Least Acceptable Agreement

As of week 2, we will have more details on how to develop a plan. So the first thing we need to do before we continue the negotiations is that we want to develop very specific objectives. In general, they had to be determined. What`s the best thing you want? We will translate them later into what I call the goals of reality. But let`s say now, what do we really need? As a general rule, the objectives must be truly fair and reasonable and be in terms of contractual quantities, delivery times or improved supplier quality. These are the typical goals you have. The second thing that is important is that you will probably establish a list of objectives, whether it is quality, price or service, and you have to decide what you need to have and what you want to have. The reason that is important is that in negotiation, there is always give and take and you are obviously going to want to have those you want to have, and abandon them when you need them. You want to make sure that those who have a lot, that you cling to them. So it`s very important. So let`s go on and use a question for you. What are the criteria for goal development when developing goals? Which one is important? What`s important when you write a good goal? So I`m going to give you about 30 seconds here, and then we`ll come back and we`ll go through that. So we use this thing called SMART.

I do not know if you have seen it in other parts of your business. We used it in Colgate. Let me let you go through this. So if it`s a simple acronym, SMART, if you remember. Specific to S, M is for measurable, A is accessible, R is realistic, and T is time. So basically, if you use those goals, you set goals, I think you get better goals, and you can read the definitions here. But basically, they say you really want specific, measurable, achievable, realistic, time-based goals. If you use this, you can set better targets.

Let`s talk about how you take this to the next level. So you`ve set your goals, which is important or not. I think what you need to have the most critical goals you`ve set for yourself is that you want to develop what we call MDOs and LESA. I will show you in a minute why this is important. This is the most desirable result. In the best of circumstances, what would be the most desirable outcome you would want to achieve either in terms of price, quality or service? We will, frankly, use the price over and over again in examples, because it is most often used, but it can be the quality of service or other things. The least acceptable term says I can`t go below that amount. What happens if you do? Well, if that`s true, if you`ve really written an LAA to be exactly what you want, you`re going to have to leave, and you`re going to have to go to another alternative. We call this the best alternative to a negotiated agreement. Normally, one of the most important areas, we will talk a little later about the fact that people have no joke. So what do you do if you don`t get your least acceptable alternative? So let`s look at how things balance out.

This is usually the way it works. So you have down, you`re the buyer, you have an LAA and an MDO, but you can`t recognize it, but if the supplier has something like that, or if it could have been driven by MDOs and LAA, it might have similar ones. What we are seeing here is that it is a compromise. I hope you will be able to find that negotiating window and try to find a negotiated agreement through consultations, speeches and listening. So let`s take an example of real life, because I realize that it can be a bit confusing. Let`s take the buyer who`s black here. What he is saying is that I would like to pay, if I could really, $11.