Negotiation steps

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