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Negotiating Skills

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Negotiating Skills -- http://www.presentationsexpert.com

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Negotiating Skills

  1. 2. <ul><li>Negotiating is the process of communicating back and forth, for the purpose of reaching a joint agreement about differing needs or ideas. </li></ul><ul><li>It is a collection of behaviours that involves communication, sales, marketing, psychology, sociology, assertiveness and conflict resolution . </li></ul><ul><li>A negotiator may be a buyer or seller, a customer or supplier, a boss or employee, a business partner, a diplomat or a civil servant. On a more personal level negotiation takes place between spouse’s friends, parents or children. </li></ul>
  2. 3. <ul><li>Title comes from remarks made by participants at some of my negotiation workshops </li></ul><ul><ul><li>“ that’s the opposite of what I do” </li></ul></ul><ul><ul><li>“ I know I should do that, but I find myself doing exactly the opposite” </li></ul></ul><ul><ul><li>“ Its counter-intuitive” </li></ul></ul><ul><li>What are people saying ? </li></ul><ul><ul><li>They recognise the prudence of a particular strategy </li></ul></ul><ul><ul><li>But they find it difficult to implement it </li></ul></ul><ul><ul><li>Their natural inclination is to do the opposite of what they recognise is the prudent strategy </li></ul></ul>
  3. 4. <ul><li>What are </li></ul><ul><ul><li>some of the intuitive things we do in a negotiation </li></ul></ul><ul><ul><li>the counter-intuitive thing we might consider as an alternative ? </li></ul></ul>Automatic gear Shift into manual Focus on Positions Focus on interests Dive into the negotiation Defer the negotiation to a time of our own choosing, gather information first When our proposals are rejected, justify and defend them Ask why our proposal doesn’t work, and gather information When a proposal is made to us that is unacceptable, rejection Instead of rejecting, ask why their proposal is important, and gather information
  4. 5. <ul><li>There are minimum 2 parties involved in the negotiation process. There exists some common interest, either in the subject matter of the negotiation or in the negotiating context, that puts or keeps the parties in contact. </li></ul><ul><li>Though the parties have the same degree of interest, they initially start with different opinions and objectives which hinders the outcome in general. </li></ul>
  5. 6. <ul><li>In the beginning, parties consider that negotiation is a better way of trying to solve their differences. </li></ul><ul><li>Each party is under an impression that there is a possibility of persuading the other party to modify their original position, as initially parties feel that they shall maintain their opening position and persuade the other to change. </li></ul>
  6. 7. <ul><li>During the process, the ideal outcome proves unattainable but parties retain their hope of an acceptable final agreement. </li></ul><ul><li>Each party has some influence or power – real or assumed – over the other’s ability to act. </li></ul><ul><li>The process of negotiation is that of interaction between people – usually this is direct and verbal interchange. </li></ul>
  7. 8. <ul><li>He should be a good learner and observer. </li></ul><ul><li>Should know the body language of the people at the negotiation process. </li></ul><ul><li>Should be open and flexible and yet firm. </li></ul><ul><li>Exercise great patience, coolness and maturity. </li></ul><ul><li>Should possess leadership qualities. </li></ul>
  8. 9. <ul><li>Should control emotions and not </li></ul><ul><li>show his weaknesses. </li></ul><ul><li>Should bargain from the position of strength. </li></ul><ul><li>Should know and anticipate the pros and cons of his each move and its repercussions. </li></ul><ul><li>Should know how to create the momentum for the negotiations and must know when to exit and where to exit by closing the talks successfully. </li></ul>
  9. 10. <ul><li>Should build trust and confidence. </li></ul><ul><li>Should be confident and optimist. </li></ul><ul><li>Should have clear cut goals and objectives. </li></ul><ul><li>If necessary, he should provide a face saving formula for his counter party. </li></ul><ul><li>Should be able to grasp the situation from many dimensions. </li></ul><ul><li>Should know human psychology and face reading </li></ul>
  10. 11. <ul><li>Should not be a doubting Thomas. </li></ul><ul><li>Should plan and prepare thoroughly with relevant data and information to avoid </li></ul><ul><li>blank mind in the process. </li></ul><ul><li>Should radiate energy and enthusiasm and must be in a position to empathize with his opponents. </li></ul><ul><li>Should be a patient listener. </li></ul>
  11. 12. <ul><li>what negotiation means and the various forms it can take </li></ul><ul><li>that negotiating, in the fullest sense, means forging long-term relationships </li></ul><ul><li>the role that the individual personalities play in negotiating </li></ul><ul><li>that you must take a variety of approaches to negotiation, since no single set of principles will suffice in all circumstances </li></ul>
  12. 15. Types Parties Involved Examples   Day-to-day/ Managerial Negotiations <ul><li>Different levels of Management </li></ul><ul><li>In between colleagues </li></ul><ul><li>Trade unions </li></ul><ul><li>Legal advisers </li></ul><ul><li>Negotiation for pay, terms and working conditions. </li></ul><ul><li>Description of the job and fixation of responsibility. </li></ul><ul><li>Increasing productivity. </li></ul>
  13. 16. Types Parties Involved Examples Commercial Negotiations <ul><li>Management </li></ul><ul><li>Suppliers </li></ul><ul><li>Government </li></ul><ul><li>Customers </li></ul><ul><li>Trade unions </li></ul><ul><li>Legal advisors </li></ul><ul><li>Public </li></ul><ul><li>Striking a contract with the customer. </li></ul><ul><li>Negotiations for the price and quality of goods to be purchased. </li></ul><ul><li>Negotiations with financial institutions as regarding the availability of capital </li></ul>
  14. 17. Types Parties Involved Examples   Legal Negotiations <ul><li>Government </li></ul><ul><li>Management </li></ul><ul><li>Customers </li></ul><ul><li>Adhering to the laws of the local and national government. </li></ul>
  15. 19. <ul><li>Depending on a scale of disagreement, the level of preparation might be appropriate for conducting the successful negotiation. </li></ul><ul><li>For a small disagreements, excessive preparation could be counter-productive because it do takes time which is better focused in reaching the team goals. </li></ul>
  16. 20. <ul><li>If the major disagreement needed to be resolved, preparing thoroughly for that is required, and worthwhile. </li></ul><ul><li>Think through following points before you could start negotiating. </li></ul><ul><ul><li>Goals: What you want to get out from the negotiation? What do you expect from the other person? </li></ul></ul>
  17. 21. <ul><li>Trading: </li></ul><ul><ul><li>What you and the other person have which you can trade? </li></ul></ul><ul><ul><li>What do you and the other person have so that the other wants it? </li></ul></ul><ul><ul><li>What might you both be prepared to give away? </li></ul></ul>
  18. 22. <ul><li>Alternatives: </li></ul><ul><ul><li>If you do not reach the agreement with him/her, what alternatives you have? </li></ul></ul><ul><ul><li>Are these things good or bad alternatives? </li></ul></ul><ul><ul><li>How much it matters if you do not reach the agreement? </li></ul></ul><ul><ul><li>Will the failure to reach the agreement cut out future opportunities? </li></ul></ul><ul><ul><li>What alternatives may the other person have? </li></ul></ul>
  19. 23. <ul><li>The relationship: </li></ul><ul><ul><li>What is a history of relationship? </li></ul></ul><ul><ul><li>Can or should this history impact negotiation? </li></ul></ul><ul><ul><li>Will there be any of the hidden issues that might influence negotiation? </li></ul></ul><ul><ul><li>How you will handle these? </li></ul></ul>
  20. 24. <ul><li>Expected outcomes: </li></ul><ul><ul><li>What outcome would people be expecting from the negotiation? </li></ul></ul><ul><ul><li>What was the outcome in the past, and what precedents been set? </li></ul></ul>
  21. 25. <ul><li>The consequences: </li></ul><ul><ul><li>What are the consequences of winning or losing this negotiation by you? </li></ul></ul><ul><ul><li>What are the consequences of winning or loosing by the other person? </li></ul></ul>
  22. 26. <ul><li>Power: </li></ul><ul><ul><li>Who has the power in the relationship? </li></ul></ul><ul><ul><li>Who do controls the resources? </li></ul></ul><ul><ul><li>Who stands to lose most if agreement is not been reached? </li></ul></ul><ul><ul><li>What power does other person have to deliver which you do hope for? </li></ul></ul>
  23. 27. <ul><li>Possible solutions: Based on all considerations, what possible compromises might be there? </li></ul>
  24. 28. <ul><li>Good negotiators are the people who understand </li></ul><ul><ul><li>how to build key relationships </li></ul></ul><ul><ul><li>how to identify what people need </li></ul></ul><ul><ul><li>how to give them what they need and </li></ul></ul><ul><ul><li>how to get what they want in return, all in a way that seems effortless. </li></ul></ul>
  25. 29. <ul><li>Autocratic managers typically hold the view that they are going to get what they want when they interact with subordinates, because their inherent authority precludes the need to negotiate. </li></ul><ul><li>These managers do not realize that, in the process of handing out orders, they are engaged in a kind of one-sided negotiation that can antagonize others, with the result that the tasks they wish to see completed may be carried out improperly or not at all. </li></ul>
  26. 30. <ul><li>The Accommodating manager is more concerned with what others want than with their own needs. </li></ul><ul><li>In order to avoid conflict, they do not negotiate at all and often end up overriding their own interests. </li></ul>
  27. 32. BATNA The B est A lternative T o a N egotiated A greement; the lowest acceptable value (outcome) to an individual for a negotiated agreement.
  28. 33. <ul><li>Your BATNA &quot;is the only standard which can protect you both from accepting terms that are too unfavourable and from rejecting terms it would be in your interest to accept.” </li></ul><ul><li>In the simplest terms, if the proposed agreement is better than your BATNA, then you should accept it. If the agreement is not better than your BATNA, then you should reopen negotiations. </li></ul>
  29. 34. <ul><li>BATNAs are not always readily apparent. Fisher and Ury outline a simple process for determining your BATNA: </li></ul><ul><ul><li>develop a list of actions you might conceivably take if no agreement is reached; </li></ul></ul><ul><ul><li>improve some of the more promising ideas and convert them into practical options; and </li></ul></ul><ul><ul><li>select, tentatively, the one option that seems best. </li></ul></ul>
  30. 36. <ul><li>A community discovers that its water is being polluted by the discharges of a nearby factory. </li></ul><ul><li>Community leaders first attempt to negotiate a cleanup plan with the company, but the business refuses to voluntarily agree on a plan of action that the community is satisfied with. </li></ul>
  31. 37. <ul><li>The Role of Mood & Personality Traits in Negotiation </li></ul><ul><ul><li>Positive moods positively affect negotiations </li></ul></ul><ul><ul><li>Traits do not appear to have a significantly direct effect on the outcomes of either bargaining or negotiating processes (except extraversion, which is bad for negotiation effectiveness) </li></ul></ul>
  32. 38. <ul><li>Gender Differences in Negotiations </li></ul><ul><ul><li>Women negotiate no differently from men, although men apparently negotiate slightly better outcomes. </li></ul></ul><ul><ul><li>Men and women with similar power bases use the same negotiating styles. </li></ul></ul><ul><ul><li>Women’s attitudes toward negotiation and their success as negotiators are less favorable than men’s. </li></ul></ul>
  33. 39. <ul><li>Once parties establish a BATNA, they must then compare the costs and benefits of the BATNA to all of the settlement options on the table. </li></ul><ul><li>Ask, &quot;What's it going to cost you if you don't?&quot; </li></ul>
  34. 41. <ul><li>Most of the negotiation literature focuses on two strategies, although they call them by different names.  </li></ul><ul><li>One strategy is interest-based(or integrative, or cooperative) bargaining, while the other is positional (or distributive or competitive) bargaining. </li></ul>
  35. 42. <ul><li>Integrative bargaining in which parties collaborate to find a “win-win&quot; solution to their dispute. </li></ul><ul><li>This strategy focuses on developing mutually beneficial agreements based on the interests of the disputants. </li></ul><ul><li>Interests include the needs, desires, concerns, and fears important to each side. </li></ul>
  36. 43. <ul><li>Positional bargaining is one that involves holding on to a fixed idea, or position, of what you want and arguing for it and it alone, regardless of any underlying interests. </li></ul>
  37. 46. Roles : Rita , a 15 year old girl. The Observer becomes Rita’s parent . Others are Observers to record use/abuse of “win/win” techniques. Background : Rita is calling home from a payphone on Hwy 401 to tell her parent she is hitch-hiking to Hollywood to be a movie star. She has no money, is a little afraid, and secretly wants to go to drama school. The parent is worried about Rita being out after curfew. Parent picks up the ‘phone, and has 3 minutes to effect a “win-win” approach before the payphone times out.
  38. 47. Background : Suresh has a Programmer off sick, and wants to negotiate two weeks of Kunal’s time to work on the Company’s most important project immediately, because Kunal is the best programmer, and knows the tasks. Delays may affect everyone’s bonus. Kunal’s Manager is concerned the loss of Kunal will mean he will not be able to complete tasks on another project their department is committed to deliver (requiring one week of work in the next 3 weeks), because Suresh has a reputation of over-utilizing resources (and padding their schedule contingency). Other commitments will also need juggling.
  39. 48. Background: Raima is not using the car this weekend, but is concerned the good friend is a fast driver. The friend is generous, and has done Raima several favours for Raima, including a recent birthday gift. Time : 3 minutes
  40. 49. <ul><li>When quick, decisive action is vital (in emergencies); on important issues. </li></ul><ul><li>Where unpopular actions need implementing (in cost cutting, enforcing unpopular rules, discipline). </li></ul><ul><li>On issues vital to the organization’s welfare. </li></ul><ul><li>When you know you’re right. </li></ul><ul><li>Against people who take advantage of noncompetitive behavior. </li></ul>
  41. 50. <ul><li>To find an integrative solution when both sets of concerns are too important to be compromised. </li></ul><ul><li>When your objective is to learn. </li></ul><ul><li>To merge insights from people with different perspectives. </li></ul><ul><li>To gain commitment by incorporating concerns into a consensus. </li></ul><ul><li>To work through feelings that have interfered with a relationship. </li></ul>
  42. 51. <ul><li>When an issue is trivial, or more important issues are pressing. </li></ul><ul><li>When you perceive no chance of satisfying your concerns. </li></ul><ul><li>When potential disruption outweighs the benefits of resolution. </li></ul><ul><li>To let people cool down and regain perspective. </li></ul><ul><li>When gathering information supersedes immediate decision. </li></ul><ul><li>When others can resolve the conflict effectively. </li></ul><ul><li>When issues seem tangential or symptomatic of other issues. </li></ul>
  43. 52. <ul><li>When you find you’re wrong and to allow a better position to be heard. </li></ul><ul><li>To learn, and to show your reasonableness. </li></ul><ul><li>When issues are more important to others than to yourself and to satisfy others and maintain cooperation. </li></ul><ul><li>To build social credits for later issues. </li></ul><ul><li>To minimize loss when outmatched and losing. </li></ul><ul><li>When harmony and stability are especially important. </li></ul><ul><li>To allow employees to develop by learning from mistakes. </li></ul>
  44. 53. <ul><li>When goals are important but not worth the effort of potential disruption of more assertive approaches. </li></ul><ul><li>When opponents with equal power are committed to mutually exclusive goals. </li></ul><ul><li>To achieve temporary settlements to complex issues. </li></ul><ul><li>To arrive at expedient solutions under time pressure. </li></ul><ul><li>As a backup when collaboration or competition is unsuccessful. </li></ul>
  45. 55. <ul><li>Behaviour </li></ul><ul><li>Motivation: Analytic-autonomizing, Assertive-directing, Altruistic-nurturing, Flexible-cohering </li></ul><ul><li>Personal strengths </li></ul><ul><li>Personal weaknesses </li></ul>
  46. 57. <ul><li>Prepare, prepare, prepare </li></ul><ul><li>Pay attention to timing </li></ul><ul><li>Leave behind your ego. </li></ul><ul><li>Ramp up your listening skills. </li></ul><ul><li>If you don't ask, you don't get </li></ul>
  47. 58. <ul><li>Anticipate compromise </li></ul><ul><li>Offer and expect commitment </li></ul><ul><li>Don't absorb their problems </li></ul><ul><li>Stick to your principles </li></ul><ul><li>Close with confirmation. </li></ul>
  48. 60. <ul><li>Speak more quietly than them. </li></ul><ul><li>Have more space in between your words than them. </li></ul><ul><li>If they interrupt, pause for a few seconds after they finish. </li></ul><ul><li>Be critical of foul language. </li></ul><ul><li>Do not rise to a bait if they attack or blame you. </li></ul><ul><li>Ignore all threats.  </li></ul>
  49. 61. <ul><li>Emotional Challenges </li></ul><ul><li>Anger/exasperation </li></ul><ul><li>Insulted </li></ul><ul><li>Guilt </li></ul><ul><li>False flattery </li></ul><ul><li>Recommended Response </li></ul><ul><li>Allow venting. Probe for why </li></ul><ul><li>What wouldn’t be insulting? </li></ul><ul><li>Focus on issues </li></ul><ul><li>Re-focus </li></ul><ul><li>Tips : </li></ul><ul><li>Don’t lose your cool . </li></ul><ul><li>Try to defuse with acknowledgement, empathy, patience, impartiality. </li></ul><ul><li>Consider dealing with less emotional issues first </li></ul><ul><li>Know your own “Hot Buttons” </li></ul><ul><li>Practice </li></ul>
  50. 62. Exercise: List the last 3 times you felt someone pressed your “Hot Button”. Subject discussed Who pushed your buttons? Why did you feel manipulated? Next time I will…..

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