Negotiating

“Negotiating is the art of reaching an agreement by resolving differences through creativity”

References

Creative Negotiating, Stephen Kozicki, Adams Press, 1998

Business Negotiating Basics, Peter Economy, Briefcase Books, 1994

“Diagnosing and Overcoming Barriers to Agreement”, Michael Watkins, HBS, 2000

“Negotiation Analysis”, Michael Wheeler, HBS, 2001

Negotiating Decisions

Style

Outcome

Principles

Style

Style is a continuum between two styles: Quick Deliberate Middle is

compromise

Quick Style

Negotiate in a hurryUse when you won’t negotiate

with these people again Get the best deal without regard

to the other side’s “win” Price main consideration

Deliberate StyleUse when long term

relationship likely Involves

cooperation and relationship building to reach agreement

Needs much prep, hard work

May move in fits and starts

OutcomesRealistic

Both sides satisfied, win/win situation Usually results from deliberate style

Acceptable Likely to result from quick style Something is better than nothing Always ask for a better deal

Worst When you’re too stubborn to be flexible Usually from quick style

Outcomes

Predetermine the outcomes before you start negotiations, you have a better chance of getting a better result

“Think carefully, think creatively, and think ahead”

PrinciplesThere are no

rules Establish an

agendaEverything is

negotiableAsk for a better

dealBe creative Learn to say

“NO” yourself

Are you a Motivated Negotiator?

Enthusiasm Confidence Engaged

Recognition Accomplishment Pat on the back

Integrity No trickery Trustworthiness

Social Skills Enjoy people Interest in others

Teamwork Better as a team Self-control

Creativity Always looking for

ways to complete the deal

Negotiation Steps

InvestigatePresentationBargainingAgreement

Step 1: Investigate

What do you want? Who are the real

parties involved.What does the other

side need? Value to be created

and who gets it? Decide on styleWhat are the

consequences of each choice.

Consequences of Not being Prepared

Can’t defend your position Trouble evaluating the issues Succumbing to pressure to end

negotiation Giving up too much too soon Forgetting key details Losing control of the process

Step 2: Presentation

Prepare other side’s case

Present the reasons for your side better

Planning sheet Issues involved Realistic,

possible, worst

“The” Presentation

Creative titleReduce to “must

know” itemsKeywordsMini-speeches

around keywordsVisuals

Don’t give concessions just to keep things going

Make note of concerns and keep going

Step 3: Bargaining

When in doubt, ask questions!

Open questionsReflective

questionsTactics Ethics

Barriers to Agreement

Structural Strategic Psychological Institutional Cultural

Tactics

Use Walk out Substitution

Don’t use Emotional

outburst Argue special case Pretend ignorance Play for time Nibble and retreat

“You go first” Bad environment Defer to higher

authority Not willing to

make any changes

Silence Good cop/bad cop

Do’s and Don’ts

Do’s Keep your word Listen carefully Leave room for

maneuvering Feel free to

reject Conditional

offers Probe attitudes

Don’ts Make early

concession s Extreme opening

offer Use “never” Make other side

appear foolish Use “yes” or “no

answers

Step 4: Agreement

Arrangements should be neutral and comfortable

Pay attention to what others sayScreen out all visual distractionsAsk open ended questionsListen to responsesProactive vs. reactive behavior

If Disagreement Persists

Recognize and list areas of disagreement

Rank the issues Assess the value to each party Compromise Brainstorm solutions

A Good Negotiator Is..

CreativeVersatileMotivated Has the

ability to walk away

Strive for…. Goal(1) + Limits (1) Goal (2) + Limits (2)