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Negotiating

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  1. Negotiating • Information is Power – So Get It! • Set Appropriate Goals – in any negotiation, first find sufficient information to determine your goal(s). Then design a strategy to accomplish it. • How do you define “success”? • Goal-setting tips a. set “aggressive but realistic” goals - how much is enough? b. create positive expectation of achievement - passionate, positive attitude makes a difference c. set concrete, specific goals

  2. Negotiating Which is more effective: “Do the best you can.” vs. “Get me $425,000 and a corner office” d. Evaluate importance of relationship e. Commit yourself by writing down goals 2) Evaluate other side’s goal(s)

  3. Negotiating • Get Critical Information – The more you learn about what both sides have and will agree to, the better you’ll do. • What information – for both sides – do you want? • Substantive Information • Related facts, issues & opinions • Fundamental interests underlying positions • Options that might satisfy interests • Strategic Information • Willingness to agree/disagree • Negotiation styles/strategies – Know thyself and thy counterpart(s).

  4. Negotiating • Information - How to get it? • Write down information needs • Psychological Tendency: “The Liking Principle” • Research: We’re more likely to say yes and share info with those we like! • Ask lost of questions • Research: effective negotiators ask at least 2.5x questions than others. 1) Use “Funnel Approach” – use open-ended questions (leading) “tell me about…..” 2) Ask WHY! – focus on interests, not positions 3) Use the “Power of Silence”

  5. Negotiating • Information - How to get it? Cont’d • Answering • Decide information to disclose • Decide information NOT to disclose Do this before you begin discussions! And revisit before every meeting!

  6. Negotiating • Maximize Your Leverage • Determine Level of Needs (both sides) – How much do you – and they- want it? • Do the BATNA (both/all sides) Best Alternative To a Negotiated Agreement • Why? • Tells you when to walk – prevents you from making an agreement you should reject. • Tells you when to sign – accept agreement only if its better than your best likely alternative

  7. Negotiating • Maximize….cont’d • How? • Invent….alternatives to take if you don’t/can’t reach agreement. • Convert…better alternatives into practical possibilities • Select…..the best – and measure other offers against it.

  8. Negotiating • Employ “Fair” Objective Criteria • Issue: What is a “fair and reasonable” basis for resolving the issues? • Find objective criteria and standards based on principle, not pressure • Fair independent standards • Market value • Precedent • Scientific judgment expertise • Professional • Efficiency • Costs • Tradition

  9. Negotiating • Employ “Fair” Objective Criteria • Issue: What is a “fair and reasonable” basis for resolving the issues? • Find objective criteria and standards based on principle, not pressure • Fair independent procedures • One cut, other choose • Take turns/draw lots/flip a coin • Use a third party – arbitration/mediation (nonbinding)

  10. Negotiating • Prepare to negotiate over “fair” objective criteria • Psychological Tendency: “The Consistency Principal” • Research: People have a nearly obsessive desire to be – and appear to be- consistent (tip - use the expert the other side has previously used!)

  11. Negotiating • Design an Offer/Concession Strategy Issue – What to do regarding timing, speed and size of offers/concessions? • Recognize concession dynamics • General concession patterns • Start – big and far apart • End – small and quick - • Center movers – go 2nd, let other side go first Center Moving Dynamic - be careful not to fall into the trap set by efficiency goal.

  12. Negotiating • HRESSC - High Realistic Expectation and Small Systematic Concessions • Analyze “First Offer” Issues • Advantages to making first offer • Sets the focal point • Elicit genuine reaction from the other party • Set mandate/range for concessions

  13. Negotiating Analyze “First Offer” Issues • Disadvantages to making first offer • Lack information to opportunity set it • Other side gains important info from your reaction • You are more likely to make first concession and thus do worse Make Convincing offers and concessions • Be specific and promote air of finality • Justify with standards • Sometimes point out consequences – no ranges

  14. Negotiating Pre-Plan concession/flexibility strategy • Evaluate flexibility and agency issues • Agents concede less per unit time Psychological Tendency: “The Reciprocity Rule” Research: we try to repay – in kind – what others provide to us. • Justify with standards • Sometimes point out consequences – no ranges

  15. Negotiating • Control the Agenda: Substantive & Timing/Deadlines Issues: If and when and how subject matters get addressed affects your results • Techniques to Set the Agenda – prioritize which issues to address and when • Use the “Power of the Pen” • Prepare a written agenda and hand out • Use whiteboard/blackboard/flip chart • Use questioning techniques to keep on track • If necessary – negotiate over agenda

  16. Negotiating • Recognize Deadlines Dynamics • Competitive/tense and increasingly fast concessions as near end • Apply “the 3 Ps Principle” • Perception of Patience Pays • Apply “The DEF Principle” • Deadlines: Evaluate Flexibility

  17. Negotiating • Use a situation – specific approach (generally, two different negotiation strategies) a) Competitive Negotiations – strategies and tactics to undermine the other negotiator’s confidence in his/her bargaining position and strength his/her perception of your position Examples of Competitive Strategies 1. highly reluctant to share information and directly challenges other side’s positions. 2. relatively open conflict on leverage issues 3. minimal reliance on independent standards and procedures 4. extreme initial offer/demand and highly reluctant moves 5. overt and biased agenda control tactics

  18. Negotiating Ten Common competitive “negotiation games” 1. power in numbers 2. First/Firm/Fair/Final – Take it/Leave it 3. limited authority 4. overt anger 5. seemingly irrational 6. context manipulation (time/location/setting – home court) 7. threats and warnings 8. flattery 9. good/bad cop 10. “the nibbler”

  19. Negotiating b) Problem-Solving (PS) Strategies – strategies focused on building trust, relationships and relatively open communications that enable parties to jointly work to find mutual solutions to problems 1. Examples of PS strategies - actions and atmosphere confirm trust and valued relationship, and relatively openly share information - leveraged downplayed – but still there - overt reliance on objective criteria - reasonable offered and principled concessions - mutually agreeable agenda and agenda control tactics

  20. Negotiating c) Factors Affecting Negotiation Strategy - Value of future relationship – The more you see potential interests satisfied with a future relationship, the more likely you should use a PS approach. - Number of interests and issues As the number of interests and issues increases, so does the likely success of a PS approach - Creative option-generation/non-zero-sum potential - Will they problem solve?

  21. Negotiating 2. It Takes Two to Tango Issue: What if you want to problem solve, but the other side engages in competitive tactics? - can’t problem solve alone – you’ll potentially get “taken” How to get Past No… • Don’t React: “go to the balcony” • Prevent action/reaction emotional escalation • Refocus on your fundamental interests • Separate people and problem

  22. Negotiating Don’t Argue: Step to their side • Defuse their negative emotions (defensiveness, fear, suspicion, hostility) • How? • Listen respectfully • Acknowledge legitimacy of points and feelings without agreeing Don’t Reject: Reframe • Reframe their position as an attempt t problem solve. Ask why? Don’t Push: Build a golden bridge • Bridge the gap between their interests and a mutually beneficial solution • Show how it’s in their interests to agree to….

  23. Negotiating Don’t Escalate: Use power to educate • Don’t use threats and coercion – educate them to consequences of their approach • Focus on process and objective criteria Top Ten Impasse-Breaking Strategies 1. get more info – data gathering and sharing 2. switch objective criteria 3. brainstorm options 4. set deadlines 5. temporarily switch issues 6. take a break 7. prioritize needs and interests 8. move up the chain – speak with their decision-makers 9. list potential gains/losses 10. bring in third party (mediator, arbitrator..) If Nothing works, engage in competitive strategies