Negotiating Contracts on Behalf of the Church Module 2 Preparing for Negotiations February 19, 2009 Confidential: For Purchasing and Travel Employees only
Objectives You will learn: • How to prepare yourself for negotiations • How to prepare your team for negotiations • How to prepare your customer for negotiations
Why Prepare? • “There is no harm in just talking. We can just hear them out.” • “Preparation takes too much time.” • “All I need to know is what I want and what I will concede.” • “I have negotiated contracts like this for years.”
Preparation “Remember the promise of the Lord: “If ye are prepared ye shall not fear.” Fear is a deadly enemy of progress. It is necessary to prepare and to plan so that we don’t fritter away our lives. Without a goal, there can be no real success…. I want to state here and now that wishing will not replace thorough preparation to meet the trials of life. Preparation is hard work but absolutely essential for our progress.” Thomas S. Monson, “Treasure of Eternal Value,” Ensign, Apr 2008
Developing a Plan • Negotiation Plan • Goal of this plan is to provide you a systematic yet flexible tool to help you prepare for negotiations.
Negotiation Plan • Information Overview • Stakeholders • Interests • Objectives • Issues • Other Negotiable Items / Contract Terms • Options for Mutual Agreement • Objective facts and criteria • Best Alternative to a Negotiated Agreement (BATNA) • Walk Away Point • Plans / Strategies / Tactics • Agenda
The Negotiation Teams • Planning Teams • Negotiation Teams • Roles • Team Leader • Negotiation Lead • Technical • Financial • Legal • Other Stakeholders • How do you prepare your team for a negotiation?
Vendor’s Team • Potential Vendors • Current Vendor Status • Active/ Current • Former • Prospective
Contract Negotiation Objectives • What are your goals and objectives for the negotiation? • Fair and reasonable price • Timely performance • Minimum essential needs of the organization • Defining must haves and wants • Control over how the contract is performed. • Achieve a mutually beneficial agreement • Maximum supplier cooperation • Sound relations with suppliers CPSM Study Guide 1 pg 16-18
Negotiable Items • What is negotiable with a given good or service? • What is not negotiable with a given good or service? • How much does the Church care about it?
Objective Facts and Criteria How do you determine what is fair? • What facts represent the Church’s position? • What specific substantive question has to be answered in this negotiation? • What standards or measurements can be used to make the position of the Church more legitimate? • How would the vendor’s negotiator explain to their boss the results of this negotiation?
Church/Customer Alternatives Best Alternative To a Negotiated Agreement Interests Attractive Alternative (BATNA) Alternative (BATNA)
Vendor Alternatives Make It Less Attractive Vendor Interests Vendor Best Alternative (BATNA)
Determine Walk-Away Point Plan when you should walk away • Can the Church walk away from this negotiation? • When do you walk away? Walking away is not a failure
Negotiation Site Location • Which is a better place to negotiate?
Planning Negotiation Tactics • Plan Tactics • Prioritize the issues • Plan out questions • Prepare solid data • Options to propose
Creating a Negotiation Agenda • If you set the agenda you have power over the negotiation • An agenda sets the rules for the negotiation • Place items in order of importance • Plan out caucuses or recesses into your agenda • Plan out how long the negotiating sessions will be
Practicing the Negotiation • Practice with someone else • Practice in your mind • Questions you will ask • Points you will cover • Check your assumptions • I assume that… • I will listen for…
Negotiating with the Customer • How do you negotiate with the Customer? • How do you educate customers about their role in contract negotiation?
A New Contract Negotiation Thought Recognition Software • ThinkWorks • BrainFlow • PonderMatic
Principles to be more United • Seek Revelation • Be Humble • Be a Peacemaker • Find common ground • See differences as an opportunity • Speak well of others • Realize that you see others in an imperfect light Henry B. Eyring, “Our Hearts Knit as One,” Liahona, Nov 2008
Preparation precedes Revelation “I say unto you, that you must study it out in your mind; then you must ask me if it be right” Doctrine and Covenants 9:38
Application • Use the Negotiation Plan to help you prepare for an upcoming negotiation and share it with your supervisor along with what you have learned in the process. • Present the Customer pamphlet to one or more customers and relate your experience on the Contract discussion board.