Negotiation Skills


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Negotiation Skills

  1. 1. Negotiating Skills Negotiating for Results
  2. 2. Course Overview • Understand how often we all negotiate and the benefits of good negotiation skills. • Recognize the importance of preparing for the negotiation process, regardless of the circumstances. • Identify the various negotiation styles and their advantages and disadvantages. • Develop strategies for dealing with tough or unfair tactics. • Gain skill in developing alternatives and recognizing options. • Have the opportunity to practice the “how to” of these skills in a supportive environment. • Understand basic negotiation principles, including BATNA, WATNA, WAP, and the ZOPA.
  3. 3. • How would you define negotiation? • What other words might we use instead of “negotiate”? Any method of negotiation may be fairly judged by three criteria: • It should produce a wise agreement if agreement is possible. • It should be efficient. • It should improve or at least not damage the relationship between the parties. What is Negotiation?
  4. 4. Types of Negotiation 1.Integrative/Distributive 2.Inductive/Deductive/Mixed 3.Soft/Hard/Principled 4.Alternative Dispute Resolution 5.Non-Negotiable Positions vs. Options What is Negotiation?
  5. 5. Positional Bargaining What is Negotiation? Customer Shopkeeper • How much do you want for this brass dish? • That is a beautiful antique, isn’t it? I guess I could let it go for $75. • Oh, come on, it’s dented. I’ll give you $15. • Really! I might consider a serious offer, but $15 certainly isn’t serious. • Well, I could go to $20, but I would never pay anything like $75. Quote me a realistic price. • You drive a hard bargain. $60 cash, right now. • $25. • It cost me a great deal more than that. Make me a serious offer. • $37.50. That’s the highest I’ll go. • Have you noticed the engraving? Next year, pieces like that will be worth twice what you pay today.
  6. 6. • Arguing over positions produces unwise agreements • Arguing over positions endangers ongoing relationships • Being nice is no answer! What is Negotiation?
  7. 7. What is Negotiation? Soft Hard • Participants are friends • Participants are adversaries • The goal is agreement • The goal is victory • Make concessions to cultivate the relationship • Demand concessions as a condition of the relationship • Be soft on the people and the problem • Be hard on the problem and the people • Trust others • Distrust others • Change your position easily • Dig in to your position • Make offers • Make threats • Disclose your bottom line • Don’t disclose your bottom line • Accept one-sided losses to reach agreement • Demand one-sided gains as the price of agreement • Search for the single answer: the one they will accept • Search for the single answer: the one you will accept • Insist on agreement • Insist on your position • Try to avoid a contest of wills • Try to win a contest of wills • Yield to pressure • Apply pressure
  8. 8. The answer to the question of whether to use soft positional bargaining or hard is “neither.” This method can be boiled down to 4 points. •People: Separate the people from the problem. •Interests: Focus on interests, not positions. •Options: Generate a variety of possibilities before deciding what to do. •Criteria: Insist that the result be based on an objective standard. What is Negotiation?
  9. 9. • Soft negotiators want to avoid personal conflict and so make concessions readily in order to reach agreement. • Hard negotiators see any situation as a contest of wills in which the side that takes the more extreme position and holds out longer fares better. • There is a third way to negotiate, a way neither hard nor soft, but rather both hard and soft. This method suggests that you look for mutual gains whenever possible. What is Negotiation?
  10. 10. Researchers have found there are three basic negotiating styles. •Co-operative Style •Aggressive Style •No Pattern What is Negotiation?
  11. 11. What is Negotiation?
  12. 12. What are the characteristics a successful negotiator must have? •They see possibilities rather than problems. •They are excellent communicators. •They keep an open mind. •They have confidence in their own abilities (or act like they do) and the negotiation process. •They are willing to listen. •They are optimistic. The Successful Negotiator
  13. 13. • Their egos don’t get in the way of a win/win solution. • They are creative and ready to consider ways of doing things differently. • They are flexible. • They have excellent self-control. • They are always well-prepared. • They are life-long learners. The Successful Negotiator
  14. 14. Topic List: • Communication skills • Understanding body language • Problem solving • Creative thinking • Building enthusiasm and confidence The Successful Negotiator
  15. 15. Only our minds can produce fear. • Fear of humiliation • Fear of failure • Fear of rejection • Fear of powerlessness • What are some other fears you are familiar with? Preparing for Negotiation
  16. 16. • Do you know things about you that are true, but that you would prefer to avoid? • When people make comments about (or when situations expose) things that we are ashamed of or that we try to deny, we say that they are “pushing our buttons.” • When you know what your own personal hot buttons are, you can prepare for them and then control your reactions. • Take a few moments to write down some of your hot buttons and ways to respond when those buttons are pushed. Preparing for Negotiation
  17. 17. Preparation Checklist • Determine your main objective. • Determine your supporting points. • Determine a fallback position. • Identify your Best Alternative To a Negotiated Agreement (BATNA) and Worst Alternative To a Negotiated Agreement (WATNA). • Identify your WAP. • What Zone Of Possible Agreement (ZOPA) might exist? Preparing for Negotiation
  18. 18. Case Study You and your best friend recently decided to become roommates and share a two-bedroom apartment. You are a freelance artist and you work from home. Because you spend more time at home, she feels that you should do more of the housework and pay a larger share of the power and water bills. This issue is causing significant strain on your relationship, so you decide to try to negotiate a solution. Preparing for Negotiation
  19. 19. • What might be some of your hot buttons? • Determine your main objective. • Determine your supporting points. • Determine a fallback position. • Identify your Best Alternative To a Negotiated Agreement (BATNA) and Worst Alternative To a Negotiated Agreement (WATNA). • Identify your WAP. • What Zone Of Possible Agreement (ZOPA) might exist? Preparing for Negotiation
  20. 20. Some things you can explore about the negotiator: •What is their business about? •What are their competitors like? •What is their stock like? •What associations does the person belong to? •What people do you both know? •What hobbies does the person have? Preparing for Negotiation
  21. 21. • Always prepare your research in a professional format and bring it with you. • Ensure you have separate folders for confidential information and information you’re going to share. • Keep both sets of information with you at all times during the negotiation. • You should have an information sheet outlining your main objectives, supporting points, fallback position, BATNA, WATNA, WAP, and ZOPA. The Nuts and Bolts
  22. 22. • The best place to meet is somewhere that you feel comfortable – your office, your company’s boardroom, or even your favorite coffee shop. • The worst place is somewhere your opponent feels comfortable. • Neutral ground would be a rented boardroom or a restaurant neither of you have visited before. • If you’re given the choice, choose a time of day that works best for you. The Nuts and Bolts
  23. 23. Case Study You and your best friend recently decided to become roommates and share a two-bedroom apartment. You are a freelance artist and you work from home. Because you spend more time at home, she feels that you should do more of the housework and pay a larger share of the power and water bills. This issue is causing significant strain on your relationship, so you decide to try to negotiate a solution. The Nuts and Bolts
  24. 24. • What documentation might you want to bring? • What would be your home turf? • What would be neutral ground? • What would be your roommate’s home turf? The Nuts and Bolts
  25. 25. Here are some things to keep in mind to make a positive impression: •Confident posture •Eye contact •Minimal body movement •Clothes are clean, unrumpled, stain-free •Shoes are clean and polished •Fingernails are clean •Pleasant expression Making the Right Impression
  26. 26. The Rule of Twelve suggests that we first notice and remember three things about people we meet. •The first twelve inches (shoulders up). •The first twelve steps a person takes. •The first twelve words a person speaks. Making the Right Impression
  27. 27. Research tells us people determine seven things from your appearance. •Income •Education Level •Social Position •Sophistication •Success •Moral Character •Trustworthiness Making the Right Impression
  28. 28. The message you communicate with your handshake is determined by five factors. •Degree of firmness •Dryness of hand •Depth of grip •Duration of grip •Eye contact Making the Right Impression
  29. 29. Tips to dress for success: • Do your research • What does your appearance say? • Consider your work environment Making the Right Impression
  30. 30. • Small talk has a bad reputation. • However, without small talk, many of us will never get to those “real” conversations. • Small talk helps us put others at ease and make them comfortable. • Small talk breaks the ice and goes a long way toward furthering a relationship. • It is crucial to getting negotiation off to a good start. Making the Right Impression
  31. 31. • When you are out with a gathering of friends, do you find it easy to just chat away without thinking of what to say next? • How about when you get thrown in with a group of people you don’t know? • Where can you get some good conversational openers? • What are some ways you have started conversations with people you didn’t know? • What doesn’t work? Making the Right Impression
  32. 32. • Another good way to establish common ground is to set out some ground rules for the negotiation. • This is also known as meta-negotiation, or negotiating about how you will negotiate. • What are some good ground rules? Session Seven: Getting off to a Good Start
  33. 33. • Once the warm and fuzzies are over, it’s time to get into the meat of the negotiation. • Start by outlining your position and having the other party outline their position. • If you’ve identified a zone of possible agreement (ZOPA) that gives a solution that you’re happy with, you will want to outline that as well. Exchanging Information
  34. 34. What If… • Your opponent appears to have made up their mind. • Your opponent is in a bad mood. • Your opponent keeps interrupting you. • Your opponent becomes emotional. • Your opponent keeps using words you don’t understand. • Your opponent is using unfriendly words. • Your opponent’s body language appears unfriendly. Exchanging Information
  35. 35. Techniques for Success • Equalization • Building a Case • It’s Too Bad… • Wear Them Down • Mix It Up • Bridge the Gap The Bargaining Stage
  36. 36. In most negotiations there are four major obstacles that inhibit the inventing of an abundance of options: •Premature judgment •Searching for the single answer •The assumption of a fixed pie •Thinking that “solving their problem is their problem.” Inventing Options for Mutual Gain
  37. 37. There are some easy ways to overcome these challenges and invent options towards mutual gain. •Make their decision easy •Whose shoes? •What decision? •Identify shared interests Inventing Options for Mutual Gain
  38. 38. Getting Past No and Getting to Yes
  39. 39. • Go to the balcony. • Step to their side. • Invite them to step to your side. • Build a golden bridge. • Make it difficult to say “no.” • Use high-yield questions. Getting Past No and Getting to Yes
  40. 40. On the road from No to Yes, you’re likely to reach one (if not several) impasses, where one or both of you are digging in your heels and you’re not making progress. Break it by: •Taking a break. •Identify hidden interests. •Deal with unrealistic expectations. •Use brainstorming techniques. Getting Past No and Getting to Yes
  41. 41. What should you do once you break the impasse and get past “no”? •Avoid positional bargaining. •Separate the person from the problem. •Focus on interests. •Work towards a mutual gain solution. •Insist on using objective criteria. Getting Past No and Getting to Yes
  42. 42. • There are three natural and instinctive reactions to negative responses: we want to strike back, give in, or break off negotiations. • No matter which response we choose, we don’t get what we want from the process. • How can we develop a mental attitude of detachment? Dealing with Negative Emotions
  43. 43. Three tactics: • Stonewalling • Attacking • Dishonesty Dealing with Negative Emotions
  44. 44. If you are alert to these possibilities, you have the opportunity to respond by: •Challenging them •Asking them some questions that can clarify or expose the deception •Play dumb and see what happens •Make a request Remember, always know your personal hot buttons. Dealing with Negative Emotions
  45. 45. • It helps to use the other person’s name. • Listen and allow the other person to vent and get their feelings out. • Don’t interrupt. • Try not to use red flag words like “but,” “always,” and, “never.” • Give them a token or early concession of something you consider less important, but may be important to the other party. • Apologize for the situation, not your action. • Agree with the other party using a sentence like, “From your perspective, you are absolutely right.” Dealing with Negative Emotions
  46. 46. • Point out where you agree more than you point out differences. • Build their self-esteem. Give them sincere praise on what they do well. • Prepare three questions for which they will have to say “yes.” • Make sure your words and your body language are consistent. • Use more “I” than “you” statements. • People don’t care what you know until they know that you care. Dealing with Negative Emotions
  47. 47. • Do you truly think your opponent will say yes? • If you’re not sure, keep bargaining. • You may want to summarize your last counter offer, or ask your opponent for more details on their last offer. • Body language can be your biggest key. Moving from Bargaining to Closing
  48. 48. Moving from Bargaining to Closing
  49. 49. Things not to do: • Beg, plead, or bully. • Give your opponent time to think the deal over. • Raise additional questions or points during your closing procedure. Moving from Bargaining to Closing
  50. 50. • For simple negotiations, a verbal agreement will probably be sufficient. • You will, however, want to date and sign any notes that you took and any documentation you gathered and file them away for reference. • It’s also good to send a follow-up letter outlining the terms of the negotiation and get a signed receipt. Moving from Bargaining to Closing
  51. 51. • For more complex negotiations, written documents will likely be involved. • We strongly recommend that you use a lawyer. It’s worth the investment. • If possible, have your lawyer prepare the document to be signed. If you are taking this route, make sure you have all the necessary paperwork with you when you go to the negotiation. • Read the document over thoroughly, clause by clause. Ask about anything that is unclear to you. • Ensure that you and your opponent have signed, original copies of all documents. Keep your copies in a safe place. Moving from Bargaining to Closing
  52. 52. In general, there are three possible outcomes to a negotiation. •Lose-Lose •Win-Lose •Win-Win The Closing Process
  53. 53. • What do we mean by a sustainable agreement? • What makes a sustainable agreement? Three Steps: 1.Getting everyone’s perspective 2.Reviewing the information 3.Outlining the options The Closing Process
  54. 54. Getting Consensus • Please explain what we have agreed to. • Do you agree with what we have agreed to? • Are you committed to carry out the agreement? • If not, what factors need to be clarified? The Closing Process