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A Real-World Example
The Issue and Context |
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At the Client, the decision on an acceptable value would be made by the CFO. The CEO, who was not involved in the negotiation, would likely veto anything less than 50%.
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At the Counterparty, there were three partners. Two of the partners would need to be in agreement for the deal to proceed. The deal was very important to these partners.
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Data Collection |
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List of Stakeholders |
Influence |
Salience |
Position |
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Partner 1 at Counterparty |
80 |
70 |
30% |
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Partner 2 at Counterparty |
100 |
90 |
50% |
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Partner 3 at Counterparty |
25 |
50 |
30% |
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Client CFO |
100 |
30-40 |
70% |
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Client Line Manager |
20 |
75 |
75% |
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Client’s Bank Advisor |
40 |
70 |
85% |
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Example Results
Base Assessment |
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The Base Assessment suggests that agreement will be reached after three rounds of negotiation at 50% Client ownership.
The partners at the Counterparty and the Client CFO are willing to reach a compromise in the third round. The Client line manager is unhappy with the outcome. |
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Stakeholder |
Round 1 |
Round 2 |
Round 3 |
Round 4 |
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Partner 1 at Counterparty |
30 |
59 |
50 |
50 |
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Partner 2 at Counterparty |
50 |
50 |
50 |
50 |
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Partner 3 at Counterparty |
30 |
46 |
59 |
50 |
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Client CFO |
70 |
65 |
50 |
50 |
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Client Line Manager |
75 |
75 |
75 |
75 |
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Client’s Bank Advisor |
85 |
85 |
85 |
85 |
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Negotiation Opportunties Identified |
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The model indicates that the Client's Bank Advisor has more influence than he realizes with Partners 1 and 2 of the Counterparty. (This influence may be the result of the importance attached to the deal by the Counterparty.)
In the third round, when the Client CFO believes that 50% is the best outcome available, the model indicates that the Advisor has the opportunity to intercede and persuade Partners 1 and 2 to accept a more favorable outcome (up to 75%). |
The model indicates that Partner 3 is unlikely to move as far as 75%, but will not veto the result.
Had this Client not used the DII Model, it would own only 50% of the Joint Venture, not 75%!
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