Negotation - Main

8/8/2019 Negotation - Main

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Win - Win Negotiating Principles



Preparation

• Congratulations — you have

been selected for

negotiations!

• Now it’s time to prepare for

success

• First step — review this

presentation and your notes

to refresh yourself on the

fundamentals of effective

negotiations



Preparation

• Strategize with your

negotiation teammates to

develop a strategy

• Develop a plan

incorporating your

negotiation knowledge

and the needs of your

customer

• Practice, refine, practice,

refine, practice



Establish Win – Win Climate

• Seek to establish a climate of mutual trust and shared

goals• Get to know your counterpart as a person (family,

likes & dislikes, college, sports teams, etc.). Butdon’t be intrusive.

• Some clients like to small talk (schmooze) before

beginning negotiations. If you are a sensor, havepatience.

• It’s okay to get coffee for your counterpart

• Don’t miss an opportunity to personalize therelationship:

– Congratulatory note on your counterpart’s newbaby, promotion, favorite team victory, etc.

• Consider sharing with your customer how you arrivedat your fee proposal. BENATECH sent our feespreadsheet to our DOD customers. First step inestablishing trust relationship.

è Seeking to establish a positive climate withcounterpart •



It’s Not Always About Money

• Everyone would like to earn more money, but otherthings may be just as important in any particularnegotiation

• You may be willing to accept a lower fee if you couldstretch out the project a few months to complete

some existing projects and free resources• Your customer might be willing to stretch out the

schedule to obtain a reduced fee

• Same issues with your subcontractors. •



Be Willing to Leave SomethingOn the table

• Contrary to Gordon Gekko (movie Wall Street ), in win– win negotiating, greed is not good.

• Even when you have the stronger negotiating position(e.g., negotiating with a subcontractor who youknow needs the work), treat the other firm fairly.

Don’t wring everything you can out of a deal.• It’s not worth the bad feelings and resentment, and it

may result in your sub cutting corners on qualityand or seeking to recoup the funds throughelevated change-order fees.

• Similarly, by treating the subconsultantfairly, whenyou need some help (and all firms do from time totime), the consultant might fix a mistake your firmmade at little or no extra cost.

• Your experiences on this point . . . •



Other Tips

• If possible, have flexible travel arrangements. Don’tput yourself in a position that you need to makecritical concessions because you have to catch thatlast flight today.

• Similarly, ensure you have fallback hotel reservations

if the negotiations should go on for another day.• Caucus as needed. If part of a negotiating team and

you are hit with a totally unanticipated question,comment or strategy, it’s okay to say somethinglike “That’s an interesting point. Would it be okay

to caucus with my team to see how we can makethis work for both us?” •









Obstacles to Negotiation

• Sometimes people fail to negotiatebecause they do not recognize thatthey are in a bargaining position.

• Or, they may recognize the need forbargaining but may bargain poorlybecause they do not fully

understand the process and lackgood negotiating skills.



Therefore;

• parties must be aware of theiralternatives to a negotiatedsettlement

:Weaker parties must feel assuredthat they will not be overpowered ina negotiation

:parties must trust that theirneeds and interests will be fairlyconsidered in the negotiation

process.




• Negotiation seems to bring conflicts .Any misunderstanding that arisesbetween them will reinforce their

prejudices and arouse theiremotions.



Therefore;

• To combat perceptual bias andhostility, negotiators shouldattempt to gain a better

understanding of the other party'sperspective and try to see thesituation as the other side sees it.




• if the "right" people are not involvedin negotiations, the process is notlikely to succeed.

•









Negotiation Questions

What aspects of the negotiation willindicate it is proceeding well or poorly?What will tell you that it is time tocaucus?What signs will you use to decide whena change in negotiators is necessary?What constitutes a "successful"

negotiation?



Negotiation -- Remember

“Two elements are essential: Reasonableness and

Flexibility.”





Basic Components (1 of 2)

1. Preparation:

Prepare for negotiation if you wantto succeed.

2. Objectivity:

Assess your strengths, weaknesses,

and goals. Successful negotiatorsmake a point to "accentuate the positive."



Basic Components (2 of 2)

3. Strategy: Plan a realistic course of action

based on sound preparation and

objective appraisal of resources.

4. Technique:

Combine a wide range of skills;draw on experience and self-discipline.







Three stages of negotiation

ØInitial Stages

Ø

ØMiddle Stages

Ø

ØEnding StagesØ





Middle stagesMiddle stages

• Revise strategies.

• Consider other options.

• Increase power by getting the other side to commit first.

• Add credibility by getting agreements in writing.

• To get through with dead ends, just set it aside

momentarily.

• When asked for a concession, ask for a tradeoff.•







MODULE 2

ASSESSING THE BALANCE OFPOWER















Negotiating involves communicatingwith people.

Let’s look at how we cancommunicate with people better.



Why Effective Communication isImportant in Negotiations

• Engineers are good at calculations and equations

• However, we deal with people all the time,especially in negotiating

• It is imperative that we work well with people,listen effectively, and be able to communicatewith them to accomplish our goals

• This part of my presentation will give you tools todo that •



Communication Model

Thought ender Encodes Message

Words Pictures

ransmits the Message

:Receiver receives message- Hears it- Reads it- Feels it

Receiver decodes—message

Interprets meaning

Receiver ACTS on message

How many opportunities are there for miscommunication ?



Personality Types/

Communication Styles



Personality Types/ Communication Styles

• Research by Swiss psychologist Carl Jungsuggested there are recognizabledifferences in personality types amongpeople.

• Isabel Briggs Myers and her mother KatharineBriggs extended and refined Jung’s theoryinto what is now known as theMyers-Briggs Type Indicator ® (MBTI® )

• The following slides summarizes four different

personality types that will help you workwith and communicate with people moreeffectively. •



• Feeler

– Considers people and friendships important. They aregenuinely concerned about other people’s feelings and goout of their way not to offend.

– Strength: People sense the Feeler’s concern and are put atease by them.

– Weakness: Can miss the big picture and mission by being

overly concerned with others’ feelings. May not give youbad news out of a desire not to hurt. – Tips for working with Feelers:

• Be prepared for small talk (“schmoozing”) before getting tothe issues needing consideration. Allow time for smalltalk.

• Listen and be responsive.• Don’t be domineering or threatening.

• Be supportive of the Feeler’s issues in seeking to accomplishyour own. •

Behavioral/CommunicationStyle Differences



• Sensor – Sensors are strong, decisive, results-oriented people. They tend to keep their emotions to themselves.

– Strength: They are energetic, dynamicimplementers. Highly mission-focused. They getthings done!

– Weakness: Can appear overly pushy or demandingat times. May not pickup on human dynamics of asituation. May make a decision before having allrelevant facts

– Tips for working with sensors:• Be brief, specific and to the point.

• Be well-prepared.• Provide alternative solutions with pros and cons of

each.

• Don’t waste their time. •

Behavioral/CommunicationStyle Differences (cont.)



• Thinker

– Thinkers are logical and organized. They deal with facts,data, logic, details. Thinkers have tendency towardperfection. They tend to keep their feelings andemotions inside, and do not usually reveal them toothers.

– Strength: The information they provide is usually very

accurate. – Weakness: Can be overly cautious. May not pickup on

human dynamics of a situation.

– Tips for working with Thinkers:• Prepare. Be as logical, practical, orderly and accurate as you

can.

• Provide tangible and practical evidence or at least beprepared to do so if asked.

• List pros and cons of any suggestions you make.

• Don’t be disorganized.

• Don’t rush the decision-making process if at all possible. •




• Intuitor

– Intuitors are highly enthusiastic and creative people. They have strong conceptualization skills, and canthink outside the box. They enjoy the world of possibilities, group activities (like parties) and feel lesscomfortable in restrictive environments.

– Strength: Think big picture. Future oriented. Long-range thinkers. Many ideas. Often see opportunities

others miss. – Weakness: Can often appear to be abstract or vague,unresponsive to deadlines.

– Tips for working with Intuitors:• Plan interactions that support their dream.• Allow time for exploring their ideas.• Help them focus by providing ways for implementing

action.• Try to stay on agenda or you will take many

tangents. •






MODULE 4

NEGOTIATION AND BARGAINING





Conflict and Group



Conflict and GroupPerformance

., , ,Robbins et al Fundamentals of Management 4th Canadian Edition ©2005 Pearson Education Canada.Inc

C fli H dli S l



Conflict-Handling Styles

Uncooperative CooperativeCooperativeness

Forcing

esolving conflicts by’atisfying one s own needs

’t the expense of another s

Avoiding

esolvi ng conflicts by ithdrawing from or uppressing them

Collaborating

ewarding conflict by seeking n advantageous solution for ll parties

Compromising

esolving conflict by each

arty giving up something f value

Accommodating

esolving conflicts by’lacing another s needs

nd concerns above yourown

., , ,Robbins et al Fundamentals of Management 4th Canadian Edition ©2005 Pearson Education Canada.Inc





The Zone of Agreement

’eller ssurplus ’uyer s surplus

one ofagreement

s x b’eller s reservation

price

( eller wants s or)ore

eller wants to move x to theright

inal

Contract

’uyer s reservationprice

( uyer wants b or)ess

uyer wants to move x to he left

( )oney $



Formulating a Negotiation



Formulating a NegotiationStrategy

• Strategic plan – Commitment to an overall approach

that has a good chance of achievingthe negotiator’s objectives

• Soft : avoid conflict, makeconcessions; often end up exploitedand feeling bitter

• Hard : sees any situation as a contest

of wills. Exhausts people andresources and harms relationships

• Other strategies are between hard andsoft, but each involves a trade off

• Making good tactical decisions









• The more credible you are, the morebelievable is your price.

• The more written documentation you

have, the more believable is yourprice.

•

RULES OF NEGOTIATING




• The weaker your perceived position,the more of discount will beexpected.

• If you give a much requestedconcession, demand a biggerconcession in return.

•




• Know their deadlines

• Be aware of your options

• Be aware of their options

• Use all the time available tonegotiate




• Be comfortable with stress andpressure.

• Make small concessions, slowly.

• Control your pattern of concessions.

• Make non-price concessionswhenever possible.

• Never agree to “split the difference.”




• Negotiate at the end of the day.

• “I’m sorry, but I don’t have theauthority.”

• Don’t be afraid to walk away andnegotiate another day.



t Know Rules



66

ule No ZERO ule No ZERO

now the Basic Info now the Basic Info



67

ule No 1

–o Free Gifts Seek-Trade off

ake sure you highlight your ompromises and make them

gainst a compromise by the

ther party

ust Know Rule



68

ule No 2

tart Higher Than What ou Desire

.I rite down what you want and lways start higher than what

ou desire

.I he recent CNG price hike story

ust Know Rule



69

ule No 3

dentify Your Envelope f Negotiation

.I Ranges.II Openingpening.II Targetarget.IIII ottom Lineottom Line

.I -he car buying experience

ust Know Rule



70

ule No 4

now Your BATNA

.I he Power to Walk Away

ust Know Rule



71

ule No 5

ever Settle Issues–ndividually Always ettle them as a Package

ust Know Rule



72

ule No 6 ‘ ’onclude With a Nibble

’ ‘ ’hat s a Nibble§ ittle snack or a bite ittle snack or a bite

‘ ’ ‘dd the free shipping or two days’arranty at the end

ust Know Rule



73

ule No 7 eep Looking for reative Concessions to

Trade

.I ‘ ’ree Complementary SessionConcession.II hink of your most common negotiation hink of your most common negotiation

- ,ituations and think of high value- ,ituations and think of high value-ow cost concessions you can offer ow cost concessions you can offer

ust Know Rule



74

ule No 8 ocus on Interests notPositions

he Rules that Maximize Retu



75

ule No 9 lways Communicate

enefits of Your Offer ot Features

‘ ’ifference between Feature and‘ ’enefits

he Rules that Maximize Retur





MODULE 5

NEGOTIATING STYLES









Step Five - Agree

• Usually final concession :“IF you do that, THEN we have adeal!”

• Gain commitment• Record and agree results

• Leave satisfied

Thi k b t i fl i t l



Think about your influencing style

Inspirational

Logical

Personal

Forceful

7 D dl Si f N ti ti



7 Deadly Sins of Negotiating

• Pride - Be prepared to compromise

• Gluttony - Don’t bite off more than you canchew

• Anger - Handle objections calmly• Covetousness - Prioritise needs/wants

• Envy - Know competitors strengths &weaknesses… AND your own

• Sloth - Do your homework

• Lust - Don’t look desperate to settle

An Unconditionally Constructive



yStrategy

o only those things that are both good for the relationship nd good for us

- h e t h e r o r n o t t h e y r e c i p r o c a t e

RATIONALITY ,Even if they are acting emotionally balance emotions with reason

UNDERSTANDING ,Even if they misunderstand us try to understand them

COMMUNICATION ,Even if they are not listening consult them before deciding on matters that affect them

RELIABILITY ,Even if they are trying to deceive us neither trust:them nor deceive them be reliable

-ON COERCIVE MODES

F INFLUENCES

,Even if they are trying to coerce us neither yield to

,that coercion nor try to coerce them be open to persuasion and try to persuade them

ACCEPTANCE Even if they reject us and our concerns as unworthy of,their consideration accept them as worthy of

,consideration care about them and be open to learning from them

" "Getting TogetherFisher

Three Approaches To Resolving



pp gDisputes

MOVING FROM A DISTRESSED TO AN EFFECTIVE RESOLUTION SYSTEM

Distressed System

Power

Rights

Interests

"Dispute Resolution" Goldberg Green Sande

Three Approaches To Resolving



Effective System

Power

Rights

Interests

Goldberg

MOVING FROM A DISTRESSED TO AN EFFECTIVE RESOLUTION SYSTEM

pp gDisputes



Negotiation Check List

42



Negotiation Check List

Good Practice Avoid

Actively listenQuestion for clarificationSummarisingTest commitmentSeeking & giving informationEncourage two way conversationState and plan your proposal – then summariseUse the ‘if you ….then we’ll’ principle

InterruptingAttackingBlamingTalking too muchSarcasmThreatsTaking it personallyClosed body language







MODULE 6

PLANNING : THE KEY TOWIN-WIN NEGOTIATION









MODULE 7

TRADING CONCESSIONS







MODULE 8

PREPARING AND CONDUCTINGINDIVIDUAL AND TEAM

NEGOTIATIONS



Tactics & Tips



1.Decline to speak first: who speaks second usually has a better opportunity to

analyze his counterpart3.Volunteering to keep the minutes of the meeting:When you do so, you willhave a better opportunity to phrase the minutes, and better window to analyze and

assess negotiation pathway.5.Stress on time-frames: Aiming to transmit sense of urgency and a feeling of

punctuality to your counterpart.7.Good guy / bad guy approach: Here, the role of the “bad guy”, or toughnegotiator is to lower counterpart’s expectations below required. Then when the

“good guy” offers the demanded solution, it gets more acceptance.

9.Claim limited authority: Never be shy saying “Sorry, but I really can not havethe rights to do this, I am not authorized to go down to this level”. Even thepresident can say “I am not authorized to accept this, it will deeply frustrate the

shareholders” 11.Caucusing: If you needed to re-align your team talks and perspectives, or to

update about an analysis you made, you can ask for a caucusing momentswith your team.

13.Walking out: If you needed to buy a moment to think a point over, you canexcuse to restroom or to smoke a cigarette.

15.Concession patterns: Whenever you feel cornerized and in a very badnegotiation positions. You can postpone reaching a consensus, or decide to focuson decreasing losses other than maximizing benefits.

17.Fait accompli : “What is done is done, let us face the current situation”. You

might use this approach if you do not wish to dig in the past and relateconsequences to it.19.Love it or Leave it : When you hold a very potent position, and you are not

willing to create a win-win for whatever reason. You can as a last option use the “take it or leave it” approach. Not as is, but to give the meaning in a descent way

that allows your counterpart a surrender with dignity.

STAGES OF NEGOTIATION

http://1.bp.blogspot.com/_hUEF58RjGNg/SOC0I3TD8jI/AAAAAAAABe0/Tx-c7pMUCYQ/s1600-h/00042.jpg

http://1.bp.blogspot.com/_hUEF58RjGNg/SOC0I3TD8jI/AAAAAAAABe0/Tx-c7pMUCYQ/s1600-h/00042.jpg



STAGES OF NEGOTIATION

• Phase 1:Preparation

• Phase 2:Interacting

• Phase 3:Agreement



PREPARATION



INTERACTING



he Art of Listening

&hallenges &hallenges



Obstaclesbstacles



A C T I C S R E G A R D I N GP R I C E

Should I ever state my acceptablerange?

Should I ever tell the other side my

bottom line?

Suppose that the other side opens with,an incredibly unreasonable number

should I counter with an equally,unreasonable number or decline to counter at all?



A C T I C S R E G A R D I N GP R O C E S S

Is it acceptable to make two moves at atime?

Is it smart or fair to bluff?

,In a complex deal is it better to reach agreement issue by issue or wait until the end?

Is it better to deal with difficult or

easy issues first?

A C T I C S R E G A R D I N G



P E O P L E

.Collaborative negotiator vs positional hardbargainer? How should I react if the other side seeks

to change something in its offer after a deal has been reached?

What should I do when the negotiator on the other side has a temper tantrum?

’ .I don t believe in what the other side says Is it essential to negotiate face to face?

How should I react when the other side,challenges my credentials status or

authority to make a deal?



CLOSURE







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Negotation - Main