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The Fine Art of Negotiations

The Fine Art of Negotiations

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The Fine Art of Negotiations

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  1. The Fine Art of Negotiations Presented by: Patrick Callahan Callahan Municipal Consultants - LLC 563-599-3708 Callahan.cmc@gmail.com

  2. The Final Art of NegotiationsGeneral Overview of Session • City Government – Examples of Negotiations • Introductions – Speaker & Participants • The Elements of Negotiation • Styles of Negotiations • The Path to Preparation • Preserving the Relationship • Sealing the Agreement • Tips for Negotiating

  3. Definition of Negotiate • Negotiate – to settle by bargaining; to arrange; to transfer (a bill, etc..); to surmount; v.i. to discuss with a view of finding terms of agreement; to bargin • Webster’s Dictionary 1987 Edition

  4. Patrick Callahan Work Experience • City Experience • City of Fort Madison, IA - 1974 to 1977 • City of West Point, IA – 1977 to 1978 • City of Maquoketa, IA – 1978 to 1993 • City of Anamosa, IA – 2005 to 2010

  5. Patrick Callahan Work Experience • Consulting Experience • Institute of Public Affairs – 1993 to 2005 • Ruan Securities Corporation – 2000 to 2005 • MCMS Consulting – 1993 to 2005 • Synder & Associates – 2010 to 2013 • Callahan Municipal Consultants - 2013

  6. Patrick Callahan Education • Formal Education • Cascade High School – 1968 • Loras College – 1972 Political Science • The University of Iowa – 1974 Public Administration • Recent Class - Negotiation – Get More and Give More at Kirkwood Community College by Julia King Tamang March 12, 2012

  7. Professional Experiences Negotiations • Maquoketa – Union Negotiations • Anamosa – Contractor Disputes • Consultant – Cable & Gas Franchise Renewals • Consultant – Employment Agreements on Searches for City Administrators

  8. Negotiations in Your Daily Lives • Major agreements – union contracts and franchise renewals • Routine agreements – payment plans and employee issues • Personal business – car purchases, service fees, etc • Personal lives – spouses, children and grandchildren

  9. City Government – Examples of Negotiations • Collective Bargaining Agreements – Labor Unions • City Employees – Salary adjustments, Fringe benefits, and Hiring • Department Heads – Employment Agreements • City Budget Discussions – Meetings to balance the budget

  10. City Government – Examples of Negotiations 5. Lawsuit Settlements • Contractors – Change orders on projects • Engineers – RFQ, RFP, & Fees • Utility Company Franchise Agreements • 28E Agreements – Multiple Agencies and Government Units

  11. City Government – Examples of Negotiations 10. Citizens – Utility Payment Plans • Employee Termination Agreements • Regulatory Agencies – DNR, EPA, IRS, DOT

  12. City Government – Examples of Negotiations 13. Vendors – Purchase of City Supplies 14. Economic Development Incentives • TIF Rebate Agreements • TIF Grants • Tax Abatement Agreements

  13. Negotiations in Your Personal Lives • Spouse/Significant Other • Children • Grandchildren • Service Providers – Cable Company • Vendors – Car Dealers

  14. Class Participants - Introductions • Your Name • Your City and Population • Your Position • Negotiation Experiences • What is your City known for?

  15. What is Negotiation? Negotiations: Agreement: A process we all use instinctively When used consciously, it can help fulfill our needs An exchange between two or more parties for the purpose of reaching an agreement Occurs when both parties accept the terms of the arrangement – They do not have to like it. The Executive SummaryThe Elements of Negotiation

  16. The Essence of Negotiations: The Vehicle of Negotiations: The Criteria of Negotiations: Cooperation Communication Self Knowledge Flexibility Empathy Timing The Executive SummaryThe Elements of Negotiation

  17. What signals success? • You met or exceeded your goals • Your success is good in the short run and in the long run • You strengthened the relationship • You had an efficient bargaining process

  18. What signals success? • No damage to relationship “Bringing them to their senses, not to their knees.” • Long term – Took care of the other person

  19. Barriers to Negotiations • Anger • Fear of Rejection • Manipulation • Criticism • Assumptions • Failing to Listen • Bottom Line – Sole Focus

  20. Special Considerations for Public Officials • Client • City Council or Board Approval • Confidentiality • Fiscal Limitations

  21. Special Considerations for Public Officials 5. “Deep Pockets” • Fairness and Equality • Precedent • Municipal Bond Rating

  22. Special Considerations for Public Officials 9. Costs of Litigation 10. Public Accountability 11. Integrity

  23. Understand yourself as a negotiator • Competitor – Win/Lose Person • Accommodator – “Door Mat” • Collaborator – “Win/Win” Style • Avoider – No interest In any given situation we all have some of these styles.

  24. Which style is best? Substantive outcome important? YES NO YES NO Relational outcome important?

  25. What is your predominate style of Negotiations? • Work Life? • Personal Life? Group Discussion

  26. Keys to managing style • Develop flexibility • Know your strengths and weaknesses • Compensate for your weakness – outside assistance • Know your “hot buttons” – take a break

  27. Know your power sources & strengths • Information or other resources • Personal traits • Skills – Especially communications • Expertise • Experience (your or someone else’s)

  28. Know your power sources & strengths • Problem solving • Trade Information – “Buy Points” • Do not make too many assumptions – Check it out!

  29. Take history into account • Your general negotiating experience • Your negotiating experience with this person or company • Look for how your experience creates an advantage or bias

  30. Know your beliefs & attitudes • What are your beliefs and attitudes about negotiations? • Do they apply here? • How will they affect this deal? • Know your attitude on money • Your attitude towards the boss – i.e. city council

  31. Authority & constituencies • How much authority or power do you have to affect the outcome of this negotiation? • Do city or state laws or policies restrict or protect you? • Are there rules by which you must abide? • Are you negotiating on behalf of someone higher up who has the final say? City council?

  32. Why are negotiators unprepared? • People assume “just talking” is low risk • Preparation takes too much time • People don’t know how to prepare

  33. Why are negotiators unprepared? • Many deals are lost or missed due to poor preparation • Not ready? Postpone it • Know how to prepare

  34. Stakeholders Challenge Position Interests Options Alternatives Legitimacy Communication Relationship Commitments Path to preparation

  35. Group Discussion The Path to Preparation Two Examples • Collective Bargaining Agreement • Construction Project – Contractor change order • What are some actions that could be taken to prepare for negotiations? • How do you maintain a good working relationship after negotiations?

  36. Preparation: Identify stakeholders • Who has stake in the outcome? • Anyone at the table • Anyone who stands to gain or lose anything they value • Any “invisible” players or constituencies • Anyone on either side who is affected by the outcome

  37. Preparation: Interests • Look for the interests behind positions • Ask “why?” and “for what purpose?” • Ask yourself, “What will happen if I get this?”

  38. Preparation: Interests • Consider the other side’s interests • Probe for their underlying interests • Record this information and use it • Verify it

  39. Preparation: Four kinds of interests • Content (substantive) • Be specific and measurable • Break complex goals into strategic stages • Relationship • Present • Future

  40. Preparation: Four kinds of interests • Identity • Your sense of “who I am” and the other side’s • Process • How to communicate

  41. Preparation: What can be traded • Define the bargaining “mix” • What are the pieces? • Are any pieces linked?

  42. Preparation: What can be traded • Prioritize your interests • Content, relationship, identity and process • Identify limits (upper and lower constraits) for substantive issues

  43. Preparation: What can be traded • Hold off on commitment until your know their needs and desires • Not sure on their priorities – Ask them • Goal – Give away low value stuff

  44. Preparation: What do people want? • Consider short and long term interests • Check to make sure your interests include the needs of your constituents in your organization • Political mistakes cost you later • Look beyond this first deal • What is the order of priority

  45. Preparation: What’s most important? • Order tells relative importance • Order tells relative value in terms of dollars • Order helps avoid making concessions on the wrong things • Order helps you decide on packages later on in the deal

  46. Preparation: Developing supporting arguments • What facts support your view? • What validates those facts? • Who can help you elaborate or clarify facts? • What data do you need? • Get help, if necessary

  47. Preparation: Exploring their interests • Why are these objectives important to them? • How did they come to this position? • What if they can’t reach your goals?

  48. Preparation: Exploring their interests • How have their needs changed since you last talked? • Last, outline what you don’t know. Inquire about those things as you go along.

  49. Researching the other party • Things to learn • Their objectives • Their interests • Their alternatives

  50. Researching the other party • Things to learn • Their resources • Their reputation, style, and behavior • Their authority to make an agreement • Their likely strategy and tactics