Negotiation Skills

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Negotiation Skills

• Welcome

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Negotiation Skills
My father said "You must never try to make all
the money that's in a deal. Let the other fellow
make some money too, because if you have a
reputation for always making all the money, you
won't have many deals. J. Paul Getty
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Why Negotiate?
Gavin Kennedy in his book The New Negotiating
Edge says..
Animals do not negotiate. They use violence or
the threat of violence to get what they want,
whether it be food, a mate or territory. Have
you ever seen 2 dogs negotiate over a
bone? Trade is the human foundation of human
civilisation. It is what makes humans different
from animals. Negotiation is anathema to
tyrants, who usually want something for nothing
and do not recognise a need for another persons
voluntary consent before they get what they want
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Negotiation What is it?
Negotiation is an explicit voluntary traded
exchange between people who want something from
each other Gavin Kennedy
The process by which we search for the terms to
obtain what we want from somebody who wants
something from us Gavin Kennedy
To negotiate is to trade something we have for
something we want. Anon
Confer with others to reach a compromise or
agreement. Concise Oxford Dictionary
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Some decision making tools for negotiation
Persuasion Usually the first method we choose
when we want something. Useful when interests
or opinions are the same. Giving in This
is not the easy way out, and sometimes its just
not worth continuing if the cost (in any
terms) is too high. Coercion This could
simply be stating your options, I could take
my business elsewhere. It could also be gentle
reminders or unspecified consequences right up
to threats. Threats are not useful in a
negotiation situation as they erupt in full
blown battles. Problem Solving Works well when
both parties have a strong relationship,
where you trust each other, and share the
problem.
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When do we Negotiate?
When we need someones consent When the time and
effort of negotiating are justified When the
outcome is uncertain Source The Negotiate
Trainers Manual 1996 p6.
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Negotiating Behaviour
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• Gavin Kennedy (The New Negotiating Edge)
  describes 3 types of behaviour that we can
  display and encounter when in a negotiating
  situation
• RED BLUE PURPLE

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RED Behaviour

• Manipulation
• Aggressive
• Intimidation
• Exploitation
• Always seeking the best for you
• No concern for person you are negotiating with
• Taking

People behave in this manner when they fear
exploitation by the other party, but by behaving
this way to protect themselves, they provoke the
behaviour they are trying to avoid.
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BLUE Behaviour
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• Win win approach
• Cooperation
• Trusting
• Pacifying
• Relational
• Giving

Kennedy talks of a behavioural dilemma, do you
cooperate (blue) or defect (red)? Can you trust
the other person? And to what extent? Trusting
someone involves risk, on the one hand being too
trusting is naïve and on the other, not trusting
at all can create deceitful behaviour. The answer
is to merge blue and red behaviour into purple.
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PURPLE Behaviour
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• Give me some of what I want (red)
• Ill give you some of what you want (blue)
• Deal with people as they are not how you think
  they are
• Good intentions
• Two way exchange
• Purple behaviour incites purple behaviour
• Tit for tat strategies
• Open
• People know where they stand
• Determination to solve problems by both sets of
  criteria of the merits of the case and/or the
  terms of a negotiated exchange

To the red behaviourist the message is loud and
clear, You will get nothing from me unless and
until I get something from you.
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The Four Phases of Negotiation
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BARGAIN
PROPOSE
DEBATE
PLAN
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PLAN
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• When you have no time to prepare for a
  negotiation, do you
• a. Rely on your experience of similar
  situations?
• b. React to what the other person has said?
• c. Listen to them and adjourn at the first
  opportunity?
• a. This might be tempting on the grounds that it
  is all you have time for and could become a habit
  of this is how you prepare for all other
  negotiations even when you do have time.
• b. This is the limit of preparation for some
  people, and is a sign of reactive management.
• c. The best response. If are thrown in the deep
  end and do not have any preparation time.

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PLAN
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• You are depending on winning a contract and are
  the preferred bidder. A problem has come up that
  could jeopardise your preferred bidder status and
  therefore winning the contract. Do you
• a. Ensure that the clients interests take
  precedence over yours?
• b. Put your interests before those of the
  client?
• c. Judge the importance of each partys
  interest on their merits?
• a. Most likely to be necessary if you do not
  meet the clients interest you are unlikely to
  remain the preferred bidder.
• b. Not a sensible option. If you put your
  interests first, she doesnt get what she wants
  and therefore will not give you what you want.
• c. Address the other party interest first. You
  cannot compare the merits of each partys
  interest.

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PLAN
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• What do I want?
• What do they want? Try to judge the objective
  they will want, what arguments are they going to
  use to support their objective and how will you
  counter them?
• What will/can I trade?
• Explore all the available options of the trade
• Explore long and short term implications of each
  option for all parties involved
• Set objectives in terms of acceptable limits and
  that you have a realistic chance of achieving.
• Visualise possible gains, not losses.
• Be aware that the opposition might have a hidden
  agenda

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PLAN

• Identify your supporting arguments that justify
  your objectives and the arguments that the other
  party may use against them. How will you counter
  their arguments?
• What strengths and weaknesses do you take to the
  negotiating table? How can you maximise your
  strengths and minimise your weaknesses?
• What are the strengths and weaknesses of the
  other party?
• What will be your opening gambit and how will you
  present it?
• Timescale how much time is there to negotiate
  how imperative are deadlines?
• What will be your opening position, your fall
  back position and your final fall back position
  beyond which you will refuse to do business.

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DEBATE

• You are negotiating with a colleague over parking
  spaces for your teams, and he makes a factually
  incorrect statement about your entitlement to
  parking places. Do you
• a. Stop him right there to correct the error?
• b. Shake your head vigorously, indicating
  disagreement but say nothing until he finishes or
  gives way?
• c. Say and do nothing until he is finished?
• a. Nobody likes being interrupted and it does
  not help if a negotiator does so.
• b. Body Language that is visually interruptive
  is still an interruption.
• c. Yes. If the case is built on the factual
  error it will disintegrate more quickly if you
  wait to reveal the truth.

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DEBATE

• The other negotiator is quite angry and winds up
  her tirade of a clear threat of what she will do
  if she does not get her way. Do you
• a. Ignore her threats and concentrate on
  rebutting her claims?
• b. Demand that she withdraw her threat if you
  are to continue negotiating?
• c. Counter her threat with one of your own?
• a. Better to ignore the threats.
• b. Its pointless, and unlikely she will
  withdraw.
• c. No. This could spark of a cycle and end up in
  a fight.

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DEBATE
The other negotiator makes a statement with which
you profoundly disagree. Do you a. Tell him
that he is mistaken and explain why? b. Ask him
why he believes that his statement is true? a.
He wont listen. He will be constructing his
counter argument. b. Yes. The best way to
handle disagreement is to question the person
with whom you disagree.
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DEBATE

• Positive Powerful opening confident body
  language, tone and words
• Break the ice and discuss neutral topics and
  build rapport
• Cover Why we are here, what we are going to do,
  how long it will take
• Emphasise the need for agreement at the outset
• Listen to what the other party say and how they
  say it
• Observe non-verbal signals
• Sit where you can see everyone
• If you are with one other person sit apart so
  you are 2 voices.

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DEBATE

• Give your general views on the broad field to be
  covered.
• Look together at the possibilities for joint
  advantage emphasise areas of agreement
• Never pass over something you dont completely
  understand.
• Dont feel intimidated both sides are under
  pressure. The person under the greatest time
  pressure loses so dont reveal your deadlines.
• Always maintain walk away power
• Exchange information through statements. Explain
  and explore the differences that prompt the
  search for a negotiated solution.

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DEBATE

• Deliver the statements in a neutral tone.
  Deliver it in a hostile tone and you can predict
  the effect and response.
• Reinforce your tone with your behaviours. You
  want a solution to meet both parties needs.
• Give assurance, i.e. you are in the solution
  business, and any current difficulties are
  problems to be jointly overcome.
• Disclaim any intention of acting negatively
  towards the other party.
• Use questions to elicit information not to fuel
  argument. Questioning is an important negotiating
  skill, and demonstrates your willingness to
  understand the other negotiators interests
• Actively listen, dont pretend to listen and
  dont wait to speak give the speaker your full
  attention.
• Summarise their views too their satisfaction to
  demonstrate you have understood.

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PROPOSE
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• A union leader interviewed on television made a
  passionate case that if only the management would
  return to the negotiation table and show some
  flexibility, he had no doubt that the bitter
  strike would be settled in a matter of hours.
  Did he mean that
• The union was ready to make some concessions?
• The management must make some concessions?
• If the management made some concessions then the
  union would too?
• Unlikely. The union has to keep the spirits of
  its members high and show they are doing their
  best to find a settlement. Usually they mean
  what they say, the return to work is conditional
  on the management showing some flexibility and
  conceding the unions claim.
• Yes.
• Unlikely. If movement was possible if
  reciprocated, the union would be unlikely to use
  a public forum.

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PROPOSE

• In an effort to conclude the negotiations, the
  seller offered to cut her prices by 10 and drop
  the pre-payment demand. Which statement would
  most likely to achieve her objective?
• Ok. Well cut our prices by 10 but we must be
  paid after 30 days delivery
• If we drop our prices by 10 and allow 30 days
  credit, can you confirm the order of 1000 units?
• If you confirm the order of 1000 units, we will
  reduce prices by 10 and allow you 30 days
  credit
• a) Deceptively ok, except that it is an
  unconditional offer requiring nothing to be
  offered in return by the buyer. A free-gift
  concession, not a trade.
• A question-proposal which is weaker than a
  statement proposal
• Yes, much better. The bargain is conditional and
  the condition (demand for 1000 units) is stated
  first, followed by the offer (10 price cut and
  30 days credit)

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PROPOSE

• Decide whether you will speak your proposal
  first or respond to the proposal from the other
  party.
• Put forward your proposal with as little emotion
  as possible.
• Leave room for manoeuvre in your proposal
• Full Disclosure really means 90. You may not
  know or are unwilling to disclose 100 of your
  position. This can be very productive reaching
  out to the other party can be a strong positive
  behaviour builder, however, both parties must
  want to negotiate towards agreement.
• Be assertive remember PURPLE. (Not RED or BLUE)
  Use If youThen I not If we will you this
  avoids a question proposal.

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Examples of Proposals
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Examples of Proposals
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PROPOSE

• Avoid wish, hope, would like this is
  not assertive
• When you make and consider proposals it means you
  are moving towards a jointly agreed solution.
• Proposals consist of 2 elements the condition
  plus the offer and can be best presented with the
  If .Then technique.
• Both the condition and the offer can be couched
  vaguely. But it is better to state your
  condition first.
• Example 1 If you change your terms of
  business, then I could consider some amendments
  to our payment schedule.
• Is example 1 A. Vague-vague (vague in
  condition and offer)
• B. Specific-vague (specific in condition and
  vague in offer)

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PROPOSE
Answer Vague-Vague. Vague in the condition and
offer. The proposal isnt specific about the
changes in the terms of business nor in what
amendments could be made to the payment
schedule. Example 2 If you amended the
penalty period from 14 to 7 days then I could
consider some amendments to our payment
schedule Is example 2 A. Vague-vague (vague
in condition and offer) B. Specific-vague
(specific in condition and vague in offer)
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PROPOSE

• Answer Specific-Vague.
• Specific in the condition, but vague in their
  offer.
• Being vague in the offer is a sign of proposal.
• It isnt an exact science and you dont have to
  follow a set pattern, but research shows that
  effective negotiators do move from vague to
  specific in their proposal.
• Being vague gives you some leeway, as you dont
  know how near or far you are from the point of
  settlement, and prevents you from getting to an
  impasse.
• By being vague instant rejection and instant
  acceptance is not appropriate. How can you
  accept something that isnt specific?
• Conditions can be vague or specific.
• You can have specific proposals, but beware of
  being hasty.

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Responses to a Proposal
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• If you dont agree, avoid amateur dramatics,
  slamming the table, storming out etc. This is
  typical RED behaviour.
• Purple behaviour, means responding positively.
  Welcome the fact a proposal has been made, you
  dont have to agree with the content this is
  what you are around the negotiating table for, to
  improve on the initial proposal to achieve a
  mutually acceptable solution.
• If agreement is hard to find keep looking for a
  solution until one is found or, it is clear that
  one doesnt exist.
• You then have to either agree to disagree and
  call a halt to negotiations or, if the
  consequences or alternatives are not acceptable
  then negotiation has to continue.

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BARGAINING
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• How might the following proposals be amended to
  make them assertive?
• If we agreed to foreign rights, would you accept
  this on a licence-only basis?
• Your fee is slightly more than I was expecting,
  so could we pay it in monthly instalments?
• Would it be ok if we used our own transport?
• If you accepted this on a licence-only basis
  then we would agree to foreign rights
• If we pay in monthly instalments, then we might
  accept your fee.
• c) Would it be ok if we used our own transport?

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BARGAINING
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• How would you amend the following proposals into
  a bargain format?
• If you agree to some form of bonus, then we will
  raise the productivity by 5
• If we secure and fence the site, will you
  expedite the purchase date by 90 days?
• If we receive assurances, then we will pay
  100,000 against your outstanding debts.
• If you agree to a 20 bonus then we will raise
  productivity by 5.
• If you expedite the purchase date by 90 days,
  then we will secure and fence the site.
• If we receive the appropriate assurances as
  detailed in our letter of 12 August, then we will
  pay 100,000 against your outstanding debts.

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BARGAINING
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• A bargain is the conclusion of the negotiation.
  In Scotland solicitors close a negotiation by
  announcing a bargain is concluded.
• Phrases like
• So, what you are offering is
• Ok I get the picture
• Let me be clear, you want x for y
• Heres how I see it.
• To sum up, in return for x Ill agree to y
• Show that the two parties are moving towards
  each other and the negotiation is coming to
  agreement.

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BARGAINING
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• Be prepared to make concessions, offer the
  smallest concessions first you may not need to
  go any further.
• Compromise without losing face. If you have had
  to backtrack on a point you had as your final
  position you could say Since you have changed
  your position on I may be able to change mine
  on
• Make eye contact to emphasise that each
  concession is a serious loss for you.
• Do not ignore issues in order to speed up
  negotiations.
• Record fully all agreements finalised at the
  negotiations close.

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Closing the Negotiation
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• Summary Close Summarise the details of the
  conditions and the offer, and ask for
  agreement.
• Adjournment Close Useful where there remains some
  small differences. It gives both parties
  time to consider the final agreement.
• Final Final offer close Make it clear that this
  is your final final offer by choosing the
  right words, tone and body language. Create
  an atmosphere of decisiveness, gather your
  papers together as though getting ready to
  leave.

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Dealing with Difficult Negotiators.
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• Intimidation
• Domineering
• Bullying
• Threats
• Focusing on their own interests and not yours
• These are typical RED behaviours.
• Be careful to distinguish those who always
  behave in a RED way, to those who are just having
  a bad day.

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Dealing with Difficult Negotiators.
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• The man you are negotiating with has a bombastic
  and rude manner. He interrupts constantly and
  loudly and at a pace that does not allow
  interruptions to his flow. He is emphatic and
  threatening and shows no interest in your point
  of view. Do you
• a. Retaliate in kind with matching behaviour?
• b. Wait for an opening to say your piece?
• c. Agree to what he wants.
• Retaliation is a challenge. He is not
  intimidating you enough he will put on more
  pressure.
• Yes. But only if you are clear that his
  behaviour will not affect your focus on the
  outcome.
• Never! Do not give him the satisfaction, by
  giving into a bully and their intimidation.

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Dealing with Difficult Negotiators.

• The financial director of a large customer is an
  abusive and domineering person, who has a
  repertoire of swear words and will not accept
  No for an answer. She expects you to sit there
  and take it and theatrically waves her arms about
  and throws papers around when she wants to make a
  point. Do you
• a. Behave in a contrasting manner and keep your
  cool?
• b. Agree to what she wants?
• c. Wait to say your piece?
• To contrast her behaviour only shows her that her
  behaviour is working, shell put on more pressure
  until you give in.
• Never! Do not give in to her intimidation.
• Yes, but only if you are sure her behaviour will
  not affect the outcome.

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Dealing with Difficult Negotiators.
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• So what can you do about it?
• Do not let their behaviour affect the outcome
  that is what they want. They know if they behave
  in this way they will get what they want because
  the other party will back down.
• Do not react to their behaviour- that is what
  they want.
• You need to ignore their behaviour, this is what
  they choose not you. Be focused on the outcome
  and do not let their behaviour influence you away
  from this.

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Dealing with Difficult Negotiators.
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• Focus on the merits of both cases
• Consider what trades you are going to make.
  What you give up reflects consideration of the
  merits of their case, in exchange for what you
  insist on getting from them.
• This shows and forces them to give recognition to
  the merits of your case.
• In short, continue with your PURPLE behaviour,
  using the condition and offer, If then
  strategy.
• DO NOT LET THEM GET TO YOU!!

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Negotiation Check List
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Any Questions?
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Thank You!
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References
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• The New Negotiating Edge. The Behavioural
  Approach for Results and Relationships by Gavin
  Kennedy.
• Essential Managers Negotiating Skills by Tim
  Hindle