Power: it doesn’t matter who you are, it matters when you are and how you are
There may be several options that will be determined by the specifics of your own situation. Take time to consider them, and use them to your advantage. Above all, don’t forget that if you want someone to believe you have power, you need to behave as though you believe it too.
In negotiation, who you are (your size, your brand name, your reputation – or relative lack of these) doesn’t necessarily determine the power you may or may not have. More important is to understand when you are negotiating (and the impact that time may have, positively or negatively, on your own and your counterparty’s power), and how the circumstances of yourself and your counterparty may affect where power sits.
If you can understand the impact of time and circumstances on your negotiation, on yourself, and your counterparty, the effect can be to dramatically shift the power balance away from what might seem an obviously more powerful opponent. In these circumstances, a far smaller, less significant player in the market can suddenly find themselves with a higher, and entirely disproportionate level of power.
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Theresa May
One area where this frequently occurs is politics. In May 2017 in the UK, the Conservative leader and Prime Minister, Theresa May, took the decision to hold a snap general election, only two years after the previous one. Arguably buoyed by positive opinion polls in the April that showed a 20 point lead for the Conservatives, and with a desire to secure a clear majority in parliament to aid her negotiations over the process of exiting the European Union (‘Brexit’), she felt confident she would succeed. For a variety of reasons this failed to materialise, and the result was a hung parliament, with the
Conservatives losing 13 seats whilst the Labour party gained 30. In order to shore up her support, she opted to do a deal with an Irish political party, The Democratic Unionist Party (DUP), who, from being a very minor player on the political landscape, suddenly found themselves with some real power. They used this power to their advantage and in the negotiation to agree their support for the Conservatives they secured £1bn in financial support and potential new tax powers. The pressure of both time and circumstance had acted to shift the balance of power in the negotiations over to the far
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smaller DUP and away from the UK’s dominant political party.
This understanding of the impact of time and circumstances, of how to really get inside the head of the counterparty, reflects the classic David and Goliath story. Taking time to appreciate where the opportunities to swing the balance of power in your favour may be, even against a seemingly undefeatable opponent, can allow small players to accomplish great things.
Tyrells took on Tesco in the UK
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In 2006, Tyrells, a privately owned UK crisp manufacturer with a turnover at the time of just £10m, took on Tesco, who was at the height of its dominance of the UK grocery market with turnover of £39.5bn, in a dispute over the stocking of its products.
A classic David vs Goliath. Tyrells had established its premium price business through supplying a network of 6,000 small, independent retailers and upmarket grocery retailer, Waitrose, and did not want its products stocked in Tesco. Tesco stocked them anyway. Sourced from the grey market they sold the brand at a discounted price in 70 of its stores. Tyrells appointed lawyers to examine their options. Shortly after, Tesco agreed to stop selling its lines. A victory for David over Goliath. But how did ‘little’ Tyrells manage to succeed against this much bigger opponent? Certainly part of their success was due to the time they took to understand Tesco’s circumstances. T
he day before they agreed to Tyrells’ position, Tesco had launched a major initiative to boost links with small suppliers to address its image problem in this area – a focus and commitment that the retailer has continued very successfully to the present day, transforming its image and results. Tesco wisely recognised that, whilst they wanted to supply its customers with the products, continuing its dispute with Tyrells would have sent conflicting messages.
Tyrells recognised that this had shifted the balance of power in its favour. Five years later, after rapid growth, Tyrells could be found on the shelves of 450 Tesco stores at its intended premium price.
Negotiation planning
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In your negotiation planning, when considering how much power you do or don’t have, take a step back and review the situation objectively. In his book ‘Getting Past No’, William Ury describes the concept of going to the balcony to allow yourself to look at a situation from a new vantage point and from there gain a different perspective. He was discussing this specifically in relation to resolving conflicts, but it is equally applicable to the understanding of how to shift the balance of power in your favour.
This idea complements perfectly the concept we discuss on our workshops of getting inside the other party’s head. Only by doing this can you truly hope to identify how to optimise your power, either by recognising the weaknesses in the other party created by time and circumstance, or by appreciating your own weaknesses caused by the same factors, therefore ensuring these can never be exploited by the other side.
When it comes to understanding where the balance of power lies, there is one thought to keep front and centre at all times: You are far more equal than you think you are. As soon as you forget this, power starts to ebb away, because you are literally giving it to the other party. It’s the perception of where the balance of power lies that is key. Your challenge as a negotiator is to keep the perceived balance of power in your favour for as long and as broadly as you can, within the matters under negotiation.
How do you do that?
There may be several options that will be determined by the specifics of your own situation. Take time to consider them, and use them to your advantage. Above all, don’t forget that if you want someone to believe you have power, you need to behave as though you believe it too.
Business
Toys R Us is back in the UK four years after going bust
Daisy Jackson
Christmas has come early for kids and parents across the nation – Toys R Us is officially back up and running in the UK.
The retailer collapsed back in 2018 and closed its 100 stores, leaving gaping holes in retail parks up and down the country.
But now the beloved toy shop chain has made a return – sort of.
The Toys R Us website has relaunched today, with more than 14,000 toys and games up for sale.
Shoppers will find world-famous brands like Lego, Marvel, Crayola and Play-Doh back on sale.
The new website features a return from the retailer’s legendary mascot, Geoffrey the Giraffe, who was photographed standing in one of the empty shops with a suitcase back in 2018, breaking everyone’s hearts.
The old Toys R Us in ManchesterGeoffrey the Giraffe saying his goodbyes
A message says: “The world’s greatest toy shop is back! We can’t wait to develop and grow with you and your loved ones, over the coming weeks, months and years!”
There don’t appear to be any plans at present to bring back bricks-and-mortar toy shops.
The retailer closed due to a change in consumer habits and, like many traditional physical stores, a struggle to keep up with the rise of online shopping.
It teased that it would be making a comeback back in January.
At the time, Louis Mittoni, head of Toys R US ANZ, said: “Tailoring our successful Australian relaunch plan to the UK echoes the success of other e-commerce ‘platform play’ businesses that have delivered growth and value due to their ability to quickly and cost effectively expand their software, processes, partner relationships and brands into new countries.
“Since Toys R Us’ return to Australia in June 2019, we have scaled quickly as customers returned to the much-loved brand and our e-commerce model has proven its success.
“My team and I are looking forward to developing technical and commercial relationships with UK-based vendors and partners and to engage with the many loyal Toys ‘R’ Us former customers and fans in the UK.”
Featured image: Flickr
Business
Everything you need to know about Kwasi Kwarteng’s mini-budget 2022
Danny Jones
The Chancellor of the Exchequer, Kwasi Kwarteng, has delivered his 2022 mini-budget in an attempt to address concerns surrounding the ongoing cost of living crisis.
While significant tax cuts were already predicted ahead of the crucial economic update, many people across the country may have been surprised by the sheer extent of measures announced by the chancellor across the board.
Energy
Addressing the subjects on everyone’s mind early on, Kwarteng stated that the annual price of energy for UK households will now be limited to £2,500, resulting in savings of around £1,000 against the projected figures following the most recent energy cap.
He also confirmed that the £400 energy discount is still in place, with the most vulnerable homes receiving even more in government support. Some are less than convinced that any real ‘savings’ will be made.
Kwarteng says a typical energy bill of 2,500 this year is a SAVING of £1,000.
Earlier this week, the government announced that they would be halving energy bills for businesses over the next six months. Today he confirmed that a relief scheme will be put in place, as well as an “energy market finance scheme” which will offer liquidity to traders.
Similar relief will be afforded to schools and charities.
Lending and inflation
The hope is that this overall energy plan will reduce inflation, which currently sits at 9.9% based on August’s figures, to 5% and see the trending rate of annual financial growth to 2.5%.
Not only does the government believes this will lower the wider cost of living pressures but also free up finances to help better fund public services.
The overall energy relief package is said to be costing approximately £60 billion, meaning a significant amount will have to be borrowed from the Bank of England.
Bankers’ bonuses cap and corporation tax hike scrapped
On the subject of banks, one of the most controversial parts of the Kwasi Kwarteng’s update was the announcement that the cap on bankers’ bonuses will be scrapped entirely, arguing that previous measures only led to higher wages and people paying tax in other countries outside of the UK.
Next year’s scheduled corporation tax increase from 19% to 25% is also going to be scrapped, the rationale being that “low tax encourages investment” both domestically and from overseas.
Once again, people are less than impressed that the nation’s highest-earners appear to be the ones benefiting the most from government policy.
This is a Bankers’ Budget:
– Scrapping the cap on bonuses – Slashing tax for the top 1% of earners – Cutting tax on big businesses' profits
When millions urgently need help with the cost-of-living crisis, the Tories are helping out their super-rich mates.#EnoughIsEnough
The chancellor also said that the government are committed to removing further enterprise barriers caused by EU regulation, hoping to streamline “planning restrictions” across childcare, immigration, agricultural productivity, and digital infrastructure.
He sighted energy, telecoms and travel as key problem areas hamstrung by red tape.
However, he conversely criticised the ongoing strike action across the country and said that they plan to imitate other countries by introducing legislation to ensure minimum level service resumes.
Tax cuts
Elsewhere, businesses in nearly 40 different ‘designated zones’ have been promised tax cuts for the next 10 years and no stamp duty on new premises. Speaking of which, as of today, no payment will be required on the first £250,000 of a property’s value, with first-time buyers paying zero on the first £425,000.
In fact, it looks as though the overall tax system is set to be reviewed once again. Not only are previous corporation tax and stamp duty plans being scrapped but income tax, alcohol duty and more are all being reexamined as part of the not-so mini-budget.
Alcohol duty is set to be frozen in February, meaning that Brits can expect to save around 7p per pint, 38p per bottle of wine and £1.35 on spirits. VAT-free shopping is also due to be introduced for overseas visitors, with aim of increasing revenue from tourism.
Kwarteng also confirmed that the basic rate of income tax will be cut by 1p to 19p from April 2023, with the 45p tax rate for those earning over £150,000 will be abolished from the same time next year.
This is said to be the biggest series of tax cuts in 50 years.
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£45 billion of tax cuts. This is biggest tax cutting event since 1972. Barber's "dash for growth" then ended in disaster. That Budget is now known as the worst of modern times. Genuinely, I hope this one works very much better.
Despite the ‘real’ living wage being increased by 10% in an attempt to try and curb rising costs in almost every other walk of life, it goes without saying that the UK faces an extremely difficult period ahead as energy costs continue to rise, post-Brexit prices keep rising and we approach the ever expensive winter months.
The shadow chancellor Rachel Reeves told the Financial Times that regardless of the measures announced today, both the mini-budget and Liz Truss’ appointment as Prime Minister represents “another zigzag on a path of policy failure” rather than any real sign of change.
The Manc -
10th October 2020 
