NEGOTIATION SKILLS

Nico Decourt

Today

• When will you need to negotiate?• What is negotiation?• What is a good negotiation?• Hard, soft and principled methods• People, interests, options and criteria• Power and Dirty tricks

When & what will you negotiate?

• Investors and financiers• Customers• Competitors and Collaborators• Suppliers• Staff• Premises• Regulators & Government

What is Negotiation?

• Definition:-– To confer with another or others in order

tocome to terms or reach an agreement– Latin,from negotium to transact business• Most see themselves as having two ways

tonegotiate; HARD OR SOFT

Possible Outcomes

WIN- LOSE LOSE-LOSE WIN-WIN WIN-PERCEIVED WIN

Good Negotiation

• Should produce a wise agreement which– meets legitimate interests of both sides– resolves conflicting interests fairly– will last• Should be efficient• Should improve or at least not damage

therelationships between parties

HARD Negotiator

• Sees it as a contest of wills• Takes extreme positions• Holds out to the end• Wants to win ‘at all costs’BUTOften ends up producing an equally hard response and harms relationships

SOFT Negotiator

• Wants an amicable resolution• Wants to avoid personal conflict• Makes concessionsBUTOften ends up feeling exploited and bitter

Hard Method - Positional bargaining

• Each side– Takes a position– Argues for it– Makes compromises– (Hopefully) Reaches a compromise• This involves taking up and then giving

up a series of positions

A Wise Agreement?

• The more you defend a position– the more committed you become to it– The more you become interested in

“saving face”not agreement– The less concerned you are with underlyingconcerns of each party• The more you argue that it is impossible to

move, the more it becomes

Efficient?

• Time consuming• Tendency to start with extreme positions

and todefend them– The more extreme the position– The smaller the concessions– The longer the negotiation will take• Requires lots of decisions by each party

The Ongoing Relationship

• Becomes a contest of wills• It becomes a battle rather than a

devising of jointly acceptable solutions• Conflict words– ‘Can’t, won’t, not going to give in….’• Often leads to resentment & anger

Soft Method

• Many try to avoid the pitfalls of hard negotiation.

They:– Prefer to see the other side as ‘friends’– Focus on agreement not victory• Method emphasises relationships & is

often efficient• Wise Agreements? - beware the hard

negotiator

The Principled Negotiation

• Separate the people from the problem• Focus on interests not positions• Generate a variety of options before

deciding on what to do• Insist that the result be based on

objective criteria

Human interaction is essentially negotiation.Intimidating, chiseling, and tricking are NOT negotiation.

Defining Negotiation

Negotiation Is Personal

Emotions, temperament, and personality affect needs, interests, goals, and perspectives.

Ego, self-concept, and fears affect our needs.

Attitude affects our needs and our negotiation.

Knowledge of self is the starting point toward building effective negotiation skills.

Not Everything Is Negotiable Every person has limits to what he/she

will give and take. Not everything SHOULD be negotiated:

Potential for MUTUAL BENEFIT is a prerequisite to negotiation.

Components of Negotiation

Personality Approach Style Temperament Perception Interests Goals

Needs Values Power Type of Conflict Substantive

Issues Alternatives

How Do You Know What You Know?

What do you know? Beliefs may be confused with

Assumptions. Critical thinking includes asking: “Why?”

Fifteen-Step Plan

Practice critical thinking and empathy. Study psychology, sociology, communication, and conflict. Know yourself. Know negotiation styles and temperaments. Communicate effectively. Acknowledge cultural and contextual differences and

expectations. Understand the dynamics of power.

Fifteen-Step Plan

Identify interests and goals before you negotiate. Be assertive. Be persuasive. Be prepared and avoid common mistakes. Use tactics that work for you and understand other tactics. Know when to walk away. Know how to evaluate your performance and improve.

The Negotiation Process

• Analysis– Gathering info, organise it and think

about it– People, interests, options on the table,

criteria?• Planning– What to do on the four issues• Discussion– Focus on the four elements

People

• Negotiators are human - emotions andcommunication are central issues• Interested in substance and relationship• Often get intermeshed• Positional bargaining puts substance andrelationship in conflict• Try to separate relationship and

substance

People Problems

• Inaccurate Perceptions– Put yourself in their shoes– Don’t deduce their intentions from your

fears– Don’t blame them for your problem– Discuss each others perceptions– Make your proposals consistent with

their views

People Problems

• Emotions– Try to recognise and understand them– Make them explicit– Allow the other side to let off steam– Don’t react to outbursts

People Problems

• Communication– Listen actively, question & acknowledge– Speak about yourself not them– Know what you want to communicate

and whatpurpose the info will serve

Interests not Positions

• Interests define the problem• Opposed positions often disguise

compatibleinterests not just conflicting ones• Everyone has multiple interests• Human needs are the most powerful

interests

Interest Issues

• Ask why? and why not?• Make a list• Acknowledge the other sides interests as

part of the problem• Put the problem before your answer• Attack the problem not the people

Invent Options

• Avoid premature judgement - ‘just one solution’

• Avoid the either/or position• Don’t just focus on your own immediate

interests• Look through the eyes of different

experts

Objective Criteria

• Fair standards to both sides– market value– precedent– costs– Professional standards• Fair Procedures– ‘one cuts, the other chooses’, mediation

etc

Objective Criteria

• Ask ‘what is your theory?’• Reason and be open to reason• Don’t give in to pressure, shift from

position tocriteria

What if...

• They have a stronger bargaining position?

– Any negotiation has realities that are hard to

change• Your objectives– To protect yourself against making anagreement you should reject– make the most of your assets

Know Your BATNA

• Best Alternative to a Negotiated Agreement

– Your standard to measure against– Helps avoid over-optimism or summing

youralternatives• The better your BATNA the more powerful

your position• Disclosing your BATNA? What about theirs?

What if...

• They use dirty tricks,• Try to:– recognise the tactic– raise it explicitly, question its legitimacy– negotiate over it

Dirty Tricks

• Are their facts correct?• Ambiguous authority• Stressful environment• Personal attacks• ‘Take it or leave it’• Don’t be a victim!!

Conclusions

• Hard, soft or principled?• Wise, efficient and constructive?• Separate the people• Identify the interests• Determine the options• Use objective criteria• Practice the skills!