顶上跳下去了（虽然不知道是同归于尽还是一不小心脚滑了），总之是那种经常在电影 还是动画片里看到的很英勇的跳崖画面....之后战争就结束了世界和平了可是我们几个人却一直好伤心好伤心一直哭一直哭直到醒来。 

去查了解梦 

说是： 

梦见和别人打斗，会郁郁不乐。梦见和女人打斗，会声名狼藉。

T_________T