1. Negotiation Strategies for Project Managers
Roberto Toledo, MBA, PMP
Alpha PM Consulting, Inc.
www.alphapmconsulting.com
Welcome to the PMI Houston Conference & Expo and Annual Job Fair 2012
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2. 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
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4. Leading without Authority
• Use motivation and foster
commitment
• Use your informal authority
• Use relationship
management
• Be prepared to negotiate
everything on the project
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5. 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
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6. Common Negotiations in
PM world
Counterparty Situation
Sr. Mgmt. Support and Empowerment
Sponsor Scope, deadline and budget
Sponsor Sufficient resources
Team What’s in it for me?
Team Commitments
Contractors Scope, deadline and budget
Stakeholders Expectations and needs
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8. 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
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9. 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
10. 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
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11. 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
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14. 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
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15. Negotiation Strategies
• Integrative Negotiation vs. Distributive
• Rational Negotiation
• Silence Management
• Risk Management (information)
• Missing man
• Flattery
• Deadline
• Delay
• Good cop and bad cop
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18. 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
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19. “Let us never negotiate out of
fear. But let us never fear to
negotiate.”
John F. Kennedy
22. Closing thoughts…
Thank you for attending this session.
We hope you found this presentation
added value to your knowledge of
Project Management.
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