Negotiation and Conflict Resolution - Entrepreneurship 101 (2012/2013)

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Michael Erdle, Managing Director, Deeth Williams Wall LLP, discusses practical skills for successful negotiation, conflict management and dispute resolution including different negotiation styles and …

Michael Erdle, Managing Director, Deeth Williams Wall LLP, discusses practical skills for successful negotiation, conflict management and dispute resolution including different negotiation styles and strategies.

Register for Entrepreneurship 101 here: http://www.marsdd.com/event_series/entrepreneurship-101/

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  • 1. Negotiation andConflict Resolution MaRS Discovery District Entrepreneurship 101 Presentation by Michael Erdle, Co-Founder Practical Resolutions Inc.
  • 2. Introductionv  Negotiationv  Conflict Resolution
  • 3. What is Negotiation?v  Negotiation is: v  a process. v  a structured conversation. v  a means to an end (agreement about something).v  We do it all the time, without really thinking about it.
  • 4. Basis for Negotiationv  Interestsv  Rightsv  Power
  • 5. Escalation
  • 6. PowerPower Strategies: Characteristics of Power:•  Take action unilaterally. •  Adversarial•  Win at all costs •  “Win/Lose” at best•  Attack/Defend •  Usually “Lose/Lose”•  Threaten •  Extremely expensive•  Coerce •  Negative impact on future•  Withdraw (Take the Ball and Go relationships Home)•  Physical (or verbal) violence
  • 7. RightsRights Strategies: Characteristics of Rights:•  Contracts (guarantee the •  Adversarial minimum) •  “Win/Lose” at best•  Policies, procedures, rules •  Often “Lose/Lose”•  Precedent •  Extremely expensive•  Past practice •  Time-consuming•  Legal action •  Impact on future relationships?•  Third-party decisions (e.g. arbitration)
  • 8. InterestsInterests Strategies: Characteristics of Interests:•  Identify what’s really important •  “Win/win” process•  Dialogue about needs and wants •  Collaborative•  Honest sharing of information •  Interdependent•  Maximize results for all parties •  Builds trust•  Help everyone explore and •  Positive impact on future understand their own interests, relationship and interests of other parties•  Needs an ongoing relationship
  • 9. Power, Rights, Interests All out “War” Unilateral Action Power Threats, Coercion Litigation Arbitration RightsCosts Investigation/Fact Finding Go Up Conciliation Interests Mediation Negotiation Problem Solving Prevention Control Goes Up
  • 10. The “Golden Rule”
  • 11. De-escalation
  • 12. Duty to Negotiate in Good Faithv  Obligation to respect the legitimate interests of other party and to deal promptly, honestly, fairly and reasonably with them. v  Shelanu Inc. v. Print Three Franchising Corp. (Ontario Court of Appeal)v  Implied in negotiation where there is an imbalance. v  Wallace v. Grain Growers (Supreme Court of Canada)
  • 13. Duty to Negotiate in Good Faith Spectrum of contractual dutiesSelfish Selfless Honesty ! Good Faith Fiduciary Duty
  • 14. Duty to Negotiate in Good Faithv  Fiduciary: v  Trustee v  Corporate Director v  Lawyerv  Good Faith: v  Professional Code of Ethics v  Contract v  Employee/Employer
  • 15. Negotiation Stepsv  Distributing Value vs. Creating Value v  Opportunistic v  Problem-solvingv  Identify Issues v  What does each side want and need?v  Consider Interests v  Common v  Complementary v  Conflicting
  • 16. Effective Negotiationv  Interests vs. Positions v  “Needs” vs. “wants”v  “Separate the People from the Problem.” v  Soft on the person v  Hard on the problemv  Consider other Options
  • 17. Effective Negotiationv  Seek Objective Alternativesv  Determine BATNA and WATNA v  Best Alternative to Negotiated Agreement v  Worst Alternative to Negotiated Agreementv  Look for a “win-win” solution.
  • 18. Effective Negotiationv  Successful relationships are built on communication and trust.v  Lack of trust leads to “win-lose” or “lose-lose”.v  Negotiation is one way of creating trust – or deciding whether trust is justified.
  • 19. Multiple Negotiationsv  Selfish strategy works in a “winner take all” game.v  Life is rarely like that.v  Most negotiations involve a continuing relationship.v  What happens if there’s a series of negotiations?
  • 20. Multiple Negotiationsv  “Tit-for-Tat” strategy is most successful.v  Four key conditions: v  Nice v  Retaliate v  Forgiving v  Generous
  • 21. Multiple Negotiations1.  The player always cooperates, unless provoked.2.  The player always retaliates, if provoked.3.  The player is quick to forgive –co-operate next time.4.  The game must continue long enough for the ‘retaliation and forgiveness’ pattern to affect opponent’s behaviour.
  • 22. Negotiation Stylesv  Focus on “winning”.v  Focus on relationship.
  • 23. Negotiation StylesFocus  on  Content   Win - Win Win - Lose Focus  on  Rela,onship  
  • 24. Negotiation StylesFocus  on  Content   Focus  on  Rela,onship  
  • 25. Negotiation StylesFocus  on  Content   Focus  on  Rela,onship  
  • 26. Negotiation StylesFocus  on  Content   Focus  on  Rela,onship  
  • 27. Negotiation StylesFocus  on  Content   Focus  on  Rela,onship  
  • 28. Negotiation StylesFocus  on  Content   Focus  on  Rela,onship  
  • 29. Power Ploysv  Classic “Hard Bargaining” Ploys v  Extreme claims, small concessions v  “Take or leave it.” v  Unreciprocated offers v  Threats and warnings v  Attacking the alternatives v  Good cop, bad cop
  • 30. Ways to Respondv  Extreme claims, small concessions v  Tit for Tat – make equally small concessions.v  “Take or leave it.” v  Make a counter offer. v  Offer an alternative. v  Don’t be afraid to walk away.
  • 31. Ways to Respondv  Unreciprocated offers v  Don’t negotiate against yourself. v  Wait for a serious counter offer.v  Threats and warnings v  Don’t make a counter-threat. v  Challenge the underlying assumptions .
  • 32. Ways to Respondv  Attacking the alternatives v  Ask for an explanation. v  “Why do you have a problem with…?”v  Good cop, bad cop v  Negotiate with the boss. v  Use the “good cop” to your advantage.
  • 33. Understanding InterestsCommon Interestsv  Parties want the same things.v  E.g. company and workers both want to avoid strikes and workplace grievances (costs them both money).
  • 34. Understanding InterestsComplementary Interestsv  Parties want different things, but they don’t conflict.v  E.g. company wants to increase productivity & profits; workers want better pensions.
  • 35. Understanding InterestsConflicting Interestsv  Parties want different and incompatible things.v  E.g. company wants to reduce labour costs; workers want to be paid more.
  • 36. Negotiation Skillsv  Communication is the key to effective negotiation.v  Assertiveness vs. Empathy v  Effective negotiator is assertive and empatheticv  What you say is often less important than how you say it. v  Tone v  Body language
  • 37. Negotiation Skillsv  Understanding and recognition do not mean compromise and concession. v  “I understand” vs. “I agree”.v  Your own emotions and subconscious brain can hinder your ability to negotiate effectively.
  • 38. Negotiation Skillsv  Listening v  Develop “active listening”.v  Understanding v  Acknowledge the other person’s perspective.v  Flexibility v  Be open to other options.v  Pragmatism v  Accept the best available option.
  • 39. Conflict Resolution:Match Process to Business Goalsv  Litigation v  Mediation v  Public v  Private v  Little control over v  Cheaper and quicker time & expense v  Control outcomev  Arbitration v  Facilitation v  Private v  Informal v  Quicker and v  Inexpensive cheaper?
  • 40. Power, Rights, Interests All out “War” Unilateral Action Power Threats, Coercion Litigation Arbitration RightsCosts Investigation/Fact Finding Go Up Conciliation Interests Mediation Facilitation Problem Solving Negotiation Control Goes Up
  • 41. Facilitationv  Informal processv  Parties control process and outcomev  Facilitator ensures that all issues are addressed and all parties have an opportunity to be heardv  Examples: partnering workshops; joint problem-solving; facilitated negotiations (re-negotiations)
  • 42. Mediationv  A more formal process of facilitated negotiation.v  The Mediator guides the process and helps the parties negotiate more effectively.v  The Mediator does not decide who is right or wrong.
  • 43. Mediationv  Interest-based Mediation v  Mediator is a facilitator. v  Focus on interests, not legal rights or obligations. v  Options for creative solutions.v  Evaluative Mediation v  Neutral evaluation. v  Based on legal rights & obligations.
  • 44. Mediationv  Qualities of an effective mediator: v  Subject area knowledge v  Negotiation & mediation process skills v  Lets parties make key decisions v  Creative approach to the problem v  Patience
  • 45. Arbitrationv  Adversarial processv  Less formal than litigation, but need to follow procedural rules for fairness and efficiencyv  Not necessarily quicker or cheaper than litigationv  Parties can select arbitrator with particular legal, financial or licensing expertisev  Private – don’t “air dirty laundry”
  • 46. Arbitrationv  Qualities of an effective arbitrator: v  Subject matter expertise v  Active control over process v  Fairness and good judgment
  • 47. Other Dispute Processesv  Executive Committee v  Formal escalation process v  Risk that positions become harder as they escalate v  Executives must remain engaged throughout the agreementv  Project Umpire v  Can facilitate or mediate resolution of project disputes v  Can also provide neutral evaluation or non-binding arbitration v  Umpire is engaged throughout the project v  Available to deal with issues on short notice
  • 48. Resourcesv  Fischer, Ury and Patton: Getting to Yes, Penguin, 1991v  Ury: Getting Past No, Bantam, 1993v  Cohen: You Can Negotiate Anything, Bantam, 1980v  Mnookin, Peppet and Tulumello: Beyond Winning, Harvard University Press, 2000v  ADR Institute of Ontario (ADRIO) http://www.adrontario.ca/
  • 49. Questions?