Negotiations

2 ECTS, 2 Semester, 2 SWS UE Social Competence and Leadership

Innovation and Product Management

University of Applied Sciences Upper Austria

Wels, 2015

Mag. Violeta Bulc, PMBA

www.vibacom.si

www.incomovement.eu www.violeta.si

Violeta.bulc@viabcom.si

About the course

Harvard negotiating approach Types of argumentation in negotiation Preparing efficiently for negotiation and carrying it out successfully Obtaining results that satisfy both sides (win-win situations) Understanding negotiating partners better and concluding negotiations Mastering difficult negotiation situations with confidence Examining and developing individual current negotiating styles Practical experiences: - Business games - Simulation of negotiating scenarios - Involution/evolution

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The Grading and Deadlines

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Grading will be conducted as follows: 20% Attendance 80% Final Paper

Submission of the final paper: “Lessons gained from my negotiating experiences: personal and business”.

The final paper (12 points) – project report: Students are expected to read/listen to class materials (as listed in the handouts). Recommended readings are optional.

Based on the reading materials and the experiences in the class, students are asked to submit their own negotiating approach. Students are required to test their negotiating approach in their personal and business affairs.

The paper (the project report) should include: -title page with information about the paper, author and the class number -chapter on the content of the personal approach (description, the logic behind). (3p) -chapter on experience drawn from personal negotiation, using the proposed approach (explanation of the situation, explanation of challenges, weak and strong points of the approach, possible improvements, lessons learnt .(3p) -Chapter on experiences from business negotiations using the proposed approach (explanation of the situation, explanation of challenges, weak and strong points of the approach, possible improvements, lessons learnt. (4p) -Final thoughts on negotiation. (1p)

The paper should not be longer than six(6) A4 pages in total (title page and the body text), font 12, 1.5 line spacing. (1p)

Time table - proposal

10 units/day (10:45 – 19:45); (09:00 – 17:00) 09:00 – 10:30 BREAK 15min 10:45 – 12:15 BREAK 60min 13.15 – 14:45 BREAK 15min 15:00 – 17:00

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DAY 1

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Who are we?

Get into a group of 4: - Present yourself to the group (draw a picture of yourself as an animal that best represents you) - Present the group to the rest of the class from the perspective of the

these animals

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Part 1:

Definitions My attitude towards negotiation Types of argument within negotiation

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How do you understand negotiations (your definition, your experiences?

Work in a group of 4…. Share your stories…

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Negotiation

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Negotiation is a dialogue between two or more people or

parties, with the intention to reach an understanding, resolve points of difference, to gain advantage for an individual or collective, or to craft outcomes to satisfy diverse interests. Negotiation occurs in business, non-profit organizations, government branches, legal proceedings, among nations and in personal situations such as marriage, divorce, parenting, and everyday life. The study of the subject is called negotiation theory. Professional negotiators are often specialized, such as union negotiators, leverage buyout negotiators, peace negotiators, hostage negotiators, or may work under other titles, such as diplomats, legislators or brokers. http://en.wikipedia.org/wiki/Negotiation, May 2015

Alternative Dispute Resolution

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Arbitration (Arbitration, a form of alternative dispute resolution (ADR), is a technique for the resolution of disputes outside the courts. The parties to a dispute refer it to arbitration by one or more persons (the "arbitrators", "arbiters" or "arbitral tribunal"), and agree to be bound by the arbitration decision (the "award"). A third party reviews the evidence in the case and imposes a decision that is legally binding on both sides and enforceable in the courts.)

Conciliation (Conciliation is an alternative dispute resolution (ADR) process whereby the parties to a dispute use a conciliator, who meets with the parties separately in an attempt to resolve their differences. They do this by lowering tensions, improving communications, interpreting issues, providing technical assistance, exploring potential solutions and bringing about a negotiated settlement.)

Mediation (Mediation, as used in law, is a form of alternative dispute resolution (ADR), a way of resolving disputes between two or more parties with concrete effects. Typically, a third party, the mediator, assists the parties to negotiate a settlement. Disputants may mediate disputes in a variety of domains, such as commercial, legal, diplomatic, workplace, community and family matters.)

Negotiation Collaborative law (Collaborative law (also called collaborative practice, divorce, or family law) is a legal process enabling couples who have decided to separate or end their marriage to work with their lawyers and, on occasion, other family professionals in order to avoid the uncertain outcome of court and to achieve a settlement that best meets the specific needs of both parties and their children without the underlying threat of contested litigation.)

Conflict resolution (Conflict resolution, otherwise known as Reconciliation, is conceptualized as the methods and processes involved in facilitating the peaceful ending of conflict and retribution. Often, committed group members attempt to resolve group conflicts by actively communicating information about their conflicting motives or ideologies to the rest of the group (e.g., intentions; reasons for holding certain beliefs), and by engaging in collective negotiation.)

Lawyer supported mediation (Lawyer-supported mediation is a "non-adversarial method of alternative dispute resolution (ADR) to resolves disputes, such as to settle family issues at a time of divorce or separation, including child support, custody issues and division of property.)

Alternative Dispute Resolution

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Arbitration (Arbitration, a form of alternative dispute resolution (ADR), is a technique for the resolution of disputes outside the courts. The parties to a dispute refer it to arbitration by one or more persons (the "arbitrators", "arbiters" or "arbitral tribunal"), and agree to be bound by the arbitration decision (the "award"). A third party reviews the evidence in the case and imposes a decision that is legally binding on both sides and enforceable in the courts.)

Conciliation (Conciliation is an alternative dispute resolution (ADR) process whereby the parties to a dispute use a conciliator, who meets with the parties separately in an attempt to resolve their differences. They do this by lowering tensions, improving communications, interpreting issues, providing technical assistance, exploring potential solutions and bringing about a negotiated settlement.)

Mediation (Mediation, as used in law, is a form of alternative dispute resolution (ADR), a way of resolving disputes between two or more parties with concrete effects. Typically, a third party, the mediator, assists the parties to negotiate a settlement. Disputants may mediate disputes in a variety of domains, such as commercial, legal, diplomatic, workplace, community and family matters.)

Negotiation Collaborative law (Collaborative law (also called collaborative practice, divorce, or family law) is a legal process enabling couples who have decided to separate or end their marriage to work with their lawyers and, on occasion, other family professionals in order to avoid the uncertain outcome of court and to achieve a settlement that best meets the specific needs of both parties and their children without the underlying threat of contested litigation.)

Conflict resolution (Conflict resolution, otherwise known as Reconciliation, is conceptualized as the methods and processes involved in facilitating the peaceful ending of conflict and retribution. Often, committed group members attempt to resolve group conflicts by actively communicating information about their conflicting motives or ideologies to the rest of the group (e.g., intentions; reasons for holding certain beliefs), and by engaging in collective negotiation.)

Lawyer supported mediation (Lawyer-supported mediation is a "non-adversarial method of alternative dispute resolution (ADR) to resolves disputes, such as to settle family issues at a time of divorce or separation, including child support, custody issues and division of property.)

Negotiation is a dialogue between two or more people or parties intended to reach an understanding, resolve points of difference, to gain advantage for an individual or collective, or to craft outcomes to satisfy various interests.

BREAK

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Part 2:

Harvard negotiating approach Obtaining results that satisfy both sides (win-win situations) Understanding negotiating partners better and concluding

negotiations Mastering difficult negotiation situations with confidence Different approaches:

• Harvard Negotiation Project: 5 Lasting Rules For Negotiating Anything • Preparing Successful Negotiation • 12 Strategies for Curbing Deception • Alan McCarthy – 10 rules for negotiation

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Harvard Negotiation Project: 5 Lasting Rules For Negotiating Anything

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1. Don’t Bargain Over Positions Most of us begin negotiation by identifying a position and arguing for it, such as: “I want to retain the CEO title.” But such positional bargaining can limit your ability to arrive at a “wise agreement” that benefits both parties — the proverbial middle ground and the whole purpose of negotiation. Instead of thinking of a “position,” identify the goal. You want remuneration for the sweat you put into your company. You want, for example, status (to remain CEO). But a specific position is binary — you either get it or you don’t. A goal can be attained in many ways, giving you many more options for arriving at a solution. 2. Separate the People From the Problem Most negotiation is emotional. You want something, after all. And emotion clouds our objectivity. But you can limit the emotional content of your negotiation by thinking of the person you’re talking to as your partner and the problem you’re trying to solve as an object. Take, for example, the question of how much a company’s equity is worth. In this case, you’re not negotiating against the investor over a position, you’re engaged with that person to arrive at the right answer to the question. Some will urge you to make your negotiation opponent a partner, but this can lead to Stockholm Syndrome. Instead just think of engaging the other person, using their input to arrive at the right answer. Maintain your independence. 3. Focus on Interests We all have interests. The pursuit to fulfill our interests leads up to adopt positions. But bargaining for stated positions, such as titles, will not necessarily produce a wise agreement that takes care of the interests that led you to adopt the positions in the first place. Think instead: I want to remain engaged in the business. There are many ways to achieve goals without having specific positions. 4. Invent Options for Mutual Gain This is the creative part. You must examine each other’s interests to come up with options in which both parties gain. Your investors have an interest in a pro-CEO who can sell into large corporations (you’ve never done that). You need funding, but also want to remain engaged. Both parties can draft a list of options for your new role that satisfy everyone’s needs: COO, president, chief innovation officer, etc. Negotiate from this list. 5. Insist on Using Objective Criteria We all have personal standards. CEO conveys more status than chairman, etc. The key is to let go of personal standards in favor of objective ones upon which both parties can agree. (Think of the Kelley Blue Book, a set of agreed-upon standards for those looking to buy or sell a car). But here you have to do some real homework and investigate the objective standards that apply to your negotiation ahead of time. Some to consider: market value; legal or business precedent; scientific judgments (patents); efficiency; and reciprocity. http://gigaom.com/2008/05/25/harvard-negotiation-project-5-lasting-rules-for-negotiating-anything/, May 2015

Harvard Negotiation Project: 5 Lasting Rules For Negotiating Anything

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1. Don’t Bargain Over Positions

2. Separate the People From the Problem 3. Focus on Interests 4. Invent Options for Mutual Gain 5. Insist on Using Objective Criteria http://gigaom.com/2008/05/25/harvard-negotiation-project-5-

lasting-rules-for-negotiating-anything/, May 2015

Why are these points important?

Discuss in pairs

Preparing Successful Negotiations

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Goals: what do you want to get out of the negotiation? What do you think the other person wants?

Trades: What do you and the other person have that you can trade? What do you each have that the other wants? What are you each comfortable giving away?

Alternatives: if you don't reach agreement with the other person, what alternatives do you have? Are these good or bad? How much does it matter if you do not reach agreement? Does failure to reach an agreement cut you out of future opportunities? And what alternatives might the other person have?

Relationships: what is the history of the relationship? Could or should this history impact the negotiation? Will there be any hidden issues that may influence the negotiation? How will you handle these?

Expected outcomes: what outcome will people be expecting from this negotiation? What has the outcome been in the past, and what precedents have been set?

The consequences: what are the consequences for you of winning or losing this negotiation? What are the consequences for the other person?

Power: who has what power in the relationship? Who controls resources? Who stands to lose the most if agreement isn't reached? What power does the other person have to deliver what you hope for?

Possible solutions: based on all of the considerations, what possible compromises might there be? http://www.mindtools.com/CommSkll/NegotiationSkills.htm, May 2015

Preparing Successful Negotiation

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Goals

Trades

Alternatives

Relationships

Expected outcomes

The consequences

Power

Possible solutions http://www.mindtools.com/CommSkll/NegotiationSkills.htm, May 2015

Why are these points important?

Discuss in pairs, the 2 most important ....

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12 Strategies for Limiting Deception

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In a new study in the Negotiation Journal, researches Denise Fleck, Roger Volkema, Sergio Pereira, Barbara Levy, and Lara

Vaccari proposed 12 moves that could ward off deceptive acts in negotiation. These moves flag both the short- and long-term risks that unethical behavior poses to the negotiator’s goals and to the relationship. Some of the moves highlight potential benefits of behaving ethically; others emphasize potential losses incurred by dishonesty.

12 moves:

1. Assure your counterpart that he/she will meet his/her goals. 2. Convince your counterpart that he/she is making progress. 3. Point out how your goals and your counterpart’s are linked. 4. Suggest that your counterpart has limited alternatives to the current deal. 5. Imply that you have strong outside alternatives. 6. Point out shared social identities (age, job history, marital status, etc.). 7. Encourage your counterpart to identify with an ethical organization, such as his trade group. 8. Note your connections to your counterpart’s social network. 9. Suggest long-term business opportunities you might offer. 10. Remind your counterpart of the legal implications of unethical behavior. 11. Mention the prospect of future personal or social support. 12. Propose becoming a gateway to valued social or business networks.

http://www.pon.harvard.edu/daily/business-negotiations/in-business-negotiations-12-strategies-for-curbing-deception/, May 2015

12 Strategies for Limiting Deception

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12 moves: 1. Assure your counterpart that he/she will meet his/her goals. 2. Convince your counterpart that he/she is making progress. 3. Point out how your goals and your counterpart’s are linked. 4. Suggest that your counterpart has limited alternatives to the current deal. 5. Imply that you have strong outside alternatives. 6. Point out shared social identities (age, job history, marital status, etc.). 7. Encourage your counterpart to identify with an ethical organization, such as his trade group. 8. Note your connections to your counterpart’s social network. 9. Suggest long-term business opportunities you might offer. 10. Remind your counterpart of the legal implications of unethical behavior. 11. Mention the prospect of future personal or social support. 12. Propose becoming a gateway to valued social or business networks.

http://www.pon.harvard.edu/daily/business-negotiations/in-business-negotiations-12-strategies-for-curbing-deception/, May 2015

Why are these points important?

Pick one that you find the most

intertesting/important and discuss it in a

group of 3.

Alan McCarthy – 10 rules for negotiation 1. Don’t negotiate 2. Never negotiate with yourself 3. Never accept the first offer 4. Never make the first offer (if you can avoid it) 5. Listen more and talk less: 80/20 rule 6. Never give anyone a free gift 7. Watch the salami 8. Avoid the rookie's regret 9. Never make a quick deal 10. Never disclose the bottom line

http://www.youtube.com/watch?v=oy0MD2nsZVs, May 2015

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Alan McCarthy – 10 rules for negotiation 1. Don’t negotiate 2. Never negotiate with yourself 3. Never accept the first offer 4. Never make the first offer (if you can avoid it) 5. Listen more and talk less: 80/20 rule 6. Never give anyone a free gift 7. Watch “the salami” 8. Avoid the “rookie's regret” 9. Never make a quick deal 10. Never disclose the bottom line

http://www.youtube.com/watch?v=oy0MD2nsZVs, May 2015

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Pick one rule and make a mind map

for it? work in pairs...

BREAK

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The art of negotiation

William Ury: The walk from "no" to "yes”: http://www.youtube.com/watch?v=Hc6yi_FtoNo,May 2014

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Listen to the video and note the key messages…

Reflections

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The project

Start working on a project… develop the basic outline….

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DAY 2

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What do I remember from the DAY 1 … How did I feel? … What made me think ?…

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SOCIO-POLITICAL CONDITIONS

4 THINGS TO BE

AWARE OF

LANGUAGE

WEATHER CONDITIONS

CULTURE

Multicultural Mis-Communication

Cultural and language differences and negotiations …(the influence of!)

Discuss the challenges thus presented… Work in a group of 4…. Share an experience from the group and 3 major points with the rest

of the class…

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BREAK

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The art of negotiation and system evolution

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*intelectual property of Vibacom d.o.o., 2011

*intelectual property of Vibacom d.o.o., 2006

Negotiations get effected by the system evolution/evolution of values…

The art of negotiation and system evolution - form 8 groups (think about the values suggested in the different stages of system evolution); 2 groups work on the same phase (15min) - compare the findings between the groups with the same phase (10min) - present the findings and discuss them with the rest of the class (5min/phase)

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InCo movement, 2012

Holistic decision making

"Intuitive decisions for more social responsibility", Kovačič V., Bulc V., Battelino U., 8th International Conference Social Responsibility and Current Challenges 2013: "Education and communication for more social responsibility", Institut IRDO, 7th March 2013

Subconscious

Body language

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Amy Cuddy: Your body language shapes who you are: http://www.youtube.com/watch?v=Ks-_Mh1QhMc, May 2015

Watch this video and note significant messages…

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6 Human Dimensions

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What kind of effect does an individual human dimension have on negotiations (involution)? - discuss in groups of two

- share the thoughts

8+1” business relationships

With vision and mission

With customers

With suppliers

With public

With global conciousness

With Owners/

shareholders

Among employees

Between management and employees

With

yourself

*intelectual property of Vibacom d.o.o.

8+1 business relationships and negotiations - form 8 groups (different from the previous exercise); - select 3 types of relationships - discuss the differences in negotiation with different participants in the group - report to the class

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Reflections

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The project

Continue working on a project… improve your approach .

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DAY 3

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What do I remember from the DAY 2 … How did I feel? … What made me think? …

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The art of negotiation and innovation ecosystems

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GROWTH OF VALUE & GROWTH OF SOCIAL RESPONSIBILITY

SOCIAL MODELING

(What is my

impact) TECHNOLOGY

(What can I do)

BUSINESS MODELING

(Who can I do it with)

ORGANIZATIONAL MODELING

(How can I do it)

INNOVATION ECOSYSTEMS

(CONSTANT PROTOTYPING)

(How can I co-exist)

DO 2000 2005 2008 2010 2013 2015 and beyond

TECHNICAL INNOVATION

NON-TECHNICAL INNOVATION

New value .vs. compromise

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PARTY 2

PARTY 1

PARTY 1 OPINION

PARTY 2 OPINION

WHERE CAN I USE THIS: - Get a new business - Negotiations - Addressing complaints -…..

Innovative solutions and recommendations can push the

boundaries further

New value: “WIN-WIN”

situation

COMPROMISE

“lose-lose”

situation

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MARKETS

CUSTOMERS

THE KEY SEGMENTS: we want to have at least 80%

customers in this section

Strategic

Potential

Undeveloped

Critical

Strategic Potential Undeveloped Critical

New value .vs. compromise

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VALUES 4 DRIVERS OF

NEGOTIATION

NEEDS

NEW VALUE

MOTIVATION

Phase of system of Evolution

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The Red Monkey

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Jeff Staes: The Red Monkey Story - Or how to manage creative ideas http://www.youtube.com/watch?v=BFk4dCCwlRg (May 2015)

Listen to the video and note the key messages… Which key roles of innovation ecosystems were presented ?…. How do we negotiate with each of these roles (using 4 drivers of negotiation) ?

Simulation of negotiation within innovation ecosystem ROLES to play (repeat 3 times; play different roles): - the head of marketing (creator) - the chief engineer (pioneer) - the finance manager (follower) - settler (the general manager) - client (an eager customer that wants to send to the market a break-through innovation) - observer (monitors the negotiations and reports the findings) Form a group of 6 members. The creator comes up with an innovative idea that she/he presents at the meeting with a client. The invited attendees play the roles that they are assigned. The aim of the meeting is for consensual agreement on a solution that will keep the customer happy, yet make all group members comfortable with the outcome and the tasks that they will have to undertake.

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Simulation …. continued ROLES to play (repeat 3 times; play different roles): - the head of marketing (creator) - the chief engineer (pioneer) - the finance manager (follower) - settler (the general manager) - client (an eager customer that wants to send to the market a break-through innovation) - observer (monitors the negotiations and reports the findings) Form a group of 6 members. The creator comes up with an innovative idea that she/he presents at the meeting with a client. The invited attendees play the roles that they are assigned. The aim of the meeting is consensual agreement on a solution that will keep the customer happy, and make the group members comfortable with the outcome and the tasks that they will have to perform.

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Simulation of negotiation in innovation ecosystem Report back on the experiences (observers, the rest of the participants).

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Final Reflections

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The paper/project

Continue working on a project… improve your approach; clearly define personal and business scenarios for negotiations.

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Thank you!

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Additional sources

How to Negotiate Your Job Offer - Prof. Deepak Malhotra (Harvard Business School): http://www.youtube.com/watch?v=km2Hd_xgo9Q, May 2015 How to Use Game Theory for Negotiations and Strategic Decisions http://www.youtube.com/watch?v=s4jryziVjNE, May 2015 Nelson Mandela, Negotiation and Conflict Management: David Venter at TEDxEutropolis: http://www.youtube.com/watch?v=ufjV1fdCTbQ, May 2014

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