Boise State University - EMBA Tip of the Month

Holiday Negotiation Greetings

embabsu — Sat, 11 Dec 2010 17:52:31 +0000

The winter holiday season is a good time to refresh the spirit of collaborative negotiation. What can be better for the holidays than fostering situations that benefit everyone involved as much as possible? Negotiators with the spirit of the season still ask for a discount when doing that holiday shopping or end-of-year deal, but remember the best deals are good for everyone now and when the New Year comes along.

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

Doing Business in Emerging Markets

embabsu — Tue, 28 Sep 2010 20:28:58 +0000

As the second year EMBA class prepares to travel to Hanoi, Vietnam for its International Residency in October class members are studying about Vietnam’s exploding economy, culture, and doing business in Vietnam before they leave the United States. In preparation they are scouring business publications and newspapers for the latest news to help them with this experience and to assist their understanding. When seeking to expand your business don’t forget to explore opportunities both inside and outside of the norm.

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

Marketing “Value” To Your Customers

embabsu — Thu, 18 Feb 2010 16:27:45 +0000

When shopping, do you always pick the cheapest alternative? Most of us would say no. When making a purchase for your organization, do you always pick the cheapest alternative? Again, most of us say no.

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 Tools

embabsu — Sat, 19 Dec 2009 21:12:38 +0000

Designing and selling the “best” product isn’t enough if your customer doesn’t see the product the same way you do. Even managers, salespeople and other company reps who interact frequently with customers don’t always know what their customers are thinking or what they want. Managers are busy attending to business, so they don’t have time to listen to the customer. And often customers don’t or can’t clearly articulate their needs.

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

KEEPING THE DIALOG OPEN WHEN WORKING IN GROUPS

embabsu — Mon, 12 Oct 2009 17:13:11 +0000

When brainstorming in a group setting a good technique for keeping the discussion going it to adopt the phrase “yes…and” instead of “but” or “no…but”. A good way to put this into practice is to decide beforehand to use “yes…and” whenever the conversation moves from one person to another. It might feel a bit strange at first but the end result of your session will most likely be superior to a conversation filled with “no’s” or “but’s”.

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

Using Net Present Value to evaluate long-term projects

embabsu — Mon, 22 Jun 2009 21:10:53 +0000

Definition
Net present value (NPV) is defined as the total present value (PV) of a time series of cash flows. It is a standard method for using the time value of money to appraise long-term projects.

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.

If…	It means…	Then…
NPV > 0	the investment would add value for the owners	the project may be accepted
NPV < 0	the investment would subtract value from the owners	the project should be rejected
NPV = 0	the investment would neither gain nor lose value for the owners	We should be indifferent in the decision whether to accept or reject the project. This project adds no monetary value above the opportunity cost of funds used to invest. Decision should be based on other criteria, e.g. strategic positioning or other factors not explicitly included in the calculation.

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

Benefiting From Change – Cross Functional Work Teams

embabsu — Wed, 20 May 2009 21:11:53 +0000

The idea of cross-functional work teams – where employees from different parts of a company work together to develop new products – often conflicts with the status quo. But it doesn’t have to.

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

Professional Selling

embabsu — Fri, 24 Apr 2009 16:44:02 +0000

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

Bad Slide vs. Good Slide

embabsu — Tue, 10 Mar 2009 19:44:10 +0000

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

Positive Cross Cultural Communication

embabsu — Wed, 11 Feb 2009 23:01:27 +0000

When dealing with clients, employees, or colleagues from other cultures the best advice is to not assume their culture is the same as ours. Americans use idioms a lot and people from other countries have no idea what we are talking about. For instance, suggesting “Going Dutch” for lunch would be very confusing to a German colleague who may think she had to change her clothes before going out. So when entertaining, hosting meetings, or going abroad read and research as much as you can about the culture you will be dealing with.

Nancy Napier, PhD
Professor of International Business, Boise State University
February 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