Negotiation Strategies for Project Managers Roberto Toledo, MBA, PMP Alpha PM Consulting, Inc. www.alphapmconsulting.comWelcome to the PMI Houston Conference & Expo and Annual Job Fair 2012• Please set your cell phone/pager to silent mode• Q&A following the presentation• There will be time at the end of this presentation for you to take a few moments to complete the session survey. We value your feedback which allows us to improve this annual event. 1
Agenda• Leading without authority• Common negotiations in PM world• What it takes to be a great negotiator• The preparation phase• Negotiation strategies• Where do I start?• Conclusions.- Key Messages 2
Leading without Authority• Use motivation and foster commitment• Use your informal authority• Use relationship management• Be prepared to negotiate everything on the project 4
Definitions• A potentially beneficial process of interaction by which two or more parties, seek to improve their options through joint actions and decisions• Negotiation is definitely the most powerful tool to balance interests and resolve conflicts 5
Common Negotiations in PM worldCounterparty SituationSr. Mgmt. Support and EmpowermentSponsor Scope, deadline and budgetSponsor Sufficient resourcesTeam What’s in it for me?Team CommitmentsContractors Scope, deadline and budgetStakeholders Expectations and needs 6
Negotiation Paradigms• Negotiation skills are an innate ability• Negotiation is an art, not a science• Negotiation is intuitive or instinctive• The client is always right in his/her demands 8
What does it take to be a great Negotiator?• Develop your skills, by studying, practicing and analyzing• The preparation phase• Self confidence• Communication skills• Ability to read the other person• Emotion management• Patience 9
The Preparation Phase• Information… – The most powerful weapon of Negotiation• Establish your “Best Alternative to a Negotiated Agreement”.- BATNA – Try to identify the other party’s BATNA• Establish your Reserve Value – The least I am willing to accept – The most I am willing to grant 10
The Preparation Phase (2)• Prepare your initial position and proposal.- Anchor. – Ambitious, but realistic!• Identify who has the Power Position• Try to establish the Anchor first – Especially if the other party has the power position 11
Negotiation Key ElementsInformation Influence Content Process What ? How?
Influence Strategies• Constantly emphasize the other party’s: – Potential losses – Potential gains• Make concessions one by one• Start with an aggressive offer and moderate it gradually• Justify your demands by providing the environment to make them reasonable• Provide social references for potential gains 14
Negotiation Strategies• Integrative Negotiation vs. Distributive• Rational Negotiation• Silence Management• Risk Management (information)• Missing man• Flattery• Deadline• Delay• Good cop and bad cop 15
Vito Corleone, The GodfatherSource of infinite wisdom!
Key Messages• The Win-Win mantra is still valid• Negotiation skills are not an innate ability, they are learned and developed• Preparation is key to a successful negotiation• Information is the key to the preparation phase• Influence is the key to the bargaining phase 18
“Let us never negotiate out of fear. But let us never fear to negotiate.” John F. Kennedy
Closing thoughts… Thank you for attending this session. We hope you found this presentation added value to your knowledge of Project Management.• Take a few moments to complete the Session Survey. We appreciate and value your feedback.• Hand your completed survey to one of the session monitors and you will receive a free raffle ticket for one of the drawings to be held in the Vendor Expo (see Conference Program Guide for details). 22