Introduction to Negotiation Strategy
At Oak Spring University, we provide corporate level professional Negotiation Strategy and other business case study solution. GE's ecomagination Challenge: An Experiment in Open Innovation case study is a Harvard Business School (HBR) case study written by Henry W. Chesbrough. The GE's ecomagination Challenge: An Experiment in Open Innovation (referred as “Ecomagination Ge” from here on) case study provides evaluation & decision scenario in field of Innovation & Entrepreneurship. It also touches upon business topics such as - negotiation strategy, negotiation framework, Entrepreneurship, Innovation, Leadership.
Negotiation strategy solution for case study GE's ecomagination Challenge: An Experiment in Open Innovation ” provides a comprehensive framework to analyse all issues at hand and reach a unambiguous negotiated agreement. At Oak Spring University, we provide comprehensive negotiation strategies that have proven their worth both in the academic sphere and corporate world.
What’s my BATNA (Best Alternative To a Negotiated Agreement) – my walkaway option if the deal fails?
What are my most important interests, in ranked order?
What is the other side’s BATNA, and what are his interests?
University of California, Berkeley-Haas collectionThe GE ecomagination Challenge case study takes place in 2010 when Beth Comstock, chief marketing officer and senior vice president of General Electric is planning a meeting with GE's CEO, Jeffrey Immelt. The pair plan to discuss the company's ecomagination Challenge, an open innovation process that solicited energy ideas from individuals and start-ups to identify potential ventures for in green and renewable energy areas for GE to invest in. Pursuing this approach required several organizational processes that were new to GE. For one, they chose to partner with four outside VC firms, and pool the due diligence process with them and co-invest with them. For another, they chose to receive submissions to the ecomagination Challenge through a publicly available website. Nearly 4,000 submissions were received, and 75,000 people participated in the process. By 2011, the ecomagination Challenge had already resulted in $140 million (out of its allocated $200 million) of investments in 23 ventures. However, the scale of these results was dwarfed by GE's $37 billion energy business. And it would take years for these young ventures to reach a size that would be of direct business value to GE's energy business. And of course many of the young ventures would likely fail along the way. So the time has come in the setting of the case for Comstock to evaluate the results of the ecomagination Challenge more carefully, and decide on whether and how to continue this kind of activity within GE's energy business, or in other GE businesses. How should GE measure ecomagination's results in order to justify its existence and possible future investments? What new processes and structures would be required to make sure that some of the Challenge's investments would pay off for GE down the road? Based on the program's results to date, was the program a good investment for GE and something GE should repeat, or was it a noble experiment that should be discontinued?
By interests, we do not mean the preconceived demands or positions that you or the other party may have, but rather the underlying needs, aims, fears, and concerns that shape what you want. Negotiation is more than getting what you want. It is not winning at all cost. Number of times Win-Win is better option that outright winning or getting what you want.
Options are the solutions you generate that could meet your and your counterpart’s interests . Often people come to negotiations with very fixed ideas and things they want to achieve. This strategy leaves unexplored options which might be even better than the one that one party wanted to achieve. So always try to provide as many options as possible during the negotiation process. The best outcome should be out of many options rather than few options.
When soft bargainers meet hard bargainers there is always the danger of soft bargainers ceding more than what is necessary. To avoid this scenario you should always focus on legitimate standards or expectations. Standards are often external and objective measures to assess the fairness such as rules and regulations, financial values & resources , market prices etc. If the negotiated agreement is going beyond the industry norms or established standards of fairness then it is prudent to get out of the negotiation.
Every negotiators going into the negotiations should always work out the “what if” scenario. The negotiating parties in the “GE's ecomagination Challenge: An Experiment in Open Innovation” has three to four plausible scenarios. The negotiating protagonist needs to have clear idea of – what will happen if the negotiations fail. To put it in the negotiating literature – BATNA - Best Alternative to a Negotiated Agreement. If the negotiated agreement is not better than BATNA then there is no point in accepting the negotiated solution.
One of the biggest problems in implementing the negotiated agreements in corporate world is – the ambiguity in the negotiated agreement. Sometimes the negotiated agreements are not realistic or various parties interpret the outcomes based on their understanding of the situation. It is critical to do negotiations as water tight as possible so that there is less scope for ambiguity.
Many negotiators make the mistake of focusing only on the substance of the negotiation (interests, options, standards, and so on). How you communicate about that substance, however, can make all the difference. The language you use and the way that you build understanding, jointly solve problems, and together determine the process of the negotiation with your counterpart make your negotiation more efficient, yield clear agreements that each party understands, and help you build better relationships.
Another critical factor in the success of your negotiation is how you manage your relationship with your counterpart. According to “Henry W. Chesbrough”, the protagonist may want to establish a new connection or repair a damaged one; in any case, you want to build a strong working relationship built on mutual respect, well-established trust, and a side-by-side problem- solving approach.
According to
Harvard Business Review
, there are three types of negotiators – Hard Bargainers, Soft Bargainers, and Principled Bargainers.
Hard Bargainers – These people see negotiations as an activity that they need to win. They are less focused less on the real objectives of the negotiations but more on winning. In the “GE's ecomagination Challenge: An Experiment in Open Innovation ”, do you think a hard bargaining strategy will deliver desired results? Hard bargainers are easy to negotiate with as they often have a very
predictable strategy
Soft Bargainers – These people are focused on relationship rather than hard outcomes of the negotiations. It doesn’t mean they are pushovers. These negotiators often scribe to long term relationship rather than immediate bargain.
Principled Bargainers – As explained in the seven elemental tools of negotiations above, these negotiators are more concern about the standards and norms of fairness. They often have inclusive approach to negotiations and like to work on numerous solutions that can improve the BATNA of both parties.
Open lines of communication between parties in the case study “GE's ecomagination Challenge: An Experiment in Open Innovation” can make for an effective negotiation strategy and will make it easier to negotiate with this party the next time as well.
Henry W. Chesbrough (2018), "GE's ecomagination Challenge: An Experiment in Open Innovation Harvard Business Review Case Study. Published by HBR Publications.
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