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Paladin Blog

Negotiating Like a Boss

Posted by Aaron Silva on Mar 12, 2019 9:27:36 AM

How does a $2B mutual bank in a small Massachusetts community find a way to drop more than $4.4 million in cash to their bottomline without changing a single IT supplier or interrupting one of their online customers?

Simple. Beginning in 2014 they took the long-game view and intelligent approach to negotiating against their very powerful core IT suppliers and critical technology vendors. BayCoast Bank is run by Nick Christ and was recently awarded the prestigious ICBA National Community Bank Service Award, Grand National Winner, but Mr. Christ has a secret weapon within his ranks - Dan DeCosta their Chief Information Officer. Mr. DeCosta is as friendly as any banker has been created but inside he is a shrewd technologist and businessman that knows how to leverage the power of outside expertise, market intelligence and pricing data with the patience of a tortoise prepared to ultimately beat any other hare.

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Topics: Contract Negotiations, Paladin Success Stories

Why so much Fat in the Middle?

Posted by Aaron Silva on Sep 19, 2013 1:58:00 PM

As a middle-aged man I ask this same question of myself all the time.  Luckily, my wife is nice enough to not bring it up so often as she might otherwise like to - which is good since this is what makes her a great wife...she lies to me (about me).  And of course I know what to say when she asks that question about how she looks in those new pants she just bought too.

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Topics: Contract Negotiations, Paladin Research, community banks, Fiserv, Fidelity, Jack Henry, Credit Unions, Editorial, Paladin Success Stories

Hiring Naked Consultants

Posted by Aaron Silva on Sep 12, 2012 9:31:00 AM

“How do you do that and make money?” “Are you crazy, why would you give away what you know?” “There has got to be a catch – really…for free?” These were the top three questions heard from bankers after we announced that all of our national market research on Core & IT providers was accessible to CEOs and CFOs for no cost or obligation. Yes, we even provide our analysts’ time up front to discuss the entirety of your Core & IT contract renewal options, make recommendations to the bank and specifically detail what steps you should take even if you do it on your own. Is it crazy consulting? No. It’s called Naked Consulting and while not a new concept in business, this model is quite rare in a community banking industry accustomed to the rote approach of paranoid vendors holding back the answers until after you have signed their contract. Coined by a old friend of mine and best-selling author Pat Lencioni (Five Temptations of a CEO, Five Dysfunctions of a Team, Death by Meeting) it describes a way of consulting whereby you build trust, confidence and respect with bank leaders [in you] by being vulnerable, disclosing and completely honest in advance. And yes, you do give away proprietary business intelligence, insights, advice and direction in the early stages of earning business relationship and without expecting a penny of compensation in return.

I had the great fortune of hiring Patrick as my CEO Coach for about 2 years (circa 1998) just as he was publishing his first book. I learned a lot from him about being vulnerable, completely clear and not being afraid of saying what I thought was important even if it meant taking a slightly weaker negotiating position. This style of management and consulting has served me well over the years and while he had not yet invented the concept of naked consulting back then – his most recent book Getting Naked finally does and I recommend it strongly.

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Topics: Contract Negotiations, community banks, Editorial, Paladin Success Stories

More Negotiating in the Trenches with Core & IT Vendors

Posted by Aaron Silva on Jul 5, 2012 9:37:00 AM

In my last article we summarized that there are two initial steps necessary to successfully renegotiate a new or renewal service agreement with any Core or IT vendor. Step One: Admit that you’re a banker and not a CIO. The deck is stacked against you. These multi-billion dollar corporations have forgotten more about writing a obnoxiously favorable vendor-leaning agreement than you might ever know in your entire career as a banker. That’s nothing to be embarrassed about – it’s reality. Begin with the humility of “knowing you don’t know what they know.” Step Two: Don’t believe for a second that beating up your vendor will get you anything that might not be gained with a more partnering approach. Using an RFP process or overtly entertaining other vendor pricing (when you genuinely have no real intention of ever leaving your current provider) is a crime and a shame. Speaking as a former vendor…there exists a silent code amongst vendors for treatment of bankers that use this water boarding tactic to extract improved pricing, terms and conditions. That is, you may get the pricing you want – but the partnership is over. Forget ever calling in a favor or receiving anything that resembles a “deal” in the future. Unlike terrorists, you can get you want out of Core & IT vendors without the torture of an RFP or public hearing with their competitors.

So then, if you are ready to be humble and show your vendors respect, then you have a chance of executing the next steps successfully.

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Topics: Contract Negotiations, community banks, Editorial, Paladin Success Stories