(XXII) Negotiation is where Beef is made: SPIN

Negotiation is where Beef is made: SPIN
My conclusion and experience is that the value of a patent is “what you can get” – and that is a matter of negotiation. Of course, you can try to convince your counterpart-to-become- partner with all the different methods and(s)he may try to do the same with you. You will find many experts and books on the psychology of negotiation searching the web, most of whom will focus on the dialogue. My old colleague and friend, Henning Sejer Jacobsen has written an interesting book about his experiences and runs a workshop series about it. I find that negotiation is 96% preparation and 4% SPIN method. Where’s the Beef, then is 96% about preparation and 4% SPIN. What is SPIN?

Unlike most sales training methods, Neil Rackham spent 12 years on studying why traditional sales models, which were developed for small consumer sales, just don't work for large sales. He shows how conventional selling methods are doomed to fail in major sales. But most important of all, he explains with clarity the successful SPIN strategy. Creating collaborative agreements between industry and university is a “complex” or major sales situation. SPIN sales are rarely completed in one meeting or one exchange of information; rather several meetings.

Another aspect of collaboration agreements is that the persons who open the communication are not the only and seldom the final decision makers. For example, I have uploaded documents in the Beef Knowledge Management Platform about how large corporations negotiate license deals. Inevitably, you’ll see that there often are Technical Review Boards or Committees who manage different aspects of performing “due diligence” analysis.

The basic insight of Neil Rackham’s SPIN thesis is that there are different types of dialogue and the successful sales follow a pattern: the first dialogues cover S-questions: namely about (the counterpart-to-become-partner’s- Situation, ie. a form of personal grounding (“as simple as “how are you”? “who are you”?). The follows a series of dialogues about P-questions: ie. Problem related, now focusing on the problem at hand. Thirdly, the negotiation moves into I-phase, standing for Implications (of finding a solution to the Problem). Finally, and this is where the economist methods start and end, SPIN sales concern themselves with N-questions: the Needs-Payoff or Net Present Value of a solution to the Problem.

Rackham, who has founded the Huthwaite Group, which offers sales training to many corporates around the world, only gets to the “money” issue at the very last moment. Is there a difference between communication in technology transfer and in commercial innovation practise? And if so, specify how and why!

Certainly Beef Communication has many similarities with models of successful business communication in relation to complex sales/business operations.  Successful business communicators, according to Rackham, use these question types in complex negotiation cases, never at the same time but always in a sequence of meetings (communications) and always in this order. A solution is never offered immediately, but only after a thorough mutual understanding of the SPIN aspects has been reached. In many ways, the typical Technology transfer model corresponds quite well with Rackham’s SPIN model, which leads me to claim that Beef Communication is not generically different from complex sales negotiations. My conclusion from this is that there is no reason to believe that the TT profession is very much dissimilar to ordinary SPIN Selling.

One important distinction may be made in the case of application of early stage or prototype research results to commercial practise. In most of Rackham’s cases, the “interviewer” has a limited arsenal of solutions, namely his company’s products and services, most of which are well described both in terms of technical/operational aspects and price. In TT cases, where the TT Offer is not a fully developed technology, there will always be questions concerned with whether the suggested Offer will work in real life. If there is only theoretical evidence or a simple prototype, how can I convince a businessman that my Offer will work, since I often have no clear evidence that the prototype can be made into an operational production item without excessive cost? In such cases there will often be a need to actually carry out pilot projects to test the Offer. It is clear that communication between the parties will suffer from the fact that the pilot project must be funded – who should pay? The risk is, in other words, higher for TT. Furthermore, the risk profile for TT also includes the potential business of the Offer once it is introduced into the market.

In summary, I find it useful to apply Neil Rackham’s insights as guidelines for Best Practise Standards in Beef Communication. Later in this course, we shall see how this can be done in practise.

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Rackham, who has founded the machine Group, which offers sales training to many corporates around the world, only gets to the “money” issue at the very last moment.

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