We sometimes see the Grinch negotiator slinking into town with Grinchly, short-term and hard-core negotiation tactics that cast a green and sickly shadow on relationships.  Fortunately, the EMBA graduates know a Grinch when they see one–and would rather see than “be” one! 

The holidays are a time of transformation for many people—the New Year even more so.  We can use that spirit of transformation and new beginnings to open a conversation with our least favorite negotiation partners.   If there is a business relationship that has been Grinchly, adversarial, or less mutual gains than you would prefer, use the holidays as a time to start afresh.  Sharing a newly acquired perspective of different ways to negotiate could be the best holiday gift of all. 

Best wishes to all,

Suzanne McCorkle, PhD
Co-Chair, Department of Public Policy & Administration
Director, Office of Conflict Management Services and Dispute Resolution Certificate Program
Boise State University

 A pertinent article for the residency and significant for the world economic perspective is:

ACCESSING INTERNATIONAL MARKETS – GREAT EXPECTATIONS

DOING BUSINESS IN EMERGING MARKETS from the UK Trade and Investments Publication September 2010

According to court papers, Thomas’ English Muffins generate about $500 million in annual sales for Bimbo’s, and there are three secrets for making their “nooks and crannies” texture — the recipe, the engineering and the process. Most Bimbo employees know only one of the secrets—Botticella was one of just seven people with knowledge of all three.  But what exactly are trade secrets, and how does one firm create and protect its trade secrets?

There are generally considered to be 4 main types of “intellectual property”—patents, copyrights, trademarks and trade secrets.  The first three are created by, and the necessary requirements established in accordance with major federal laws.  The fourth type, trade secrets, is not defined by federal law, but has been established through court decisions over the last hundred years or so—what is called “common law.”

Although the exact definition of what a trade secret is depends on court decisions in different states, there are certain aspects that have been generally recognized across the United States.  “Trade secrets” have been described as a formula, pattern, device, compilation of information, program, method or technique, which is used in one’s business, that: (1) derives independent economic value from not being generally known, and not being readily ascertainable by proper means, by others who can benefit from its disclosure or use; and (2) is the subject of reasonable efforts to maintain its secrecy.

In determining whether a trade secret exists, courts have often looked at: (1) the extent to which the information is known outside the business; (2) the extent to which it is known by the business’ own employees; (3) the extent of measures taken to guard the secrecy of the information; (4) the value of the information; (5) the amount of money and effort expended to protect the secret; and (6) the ease or difficulty with which the information could be properly be acquired or duplicated by others.  Court decisions have held that acquiring trade secrets through theft or bribery or violation of an employee’s ethical or legal duties are “improper means,” but merely “reverse engineering” of a product purchased legally, is not considered improper.

Because patents expire after 20 years (and the relevant information must be publicly filed with the U.S. patent office) more and more companies are treating important business information like processes, formulas, customer lists and business methods as trade secrets.  If a trade secret, like the formula for Coca-Cola, is never publicly disclosed, and the company devotes significant efforts to keep it private, the exclusive right to use the secret formula or process or information may last forever.

It is critical that companies which choose to treat important information as a trade secret mark the information as “secret” and carefully control access so that the information is not seen or disclosed on factory tours or when vendors visit the facility.  The “secret” needs to be locked up both physically in a vault (as the Coke formula is) and electronically, so others cannot access it.  Also it is strongly recommended that “nondisclosure agreements” be required for all persons who negotiate supplier or vendor arrangements or discuss business relationships with the firm.  Trade secrets are often one of the most valuable assets of a business firm but must be carefully protected.

Michael Bixby, JD
Professor of Management
College of Business and Economics
Boise State University

March 2010

How then, do we choose?  Typically, people pick the option they think will give “The biggest bang for the buck.”  Or in other words, we choose the product or service believed to bring the greatest value.  In the abstract, value is what remains after one subtracts the sacrifices you must make to obtain and use the item from the benefits you think you’ll get by having the item.  I believe that if you understand the component parts of benefits and sacrifices, you can see how your organization currently creates value and you can see missed opportunities to create value.  In the end, this should give you the chance to increase value, which in turn should increase the attractiveness of your offering and ultimately make your revenues go up.

Benefits come in three basic types:  product, service, and brand.  “Product benefit” means the function a good or a service brings; it’s what you’re offering customers.  For example, if you have a custodial service business, your product is a clean workplace, and a clean workplace is worth something to your customers.  “Service benefits” refers to accompanying services; ones that assist the buyer in using your offering.  So, service benefits might come from a telephone help line, or maybe from the self-help section on your website.  Finally, “brand” benefits are those intangible positives associated with certain brand images.  Prestigious brands may enhance one’s self-image to that person’s benefit.

Sacrifices are of six general types: price paid, acquisition costs, usage costs, ownership costs, maintenance costs, and disposal costs. Often, suppliers are very fixated on their list price, aka price paid, sometimes to the exclusion of anything else.  Yet buyers may be considering some of the other costs.  I find myself thinking sometimes, “I’m never going back there.  That salesperson is just too difficult to deal with.”  That’s an indication that the acquisition costs are too high.  I place a high enough cost on dealing with the unruly salesperson that the benefits are unable to offset it and so I take my business elsewhere.

Managers are therefore encouraged to examine their offerings in light of the three types of benefits and six types of costs.  Perhaps obviously, organizations sometimes identify areas where their organization can increase value by finding new benefits to provide.  Perhaps less obviously, sometimes organizations find they are inadvertently creating costs, other than price paid, for their customers and a simple fix to the ordering system, might for example, cost very little but create a large increase in value for your customers.  Work both variables:  benefits and costs.

Kirk Smith, PhD
Associate Dean Graduate Studies
College of Business and Economics
Boise State University

February 2009

Qualitative research such as in-depth interviews or observation can reveal customers’ emotions and experiences.  Such research often yields rich insights that can dramatically improve product design, marketing or retailing.  For example, observing customers while they use the product can reveal customer behaviors that impede product performance.  In-depth interviews can reveal brand or product image associations that managers were not previously aware of.

Developing rapport and trust during an in-depth interview is critical.  Separating the interview from a sales context and conversing about topics not directly related to the product can help make the customer comfortable enough to speak freely.  During an interview, customers can be asked basic questions about perceptions of products or brands, shopping behavior and product usage.  Creative questioning techniques such as word association exercises can help customers express ideas that are more deeply held.

Trina Sego, PhD
Professor of Marketing, Boise State University
December 2009

Jenny Sternling
Business Improvisation Instructor
Boise State University – Executive MBA Program
jennysternling@u.boisestate.edu
October 2009

Formula
Each cash inflow/outflow is discounted back to its present value (PV). Then they are summed. Therefore NPV is the sum of all terms     Rt/(1+i)^t     where:

t – the time of the cash flow
i – the discount rate (the rate of return that could be earned on an investment with similar risk.)
Rt – the net cash flow (the amount of cash, inflow minus outflow) at time t

What NPV Means
NPV is a decision model that measures how much value an investment or project creates for the firm’s owners above the opportunity cost contained in the discount rate. With a particular project, if Rt is a positive value, the project is in the status of discounted cash inflow in the time of t. If Rt is a negative value, the project is in the status of discounted cash outflow in the time of t. Projects with a positive NPV should be accepted. In financial theory, if there is a choice between two mutually exclusive alternatives, the one yielding the higher NPV should be selected. The following sums up the NPVs in various situations.

Harry White, PhD
Professor of Finance, Boise State University
June 2009

Business firms tend to organize people by skill areas: marketing people work together, finance people work together, and production people work together. So to take one person out of each area and create a new team is contrary to “how things are done.”

Segmenting areas by marketing, R&D or finance puts people into silos. Each functional area does its “job” before passing a project to the next area. For example, an idea starts as an innovation from the lab. Then it goes to engineering where it becomes a working prototype. Next, the manufacturing unit builds the product at low cost before the marketing group sells it…and so on…

More firms no longer follow this simple linear process. Instead, by using cross-functional teams and forcing different departments to work together in real time, firms see cost-savings and also boost creativity and spontaneity. An additional benefit to firms is the ability of the cross functional team to leverage a sturdy but lean workforce without sacrificing quality, while saving money and strengthening the bottom line.

Nancy Napier, PhD
Professor of International Business, Boise State University
May 2009

Dr. Napier teaches in the Executive MBA Program and hosts Idaho Business Matters on Boise State Radio. This tip comes from Dr. Napier’s course sessions in the EMBA Program and her radio show. Thanks to Boise State Radio for sharing this tip from the program, Idaho Business Matters, on NPR 91.5

Managers often say they need help teaching their salespeople to close–they just aren’t converting prospects to customers.  As many of our Executive MBA participants pointed out in last month’s session, closing often isn’t the problem. 
 
Professional selling is a series of steps and many models, such as the one below, indicate that “closing” is a very late step in the sales process.  More often the problem isn’t with closing–it lies in one of the two earlier steps: Prospecting or Face-to-Face meetings.
 
If the problem is prospecting, then your salespeople aren’t seeing the right people.  No matter how good they are in front of a prospect, if it is the wrong person or company, their sales totals will be poor.  Face-to-Face problems typically mean your salespeople have poor questioning techniques or poor presentation skills.  If your salespeople get a lot of price objections and their sales are low, Face-to-Face could indeed be the source of the problem.  That combinations of symptoms typically means they are not building sufficient benefits in the customer’s estimation to offset your price.

The Sales Process

Kirk Smith, PhD 
Associate Dean, Executive MBA Program
April 2009 ]]> http://cobe.boisestate.edu/emba/2009/05/12/professional-selling/feed/ 0 http://cobe.boisestate.edu/emba/2009/05/12/bad-slide-vs-good-slide/ http://cobe.boisestate.edu/emba/2009/05/12/bad-slide-vs-good-slide/#comments Tue, 12 May 2009 21:47:50 +0000 Trisha Lamb http://cobe.boisestate.edu/emba/?p=574

Make your presentations memorable by improving your PowerPoint slides. In an attempt to provide information, presenters often create cluttered slides. This distracts the audience from your message; they try to decipher the slides instead of listening to you. Create powerful, simple visual slides and put number-heavy tables and wordy descriptions in a handout. The audience will thank you and you will benefit when they understand your message.

Kirk Smith, PhD  
Associate Dean, Executive MBA Program
MARCH 2009

Bad Slide / Good Slide Example

Dr. Smith offers this tip from Presentation Zen, by Garr Reynolds, New Riders, Berkeley, CA, one of the books used in the Executive MBA Program.

View the full Good Slide / Bad Slide presentation by Garr Reynolds
Find the Presentation Zen book on Amazon.com ]]> http://cobe.boisestate.edu/emba/2009/05/12/bad-slide-vs-good-slide/feed/ 0