Negotiation Skills Andrew Mercurio - PowerPoint Presentation

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Negotiation Skills

Andrew Mercurio

Director of Business Services

Warren Wilson College

Be Prepared!

The first and most important step in any negotiation process is preparation. It is also the most time consuming, which is perhaps why it is so often overlooked. Preparation is like exercise: it hurts while you’re doing it, but the benefits show up later. During the preparation step, network with peers, coworkers, executives from related industry associations, even your counterpart at your company’s competition. Determine precedents and benchmarks

Probing Step 2

Probing

. Probing includes asking questions and listening. When do we probe? Always! Remember, negotiation is a process, not an event. Every engagement with your vendor is an opportunity for probing. That includes telephone discussions, account reviews, presentations, product demonstrations, facility tours, lunch, etc.

The Proposal

The final step in the negotiation process is proposal. Generally speaking, while you want to influence the offer before it’s made, get the other side to propose first. It’s the reason a car dealer says, “Make me an offer”. Use the information learned during the preparation phase like benchmarks and precedents.

Negotiation Definition

Negotiation

is a complex process, one which is necessary in today’s business environment. How you handle negotiations will reflect upon you and your company. There are some basic strategies that you can follow. What you do before, during, and after the negotiation process will allow you to call it a success or not.

Strategies

Research Subject Matter

– Information is one of the keys to successful negotiation, and good research is the foundation of good information. Research your counterpart, the issues, and related factors ahead of time. Use all the information sources you can, including people, print, and the Internet. Also, research during the negotiation to check and gather new information. The better your information, the more options you'll have during the process.

Communication

– You succeed at this by how and what you communicate. Your tone of voice, body language, choice of words, and ability to listen all play a role. Be as aware of your counterpart as you are of yourself. The better you are at creating rapport, the better the negotiations will go.

Aim for a “win-win”

– This means choosing collaboration, not competition. Find mutually beneficial options and do your best to avoid coercive behaviors. This is especially true for business relationships that may have a long life and the potential for excellent mutual rewards.

Agreements

– Your final agreement is really the culmination of all your hard work. It's like the building to the builder or the painting to the artist.

Aim for a “win-win” – This means choosing collaboration, not competition. Find mutually beneficial options and do your best to avoid coercive behaviors. This is especially true for business relationships that may have a long life and the potential for excellent mutual rewards.

Agreements

– Your final agreement is really the culmination of all your hard work. It's like the building to the builder or the painting to the artist.

Central elements of a good agreement

Written

– Make sure your agreement is written. Verbal agreements aren't binding and can lead to assumptions and confusion.

Detailed

– Make sure your agreement is detailed, containing all the specifics needed to complete what is negotiated. Pay particular attention to timelines, resources, or financial arrangements that may be outlined in the agreement.

Reviewed

– Make sure your agreement is reviewed by a third party. Do this to ensure that the agreement makes sense, is legal, and truly says what you want it to say.

Honor yourself and your counterpart. Negotiating is a complex process involving one's beliefs, emotions, integrity, and creativity. A complicated negotiation can really pull at a person. If the issues at hand are personal, it can seem to pull a person apart. It's important, therefore, to honor yourself and your counterpart, regardless of the outcome.

Four main keys to successful negotiation

People

– Separate the people from the issues. There is no need to personalize the issues with remarks about the person on the other side of the table. Stick to the issues. Recognize that there is emotion and investment on both sides and be prepared to listen well. You know what Steven Covey says, “Seek first to understand, then, to be understood”. Be soft on people and hard on issues. This will allow you can keep the relationship AND achieve a mutually satisfying outcome.

Interests

– Focus on the interests of the other, rather than the position. Behind each position lie compatible as well as conflicting interests. For example, when negotiating a raise, a wise person acknowledges that the interests of the company are to be progressive while making a profit. The wise boss acknowledges the interests of the employee to accelerate on his/her career path while making a contribution to the company and supporting his/her lifestyle or family. Negotiations do not take place in a vacuum. Each person has a real life going on, with real needs and interests.

Options

– Work with the other party to generate a variety of options from which to create a solution.

Brainstorm possibilities without judgment or comment. You’d be surprised how many good ideas can surface when this is allowed to occur. Make no decisions until you’ve exhausted your list of possibilities. Then, look for areas of agreement. Where are your interests shared? Where are the interests a good fit? Explore options that are of low cost to you and high value to the other party and vice versa.

Criteria

– It is imperative to negotiate within mutually agreed-upon standards of fairness. Otherwise, negotiating can turn to street fighting! These criteria may range from current market value to procedures for resolving conflict. The setting of clear criteria will allow you to create an equitable solution while keeping your relationship intact. Want proof? Try it at home!

Ten Tips for Successful Negotiating

Develop "Negotiation Consciousness."

Being assertive means asking for what you want and refusing to take "no" for an answer.

Note that there is a difference between being assertive and being aggressive.

Become a Good Listener.

Be Prepared.

Aim High.

Be Patient.

Focus on Satisfaction.

Don't Make the First Move.

Don't Accept the First Offer.

Don't Make Unilateral Concessions.

Always be Willing to Walk Away!

The contract process

Offer

– An offer, also referred to as a bid, is given by the seller, who wishes to deliver goods or services.

Acceptance

– This is given by the buyer, who agrees to the terms of the contract.

Consideration

– Consideration is the performance of the contract, for which money is given in exchange for meeting the promise of the contract. Consideration is usually deemed the most important part of any contract, and may be amended during the job if circumstances change. For a contract to be legally enforceable, its consideration must detail all expectations of the job.

Put simply, a contract is a promise, or series of promises, that must be honored in order to satisfy both parties. If any portion of a contract is not kept, legal remedies may be the only recourse. Be sure that you are satisfied with the offer, acceptance, and consideration terms of any contract you undertake. Do not allow either side to suggest that obligations do not have to be completely fulfilled, or that deadlines should supersede commitment to legal requirements. The temptation to rationalize can lead a company into serious legal and ethical problems that could have been avoided.