Negotiation Skills and Strategies

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Common Negotiation Philosophies
Win-Win, Win-Lose, and Lose-Lose
When to Negotiate
Competitive Sealed Proposals (RFP), Professional/Consulting Services, Emergency, Proprietary, DIR, TXMAS, State Use Program
Types of Information Exchanges
Clarification, Communication, Negotiations or Discussions
Principled Negotiations
People – separate the people from the problem; Interests – Focus on interests, not positions; Options – Explore options for mutual gains and meet the interests of all parties; Criteria – Results must be based on some objective standard.
Interests vs Positions
Your position is something you have decided on. Your interests are the needs, desires, and fears that drive positions.
Four (4) major obstacles to mutual gain:
1. premature judgment, 2. search for a single answer, 3. the assumption of a fixed pie, and 4. thinking that “solving their problem” is their problem
Three (3) Phases to Negotiation
Planning and Preparation, Negotiation, and Settlement and Documentation
Helps you determine your negotiation position, anticipate the other party’s actions, respond to the other party’s proposals, and know if the agreement is reasonable
Six (6) steps in the Planning Phase
1. Analyze the other party’s proposal – look for the issues or topics to negotiate. explore options. 2. Establish objections 3. formulate your positions 4. Assess the other party’s positions / strengths 5. Define and organize the issues. Consider scarcity of a product or services. Where a lack of resources exists to satisfy all parties- include resolving or mitigating this scarcity before negotiations. 6. Develop your strategies and tactics.
Teams – Types of Decision Making
Unilateral – One person decides for the group. Minority – A few people coerce the group into a decision. Majority – At least 51% agree on a decision. Unanimous – Everyone agrees after discussing everyone’s opinion. Consensus – Short of full agreement, but sufficient input obtained so all members support final decision.
The energy that is created when people interact in a way that generates new solutions or better decisions.
Types of Analysis:
Cost, Price and Worth
actual expenses for delivery of a product or service. Includes direct and indirect costs – but not profit.
Total cost to be paid for a product or service. Includes all costs, fees and profit.
The price one is willing to pay for a product or service.
Best Alternative to a Negotiated Agreement
A conclusion that is drawn without affirmation from another source. Problems occur when one thinks and acts if the assumption is the absolute truth. Be prepared for the assumption to be proved wrong.
Sources of negotiation power
preparation, legitimacy, laws and regulations, marketplace, time, organizational, and personal power.
Characteristics of a skilled negotiator
Confident and assertive, Able to plan and be creative with alternative solutions, good business judgement, able to tolerate conflict and ambiguity, calm and patient, commitment to mutual satisfaction, open minded listener, serious with a touch of humor, skeptic, diplomatic, persuasive
Negotiation Strategies
Active listening, Use questions wisely, anticipate compromise, use solid data, use silence, avoid emotional reactions, make use of caucuses, pay attention to timing, offer alternatives
Body Language
Be aware of body language during negotiations. Look for “gesture clusters”. Stay alert to change in posture, gestures, and facial expressions.
Negotiation Don’ts
Technical Leveling – helping the vendor bring their proposal up to the level of other proposals through successive rounds of discussion. Technical Transfusion – Disclosing technical information or approaches from a competitor’s proposal. Auctioneering – Disclosing competitive vendor’s costs or prices.
How to break down roadblocks during negotiations
Focus on interests – not positions. Defuse emotions. Not reacting. Change the scope of risk sharing. Change the delivery schedule. Change the shape of money.
Dirty Tactics
Deliberate deception. Psychological warfare. Positional Pressure.
Generational Differences
Traditionalists – born before 1945, prefer communication through written word, put duty before fun and strictly adhere to rules. Baby Boomers – born 1946-1964, prefer to communicate in person, tend to be workaholics, live to work. Generation X – born 1965-1980, prefer to communicate by phone, want structure and feedback. Millennials – born 1981-2000, prefer to communicate electronically, good at multi-tasking, entrepreneurial and goals oriented.
Cultural Differences
Americans are far less comfortable negotiating than other cultures. Understand the differences when negotiating with different cultures. Consider the overall tendencies of a group – but rely more on their individual behavior at the negotiation table – not where they come from.
Settlement and Documentation
Record results and confirm in writing to the other party. Follow up with an action plan.
Categories: Negotiation