EFFECTIVE NEGOTIATION

Introduction What is Negotiation ? Why Negotiate ? The Approaches to Negotiation The Stages of Negotiation The Sources of Power Transactional Analysis Resolving Conflict Tips for Negotiation

INTRODUCTION – Ground Rules -

Mobiles Off/Silent Mode If important call, please move out of room No smoking, tea/coffee in room Questions anytime Avoid side conversations Share experiences Question & Challenge

WHAT IS NEGOTIATION A process through which

parties move from initially divergent positions to a point where agreement may be reached

A technique that enables us to : Persuade & convince others To accept our way of thinking/doing Without their feeling shortchanged

WHY NEGOTIATE ? The reason you negotiate is to produce

something better than the results you can obtain without negotiating…

B A T N A – Best Alternative To a Negotiated Agreement

W A T N A – Worst Alternative To a Negotiated Agreement

The Five Key Approaches

Compromise

Logical

Reasoning

Bargaining

Emotion

Coercion

NEGOTIATION

Five Key Approaches - Compromise

Ready to give up something that is dear

Feel as if lost something

Use as last resort

Generally perceived as sub-optimal

Five Key Approaches - Logical

Strong role of Facts/Data – don’t nitpick

Analytical – flow important

Source Credibility/Impeccability

Generally emotions take back seat

Five Key Approaches - Bargaining

1st & Last levels known

Start higher than expected. Get a return for every concession you make

Do not indicate you will move quickly from your position

Generally played like a game

Five Key Approaches - Emotion

Strong understanding of respective emotional clues – control your emotions – don’t let them control you

Facts/data take back seat/selectively used

Variable tonality of discussion

Generally involves play acting

Five Key Approaches - Coercion

Strong understanding of respective pulse points – think before you threaten

Use mirrored or emotional threats rather than real ones

Making offers that cannot be refused

Generally happens when there is some inequality in dependence

The Seven Phases

The Seven Phases of Negotiation

PLANNING &

PREPARATION

•Setting Targets

•Cost on concessions

•S.W.O.T.- both sides

•Variables/Outcomes

•Market Intelligence

•Team clear

OPENINGS

•Be Polite

•Outline your position

•Never accept their

first offer

• Avoid markers

TESTING

•Understand their weaknesses

•Probe facts and inconsistencies

•Get them on the back foot

•Silence – get them talking

•Challenge them

The Seven Phases of Negotiation

MOVING YOUR

POSITIONS

•Positive Summary

•Put on Pressure

•Emphasise that you have moved

MAKING CONCESSIONS

•When to do it ?

•How much to give ?

•What do I get in return

AGREEMENT

•Make final offer with TOTAL conviction

•Watch for closing signals BEFORE you move

•Only break deadlog if to your advantage

•Use Closing Techniques

•Make sure everybody knows what has been agreed

The Seven Phases of Negotiation

• Last Phase is of Review

• What went right ?

• What went wrong ?

• What could be done differently/better ?

• What could have been avoided ?

• This becomes input into the Planning & Preparation phase of next Negotiation

NEGOTIATION STYLES

TRADITIONAL NEGOTIATION APPROACH VERSUS CONTEMPORARY APPROACH

FIXED PIE

EXPANDING THE PIE

THETRADITIONALAPPROACH

THE CONTEMPORARY

APPROACH

The Sources of Power

The Sources of Power 8 Sources of Power “NO TRICKS”

N Need

O Options

T Time

R Relationship

I Investment

C Credibility

K Knowledge

S Skill

N: Need

Definition Who needs this solution more, you or your

client? Ask what they need; State what you need Use active listening to confirm understanding Remember, focus on interests, not positions

Application ROI can give you need power

O: Options

Definition What are the options for each party if an agreement is not reached? Consider your BATNA

Application Sketch multiple solutions. Pictures can drive

a point home Brainstorming session with key stakeholders

T: TimeDefinition

What is your client’s deadline?

Tight deadlines can strengthen or weaken your time power

Application

We lose time power because testing is done too late in the process.

Present short and long term solutions to give you time power

Definition

� How strong is your relationship with your prospect?

� Do you have a high quantity of high quality relationships with your customer ?

� Focus on the future rather than the past

Application

� In-house staff can have more relationship power than hired consultants

� Appreciate positive findings

� Encashing past favours ?

R: Relationship

Definition

� The more effort someone invests, the more committed he or she will be to reaching an agreement

Application

� Increase investment power by asking clients to participate in planning, testing, and solutions

� Use stakeholder design strategy meetings

� Build trust within group

� Get on track; stay on track.

� Increase your understanding of their needs.

I : Investment

C: Credibility

Definition

� Deals with your brand and relationships

Application

� Showcase projects

� Statistics can play a role in credibility.

� Focus on the obvious trends that you see without statistics

� Testimonials from Industry or similar.

� Prioritize findings based on ROI

K: KnowledgeDefinition

� “Knowledge in itself is not powerful; it is the application of knowledge that confers power.”

Application

� Have answers to all their questions

� Ask questions early about time, budget and resource/technology constraints when creating recommendations to enhance your knowledge power

S: Skill

Definition

� Who is the most skillful negotiator?

Application

� Take classes

� Read books

� Practice, Practice, Practice

Power: Rules of PowerRule 1: Seldom does one side have all the power.

Rule 2: Power may be real or apparent.

Rule 3: Power exists only to the point at which it is accepted.

Rule 4: Power relationships can change over time.

Rule 5: In relationships, commitment determines Power

1. Equal-sized concessions

2. Making the final concession a big one

3. Never give it all away up front

4. Giving a small concession to test the waters

Key points to remember:

1. The way that you make concessions can create a pattern of expectations in the other person's mind.

2. Don't make equal size concessions because the other side will keep on pushing.

3. Don't make your last concession a big one because it creates hostility.

4. Never concede your entire negotiating range just because the other person calls for your "last and final" proposal or claims that he or she "doesn't like to negotiate."

5. Taper the concessions to communicate that the other side is getting the best possible deal.