#37 – How to make full use of your power system in a negotiation

Power is like Fire:

to get started, fire needs the coexistence of three componentes: some fuel (eg.: hydrogen), some comburent (eg.: oxygen) and a trigger (eg.: a spark)

As well as fire is the unavoidable effect of fuel +comburent +trigger, you get a real POWER system everytime you have

  • a resource (your fuel)
  • + ability to dispose of it (this is the “oxygen” for your power system)
  • + willingness to get more value from that resource (this is the real trigger that will switch on your power system)
your power system:
resource +availabity +willingness

Only after a deep understanding of what is and how works your power system, you can lead an effective negotiation. In fact, negotiation means exchanging resources, so as to obtain greater overall value, tanks to the interaction with counterparties’ power systems.

So, ask yourself:

  • Which resources do I have?
  • Am I really able to dispose of such resources? Which constraints may I have?
  • Do I really want to make something happen with those resources? Do I really want to exchange them with other resources, to increase the overall value?

And then also:

  • What kind of resource do I lack? Who has the resource I need?
  • Can he/she really dispose of that resource?
  • Might he/she want to increase value putting that resource to good use and getting part of my resources?

Only now you are able to design and lead your negotiation, as it was a simple interaction between your power system and the counterparty’s one.

To keep it short, the negotiation final result R*, in terms of gotten value, may be seen in the following way:

R* = [(Ra * Aa * Wa) + (Rb * Ab * Wb)] * Hvr

where:

Ra: value of the resource provided by Counterparty “a”[$ or € or any other currency]

Aa: availability for counterparty “a” to dispose of his/her resource [from 0% to 100%]

Wa: willingness of the counterparty “a” to put his/her resource to use [from 0% to 100%]

similarly for Rb, Ab and Wb

Hvr: Higher value ratio [= or > 1] For example, in case it equals 1.5, it means that the Result (ie.: R*) will be one and a half time the sheer sum of the value of the initial resources

Finally, if all the necessary elements are present, and parties are fully aware and deeply knows the involved power systems, the negotiation can only start in the right direction!

in the right direction!

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