Negotiation steps


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Negotiation steps

  1. 1. Eight Steps of Negotiations <ul><li>Prepare </li></ul><ul><li>Argue </li></ul><ul><li>Signal </li></ul><ul><li>Propose </li></ul><ul><li>Package </li></ul><ul><li>Bargain </li></ul><ul><li>Close </li></ul><ul><li>Agree </li></ul>
  2. 2. PREPARE <ul><li>Prepare carefully well in advance </li></ul><ul><li>Prepare for negotiations and not defending </li></ul><ul><li>Be ready for opportunities </li></ul><ul><li>Reconsider your preparation items </li></ul>
  3. 3. Five key areas of preparation <ul><li>Objectives </li></ul><ul><li>Information </li></ul><ul><li>Concessions </li></ul><ul><li>Strategy/Style </li></ul><ul><li>Tasks </li></ul>
  4. 4. Preparation- objectives <ul><li>Define what outcome you want to achieve from the negotiation- ISSUES </li></ul><ul><li>The realistic expectation against each issues- INTEND </li></ul><ul><li>Minimum acceptable position on intends- MUST ACHIEVE or AVOID </li></ul><ul><li>What is the ideal outcome you want – WISH LIST </li></ul>
  5. 5. Step 1-Preparation- Objectives <ul><li>Do the same for your opponent – ISSUES, INTEND, MUST ACHIEVE & WISH LIST </li></ul><ul><li>As negotiations progress keep your objectives under constant review: are they still realistic? Should your INTEND be boosted by a few WISH LIST items? Should you move on an INTEND to protect a MUST? </li></ul>
  6. 6. Elements of Negotiations <ul><li>VALUES </li></ul><ul><li>POSTION </li></ul><ul><li>NEEDS </li></ul><ul><li>NEEDS SATISFIERS </li></ul><ul><li>NEEDS BLOCKERS </li></ul>
  7. 7. VALUES <ul><li>Deeply held preferences that shape our goals and means to fulfill them. Transmitted through socialization and enduring. Values are shared and often culture specific . Values create needs that we want to fulfill. </li></ul>
  8. 8. POSITIONS <ul><li>An opening demand that the negotiator believes will satisfy need. </li></ul><ul><li>Positions can be changed in skillful negotiations </li></ul>
  9. 9. NEEDS <ul><li>Needs are specific in a negotiation , but are derived from the values we hold. They have to be dug out by skillful questioning and then a suitable need satisfiers can be used to move the negotiation forward . </li></ul><ul><li>If we are not clear about our needs we may bargain away some thing we value </li></ul>
  10. 10. NEED SATISFIERS <ul><li>These bring focus to the negotiation and create a positive environment , which can then be used to change positions </li></ul>
  11. 11. NEED BLOCKERS <ul><li>They are threatening and do not lead to collaborative negotiations </li></ul>
  12. 12. Tactics of Negotiation <ul><li>ATTACK- creates negative energy </li></ul><ul><li>EVADE- can be used meaningfully </li></ul><ul><li>INFORM- clears the environment </li></ul><ul><li>OPEN- helps in understanding needs </li></ul><ul><li>UNITE- build rapport – Emphasize common ground- reframe – propose solutions </li></ul>
  13. 13. PREPARATION- Information <ul><li>Research both parties </li></ul><ul><li>Analyze the basis of power for both </li></ul><ul><li>Do SWOT for both </li></ul><ul><li>Prepare questions in advance </li></ul><ul><li>What is the BATNA of the opponent </li></ul><ul><li>What is their awareness in regard to your issues and needs </li></ul><ul><li>Brutally admit to assumptions and biases </li></ul>
  14. 14. BATNA- Best Alternatives in a Negotiation Agreement <ul><li>Ideal----------------------------------A </li></ul><ul><li>Intend---------------------------------B </li></ul><ul><li>Must avoid--------------------------- C </li></ul>Negotiations Zone
  15. 15. PREPARATION- Concessions <ul><li>Where can we be flexible? </li></ul><ul><li>What concessions can we make? </li></ul><ul><li>What can we give in order to what we want – TRADE </li></ul><ul><li>What value the concessions have to the other party? </li></ul><ul><li>What will you ask in return? </li></ul>
  16. 16. PREPARATION-Strategy <ul><li>Keep it SIMPLE and FLEXIBLE </li></ul><ul><li>Avoid confusing strategy ( means) with objectives ( objectives) </li></ul><ul><li>E.g. Take the train ( strategy ) to London (objectives ). If you meet a “ gate “ adjourn or reconsider . </li></ul>
  17. 17. Understand the preferred styles of each other <ul><li>DEFERENTIAL- Respect and Hierarchy </li></ul><ul><li>SUBSTANTIVE- Material issues </li></ul><ul><li>RELATIONAL- Trust and good faith </li></ul><ul><li>PROCEDURAL- Agenda and rules </li></ul>
  18. 18. Understand your personal style <ul><li>IMAGINATIVE- creative , intuitive, integrative and inspiring </li></ul><ul><li>FACTUAL- clear, focused, informed , verify </li></ul><ul><li>RELATIONAL- solve conflict,listen, encourage, listen and maintain relations , constructive </li></ul><ul><li>ANALYTICAL- logical and process oriented </li></ul><ul><li>EVALUATIVE- weigh , measure and moniter </li></ul>
  19. 19. PREPARATION- Tasks <ul><li>Leader- conducts the negotiation, gives information, expresses opinions, makes proposals, trades concessions. </li></ul><ul><li>Summarizer- asks questions to test understanding, draws attention to , clarifies , summarizes to buy thinking time, confirms areas of disagreement and agreement . Does NOT give personal opinions, information's, and concessions, </li></ul><ul><li>Observer- watches, listens, records and tries to understand the motivation , concerns, priorities, & inhibitions, </li></ul>
  20. 20. STEP 2- ARGUE <ul><li>It is an opportunity to – </li></ul><ul><ul><ul><li>Exchange information </li></ul></ul></ul><ul><ul><ul><li>Review issues </li></ul></ul></ul><ul><ul><ul><li>Structure expectations </li></ul></ul></ul><ul><ul><ul><li>Test assumptions </li></ul></ul></ul><ul><ul><ul><li>Probe motives </li></ul></ul></ul><ul><ul><ul><li>Explore opportunities </li></ul></ul></ul><ul><ul><ul><li>Identify inhibitions, & chinks </li></ul></ul></ul><ul><ul><ul><li>Influence, persuade & inform </li></ul></ul></ul><ul><ul><ul><li>Review sanctions & concessions </li></ul></ul></ul>
  21. 21. STEP 4- Signal <ul><li>Signals indicate change in stance </li></ul><ul><li>They are verbal or non verbal </li></ul><ul><li>When opponent moves from absolute to qualified statements it is a signal </li></ul><ul><li>Listen , reward, expand and confirm signal </li></ul><ul><li>Signals indicate when to make a proposal </li></ul>
  22. 22. What are qualified statements <ul><li>Can you explain the reasons? </li></ul><ul><li>Suppose I agree to that what can you offer? </li></ul><ul><li>Which aspects are you unhappy with? </li></ul><ul><li>Why is it important? </li></ul>
  23. 23. STEP 5- PROPOSE- ENTRY OFFER <ul><li>Open realistically- entry offer </li></ul><ul><li>A realistic proposal is based on facts that support the proposal </li></ul><ul><li>Address the key issues & your intend list </li></ul><ul><li>Matches the other parties BATNA </li></ul>
  24. 24. Making proposals <ul><li>Propose – Explain – Summarize </li></ul><ul><li>Invite response </li></ul><ul><li>If you have to modify the proposal the secondary proposal is tentative </li></ul><ul><li>If there is a grievance suggest a solution </li></ul>
  25. 25. RECIEVING PROPOPSALS <ul><li>Never interrupt </li></ul><ul><li>Question – clarify – summarize </li></ul><ul><li>Response could be No- this gives the other party the initiative. </li></ul><ul><li>If Yes- Are you missing an opportunity to add some thing from your wish list? </li></ul><ul><li>Instant counter proposal- leads to haggling and arguments </li></ul><ul><li>Adjourn- gives time to consult and think </li></ul><ul><li>Detailed response – encourages repackaging, to make the proposal more acceptable </li></ul><ul><li>Considered counter proposal- best response </li></ul><ul><li>TRY TO GIVE THEM WHAT THEY WANT ON YOUR TERMS </li></ul>
  26. 26. More about proposals <ul><li>If you are asked to concede something from your intend list then add something from your wish list </li></ul><ul><li>Remember the strengths of your proposal </li></ul><ul><li>Proposal set the agenda </li></ul><ul><li>A proposal beats arguments </li></ul>
  27. 27. STEP 6 - Package <ul><li>Packaging adjust the variable without increasing the offer in order to make the proposal more acceptable </li></ul><ul><li>If you have opened realistically then you may reach a deal without making any adjustment or concessions. </li></ul><ul><li>In order to do get more out of the other identify inhibitions and interests and address the package to them. </li></ul><ul><li>If you use a competitive stance likelihood of identifying needs about inhibitions are low , so use a cooperative stance </li></ul><ul><li>Proposals are solutions to needs </li></ul><ul><li>Think creatively about all the variables or services while packaging </li></ul>
  28. 28. Styles of Negotiations <ul><li>Co operative </li></ul><ul><li>Long term relationship </li></ul><ul><li>Voluntary relationship </li></ul><ul><li>Trust </li></ul><ul><li>Private and informal </li></ul><ul><li>Tolerance of others views </li></ul><ul><li>Emotional detachment </li></ul><ul><li>Skilled negotiations </li></ul><ul><li>Win - win </li></ul><ul><li>Competitive </li></ul><ul><li>on recurring transactions </li></ul><ul><li>Mandatory relations hip </li></ul><ul><li>Suspicion </li></ul><ul><li>Public and formal </li></ul><ul><li>Intolerance of others </li></ul><ul><li>Emotional involvement </li></ul><ul><li>Poor negotiators </li></ul><ul><li>Win lose </li></ul>
  29. 29. Step 7- Bargain <ul><li>Bargain is any trading activity , You can bargain at any stage of the negotiation: </li></ul><ul><ul><ul><li>For information </li></ul></ul></ul><ul><ul><ul><li>For concessions </li></ul></ul></ul><ul><ul><ul><li>For signals </li></ul></ul></ul><ul><ul><ul><li>For time’ for the deal </li></ul></ul></ul><ul><li>The fundamental rule in bargain is TRADE. You should always have an answer to the question “ What did you get in return? </li></ul><ul><li>Be prepared to concede in areas of lesser importance to gain in areas of greater importance </li></ul><ul><li>Put an unreasonable price to an unreasonable demand </li></ul>
  30. 30. Step 8- CLOSE <ul><li>Trial closure is useful device for drawing out issues. </li></ul><ul><li>Ask “ Are you saying if I agree to both of those items you will be satisfied?” - this insures if there are hidden issues they will emerge </li></ul><ul><li>What is the most important closing opportunity – a minor question that the other party asks about your proposal e.g. – “does that include delivery ?” or “ Would that be back dated?” </li></ul><ul><li>If both parties are happy </li></ul>
  31. 31. <ul><li>Closing concessions should be : </li></ul><ul><ul><li>Conditional ( on the deal) </li></ul></ul><ul><ul><li>Specific </li></ul></ul><ul><ul><li>Small </li></ul></ul><ul><li>Don’t get greedy </li></ul><ul><li>Agree </li></ul><ul><li>Agree to what is agreed- any ambiguity gets cleared up easily </li></ul>
  32. 32. When to go for adjournment <ul><li>When you feel you need to reconsider your objectives </li></ul><ul><li>New critical information emerges </li></ul><ul><li>Your strategy is over taken </li></ul><ul><li>Stuck in circular argument </li></ul><ul><li>When you need time to repackage </li></ul>
  33. 33. How to make adjournments <ul><li>Summarize the position the negotiation has reached </li></ul><ul><li>Withdraw to a private place and discuss with your team before breaking away </li></ul><ul><li>Agree on a new meeting date </li></ul><ul><li>Give home work to the other party </li></ul>