ELEVATING OUR PROFESIONALISM - FAPPO Session.pdf · Win/Win Negotiating ... Characteristics of a...
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ELEVATING OUR PROFESIONALISM 48 TH ANNUAL CONFERENCE MAY 17-20, 2015 ORLANDO, FLORIDA Effective Negotiations for Public Officials Warren Geltch, MBA, C.P.M., CPPO, CPCM, A.P.P. Wendy Geltch, C.P.M., CPPO, CPPB, A.P.P., FCCM, FCPM, FCPA
Transcript of ELEVATING OUR PROFESIONALISM - FAPPO Session.pdf · Win/Win Negotiating ... Characteristics of a...
ELEVATING OUR PROFESIONALISM
48TH ANNUAL CONFERENCE MAY 17-20, 2015 ORLANDO, FLORIDA
Effective Negotiations for Public Officials
Warren Geltch, MBA, C.P.M., CPPO, CPCM, A.P.P.
Wendy Geltch, C.P.M., CPPO, CPPB, A.P.P., FCCM, FCPM, FCPA
Outline
Win/Win Negotiating
Price and Cost Analysis
Planning for Negotiations
Team vs. Individual Negotiations
Negotiation Tactics
Making Concessions & Breaking Deadlocks
Some Final Basic Tips
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Win / Win
Negotiating
Characteristics of a Win / Win Negotiator
Interest bargainer asks WHY? Or “What if…”
Looks for solutions that may make both parties happy
“It’s not your way or my way, it’s a “better” way.”
No one cooperates with anyone who seems to be against them
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Appropriate Uses of Win / Win Approach
Mutual willingness to resolve
Mutual willingness to find the root problems / differences.
Mutual willingness to empathize.
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Steps in a Win / Win Strategy
Separate the people from the problem
Work from interests, not positions
Invent options for mutual gain
Invoke objective principles
Recognize that compromise may be necessary
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Separate the People from the Problem
Learn their point of view
Listen more than you talk
Avoid pointing fingers
Help them save face
Model the behavior you want to see
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Objectives of Compromise
To reach an agreement when both sides have equal power
To find common ground, preserve the relationship, and still achieve some or most of your objectives
To reach a solution under difficult circumstances, outside pressure, or time constraints
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Secret Negotiating Strategies of Donald Trump
Care a lot … but not too much
Discipline
Honesty
Don’t go it alone
Flexibility
Toughness
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Honesty is the Best Policy
Cheating is too risky
Maintain your name and reputation
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Don’t Go It Alone
Surround yourself with the best people
Get information from different sources
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Be Tough
Don’t allow anyone to treat you unfairly or cheat you.
Hold people to their promises
Ref: Trump: Surviving at the Top
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Planning for Negotiations - Outline
Define Goals and Objectives
Clarify the issues
Gather information
Humanize and set the climate
Prepare for conflict
Compromise/resolution of the issues
Agreement and confirmation
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Planning for Negotiations
“If you fail to plan, you plan to fail”
Assess the other party’s position
Assess your position
Assess your organization
Set goals for success
Dress rehearsal
The first session - Video
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How Aspiration Levels Affect Success
Satisfaction
People who expect more get more
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Define Goals and Objectives
Exactly what do I want from this negotiation?
What do I have to get to meet my needs?
What am I willing to give up to get what I want?
What are my time and economic requirements for this negotiation?
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Clarify the Issues
What are the issues as I see them?
What is the supporting framework for my position?
How will I present it to the other party?
What are the likely issues as seen by the other party?
What appears to be the significant differences in the way the parties view the issues?
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Gather Information
Who will I be negotiating with, and what do I know about them?
How do they approach a negotiation?
What are their needs?
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Gather Information
What advantages or disadvantages do I have…do they have?
What are the economic, political and human implications of the issues?
What personal power do I have that can be used constructively in this negotiation?
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Where Should You Start the Negotiations?
Two Rules:
1. Always start at the highest position you can justify.
2. Don’t start so high as to lose credibility.
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The First Session
Humanize and Set the Climate
How can I best establish rapport with the other party?
How can I establish a win/win climate?
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Prepare for Conflict
What will be the major points of conflict?
How will I attempt to resolve conflict?
Note: Every major negotiation appears to be in danger of failing at one point or another!
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Agreement and Confirmation
Write down every point agreed upon, and make
sure both parties understand that point…and
the details…exactly.
What type of agreement is required?
What approval process will be required?
How long will it take?
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Factors to be considered when determining whether to use Team
Negotiations or Individual Negotiations
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Team or Individual?
Contract development
How important are the terms and conditions?
Binding relationship needed?
Size of the contract ($) and number of issues
Large $ volume and numerous issues may necessitate team negotiations
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Team or Individual?
Time constraints
Is there sufficient time to conduct team negotiations?
Technical skills and expertise needed
Is a wide range of skills needed?
Is specialized expertise needed?
Attorney needed?
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Team or Individual?
Chances for success
Can you assemble a team that will be successful?
What has worked in the past?
Negotiating authority
Do you need someone of a higher authority -- or do you have sufficient authority to make a deal?
How does reporting to a Board affect your negotiating authority?
Does lack of authority generally help or hinder you in negotiations?
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Factors Favoring Team Negotiations
Better internal coordination and internal negotiation (buy-in)
Greater expertise
Moral support
Better planning
A show of strength
Less chance for error
On the spot decisions
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Disadvantages of Team Negotiations
Generally takes longer to negotiate a deal
Confusion and undercutting by team members if rules aren’t followed
May be more difficult to plan a strategy
Each team member’s motives and objectives may differ
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Role of the Lead Negotiator
Sets parameters
Establishes procedures
Plans strategies and tactics
Obtains buy-in from team members
Leads!
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Hints for Successful Team Negotiating
United front
Game plan (with some flexibility)
Expect some compromise
Select an appropriate setting
Lead Negotiator is in charge!!!!
Plan, plan, plan
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Should the “Easy” Items be Ironed Out First?
Pros
They are easier to agree on
They set precedence for cooperation in later negotiations
They get a lot of issues out of the way quickly
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Cons
Many “easy to agree on items” can be used later as “chips” in trading for harder issue items.
Get the other party to commit his time and energy so that he will be more likely to concede on the hard issues near the end.
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Deadlines
80% to 90% of all concessions occur just before the deadline.
How Do Time Constraints Affect the Parties?
The other party
What are his/her deadlines?
What if the deadlines are missed?
Your own organization
What deadlines has my organization imposed?
Can I renegotiate those deadlines?
Your personal needs
Are my personal objectives and deadlines consistent this those of my organization?
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Don’t create deadlines for yourself!
Negotiating Tactics
The First Move
The Flinch
Legitimacy and Authority
Lack of Authority
Budget Maximum
“You can do better than that”
Nibbling
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Negotiating Tactics
“Lets split the difference”
Escalating
“Good guy -- bad guy”
Stalling
Statistics
Trading
Emotional Tactics 42
Countermeasures
Recognize the tactic
Stay cool
Separate People from Issues
Look for alternative solutions
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Counter Measures Against Tactics
The First Move
The flinch
Legitimacy and Authority
Lack of Authority
Budget Maximum
Nibbling
“You can do better than that”
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Countermeasures (continued)
“Take it or leave it”
“Lets split the difference”
Escalating
Good guy -- bad guy
Stalling
Statistics
Trading
Emotional Tactics
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If You Have to Make Concessions
Begin by giving yourself room to negotiate
Don’t start ridiculously high
Don’t concede without getting something in return
Give in slowly and in ever-decreasing amounts
Don’t trade unless you are satisfied with the deal
Don’t concede large amounts because of deadline
pressures
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Continued
Breaking a Deadlock
“What if …” -- invent alternatives and options
Recess
Caucus
Side bar
Change scenery
Change players
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Breaking a Deadlock
Change the shape of the deal
Postpone the deadlocked issue and zero in on easier issues
Break the tension
Look for a way for the other party to save face (ex., buy local)
Mediation
Arbitration
Litigation
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BATNA
Best
Alternative
To a
Negotiated
Agreement
Critical Mistakes
Inadequate Preparation
Preparation provides a good picture of your options and allows for planned flexibility at the crunch points
Ignoring the Give/Get Principle
Each party needs to conclude the negotiation feeling something has been gained
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Critical Mistakes
Use of Intimidating Behavior
Research shows the tougher the tactics, the tougher the resistance
Persuasiveness not dominance makes for a more effective outcome
Impatience
Give ideas and proposals time to work
Don’t rush things, patience pays
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Critical Mistakes
Loss of temper
Strong negative emotions are a deterrent to developing a cooperative environment, and creating solutions.
Talking too much and listening too little
“If you live to listen, you will gain knowledge, and if you incline your ear, you will become wise”
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Critical Mistakes
Arguing instead of influencing
Your position can be best explained by education, not stubbornness
Ignoring conflict
Conflict is the substance of negotiation.
Learn to accept and resolve it, not avoid it.
Don’t count on the other person being reasonable!
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How Do You Know When It’s a Good Price?
Cost analysis
Price competition / Price Analysis
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Factors that Influence Price Supply
Number and kind of alternatives available to the buyer
Quantity available to the supplier
Expertise of the vendor/quality of the product
Demand
Intensity of the buyer’s needs for the goods or services
Usefulness of the desired goods or services to satisfy the buyer’s needs
Amount of consideration ($) the buyer can exchange for the goods or services
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Reasonable to the Seller
Demand
Number of buyers contending for goods and services
Supply
Number of sellers offering the same or similar products/services
Costs of production or performance
Amount of profit desired or attainable
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Proposed Prices May Be Compared With:
Other prices offered if there is competition.
Contract prices for the same or similar goods / services
Published price lists (ex.; catalogs, trade journals)
Independent estimates (internal and/or external)
Historical data (adjusted by indices)
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Cost Analysis Cost analysis is the review and evaluation, element by
element, of the costs supporting a vendor’s proposal.
Evaluation and determine reasonableness of specific elements or components of cost
fixed and variable costs (overhead)
direct labor and expenses
profit
How do you verify cost data?
COST + PROFIT = PRICE
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Basic Final Tips
NEVER personally attack the other party
Gain the trust and respect of the other party. (This does not mean that you have to be liked).
Take your time (to the extent possible)
Push back your deadline if possible (800 mH)
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Basic Final Tips
Negotiation is not a contest or war -- there is always a deal that will satisfy both parties.
Look for alternatives
Be Creative
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Basic Final Tips
Don’t be intimidated by:
Status or authority
Statistics
“Take it or leave it” offers
Emotional tactics
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Basic Final Tips
Never underestimate the other party
Never assume…get the facts
Practice makes PERFECT
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Questions?
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Thank You
NOTE:
If you liked our presentation, our names are Warren & Wendy Geltch.
If you didn’t like our presentation, our names are Bill and Hillary Clinton.
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