Negotiating For Results 2009

Negotiating for ResultsHASIT SETH
Pune, India
2009
(c) Hasit Seth, 2009

My Background
.edu = B.Sc, LL.M. (Mumbai, Gold Medal), LL.M. (FPLC)
Professional: New York and India Lawyer
Work: Currently @ MNC in Pune as an Asia Pacific IP counsel
Program on Negotiation @ Harvard
Contact: hasits at gmail.com

Outline
A:9.30 – Introductions
B:9.45 – Why Learn Negotiation?
C:10.00 – Negotiating for a Promotion [Demo]
D:10.30 – Principled Negotiation Framework
E:11.00 – Option, Interests, Criteria - Exercises
F:11.15 – Co-Founding a Business: 1-on-1
G:12.00 – Framework works? DDP™
H:12.15 – Team Negotiation – Pune Metro Railway Plan
I:1.00 – Filler/Backup
J: 1.15 – Q&A/Wrap-up

A: Introductions

A:Introductions
Your name
What do you do? (optional)
(1-sentence) How will you use the negotiation skills you learn today?

A:My Story
As a litigator in court, I saw daily that disputes are not being resolved.
Only result – Delays!
Forget about your “rights” under law; Forget who is right or wrong. After 20 years delay, it will be worthless to win.

A: My Story
Is there hope for dispute resolution?
My three law degrees, New York and India law licences, few degrees, 10 years of practice don’t provide me a clear answer; nor did my technical background
Then, I stumbled into the field of negotiation. Today, I feel, YES, we can get better results.

B: Why learn negotiation?
SLIDE TALK

B:Motivation
Tell us your most difficult situation where you used negotiation skills or you think negotiation could have helped.

B:Where is Negotiation Used?
Contracts
Labor Relations / Employment (Salary)
City Disputes
Water Distribution
Personal Family Disputes
International Conflicts (e.g. East Timor, Palestine…)
UN Organizations – e.g., WTO is totally negotiation based decision making body
Hostage Negotiatons

B:Positional Bargaining
Customer: “How Much for the Ring?”
Seller: “Rs. 10,000”
Customer: “I can pay only Rs. 5,000”
Seller: “That is not even my cost price!”
Customer: “How about Rs. 7,000”
Seller: “I can sell it for Rs. 9,000”
Customer: “I can finally pay Rs. 8,500”
Seller: “Okay, I will sell it for Rs. 8,500”

B:Positional Bargaining
It is Inefficient
Endangers an Ongoing Relationship
Multi-party Positional Bargaining is Worse
Does not lead to “Wise” Agreements
- “Getting to Yes”, Fisher and Ury

B:Principled Negotiation
PEOPLE: Separate the people from the problem
INTERESTS: Focus on interests, not positions
OPTIONS: Generate a variety of possibilities before deciding what to do
CRITERIA: Insist that the result be based on some objective standard
- “Getting to Yes”, Fisher and Ury

C:Negotiating for a promotion
DEMO

C:Promotion Negotiation
I am a management trainee, working since 1 year with SBIM
I want to be promoted to center manager position
I think I have skills, demonstrated work experience
I think 1 year is too short an experience to give a promotion
Money is the motivation?
Risks?
What alternative can I offer?

C: Applying PN Framework
Old Style
Talking through each other
Digging into positions
Stonewalling
More hardened situations
PN Framework
Problem minus people = Career Progress vs. Risks/Feasibility
Interests: Career, Progress, Risk Management, Feasibility, Timing
Options: Defined promotion path, milestones, salary adjustment, risk assessment, other progress opportunities
Criteria: Industry norms, company norms, objective evaluation, career path definition

D:Applying pn framework
Slide Talk

A:BATNA
Best Alternative to Negotiated Agreement (what will each party do if negotiation fails?)
Each party should ascertain its BATNA before negotiating
If negotiation is not progressing beyond BATNA, then no point in proceeding further.
Key: Valuation of BATNA, be true to yourself and your goals.

B:ZOPA
Zone of Possible Agreements
Negotiation is a not a method to achieve improbable gains
A wise negotiation will be placed within the ZOPA
E.g., A house on sale for 25 lakhs; expected ZOPA could be +/- 15%
ZOPA for Non-Price terms: Payment terms, minor repairs to be done before hand, title clearance, possession dates, electrical diagrams, society formalities…DO THESE TERMS MATTER TO YOU?

A:Tactics
Tactics

A: Negotiating in India
1. Typical tendency is to avoid putting things in writing. When people do put things in writing, they go overboard in writing EVERYTHING possible.
2. Nobody trusts the legal system, so everyone wants iron-clad guarantees for payment. Terms for performance are secondary, but payment terms are the most debated ones.
3. Irrespective of the nature of the contract, the general tendency is that, "All rights are mine, and all duties are yours"! or in other words, I must have my cake and you be damned.

4. In respect of land, nobody trusts anyone. Whether it's rental or a conveyance, the whole transaction is about suspicion. Both parties are trying to psyche each other to understand their real motives and price bottoms.
5. Once money changes hands, there is pretty much nothing you can do. Nobody fears the legal system until they are dragged there.
6. Anywhere police get involved, a civil dispute is easily converted in to a criminal one. Magically.

7. With absolute lack of trust, fairness is the first casualty. Why be fair when other side is never going to be fair? Hence, parties at a negotiation table first throw away the cloaks of being fair. Bare knuckle negotiation is the preferred style.
9. Preemptive blocking is the preparation strategy so that the other party can be made to capitulate when it comes to the negotiation table. Just make it unbearable for the other party to do anything but to agree to your terms.
10. All the above things can thrown away at will, I will do what I like!

A: Non-Cooperating Parties
F&U: Positional dance of criticism
I state a position; you assail it; I defend; you push harder to show how am I wrong; I recoil
F&U: Negotiation Jujitsu

A: F&U: “Negotiaion Jujitsu”
Don’t attack their positions, look behind it
Invite criticism and advice for your ideas
Recast an attack as an attack on your problem
Ask Questions
In worst situation, if it helps, suggest a third party negotiator (not arbitrator)

E: Option, interests & Criteria exercises
Class Exercise

E:Locating Interests
See Film Clip
Brainstorm Interests
Assume No-Double Cross
With Double Cross

E: Finding Options
Negotiation with a child to not buy an expensive toy – OPTIONS?
Negotiating with the boss to ask for less work – OPTIONS?

E:Criteria
Selling a House – Price of a house
Which movie to see today?

F: Exercise – co-founding a business
F: 1-1 Exercise

F:Background
Veeru and Jay/Basanti want to a start a restaurant in Ramgarh
Veeru is currently working a MNC. He cannot quit his job as of now but will do later. He will invest Rs. 5,00,000/-
Basanti/Jay is unemployed, so can take care of business initially but brings no investment.
They want to negotiate terms of partnership

F:More Information
Jay thinks if he is doing all the hard-work he should have a larger share of profits
Veery thinks he is the investor, is giving up his job in few months, so as risk taker, he should have a larger share of profits
Veeru and Jay both think that they should have final decision making veto power over day-to-day issues (hiring, menus, advertisement, etc)

F:Differences
OWNERSHIP: Percentage of ownership, profit sharing, investment? (anything but not 50-50)
CONTROL: Veto-power over day-to-day decisions
PLAN B: What if this fails?

Framework, DDP
Class Discussion

Framework, DDP
PN framework is a static layout
It’s a guide to ingredients of a negotiation
How to manage changing scenarios?
Dynamic Deal Plan

Dynamic Deal Plan ™
Layout the expected Positions, Interests, Criteria, Differences
Separate non-negotiable core interests and negotiable ones
Each deal situations requires a new format of DDP unless repeatable
Mix-n-Match Possibilities of solutions
Track proposals against expectations
Account for variations and fit to ZOPA, test with BATNA
Simulate deal and see if it will endure

DDP in Extreme
Film Clip

Pune METRO ROUTING
Team Negotiation

Pune Metro
Five Interest Groups:
A: Commuters Association
B: Slum Residents
C: Rich Bungalow Society Residents
D: Metro Planners

Problem:
Metro Rail is planning a station in Model colony. There are nearby slum residents and on other side of road is a posh bungalow colony.
Either slums or bungalow colony will have to be relocated to create the station
Model colony station cannot be eliminated to keep metro profitable.
Nobody is ready to move – slums/bungalows

A: Commuters Association
They want metro to happen at any cost
They want a station at Model Colony as a MUST.
They are not very concerned with either slum or bungalows are demolished, but some of their members stay in either slums or bungalows, so they are not so sure if either should happen

B:Slum Residents
They don’t much care for metro
They are okay if it happens but not if they have to move
They want a flat from Metro or Bungalow Society if they have to relocate but it should be within model colony
Fear: This is a trick of bungalow guys to get rid of them

C: Bungalow Society
They are unwilling to move in any scenario
They will not allow whole metro to happen through political pressure, courts and other tactics
They are okay if slums are relocated, or rather want that it happens
It is Metro’s headache to relocate slums or deal with slum owners

D:Pune Metro
Metro management wants a station to keep the metro financially viable
There is no alternative land available in Model Colony for station
They have limited funds to relocate only half of the slum owners

THANK YOU

Negotiating For Results 2009

by HASIT SETH

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