Getting to Win-Win in Negotiation Government Finance Officers Association Art Hinshaw Director,...
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Transcript of Getting to Win-Win in Negotiation Government Finance Officers Association Art Hinshaw Director,...
Getting to Win-Win in Getting to Win-Win in Negotiation Negotiation
Government Finance Officers Government Finance Officers AssociationAssociation
Art HinshawArt HinshawDirector, Lodestar Dispute Resolution ProgramDirector, Lodestar Dispute Resolution Program
Sandra Day O’Connor College of LawSandra Day O’Connor College of Law
Arizona State UniversityArizona State University
August 8, 2007August 8, 2007
© 2007 Arizona State University College of Law© 2007 Arizona State University College of Law
AgendaAgenda
BackgroundBackground
Interest Based NegotiationInterest Based Negotiation
Nuts and BoltsNuts and Bolts
ExerciseExercise
Negotiation – Negotiation – Background InfoBackground Info
Problem SolvingProblem Solving Context MattersContext Matters Words and DeedsWords and Deeds ReputationReputation Social ActivitySocial Activity The Right WayThe Right Way Comfort Level Comfort Level UncertaintyUncertainty Misteaks Misteaks
Primary Negotiation Primary Negotiation StrategiesStrategies
Adversarial / Position BasedAdversarial / Position Based
Problem Solving / Interest BasedProblem Solving / Interest Based
A Few Adversarial / A Few Adversarial / Position Based Position Based
Negotiation TacticsNegotiation Tactics Extreme claims with later small Extreme claims with later small
concessionsconcessions Take it or leave it offersTake it or leave it offers Personal insults and feather rufflingPersonal insults and feather ruffling False demands False demands Threats and warningsThreats and warnings Good cop, bad copGood cop, bad cop
Problem Solving / Problem Solving / Interest Based StrategyInterest Based Strategy Separate people from the problemSeparate people from the problem
Focus on Interests, not PositionsFocus on Interests, not Positions
Invent options for mutual gainInvent options for mutual gain
Insist on objective criteriaInsist on objective criteria
From - R. Fisher, W. Ury, and B. Patton, Getting to Yes (1991)
Interests Instead of Interests Instead of PositionsPositions
The purpose of negotiation is to serve The purpose of negotiation is to serve your interestsyour interests
Positions are what people say they wantPositions are what people say they want Interests are needs underlying the Interests are needs underlying the
positionposition Ask why and why notAsk why and why not Basic needs are powerful interests - Basic needs are powerful interests -
security, control of one’s life, security, control of one’s life, recognitionrecognition
Types of InterestsTypes of Interests
SubstantiveSubstantive
ProceduralProcedural
PsychologicalPsychological
Justification QuestionsJustification Questions
What works for you in this proposal?What works for you in this proposal? Why are you upset with the current Why are you upset with the current
situation?situation? What would about the current situation What would about the current situation
would you like to be different?would you like to be different? If you get what you ask for, what If you get what you ask for, what
problem would that solve?problem would that solve? What in this option does not work for What in this option does not work for
you?you?
Interest Based vs. Interest Based vs. Position BasedPosition Based
When you are trying to be interest When you are trying to be interest based and the other is not, what do based and the other is not, what do you do?you do?
1. Suspend your reaction1. Suspend your reaction
2. Defuse hostile emotions2. Defuse hostile emotions
3. Look for their interests3. Look for their interests
4. Ask why and why not4. Ask why and why not
5. Educate5. Educate
Best Alternative to a Best Alternative to a Negotiated Agreement Negotiated Agreement
(BATNA)(BATNA) Standard against which to judge any Standard against which to judge any
proposed agreementproposed agreement
BATNA equates to power in BATNA equates to power in negotiationsnegotiations
A Successful NegotiationA Successful Negotiation Better than your BATNABetter than your BATNA Satisfies interestsSatisfies interests
Yours – wellYours – well Theirs – acceptablyTheirs – acceptably Others - tolerablyOthers - tolerably
LegitimateLegitimate FairnessFairness
CommitmentsCommitments Well planned and realisticWell planned and realistic
Otherwise walk to BATNAOtherwise walk to BATNA
““It’s All About Money”It’s All About Money”
Reflects interestsReflects interests Reflects BATNA Reflects BATNA Is a languageIs a language Is symbolicIs symbolic Is certain and immediateIs certain and immediate Can mean many things at onceCan mean many things at once
Nuts and BoltsNuts and Bolts
Negotiation Negotiation PreparationPreparation
No such thing as too much No such thing as too much preparationpreparation
InterestsInterests BATNABATNA Setting goals Setting goals CriteriaCriteria Offer and Concession strategiesOffer and Concession strategies
Negotiate the process?Negotiate the process?
Distributive IssuesDistributive Issues
Caution - Too soon?Caution - Too soon? Offers and responsesOffers and responses
First offerFirst offer Concession strategiesConcession strategies CredibilityCredibility LanguageLanguage
Agreement – are we done?Agreement – are we done?
First OffersFirst Offers AdvantagesAdvantages
Set expectationsSet expectations Elicit genuine reactionElicit genuine reaction Strategic advantage Strategic advantage
Timing, BATNA, InformationTiming, BATNA, Information
DisadvantagesDisadvantages Lack of info to appropriately setLack of info to appropriately set Other side gains infoOther side gains info BracketingBracketing
First Offers – contd.First Offers – contd.
Determining the offerDetermining the offer Your original goalYour original goal Most aggressive, yet reasonable pointMost aggressive, yet reasonable point Give yourself room to moveGive yourself room to move
Expectation for the dance?Expectation for the dance? Analyze other’s interests, BATNA, Analyze other’s interests, BATNA,
negotiation style, etc.negotiation style, etc.
First Offers – contd.First Offers – contd.
When you should make themWhen you should make them Sophisticated parties w/ substantial Sophisticated parties w/ substantial
access to informationaccess to information Complex non-price issuesComplex non-price issues Technically detailed agreementsTechnically detailed agreements You have more info, defined standards, You have more info, defined standards,
or a strong BATNAor a strong BATNA
Making Offers and Making Offers and ConcessionsConcessions
Be specific and detailedBe specific and detailed Explain offer’s rationaleExplain offer’s rationale
Tie it to standardsTie it to standards Before stating the offerBefore stating the offer
Use an air of finality & increasing Use an air of finality & increasing rigidityrigidity
Avoid rangesAvoid ranges Be ready to react Be ready to react
Specific Language TipsSpecific Language Tips Significant flexibilitySignificant flexibility
““My asking price is”My asking price is” ““I’m looking to get”I’m looking to get” NOTNOT
““first offer” “non-negotiable” “bottom line”first offer” “non-negotiable” “bottom line”
Middle flexibilityMiddle flexibility ““Because of . . . I’m willing to . . .”Because of . . . I’m willing to . . .” ““This is fair and reasonable because. . .”This is fair and reasonable because. . .” NOTNOT
““bottom line” “final offerbottom line” “final offer
Specific Language Tips Specific Language Tips – contd.– contd.
Total inflexibilityTotal inflexibility ““I’ve given this a great deal of I’ve given this a great deal of
thought, and it’s the best I can do”thought, and it’s the best I can do” ““If I move any more, it’s not worth it If I move any more, it’s not worth it
for me”for me” NOTNOT
““take it or leave it” “frankly”take it or leave it” “frankly” Reaction to an offerReaction to an offer
““I’m disappointed with your offer. It I’m disappointed with your offer. It builds in a 30% profit margin and builds in a 30% profit margin and that’s out of line in this market”that’s out of line in this market”
Closing the DealClosing the Deal
Focus on the other’s gains, not their Focus on the other’s gains, not their lossloss
Beware of “nibbling”Beware of “nibbling” Watch the “take away”Watch the “take away” Make the last concession Make the last concession
Even if it is smallEven if it is small
Blast ExerciseBlast Exercise
More Practical AdviceMore Practical Advice
Getting to Yesby Fischer, Ury and Patton
Gain the Edge! Negotiating to Get What You Want
by Martin E. Latzby Martin E. Latz
Questions and AnswersQuestions and Answers