Negotiating: A Practcal Approach
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Transcript of Negotiating: A Practcal Approach
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NegotiatingA Practical Approach
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Alternatives
• Let us never negotiate out of fear, but let us never fear to negotiate.– JFK
• BATNA: Best Alternative to a Negotiated Agreement.
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What is it?• Negotiation is a
continuing problem solving process. It’s getting people with both common and conflicting interest to come together to arrange or adjust their future relationship by making a joint decision.
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Value Add
• Successful negotiations allow for beneficial exchanges and agreements to be made that give added value to relationships or situations.
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Communication
• “The problemwith communication is theillusion that it has occurred.” – George Bernard
Shaw
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Communication
• Listening• Being Explicit, candid,
honest and forthcoming.
• Understanding• Repeat what you think
you heard and understood.
• Get confirmation
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To be an effective negotiator
• Develop and use people skills.
• Effective negotiation involves 20% Technical skills and 80% people skills.
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Stereotype
• Tough• Super skillful• Secret techniques• Ruthless• Winner take all mindset
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Rapport
• Effective negotiators learn to build rapport and trust
• They are able to connect with others.
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Empathy
• Understand that the other person does not really care how the outcome of the negotiation affects you.
• The other person only cares about how it affects him or her and their side.
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Be Kind
• Be kind to people and hard on issues. Separate people from the problems and solutions.
• There’s only one rule I know of: you have to be kind.– Kurt Vonegut
• Ad Hominum
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Signaling
• Demeanor can get you more than substance.
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It is a Small World
• Negotiate with integrity. Your career will depend on it.
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Make Bridges
• Don’t burn bridges. This is especially true if there is a chance you’ll be negotiating with this same person or company again in the future.
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What is your bottom line?
Before starting, know…•your ultimate goal•what you can waive or modify•what you can give away without any issues.
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Preparation Refocus
Before starting…•craft a simple statement you can use to explain the goal of the negotiations. Something you can use over and over during the negotiations to refocus the players.
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Example
• Something like, “My client is interested in buying the house and your clients are interested in selling the house. What can we do to get this deal done?”
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Process
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Start• Start your
negotiation with a point on which you both agree:
• Mutual benefit of a successful negotiation (both want a resolution) and
• Things or issues you each have in common.
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Show interest
• Get Involved- Take your time and Take notes. The other side will appreciate you taking the time to write things down (even if you really don’t need to).
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Emotional Distance
• Treat negotiations like a game. Come across as caring about the outcome, but not that much.
• (We will talk about applications of Game Theory too.)
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Don’t be Reactionary
• Deflect, reflect and then select.
• Before responding, learn how to take time and let something bounce off you, reflect and think about it, and then select your response.
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Empathy and Understanding
• Tap into the other person’s belief system. In all negotiations there are generally three truths: your truth, the other person’s truth, and the actual truth.
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Listen
• Listen 70% of the time and talk 30% of the time.
• Two ears and one mouth. 2 to 1 ratio. : )
• Acknowledge the other person’s ego.
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Authenticity
• Set the proper frame. Smile and make a good first impression. Be honest and real.
• Don’t be cynical in applying these suggestions. You really need to care about the other party.
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Keep talking
• Communicate with tact and empathy.
• Keep the other side talking. Ask open-ended questions. “What do you mean by that?”
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Reflect on this
• Two of the best negotiators are dogs and babies. – Relentless– Sustained– Persistent– Constant
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SWOT
• Understand your strengths and weaknesses and also the other side’s strengths and weaknesses.
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Sell
• Share you position via story telling. Remember, facts tell but stories sell.
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Options and Alternatives
• Don’t fall in to the trap of the either/or dichotomy. It’s never only A or B. There’s always C, D and E.
• Open it up and be creative, don’t think binary.
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Relationships and Outcomes
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Preparation
Dress and groom yourself appropriately. Be on time, prepared and remember the 6 ps:
prior preparation prevents piss poor performance!
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Eye to Eye• Negotiate in person
when possible. Over the phone is OK. In most instances, Avoid negotiating by email.
• 70% of all communication comes from body language, expressions and eye contact.
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Avoid getting Boxed In
• On major issues, never negotiate for yourself. Use a third party.
• Do not include person with authority directly in the negotiations. Keep option open, “I need to run that by my partner…”
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Authority to make a Decision
• along the same lines, do not agree to negotiate with the other person unless he or she has full authority.
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Acknowledge, Empathize, Redirect
• Never tell the other side they are wrong. Instead use this, “I know how you feel. I use to feel the same way. But then I found out about AAA and now I feel BBB.”
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Create a sense of Urgency
• When making offers, use time sensitive deadlines and mean it.
• Credibility not threats.
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Strategic Respect
• Always leave a “back door” or “exit strategy” for the other person. Allow him or her to save face and avoid embarrassment (especially in front of a client).
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Close the Deal
• When the time is right, never be afraid to Close the deal. Ask for the sale or ultimate desired outcome.
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Signed, Sealed, Delivered
• Avoid buyer remorse. If documents are necessary, have them ready to go and don’t leave until they are signed and all terms are properly confirmed.
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Success
• Both parties relatively satisfied.
• Leave some on the table.
• Don’t crush the other side. You may need information or a follow on favor.