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EFFECTIVE NEGOTIATION
Introduction What is Negotiation ? Why Negotiate ? The Approaches to Negotiation The Stages of Negotiation The Sources of Power Transactional Analysis Resolving Conflict Tips for Negotiation
INTRODUCTION – Ground Rules -
Mobiles Off/Silent Mode If important call, please move out of room No smoking, tea/coffee in room Questions anytime Avoid side conversations Share experiences Question & Challenge
WHAT IS NEGOTIATION A process through which
parties move from initially divergent positions to a point where agreement may be reached
A technique that enables us to : Persuade & convince others To accept our way of thinking/doing Without their feeling shortchanged
WHY NEGOTIATE ? The reason you negotiate is to produce
something better than the results you can obtain without negotiating…
B A T N A – Best Alternative To a Negotiated Agreement
W A T N A – Worst Alternative To a Negotiated Agreement
The Five Key Approaches
Compromise
Logical
Reasoning
Bargaining
Emotion
Coercion
NEGOTIATION
Five Key Approaches - Compromise
Ready to give up something that is dear
Feel as if lost something
Use as last resort
Generally perceived as sub-optimal
Five Key Approaches - Logical
Strong role of Facts/Data – don’t nitpick
Analytical – flow important
Source Credibility/Impeccability
Generally emotions take back seat
Five Key Approaches - Bargaining
1st & Last levels known
Start higher than expected. Get a return for every concession you make
Do not indicate you will move quickly from your position
Generally played like a game
Five Key Approaches - Emotion
Strong understanding of respective emotional clues – control your emotions – don’t let them control you
Facts/data take back seat/selectively used
Variable tonality of discussion
Generally involves play acting
Five Key Approaches - Coercion
Strong understanding of respective pulse points – think before you threaten
Use mirrored or emotional threats rather than real ones
Making offers that cannot be refused
Generally happens when there is some inequality in dependence
The Seven Phases
The Seven Phases of Negotiation
PLANNING &
PREPARATION
•Setting Targets
•Cost on concessions
•S.W.O.T.- both sides
•Variables/Outcomes
•Market Intelligence
•Team clear
OPENINGS
•Be Polite
•Outline your position
•Never accept their
first offer
• Avoid markers
TESTING
•Understand their weaknesses
•Probe facts and inconsistencies
•Get them on the back foot
•Silence – get them talking
•Challenge them
The Seven Phases of Negotiation
MOVING YOUR
POSITIONS
•Positive Summary
•Put on Pressure
•Emphasise that you have moved
MAKING CONCESSIONS
•When to do it ?
•How much to give ?
•What do I get in return
AGREEMENT
•Make final offer with TOTAL conviction
•Watch for closing signals BEFORE you move
•Only break deadlog if to your advantage
•Use Closing Techniques
•Make sure everybody knows what has been agreed
The Seven Phases of Negotiation
• Last Phase is of Review
• What went right ?
• What went wrong ?
• What could be done differently/better ?
• What could have been avoided ?
• This becomes input into the Planning & Preparation phase of next Negotiation
NEGOTIATION STYLES
TRADITIONAL NEGOTIATION APPROACH VERSUS CONTEMPORARY APPROACH
FIXED PIE
EXPANDING THE PIE
THETRADITIONALAPPROACH
THE CONTEMPORARY
APPROACH
The Sources of Power
The Sources of Power 8 Sources of Power “NO TRICKS”
N Need
O Options
T Time
R Relationship
I Investment
C Credibility
K Knowledge
S Skill
N: Need
Definition Who needs this solution more, you or your
client? Ask what they need; State what you need Use active listening to confirm understanding Remember, focus on interests, not positions
Application ROI can give you need power
O: Options
Definition What are the options for each party if an agreement is not reached? Consider your BATNA
Application Sketch multiple solutions. Pictures can drive
a point home Brainstorming session with key stakeholders
T: TimeDefinition
What is your client’s deadline?
Tight deadlines can strengthen or weaken your time power
Application
We lose time power because testing is done too late in the process.
Present short and long term solutions to give you time power
Definition
� How strong is your relationship with your prospect?
� Do you have a high quantity of high quality relationships with your customer ?
� Focus on the future rather than the past
Application
� In-house staff can have more relationship power than hired consultants
� Appreciate positive findings
� Encashing past favours ?
R: Relationship
Definition
� The more effort someone invests, the more committed he or she will be to reaching an agreement
Application
� Increase investment power by asking clients to participate in planning, testing, and solutions
� Use stakeholder design strategy meetings
� Build trust within group
� Get on track; stay on track.
� Increase your understanding of their needs.
I : Investment
C: Credibility
Definition
� Deals with your brand and relationships
Application
� Showcase projects
� Statistics can play a role in credibility.
� Focus on the obvious trends that you see without statistics
� Testimonials from Industry or similar.
� Prioritize findings based on ROI
K: KnowledgeDefinition
� “Knowledge in itself is not powerful; it is the application of knowledge that confers power.”
Application
� Have answers to all their questions
� Ask questions early about time, budget and resource/technology constraints when creating recommendations to enhance your knowledge power
S: Skill
Definition
� Who is the most skillful negotiator?
Application
� Take classes
� Read books
� Practice, Practice, Practice
Power: Rules of PowerRule 1: Seldom does one side have all the power.
Rule 2: Power may be real or apparent.
Rule 3: Power exists only to the point at which it is accepted.
Rule 4: Power relationships can change over time.
Rule 5: In relationships, commitment determines Power
1. Equal-sized concessions
2. Making the final concession a big one
3. Never give it all away up front
4. Giving a small concession to test the waters
Key points to remember:
1. The way that you make concessions can create a pattern of expectations in the other person's mind.
2. Don't make equal size concessions because the other side will keep on pushing.
3. Don't make your last concession a big one because it creates hostility.
4. Never concede your entire negotiating range just because the other person calls for your "last and final" proposal or claims that he or she "doesn't like to negotiate."
5. Taper the concessions to communicate that the other side is getting the best possible deal.