Negotiation 101 Stephen E. Ohl, C.P.M., C.P.S.M. 11.06.2010
Famous Negotiation Quotes • Ashleigh Brilliant: If you can’t go around it, over it, or through it, you had better negotiate with it. • B. C. Forbes : Any business arrangement that is not profitable to the other person will in the end prove unprofitable for you. The bargain that yields mutual satisfaction is the only one that is apt to be repeated. • Benjamin Franklin: Necessity never made a good bargain. • J. Paul Getty: My father said: “You must never try to make all the money that’s in a deal. Let the other fellow make some money too, because if you have a reputation for always making all the money, you won’t have many deals. • John Fitzgerald Kennedy: Let us never negotiate out of fear. But let us never fear to negotiate. • Greek Proverb: Make every bargain clear and plain, that none may afterwards complain. • Chester L. Karrass: In business, you don’t get what you deserve, you get what you negotiate.
Negotiation’s & Life in General Negotiations are a fundamental, essential and integral part of each of our lives and not some isolated, sterile and formalized event that only occurs at specific scheduled times in the workplace. Consequently, each and everyone one of us can further benefit from enhancing our negotiation knowledge and skill set.
Life’s Common Negotiations • Babies negotiate to be picked up and held by parents • Children negotiate for a bigger allowance, more toys • Teen’s bargain for iphones, driving privileges and freedom • College students negotiate for more electives, more student aid, less homework • Newly weds often negotiate for TV’s and electronics, for apartments, for cars • Young families negotiate for 1st house, furniture, etc. • Professionals negotiate for more pay, more benefits, more responsibility • Seniors lobby for independent support at home, healthcare and social security benefits
ISM Definitiion for Negotiation: An exploratory and a bargaining process (planning, reviewing, analyzing, compromising) involving a buyer and seller, each with their own viewpoints and objectives, seeking to reach a mutually satisfactory agreement on all phases of a procurement transaction—including price, service, specifications, technical and quality requirements, and payment terms.
The Ten Commandments of Negotiations • Thou Shall Practice Integrity & Good Ethics At All Times. • Thou Shall Plan Far Ahead. • Thou Shall Include All Stakeholders. • Thou Shall Recognize & Respect CulturalDifferences. • Thou Shall Be A Good Communicator. • Thou Shall Reduce Stress. • Thou Shall Use Technology Wisely. • Thou Shall Always Have A Plan B Or Backup Strategy. • Thou Shall Manage Difficult Negotiations. • Thou Shall Practice Win-Win Whenever Possible.
Practice Integrity & Good Ethics • Never lie (such as tell a supplier that a competitor is less expensive unless it is true); never exaggerate (discuss potentially larger down the road quantities or longer contract if not true); never share confidential info. either from your co. or another companies quote; never accept gratuities from the customer as it may send the wrong message.
Planning Ahead Is Critical To The Success Of The Negotiation Planning ahead is considered by many negotiators as the most important step in the process of negotiations. Planning steps: • Enlist all stakeholders • Develop strategy, objectives & approaches • Develop estimates of important parameters • Role play, practice and prepare for a successful negotiation
Include All Stakeholders Today many businesses are typically based on collaboration, teaming and multi functional solutions. Gone are the days of separate and independent business silo’s and maverick spend. Figure out who is imparted by this negotiation and include them on your team: engineering, sales, marketing, legal, production control, etc.
Recognize & Respect Cultural Differences • Thomas L. Friedman’s book “The World is Flat” has showed how a convergence of technology and events has reshaped the global supply chain for manufacturing and services and has impacted every aspect of society. What is not flat is how different cultures negotiate and partner around the world.