Preparing for Negotiations

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Preparing for Negotiations
Influencing and Negotiating Skills
MTL Course Topics
INFLUENCING AND
NEGOTIATING SKILLS

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MTL Course Topics
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MTL Course Topics
ARE YOU READY?
OK, LET’S START!

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MTL Course Topics
INTRODUCTION
Work done in preparing for negotiations is never done in
vain. You need time before you meet to think about your
own position, your needs and wants; time to talk to your
own constituents; time to gather information about the
other side; time to plan the practicalities of the
negotiations. Although good preparation can never
guarantee success in the unpredictable process of
negotiations, it can certainly increase your chances.

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MTL Course Topics
HOW TO PREPARE YOURSELF
To prepare for negotiations, eight steps are necessary:
1. Check out whether you're in a negotiating situation
2. Clarify your aims
3. Gather information
4. Weigh up your respective positions
5. Negotiate with your own side
6. Get a BATNA
7. Prepare the setting
8. Prepare yourself psychologically.
The first, and most important, step in preparing for
negotiations is to decide whether you are actually in a
situation from which you can gain.
"Engage only when it is in the interests of the state; cease
when it is to its detriment. Do not move unless there are
definite advantages to be won." (Sun Tzu: "The Art of War",
400 - 320BC)

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MTL Course Topics
TO NEGOTIATE OR NOT?
At its simplest, a negotiating situation exists when you are in
any communication with others which can work out to your
advantage.
At a more complicated level, a proactive negotiating
situation exists when...
· you want something that is controlled by someone else,
and
· they have the power to withhold it from you, and
· you have some power to make them move.
A reactive negotiating situation exists when...
· you control something that somebody else wants, and
· you have the power to withhold it, and
· they have some power to make you move.

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MTL Course Topics
ALTERNATIVES TO A DEAL
Early in the preparation phase of negotiations it is worth
considering the alternatives to negotiating.
· doing nothing: In reactive negotiation, doing nothing calls
their bluff: they may or may not use their power to force
you to move. In proactive negotiation, doing nothing is likely
to lead to missing an opportunity for gain.
· agreeing to their terms: you could decide that agreeing to
their terms without the hassle of negotiations is your best
course.
· taking what you want: in proactive negotiations, you could
simply use the power you have to take what you want. You
risk a resent-and-revenge reaction in the other side if you
do this.
· going to a third party: this may be an option to resolve
stuck negotiations but should never be an alternative to
negotiations in the first place.

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MTL Course Topics
THE RISKS OF ARBITRATION
As two otters were standing on the banks of the river
Ganges, a great fish came swimming by. The first otter dived
in but, unable to overpower it, begged the second otter for
help. He too dived in and together they brought the fish to
shore. Then they began to quarrel as to who should have it.
A jackal came up to see what all the noise was about and
they asked him to decide the case. The jackal cut off the
fish's head and tail and said: "I divide the spoils equally" and
gave the first otter the head and the second otter the tail
and ran off himself with the middle part.
"Stop," shouted the otters, "you've taken the only part
worth having.“
"I can't help that," said the jackal. "When you call in a
lawyer, you have to pay his fee. You should have settled
things together."

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MTL Course Topics
TAKING THE LEAD
It is better to take the lead in instigating negotiations,
proactively, than to be on the receiving end of others'
requests to negotiate and doing it reluctantly.
One reason people hesitate to get involved in negotiating is
that they feel they lack the skills and experience. This can be
overcome by seeking out daily opportunities to practise: any
large purchase; a restaurant meal; an air flight. Simply learn
to drop your inhibitions and negotiate.
In a survey of European shopping centres, it was found that
97% of people paid the fixed price for goods they bought.
Only 3% negotiated. In a survey by "Which Car?" magazine,
every single showroom assistant questioned said they were
willing to negotiate over the price of a new car. In one
instance, it took 8 minutes for a negotiating customer to
reduce the price of a car by £1606.

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MTL Course Topics
FOCUS ON YOUR ONE AIM
Once you decide to enter into a negotiation, you need to
clarify your aims.
Your overriding aim must be to achieve the objectives you
and your constituents set. This should be linked to a wider
business strategy that you have set for yourself.
There are three subsidiary aims...
1. to make sure that the process of negotiations is efficient
and cost-effective
2. to improve the relationship with the other side
3. to produce a "wise" agreement for both of you.

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MTL Course Topics
AIM TO BE ALIGNED
When you think of what you hope to gain from negotiations,
you can think in three dimensions: strategy, operations and
tactics.
Strategy is the master plan that you believe will achieve
your long-term goals. The word "strategy" comes from the
Greek word for "general" and means the art of conducting a
military campaign.
Operations are the sum of all the actions you need to take
that lead to the overall strategy
Tactics are the short-term manoeuvres that give you a
temporarily favourable advantage over the opposition.
Aim to align your tactics, operations, and strategy as if you
were looking at one landscape.

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MTL Course Topics
MANAGE THE PROCESS
One of your aims in negotiating should be to manage the
process efficiently. There are three costs associated with
negotiations: time; administration; and emotional energy.
Time: the issues involved should give you a rough idea of
how much time should be set aside for negotiations. Having
said that, you should not let time deadlines pressure you
into deals you don't want.
Administration: these are an unavoidable cost and include
the hire of rooms, meals and the issues of letters, proposals
and draft agreements. It is often argued that controlling the
administration is a useful psychological advantage.
Emotional energy: negotiations can produce high levels of
stress, particularly in the inexperienced and unskilled. Being
fit, prepared and having the right mental attitude will also
make you efficient.

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MTL Course Topics
HAVE THEM SAY THANKS
All negotiations start because either you or the other side
wish to change the status quo. In other words, there is a
disagreement, dispute or conflict.
Disagreements can easily form the basis for a serious falling-
out between people. They are why individuals come to
blows, married partners seek divorce and people in
workplaces take out legal actions against each other.
Negotiations not only seek to avoid the negative fall-out
from disagreements; they can if they are well-conducted
lead to enhancing the relationship.
A friend of the negotiator Roger Dawson once said that his
approach to negotiations was like: "getting gold teeth out of
your mouth".
"No," Dawson replied. "That's stealing. But get them out and
have them say thank you, that's negotiating."

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MTL Course Topics
A WISE AGREEMENT
The best conclusions to negotiations are WISE agreements.
The mnemonic WISE stands for:
W for Win-win: both sides should feel that they've gained
something from the process.
I for Implementable: the agreement must be workable or
you will soon be back around the negotiation table at
square one again.
S for Satisfactory: the agreement should meet the practical
and emotional needs of both sides.
E for Effective: the agreement should produce an effective
result for both sides and one that comes near to meeting all
their aims.

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MTL Course Topics
GATHER INFORMATION
Once you have clarified your negotiating aims, the
information-gathering exercise begins in earnest. It is not
confined to the preparation stage but continues until the
very end of discussions.
Their agenda will be largely hidden from you or, if you are
given it, it may be misleading. Yours should be known clearly
to you.
At any one time, there is a negotiating equation based on
the following formula...
a = (X1 x Y1 x Z1) + (X2 x Y2 x Z2)
ie The deal = their proposal x their arguments x their power
+ your proposal x your arguments x your power

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MTL Course Topics
DO YOUR RESEARCH
The background research you need to carry out in
preparation for negotiations can include:
· a preliminary get-together to clarify initial claims, offers
and positions
· desk research, for example the outcome of previous deals
· investigation of alternative courses including getting a
BATNA (the Best Alternative To a Negotiated Agreement)
· foot-slogging for on-the-spot information
· getting advice from your own experts.
Once you have information about the other side's position it
can be compared to your own.
Five models will help to collate the information: the PIN
triangle; the butterfly diagram; the variables see-saw; a
have-want grid; and a SWOT analysis.

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MTL Course Topics
THE PIN TRIANGLE
The PIN triangle is a useful way to distinguish between
positions (P), interests (I), and needs (N).
1. Positions are the public stance negotiators take. They
are likely where you are for most of the negotiations.
2. Interests are the things that matter to you, the
principles about which you're not prepared to budge
3. Needs are the underlying reason you're in negotiations:
the things you really want.
Most people take up the position they think will help them
achieve their needs. These are often far more extreme than
is necessary but are taken because people think it will help
their case. Only after negotiations have moved out of
positional confrontation do people see other ways to meet
their needs. This is what makes win-win negotiations always
possible.

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MTL Course Topics
A BUTTERFLY DIAGRAM
A butterfly diagram draws the different positions each side
in negotiations is willing to take, based on their ideal
position, their acceptable position and their final position.
The diagram should be continually evolving and changing as
you learn more about each others' needs. It indicates
whether you are heading for breakdown or not.
An example of what the butterfly diagram show you:
a) your ideal position is a wage settlement of just 1%; their
ideal position is a settlement of 11%
b) your acceptable position is a settlement of 2.5%; their
acceptable position is 5%
c) your final position is 3%; their final position is 3%.
In this case a deal is possible.

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MTL Course Topics
HAVE A HAVE-WANT GRID
A "have-want" grid enables you to clarify the following
information:
1. what you have that the other side need
2. what you want from them
3. what the other side have that you need
4. what they want from you.
For example,
a. we want a moderate pay increase plus a deal on
company travel. They have a reduced budget on pay
deals and a set of spare company vehicles.
b. they want a quick settlement that doesn't get in the way
of the upcoming merger. We have the power to dispose
of the deal before the due date.
Detailing the haves and wants of both sides in this way
indicates where interests overlap and thus possibilities for
settling.

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MTL Course Topics
WORK OUT WHAT MATTERS
Putting different values on different issues in a negotiation is
the reason that both sides can reach win-win settlements.
A Variables See-Saw compares the respective worth of
different elements on the table: for you, cashless pay may
be really important and you rate it 9 out of 10; for them, it's
only a 3 out of 10. For them, a quick settlement is worth 7
out of 10, for you just 1 out of 10.
The Variables See-Saw is a reminder that there is no
absolute worth to anything. It all depends on your needs.
For one person a training course in Negotiations may be
good value at £100 a day. For someone else, who is about to
embark on high-powered negotiations, and wants to hone
their skills, it might be good value at £1000 a day.

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MTL Course Topics
ANALYSE YOUR POSITIONS
A SWOT analysis is an estimate of the strengths,
weaknesses, opportunities and threats of both negotiating
sides.
1. Strengths: the strengths of each side are the power
each side has over the other. Skilful negotiators are
aware of the other side's power but are not overawed
by it.
2. Weaknesses: weaknesses are the areas you can exploit
in the other side to improve your bargaining position.
All negotiators have weaknesses in that they have a
need to reach agreement with the other side and
therefore a dependence on them to settle.
3. Opportunities: Opportunities are the benefits that can
come our way from a negotiated settlement. The
greater these are, the more we will want to make a
deal.
4. Threats: The threats are the things we might lose or
miss out on or suffer if we fail to get what we want.

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MTL Course Topics
KEEP YOUR SIDE HAPPY
It is rare to go into a negotiation only representing yourself.
Usually you negotiate as a representative of others, your
constituents.
Part of your preparation for negotiations has to be spent
getting the best mandate from your constituents. Aim to get
the support you need; the trust you need; the resources you
need; the understanding you need; the freedom you need.
Part of the agreement with your constituents is how, where
and under what circumstances you have to go back to them
with proposals. It is worth educating your constituents not
to be over-optimistic in what you can expect. Just because
you believe you have a good case doesn't mean the other
side does.

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ALWAYS HAVE A BATNA
A BATNA is your Best Alternative To a Negotiated Agreement
and is the only certain way to be successful in negotiations.
By preparing for negotiations with one party by sounding
out an alternative deal with another party gives you
walkaway power. It means that, even if the alternative isn't
quite what you want, you are still prepared to go there, if
need be.
One of the best examples of a BATNA took place during
negotiations between the Malta government and the British
over the use of Maltese harbours for British naval ships.
During the negotiations, the Malta government courted the
Soviet Union who were more than interested in a deal. This
alternative gave Malta both leverage and walkaway power.

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MTL Course Topics
CONDUCTING YOUR SIDE
There are five questions to
ask yourself when preparing
the setting for negotiations.
Who? Good negotiating
teams comprise a
constructive problem-solver,
a challenging hard-liner and
a sweeper who observes the
other side for clues and
cues.
What? The wider the range
of topics, the more likely you
will be to reach a package
deal.
Where? The "where?" of
negotiations is about your
place, theirs or a neutral
location.
When? Negotiations often
take longer than you expect.
Your team have to believe
that you are doing a good
job.
How? How will you work as
a team? Who leads, who
responds, who argues?
All of these issues are open
to preliminary negotiation
either with your own team
or the other side.

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MTL Course Topics
PREPARE TO BE TOUGH
The right attitude towards negotiations is the principal
difference between successful and unsuccessful negotiators.
Getting into the right frame of mind before you begin
should be part of your preparation plan.
1. aim to be tough, business-like, alert and unyielding
2. don't feel you owe them anything - don't be a bowl-
beggar
3. don't put yourself above or below them: go into neutral
and stay in neutral right to the very end. Even if you're
in a weaker position, (and you can never be sure you
are), mentally compensate by telling yourself you're in a
strong position.
4. stay relaxed and unhurried
5. don't reveal your feelings at any point
6. true to the real meaning of "neg-otiations" ("trade"),
determine to go in and do a good job for your side.

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PREPARE LIKE THE IROQUOIS
High-level negotiations involving large amounts of money or
agreements affecting the lives and livelihood of others
require stamina and resourcefulness.
One way to prepare for such endurance tests is the Iroquois
Method. This method relates to how the Iroquois Red
Indians prepared themselves before going into battle. They
ate and drank abstemiously; they ran, wrestled and hunted
for many hours each day; they practised using their
weapons endlessly; they stayed away from their womenfolk
in another part of the village. They trained like hungry prize-
fighters before a fight.
While preparations for negotiations may not go to such
lengths, the Iroquois Method illustrates the need to focus so
that we are physically, mentally and psychologically ready.

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MTL Course Topics
THAT’S
IT!
WELL DONE!

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MTL Course Topics
THANK YOU
This has been a Slide Topic from Manage Train Learn

Preparing for Negotiations

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