Zone of Possible Agreement (ZOPA) – describes the intellectual area in negotiations between two parties, during which an agreement can be reached and on which both parties can agree. An agreement is possible within this area. Outside the zone, no trading volume will result in an agreement. Sometimes referred to as “negotiation margin.” 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.