Negotiation Skills 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.” J. Paul Getty
Why Negotiate? Gavin Kennedy in his book The New Negotiating Edge says.. ‘ Animals do not negotiate. They use violence or the threat of violence to get what they want, whether it be food, a mate or territory.’ Have you ever seen 2 dogs negotiate over a bone? ‘ Trade is the human foundation of human civilisation. It is what makes humans different from animals.’ ‘ Negotiation is anathema to tyrants, who usually want something for nothing and do not recognise a need for another person’s voluntary consent before they get what they want’
Negotiation – What is it? ‘ The process by which we search for the terms to obtain what we want from somebody who wants something from us’ Gavin Kennedy Confer with others to reach a compromise or agreement. Concise Oxford Dictionary To negotiate is to trade something we have for something we want. Anon ‘ Negotiation is an explicit voluntary traded exchange between people who want something from each other’ Gavin Kennedy
Some decision making tools for negotiation: Persuasion : Usually the first method we choose when we want something. Useful when interests or opinions are the same. Giving in: This is not the easy way out, and sometimes it’s just not worth continuing if the cost (in any terms) is too high. Coercion : This could simply be stating your options, ‘I could take my business elsewhere’. It could also be gentle reminders or unspecified consequences right up to threats. Threats are not useful in a negotiation situation as they erupt in full blown battles. Problem Solving : Works well when both parties have a strong relationship, where you trust each other, and share the problem.
When do we Negotiate? When we need someone’s consent When the time and effort of negotiating are justified When the outcome is uncertain Source: The Negotiate Trainers Manual 1996 p6.
Kennedy talks of a ‘behavioural dilemma’, do you cooperate ( blue ) or defect ( red )? Can you trust the other person? And to what extent? Trusting someone involves risk, on the one hand being too trusting is naïve and on the other, not trusting at all can create deceitful behaviour. The answer is to merge blue and red behaviour into purple . 9
The other negotiator is quite angry and winds up her tirade of a clear threat of what she will do if she does not get her way. Do you:
a. Ignore her threats and concentrate on rebutting her claims?
b. Demand that she withdraw her threat if you are to continue negotiating?
c. Counter her threat with one of your own?
a. Better to ignore the threats.
b. It’s pointless, and unlikely she will withdraw.
c. No. This could spark of a cycle and end up in a fight.
The other negotiator makes a statement with which you profoundly disagree. Do you: a. Tell him that he is mistaken and explain why? b. Ask him why he believes that his statement is true? a. He won’t listen. He will be constructing his counter argument. b. Yes. The best way to handle disagreement is to question the person with whom you disagree. DEBATE 18
A union leader interviewed on television made a passionate case that if only the management would return to the negotiation table and ‘show some flexibility’, he had no doubt that the bitter strike ‘would be settled in a matter of hours’. Did he mean that:
The union was ready to make some concessions?
The management must make some concessions?
If the management made some concessions then the union would too?
Unlikely. The union has to keep the spirits of it’s members high and show they are doing their best to find a settlement. Usually they mean what they say, the return to work is conditional on the management showing some flexibility and conceding the union’s claim.
Unlikely. If movement was possible if reciprocated, the union would be unlikely to use a public forum.
Decide whether you will speak your proposal first or respond to the proposal from the other party.
Put forward your proposal with as little emotion as possible.
Leave room for manoeuvre in your proposal
Full Disclosure – really means 90%. You may not know or are unwilling to disclose 100% of your position. This can be very productive – reaching out to the other party can be a strong positive behaviour builder, however, both parties must want to negotiate towards agreement.
Be assertive remember PURPLE . (Not RED or BLUE ) Use ‘ If you…Then I’ not ‘If we… will you’ this avoids a question proposal.
Examples of Proposals 25 Submissive Assertive 1. How about we make it 10%? 2. No Problem. 3. I hope you can meet that deadline. 4. We were hoping to include a liquidated damages clause. 5. It’ll be tough to meet that deadline but ok we’ll give it a go
Examples of Proposals 26 Submissive Assertive 1. How about we make it 10%? If you make it a 10% discount, then we will order in lots of 100,000. 2. No Problem. If you pay our costs then we could consider uplifting it ourselves. 3. I hope you can meet that deadline. If you meet that deadline then we can consider giving you the work 4. We were hoping to include a liquidated damages clause. If you include a liquidated damages clause then you are eligible to be awarded the contract 5. It’ll be tough to meet that deadline but ok we’ll give it a go If you pay our premium hourly overtime rates then we’ll go for that deadline.
Avoid – ‘wish’, ‘hope’, ‘would like’ – this is not assertive
When you make and consider proposals it means you are moving towards a jointly agreed solution.
Proposals consist of 2 elements: the condition plus the offer and can be best presented with the ‘If ….Then’ technique.
Both the condition and the offer can be couched vaguely. But it is better to state your condition first.
Example 1: ‘If you change your terms of business, then I could consider some amendments to our payment schedule.’
Is example 1: A. Vague-vague (vague in condition and offer)
B. Specific-vague (specific in condition and vague in offer)
Answer: Vague-Vague. Vague in the condition and offer. The proposal isn’t specific about the changes in the terms of business nor in what amendments could be made to the payment schedule. Example 2: ‘If you amended the penalty period from 14 to 7 days then I could consider some amendments to our payment schedule’ Is example 2: A. Vague-vague (vague in condition and offer) B. Specific-vague (specific in condition and vague in offer) PROPOSE 28
If you don’t agree, avoid ‘amateur dramatics’, slamming the table, storming out etc. This is typical RED behaviour.
Purple behaviour, means responding positively. Welcome the fact a proposal has been made, you don’t have to agree with the content – this is what you are around the negotiating table for, to improve on the initial proposal to achieve a mutually acceptable solution.
If agreement is hard to find keep looking for a solution until one is found or, it is clear that one doesn’t exist.
You then have to either agree to disagree and call a halt to negotiations or, if the consequences or alternatives are not acceptable then negotiation has to continue.
Summary Close Summarise the details of the conditions and the offer, and ask for agreement.
Adjournment Close Useful where there remains some small differences. It gives both parties time to consider the final agreement.
Final Final offer close Make it clear that this is your final final offer by choosing the right words, tone and body language. Create an atmosphere of decisiveness, gather your papers together as though getting ready to leave.
The man you are negotiating with has a bombastic and rude manner. He interrupts constantly and loudly and at a pace that does not allow interruptions to his flow. He is emphatic and threatening and shows no interest in your point of view. Do you:
a. Retaliate in kind with matching behaviour?
b. Wait for an opening to say your piece?
c. Agree to what he wants.
Retaliation is a challenge. He is not intimidating you enough – he will put on more pressure.
Yes. But only if you are clear that his behaviour will not affect your focus on the outcome.
Never! Do not give him the satisfaction, by giving into a bully and their intimidation.
The financial director of a large customer is an abusive and domineering person, who has a repertoire of swear words and will not accept ‘No’ for an answer. She expects you to sit there and take it and theatrically waves her arms about and throws papers around when she wants to make a point. Do you:
a. Behave in a contrasting manner and keep your cool?
b. Agree to what she wants?
c. Wait to say your piece?
To contrast her behaviour only shows her that her behaviour is working, she’ll put on more pressure until you give in.
Never! Do not give in to her intimidation.
Yes, but only if you are sure her behaviour will not affect the outcome.