The Skill and Art of Negotiation: Strategies for Negotiation Success - PowerPoint Presentation

The Skill and Art of Negotiation: Strategies for Negotiation Success Mark J. Heley Heley, Duncan & Melander, PLLP May 3, 2019

You Negotiate all the Time Daily Lives Getting your kids organized in the morning Agreeing on weekend activities Making consumer purchases Business Entering into business contracts Construction Administration Changes Dispute resolution Claims and Lawsuits

Initial Points Plenty of Articles and Research, including studies and empirical Data Design and Construction World is Small Your Negotiation Style will impact your business Your Negotiation Style will Impact your Client’s business Goals of Negotiation Agreement Successful Implementation of Agreement

What is “Negotiation”? From the Latin expression, " negotiatus ", "to carry on business" It is a dialogue intended to resolve disputes, to produce an agreement upon courses of action, to bargain for individual or collective advantage, or to craft outcomes to satisfy various interests.

What is “Negotiation”? A Discussion where terms can be varied No Common Ground – No Need to Negotiate Complete Agreement – No Need to Negotiate Competing Interests – Time to Negotiate Have something that others want – Time to Negotiate Need something that others have-Time to Negotiate

Definition of a Skilled Negotiator Prepares for Negotiation Routinely Reaches Agreement Agreements Usually Implemented Successfully Other Side or Sides willing to Negotiate again on other matters

Definition of Unskilled Negotiators Views Negotiations as a confrontation Tries to “Win” at all costs It’s a solution that should benefit both parties not a win lose confrontation Being Emotional It’s important to maintain control Not trying to understand the other person’s perspective

Bargaining StylesCompetitive v. Collaborative COMPETITIVE NEGOTIATORS Traditionally Focuses on Outcome Only Set Starting Point at Extremes Get as Much Information as Possible Give as little Information As Possible Don’t Share Alternatives or Resistance Points

Bargaining StylesCompetitive v. Collaborative COLLABORATIVE NEGOTIATORS Uses Interest and Options to Build Common Ground Consider a Variety of Starting Points and Trade-off Options Consider and Look Behind Other Side’s Starting Point Share Alternatives or Resistance Points

5 Basic Bargaining Styles Competitor: win-lose Problem Solvers: win-win Compromisers: each win and lose a bit Accommodators: lose-win Conflict Avoiders: lose-lose

Competitor They like to win and be in control of the situation. They believe if they win, you lose.

Problem Solvers The most imaginative thinkers who think about fair “win/win” solutions and greater solutions that “ make the pie bigger .” This is the one you want to be!!!

Compromisers Their priority is to maintain a productive relationship. So they will make a compromise first, giving the other person what they want in order to reach an agreement and preserve the relationship.

Accommodators They like to resolve conflict by solving the other person’s problems. If the other person is also an accommodator then they return the favor and help solve their problems. If not, the other person takes and gives nothing in return.

Conflict Avoiders The most imaginative thinkers who think about fair “win/win” solutions and greater solutions that “ make the pie bigger .”

Scenario 2 partners, Tom and Sarah, are working on a team project that has a midnight deadline, and must finish so they can present it at work the next morning. Its 2pm now. Tom’s parents from out of town are flying in that evening to visit. Sarah has dinner reservations to celebrate her 10 year anniversary with her husband. Neither want to work late- how do they get the work done? The outcome varies depending on their bargaining style:

Approach: CompetitorTom wont budge, he absolutely will not miss a minute of his parents visit. He argues that either Sarah stays late and finishes it by herself , or it doesn’t get done at all, which he knows Sarah won’t allow. Result: Tom wins, Sarah Loses

Approach: Problem Solvers Ideal situation where both get what they want (I win, you win) Tom and Sarah talk to the Boss and determine there is some float in the schedule. They work out a deal with their boss who gives them an extension so they can both go home on time, and neither misses out on any plans that evening Result: Both Tom and Sarah win

Approach: Compromisers Balance of consideration for both self and others (I win/lose some- you win/lose some) Tom and Sarah each agree to stay until 7pm to finish it together, each misses a little bit of their evening plans and neither has to cancel any plan Result: Both Tom and Sarah win and lose a little, but neither totally concedes

Approach: AccommodatorIf I give in, you’ll get what you want (I lose- you win) Tom agrees to bail on his parents so Sarah can go to dinner Result: Tom Loses, Sarah Wins

Approach: Conflict Avoiders Both Concede (I lose- you lose) Tom and Sarah both stay late, not realizing that the other partner is working on the same task, and as a result of their avoidance, they both miss their plans Result: Both Tom and Sarah lo se

TEN NEGOTIATION TIPSPrepare for the Negotiation Set your goals for the Negotiation Determine Strategy to Achieve your Goals Understand the Other Side’s Goals and Interests Understand your Strengths and weaknesses; Understand Other Side’s Strengths and Weaknesses Information is Power –to negotiate the best deal and to know when the deal is right or to walk

TEN NEGOTIATION TIPSCONSIDER AND NEGOTIATE THE PROCESS When to Meet Where to Meet Who should be Present Set Agenda

TEN NEGOTIATION TIPSBUILD RAPPORT Small Talk Introductory Phone Calls Sets collaborative atmosphere Be Friendly Supported by Research or Preparation

TEN NEGOTIATION TIPSLISTEN ACTIVELY Attempt to understand Key Interests Read between the lines Pick up on Cues Adapt to your Partner in the Negotiation – for example -If the other side is formal, don’t be too casual (visa-versa) Maintain a sense of humor if its appropriate Paraphrase discussions and Ask Questions

TEN NEGOTIATION TIPSBODY LANGUAGE IS IMPORTANT What body language message are you telling the other person? What should you do: Maintain Eye Contact Smile confidently Nod in agreement when the other party is talking Keep hand gestures natural Sit up straight Things to AvoidAvoid crossing arms tightly Avoid putting hands on faceAvoid fidgeting and messing with your clothesTry not to talk too fast or increase your pitch if you get nervousDon’t get defensive or aggressiveRead your partner’s body language

TEN NEGOTIATION TIPSINITIATE PROPOSALS – ASK FOR WHAT YOU WANT Plan your first request/proposal carefully Consider value/risks of extreme numbers Concept of Anchoring Set the Atmosphere of the Negotiations. Define Rules of Engagement

TEN NEGOTIATION TIPSCONSIDER ONLY REASONABLE COMPROMISE Develop Strategy for Compromise Develop hierarchy of compromise Do not Compromise Unless you Receive Something in Return (or Expect to Receive Something in Return) Look for Smart Tradeoffs – Consider Interests versus Positions Be Prepared to Walk Away and Know When to Walk Away

TEN NEGOTIATION TIPSBE PATIENT AND PERSISTENT Don’t take Negotiations Personally Understand every position is negotiable. Understand you may have to ask more than One Time for Certain Items or Concessions.

TEN NEGOTIATION TIPSOPTIONS WHEN NEGOTIATIONS APPEAR TO BE AT AN IMPASSE –BREAKING IMPASSE Don’t Leave without a Plan for Advancement If Impasse is imminent, Stop before Impasse Impasse is Fleeting – No means no “at this time” and “under these circumstances” Ask for Options Restructure Offer Consider alternative offers Explore BATNA and WATNA from each Perspective

TEN NEGOTIATION TIPSPLAN FOR IMPLEMENTATION Know Next Steps if Agreement is Reached. Facilitate Implementation Send over contract form; Deliver Product; Set Meeting Document/Confirm Agreements in Writing

TEN NEGOTIATION TIPSPRACTICE NEGOTIATIONS – ROLE PLAY

PUSHERS AND PULLERS PUSHERS STRONG ARGUMENTS WELL PRESENTED ENERGY COMES FROM THE PERSUADER PULLERS GOOD QUESTIONS SKILLFULLY ASKEDENERGY COMES FROM INDIVIDUAL TO BE PERSUADED

WHEN PUSH AND PULL STYLES WORK BEST PUSHERS STRONG ARGUMENTS WELL PRESENTED ENERGY COMES FROM THE PERSUADER WORKS BEST IN TIGHT TIME CONSTRAINTS – ONE OFF NEGOTIATIONS PULLERS GOOD QUESTIONSSKILLFULLY ASKEDENERGY COMES FROM INDIVIDUAL TO BE PERSUADED WORKS BEST WHEN ADEQUATE TIME FOR NEGOTIATION – LONG TERM RELATIONSHIP IS PART OF THE GOAL

CONCLUSION