|COVID cases were surging out of control with little relief in sight. Then on November 9th, 2020, the world got some good news. Pfizer and its partner, BioNTech, announced results that suggested they had a very effective vaccine. We sighed with relief, we felt, well, okay and then… it was time. The players entered the “Big N” arena. The Formal Negotiation Time Zone had begun.
Through our Negotiation Process lens, let’s have a look at what is transpiring as we move from
vaccine creation to mass immunization. What we can pull from these massive deals as
key negotiation takeaways?
These mammoth negotiations do not comprise of a singular event. They are ongoing and serial in nature. They are linked to past, future and concurrent negotiation, agreements, talks and milestone events such as approvals from FDA and WHO. Complicated relationships with wildly complex stakeholders are being worked on many levels. These negotiations are politically charged, and the stakes are as high as imaginable.
Up until the Pfizer BioNTech announcement, we had been Pre-Negotiation timezone, preparing for what was to come. Relationship were being forged, mindsets being prepped and of course, the substance of the negotiation - The Vaccine - was being created. With all eyes on the development of the vaccine, the Substance of the Negotiation, was there enough focus attributed to Process Plan? How would we actually get the vaccine when it came out? On the big pharma flipside, how would we sell it?
When Pfizer first announced the good news, countries were jumping in to get their share. The Pfizer BioNTech vaccine was the “Belle of the Ball” and everyone was pushing to get a chance to dance. The deficiencies of the vaccine were not completely overlooked; indeed, there was talk, albeit relatively little talk, about the need for 2 doses and freezer storage at -94°F. Regardless, the Pfizer vaccine was wanted. Afterall, a viable vaccine was the alternative to death and disease.
A few weeks went by and another joined the party. On December 18th, FDA gave emergency use authorization for a vaccine made by Moderna. Like Pfizer, Moderna vaccines required 2 doses but unlike Pfizer, the Moderna vaccine could be stored at –4°F . The Moderna vaccine, while not perfect, represents a potential viable option, an alternative.
In early February, J&J applied to the FDA for an emergency use authorization for their vaccine. It could be authorized by early March. J&J’s vaccine requires only single dose and can be stored for up to two years at –4°F. The J&J vaccine efficacy rate is less than Pfizer and Moderna, but, if approved, represents a potential viable option, an alternative.
Pfizer lost negotiation clout. Can you pinpoint when this happened? The introduction of real and credible alternatives will shift the power balance back to the buyers. As we screech through the most important negotiations of our lifetime, as agreements are forged and then as the fulfillment fails, the importance of the BATNA emerges at the top.
BATNA stands for Better Alternative to Negotiated Agreement. Also known as BAE or Better Alternative Elsewhere. Also known as THE BACK UP PLAN!
As vaccine options enter the arena, the alternatives to a negotiated agreement move from death and disease to potentially a better vaccine option. The availability of options shape the negotiation play. We now have 63 vaccine candidates in the works, and more countries now making their own. While the buyers are still a fair ways away from calling the shots, the more vaccines there are, the more options they will have, and the more (and maybe better) alternatives to the negotiated agreements there will be.
For now, let’s just get what we have, in the arm.
What about takeaways? What does it mean to us as negotiators?
1- Build your BATNA(s).
2- Strength & Courage at the table.
- During your PREPARATION in your Pre-N timezone planning your alternatives is a critical step. Take the time and do the work. The best BATNAs are real and credible.
- As you build out your BATNAs, it is possible that your BATNA evolves into the # 1 spot.
- When you have developed a real and credible alternative, find another. Find a Back Up to your Back Up.
3- What about the Other Guy's?
- Your aspirational position in the negotiations is tied to the strength of your alternative.
Research proves this is especially true when women are the lead negotiator. The better your alternatives the more confident the negotiator is to open high and be aspirational.
4- Competition has a place.
- Remember the other side too. Do the exercise. What are the Counter Party’s alternatives? If you are coming in from the sourcing side, consider how the Other Party will fill their revenue gap? This will help you understand just how important you are (or aren’t) to them.
- Sometimes when we go through the exercise of identifying the Other Party’s BATNA, our stomach churns as we realize we are THE ALTERNATIVE. In which case, we can proactively decide our strategic maneuverer.
- Not only does competition add to the “sharpening of the pencil”, it also makes us think of expanding and adding options and identifying creative value solutions.
One last thing-
We have looked at only a slice of influencing, persuading and yes, negotiation activity that has taken place over the past year. The COVID world has given us much to ponder upon, including the breakdown of the greatest of all Negotiation Myths: Other People’s Problem are Solely Their Own. Because, until we can figure out how to get everyone safely vaccinated, we all remain vulnerable.
Until next time,
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