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Context Exercise

Lesson 23 from: Worth It: Negotiation for Creatives

Ted Leonhardt

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Lesson Info

23. Context Exercise

Lesson Info

Context Exercise

The next chapter what's goingto happen with alfa group and better world just to remind us all alpher group has purchased charges for an astonishing fifty billion dollars charge it will dramatically extend the use of anything powered by battery better world design is one of two finalists for the product and brand to sign assignment and you will see in this clip you will see the first encounter between better world and alfa group they're going to sit down and they're kind of try and reach a deal and so we're going to get to see that happen and just to remind you who the characters are we will see alison who is ceo and co founder of a better world ben who is teeth chief stat strategy officer and co founder of better world and cindy who has a phd is in charge of research a better world and she actually was hired away from ideas ink which is the competitors and then you will see ted front from alfa group you'll see ted who's vp marketing charles who's vp purchasing and you'll notice that ch...

arles has a frown and that's because he's in purchasing and he's supposed to disagree with everything and tabatha who is new to alfa group and it is in charge of all of design and alfa group is a huge global organization employing hundreds of thousands of people and doing business in almost every market and every consumer segment and industrial segment so here are the questions how would you describe the dynamic what are the issues number two three what are the underlying interests four have you had a similar experience and five what was most notable about what happened so how would you describe the dynamic what are the issues what are the underlying interests remember we always look for what are the interests that uh underline the way people behave and then any similarities between your experience and this experience and what was most notable shall we roll that clip now thanks for coming way nice to finally meet y todo hi how are you charles is our senior uh purchasing agent on this assignment and uh you know the money is important here uh I know that you know tabitha uh she is in charge of design and there's much more visibility design within alfa these days than there has been in the past which personally I think it is incredibly important for our future and that's why you're here and uh allison you and I've worked together in the past on the led saying and that was great good experience also with you ban on uh cindy your new we've met but I don't know much about you your research is that is that is that right I do represent a better world phoebe of research design good good where'd you get your phd harvard I've heard of it so um so we're here tio tio teo uh kind of decide how we're going to go forward um um how's your stay in the city ben I mean have has it been ok? I mean, the hotel okay and everything yeah it's good. We're happy we're comfortable we've just had one thing on her mind that's today's meeting so I'm really glad to be here uh we were wondering is there anything that's changed since we last spoke? Anything we need to know about that might be new yeah, we looked at a bunch of different companies um we narrowed it down well, you and one of the company and so you guys have done a really great work we won't be at your back ground and I am personally worked with your company but they haven't said great things about you guys um but I got to say, um, we are you are a lot more than our competitors that we're looking at and who also have great track records. Um, so I think what we're really trying to do is figure out why the budget is a million dollars more so about fifty percent more than the competitors. So I think we're just trying to narrow that down because we have to go up two senior management and kind of explain the budget and so I think our concerns definitely definitely that's our one most important makes sense that's obvious absolutely and we've we've discussed it as well on our end were hoping as we come here to this meeting to give you our, uh, point of view on the reasons why we are more expensive bring forth the track records that we do have working with ted on the led and boeing solar and also clean water so hopefully that uh the advantages that we can bring to the table we might be able to convince charles tabatha and of course you ted that we can um we can launch this product successfully. Well, the million bucks is really a big deal around here, you know it really it really is a big deal it's not arbitrary I mean, I'll let then explain further, but but I'd like to explain just for a moment that we're in a precarious situation I mean, you know that I'm a fan of your process we've worked together before uh we had a fantastic result and we really appreciate it, but this venture is far bigger than that adventure and we are basically on the line with wall street if our if wall street if the investors feel that we cannot make this charge it thing happened and happened with reasonable costs and a reasonable timeframe um our stock can go into free fall that's terrifying and that's that's a big a big a big a concern around here and costs our huge um uh we're building factories in mexico and northern ireland and uh china right forgot china we have people spread out around the world sourcing materials for the fundamentals of the manufacturing process we're hiring people um so costs are a big issue on every on every level and you know my my job is marketing um and uh I have to say I mean I have a bias I favour you but a million dollars differences is charles and tabatha know that and uh uh so I have to say that uh I just really want to put some put some emphasis on that and let me say for myself too I'm I'm not opposed to this at all I mean everything I've heard about you folks has been terrific so yeah I think you're terrific outfit and I like your values on they are the same values that we're like we're hopeful teo position our company in in the future because this is a time of enormous change in our business uh which has been really an industrial concern and all of a sudden we're presented with an opportunity to really change the world and we'd like to be partners with you and we want to be part of that as well yeah I uh I I can feel that I mean I understand that and I can see your enthusiasm and um I've got a meeting in three days in the with the cfo and the cfo is going to say, why would you go with a company that was half again as expensive as the company that we've also had a good track record with that we know does good work? Um, so I'm gonna I don't know enough about this world of design to be able teo say to them what it is that we have all decided as the a proper way to go when we're looking at a million dollars uh, difference between this proposal and what, as far as I can see is an equally competent proposal. Well, first of all, charles, I I wanna hit on something you said, which is personally for me most exciting part of this is that, as, you know, a better world were very selective about the products that we take on and with charge it both our companies have this opportunity to do a partnership that is going to change the world, but this is possibly the most most significant product to come out in the history of industrial corporations uh, if we get it right exactly. And so at better world, we look at this very seriously, we want to help you with this product because this is a game changer for us to the stakes are very high er and so through this process, we don't want to get anything wrong that means the expenses that it takes for design and research and every step of the way personally that's one of the things that puts us ahead that's ahead of the competition, as far as I'm concerned, is that we pay the extra dollars because that's what it takes to make sure that our timelines don't slip, that we don't take risk that everything is flawless in the process, which unfortunately translates the higher costs. Yeah, but the profit margin that we have compared to our competitors is much slimmer. Exactly. Oh, that's, nice to hear I love to see more detailed, maybe of the budget on the budget I saw um, I mean, of course we're still looking at the final numbers of million dollars difference, but if if you could send us over a more detailed a list of the budget items and maybe what the costs are because to us just tow, prove your company into using your management because that amount of so much, um and then maybe we can see if there is maybe your costs are more for reasons that there's something we could work out or something maybe kind of meet us in the middle a little bit, I don't know if that would be possible after looking at the numbers more, um, there was one item on the list that which was the most the biggest difference I found on the list was the design it was about four hundred thousand more than the competitors, so really I'd like to hear a little bit more about what you would have to say about the difference, right? We build research in our design at our firm at our company. We know that there's a gap between the design people and the, uh the development, the research um we want to close that gap. We really want to bring the design and the research together and to do that we have to go out into field and do the research for the product. Then we come back to our paperwork in your books and say, hey, this work this didn't work, we were lady information toward design team they will make the adjustments, we go out to field again and we want to make sure that consumers consumer acceptance is really important to us. So if we can waken really decrease that gap between the two departments the two teams for us that money that is spent is very important because that's what's gonna get consumer acceptance for your product out much quicker there's really one for me personally there's one telling number and that is the profit margins of our company. Compared to others, our profit margins are around ten percent where is all of our competition hovers around thirty percent so if you look at that a very high level and you go there charging a million dollars more where profit is twenty percent less. That should tell you right where our dollars air going? Yes, that's. Definitely. I'd love to see more information about that afterwards. Building on the, uh, the consumer acceptance that's going to again. I know he talked about stock prices that's going to increase stock price that's going to increase revenue. That's going to make the whole company very content. If we can do these things for you and it all this start with the consumer is accepting this product and making it work. I'd liketo ask you guys a question. Alfa group has this product that could possibly change the world. Uh, what is your underlying root goal for the release of this project? Well, let me take a first crack at it, and then the two of you do you do you want to start? You looked like you had something right on the tip of your tongue. Weight of gold. But that's the long terms. Of course, ray. The long term goal that all of us actually the table want is to make a better, you know. We're a better world like you which is why I think that we would do such a good team and which is why we were hoping that you could come closer to the numbers of the competitors so that we could work together because I feel like we all have the school to make the world better and tio I mean if this product of this prototype charge it which is a terrible name by the way when gotta change it but if we can make it in a usable form and design a properly too appeal to the masses it could reduce our fossil fuels the world's fossil fuels and I mean things that we use every day I'm that's I think the ultimate goal of our company um other things you know, money and stuff are there obviously but that is the major goal for us well and you hit on important one uh branding right you're about to release a product that's gonna change the world consumer acceptance from mr marketing over here and you worked with us before ted you know how much money and how much time that we put into branding and making sure that there are no mistakes on this release uh and I know it's a significantly higher price tag but can you put a dollar amount on a product that's going to change the world for our kids for generations and generations that money that time needs to be spent doing this exactly right, not cutting corners. We have gone through our numbers and we've eliminated a lot of open ah lot of what we do, I wanted to be into the budget, but we've actually went back to the numbers and have cut down to the three million okay to limit the scope or budget any further would not be in good service of the final result for you are staking god, okay? It would compromise our process for sure, okay? And we wouldn't be able to perform for you at the level that we want to be known for and that this product really deserves. Can you do it at the level that you've quoted or we're gonna have issues coming back on us? You know? We don't know, yeah, facing it thats a great that's a great question, and we run the numbers several times in our prime assesses airtight. By now, we've had a learning curve and, um, ok, no, we're over that kind of thing. We're solid it's an excellent question, charles, and frankly, that's why we're better than everyone else is because we charge more, but every step of the life cycle of development we put in that time and the expense necessary to make sure that we don't have to retrace our steps. Damn sensitive that way had a situation just last week where a company did what I call o by the ways, and they got the contract and, oh, by the way, there's going to be this in this in this or we can't perform, and, uh, we don't like that particular doesn't foster good relationships between between what we hope to be partners, and I know that this design is really going to be important. I mean, I I'm old enough not to necessarily byproducts on the basis of design, and I recognize that you folks around the table are much more sensitive to that, and your age group is much more sensitive to that than mine. Wass so I'm not opposed to putting money into design. I don't want money put into design that is just for more money. Uh, and I don't want money put into design that's not going to get us a product release that happens smoothly and effectively and quickly, quickly that's what has been point? Yeah, well, can we get our kitchen where we go? How would you describe the dynamic what's going on what's going on that's what I want to know from folks online, we can start there on dh jumped you guys we have clara r a who says that they felt like tabatha was can't doing charles is a job for them. Why would she do that question? Yeah, I'd like to hear her thoughts on why tabatha would do that. Yeah, actually, I feel like there was a lot of, like, role reversal with alfa group charles kind of took on ted's role like from a like he was he was actually rather he was pretty aggressive in the first meeting about money, and then he was ready rather like light hearted with a signature this one? Why would he do that? Might have put in for early? Um, it felt like they were kind of trying to, like, negotiate with our heart and be like, oh, we can make a better world, but you know, if you take a little less money, but why would charles kind of reverses his from the meaning in the first meeting to a nice guy in this meeting? Uh, rodney beds will have the thought. Ted is ingratiating himself to charles by talking so much about money and also setting up a better world to convince charles and tabitha there that they're worth the extra money. Go back through that one again, I just lost it, rodney says that head is I'm realizing that I wasn't actually answering your questions this's separate thing, okay, that wasn't we're starting over, okay? I'm sorry s o running menzel says ted is ingratiating himself to charles by talking so much about money and he's also setting up better world to convince charles and tabatha that they're worth the extra money isn't that interesting little role reversal their underlying underline and what's ted's underlying it issue interest you think ted's underlining interest you know, seeing the past videos is ted one's better world like that that's his underlying interest right? Charles is getting the number to where it needs to be tabatha is I think her underlining interest is standing out and making a name for herself on this one. Yes, yes yeah really quick actually get some answers to the question about charles we have shelley and are already in our villa who says so he can step in and be the hero or the bad guy whichever is needed when push comes to shove exactly elwood's tabatha doesn't so that charles can come into the heavy later on when it comes down to brass knuckles if he has to yes, exactly very good, very good all right, so but has better? World budged texas girl says they're positioning themselves as the prize this is how we work were selected we haven't expensive but have a proven process we're not looking you that extra million is going to be used and not just put in the bank is profit I wonder do they think it's gonna work? I mean it's mean tabatha keeps saying, uh, we got four hundred thousand dollars go ahead, I think they're setting themselves up for you going into for that other proposal because towards the end there it's like, I think they kind of got where they wanted to go where she said timing timing is the most important part about this overall, you know, better worlds like I'm describing that, you know, the way that we do our business here is we're extremely selective and how we do it, we're airtight in our process, so we won't have these, you know, all the sudden hoops, you know, we need some more, but they're they're shoring themselves up it's like a we're awesome, we know we're good. We're confident about that because we've done this before for you on multiple occasions and, you know, that's why we are who we are but no budge on the money, there was one little hint of timing, wasn't there? Yeah, yeah, one little hint of time and awaken visual says they put it back on them, saying it will hurt their product to lower the price, right? Yeah, and don't don't we all feel that way from time to time, exactly a really key point in the conversation where ben goes, can you put a dollar mona what's going to change the world? And I feel like that was the shift in the conversation where it's, almost alfa group, like, backed off, started backing off on the money, pushing a little bit, I think I think right then is when better world straight, getting control of it, of the conversation when they're asking them questions like a like, like you said, like it's, do you want a lesson your product by, you know, cutting corners? You wantto, you know, can you, you know, put a price tag team you followed up with? You know, we can't perform at a level that's needed with any less of a mountain this but isn't it interesting how, in direct the conversation seems to be it's kind of meanders, doesn't it? Rebecca houghton actually said, I feel like they're talking in circles a little bit. Yes, it's just going round and round. Why does that happen? No one kind of want to get to it because they haven't issued, don't they? They've got a million dollars difference, they'd like to work together, but they haven't come up with how that can happen, have they? And mark are says that one of the issues is justifying that additional million dollars, right? Elwood says they still haven't gotten to the point that they can save alfa money and rodney bed soul says that tabitha's treating a better world as though they're a commodity she is isn't she why is tabitha trying to be so tough definitely peace trying make name for herself she wants chimney needs this win and she is gonna you know be as tough as she can so she can get it she's got to be tougher than charles she has to be tougher than charles and why as charles seems to be so nice he's smiling these little role reversals are very interested in these behaviors in these in these situations yes you know one thing I see with this is you know having the role reversals it's like you know better world like when they got into it it's like you know hey charles is that that tough guy wanted comes money like ted's on her side and tab with us the new person but been alfa you know probably going to see this me like hey let's throw them a loop getting a little bit off the game but charles is like he needs to be okay yeah you know we can see what we can dio like I like you guys you know but at the end of the day I think he knows that like when it times put his foot down he can and he will but we know that ben has a plan doesn't mean we know that ben has a plan so is it has an interesting question along this line is beating around the bush a strategy when do you know when to actually get down to it when so much is at stake? Well, I'd like to throw a question back for a minute why did why didn't ben simply throw out the plan? I think he was beating around the bush to get that that point we're at the end, it was timing came up, he wanted to hear what he needed to hear so he's like, but wait, I have a bold, great idea that's going to change the context in the way that they're talking about it now, so he's, going from this is what we're looking at, okay let's, step out of the box here like what we were talking about before we have that context when you're in it, you don't see it when you're out, you can look at it. Devon made that point really nicely yeah, so he's he was waiting for that moment where it's like timing. Yes, okay he's waiting for the moment the waiting for the moment I step out and let's shift it there's some other things happening as well anything else online on that so much so, so much so um so we all need to feel comfortable with each other, don't we? We have to get to know each other sort of like the first day we weren't interacting the way we are now, we need to kind of get to know each other so one of the dynamics that's going on is we're all kind of feeling kind of feeling each other out without really without really getting the issues out there because we don't really want get into a fight we don't really want to get into I'm here and you're there and we have this million dollars with no obvious resolution to it, so no one really wants to approach it and they but there's plenty of threats in the air we have the hint that they could they could get the other they could hire the other organization we have we have wei have tabatha pressing for them too kind of meet them half way of sort of what she's suggesting, which is a very traditional you know way of negotiating you know we'll split half and we'll split half again and so on and so forth, but they don't seem to be going for and teddy to suggest that the charles may have been waiting until all the cards were on the table to see what was hidden very kind of let the discussion go on a little bit get as much information as possible before taking a stand extending the conversation is a very very good tactic because it gives you a clearer understanding of the way everyone is feeling and the other thing that happens that I think is extremely important here is that it gets the issues in everyone's frontal lobe so we're sort of we're sort of loading the a computer that's what we're doing we are way are in the process of loading the computer and kind of working around these issues in sort of a soft way and both teams are doing it and they're doing it collaboratively in effect an interesting idea from texas girl that I love a better world could have said when there's that big of a money gap between you and a heating bid you can put that money difference as a negative on the other firm they obviously don't understand the scope that they've left out important that they're trying to cut corners do that so you can use your higher price as an advantage showing your expertise yes but I would say that it's best to do that without saying it so let them come to that everyone come to that conclusion but not be so rude as to put it out I think I think that did that in a fantastic way bye you know doing that through his own costs being like hey you know if we did that ourselves we would be you know doing you a disservice and cutting corners and then that they're thinking in their head well, why are they a million less when they're off their profit margins? More right? So they're taking more from themselves and not putting more of that to their right to the design, right? A lot of photo, yogi is wondering how many conversations can you actually have, like this? They're thinking about you're slamming your hand down story from yesterday, and I know we're gonna talk more about when do you slam your hand on the table later on today? Well, it was it was four or five days of conversations like this for five days, so this is nothing. What do we have? Fifteen minutes we had fifteen minutes, we had four or five days of conversations like this, obviously to bring this back to scale, like, if you are working with, you know, if you're a solo preneurs working with a mom and pop company, you're not going to spend four or five days all day work negotiations, it's a question of scale, this was a million dollar contract and obviously it's a bigger thing there. So this is more on a smaller scale as well, yeah, but I mean, you could easily spend fifteen minutes having a discussion like this with a client over five hundred dollars, you know, so it's definitely you five hundred dollars is certainly worth a fifteen minute conversation. A thousand dollars is certainly worth a half a hour conversation, so we could kind of ratchet it up from there, I suppose, but but but extending the conversation is a nice thing to do because partially because it gives you a sense of where everyone is, and even though in your heart of hearts, especially a creative person, you want to just leap to the conclusion because you'd really like to resolve this so you can get on with doing the fun part, if you will. So that's, that's the that's kind of where we're going, so this afternoon I'm going to cut this off. Now, this afternoon we will see the final chapter of alfa group and better world and see what happens, okay? Uh, and I think I have so and and we, of course know that we're looking for a context change, and we think that ben might, uh, might bring up a higher purpose, so principal always strive for a higher purpose that you are passionate about. It will empower your expertise principle it will empower your expertise because when you evoke a higher purpose and better world does it in the name of their business, they are saying with the name of their business, they're putting a stake in the sand, saying we I want to contribute all of our work wants to contribute to a better world, so that means we don't want to do things that are plastic and end up in the oceans. That means we don't want to do things that create mohr coal fired plants. We don't want to do things that will be damaging the environment or contribute to go global warming. We do want to be involved in things that reduce the amount of of carbon footprint. We do want to be involved in things that improve the world for people so better world is already there, and in fact they're clients almost there, so we'll see what happens next so next, our next segment planning is the key to understanding. Planning is the key to understanding, and now some ted tips, we want to move from being tough to being aware, so when we go into negotiations, sometimes the kind of boy stir ourselves up and try to be tough, uh, when we go into negotiations, toughness is not really so good. What we really want to be is super aware of what's going on super aware we want to use up all of our little antenna to know what's going on, uh, we we know that clients do want to help, we actually saw the better world clients actually do want a better world and do want this project to be successful, and they do want to help the design firm achieve that. They just haven't gotten there yet. Uh, we're going to talk about bullying this afternoon. Bullying does work, so watch out for it. Uh, keep my tips handy and hang in there and learn.

Class Materials

bonus material

Ted Leonhardt - 13 Negotiating Tips.pdf
Ted Leonhardt - Core Principles.pdf
Ted Leonhardt - Nail It.pdf
Ted Leonhardt - References.pdf
Ted Leonhardt - Session Keynote

Ratings and Reviews


While I walked away with some amazing knowledge and skills to apply to negotiation, more than anything, I appreciated the authenticity and humility with which Ted crafted and delivered all of the materials in this class. As a fellow creative, every word spoken in this course resonated with me on a deep level, and led me to retain and integrate the materials far better than I expected. A most sincere thank you to Ted for sharing these pieces of his inner life with us.

Kal Sayid

Love Ted. His desire to help creatives shines through. Lots of great nuggets as well as strategies for both the newbie creative and the veteran.

a Creativelive Student

Another terrific course from CreativeLive. I would and did recommend it for anyone, creative or otherwise. Most negotiation courses leave one with a "bad taste"-not this one. I vastly prefer this approach. My life would be very different right now if I had this information available when I first graduated from college with a BFA in Graphic Design. Oh, and an unmentioned bonus-a design agency soap opera is included. Ted is a marvelous teacher.

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