The Fine Art of Negotiations
description
Transcript of The Fine Art of Negotiations
The Fine Art of Negotiations
Presented by:Patrick Callahan
Callahan Municipal Consultants - LLC
The Final Art of NegotiationsGeneral Overview of Session
1. City Government – Examples of Negotiations
2. Introductions – Speaker & Participants
3. The Elements of Negotiation4. Styles of Negotiations
The Final Art of NegotiationsGeneral Overview of Session
5. The Path to Preparation6. Preserving the Relationship7. Sealing the Agreement8. Tips for Negotiating
Definition of Negotiate
Negotiate – to settle by bargaining; to arrange; to transfer (a bill, etc..); to surmount; v.i. to discuss with a view of finding terms of agreement; to bargin
Webster’s Dictionary 1987 Edition
Professional Experiences Negotiations
Maquoketa – Union Negotiations Anamosa – Contractor Disputes Consultant – Cable & Gas
Franchise Renewals Consultant – Employment
Agreements on Searches for City Administrators
Negotiations in Your Daily Lives
Major agreements – union contracts and franchise renewals
Routine agreements – payment plans and employee issues
Personal business – car purchases, service fees, etc
Personal lives – spouses, children and grandchildren
City Government – Examples of Negotiations
1. Collective Bargaining Agreements – Labor Unions
2. City Employees – Salary adjustments, Fringe benefits, and Hiring
3. Department Heads – Employment Agreements
4. City Budget Discussions – Meetings to balance the budget
City Government – Examples of Negotiations
5. Lawsuit Settlements 6.Contractors – Change orders on projects7.Engineers – RFQ, RFP, & Fees8.Utility Company Franchise Agreements
City Government – Examples of Negotiations
9. 28E Agreements – Multiple Agencies and Government Units10. Citizens – Utility Payment Plans11.Employee Termination Agreements12.Regulatory Agencies – DNR, EPA, IRS, DOT
City Government – Examples of Negotiations
13. Vendors – Purchase of City Supplies14. Economic Development Incentives
TIF Rebate Agreements TIF Grants Tax Abatement Agreements
Negotiations in Your Personal Lives
1. Spouse/Significant Other2. Children3. Grandchildren4. Service Providers – Cable
Company5. Vendors – Car Dealers
Class Participants - Introductions
Your Name Your City and Population Your Position Negotiation Experiences What is your City known for?
The Executive SummaryThe Elements of NegotiationWhat is Negotiation?
Negotiations:
Agreement:
A process we all use instinctively
When used consciously, it can help fulfill our needs
An exchange between two or more parties for the purpose of reaching an agreement
Occurs when both parties accept the terms of the arrangement – They do not have to like it.
The Executive SummaryThe Elements of NegotiationThe Essence of
Negotiations:
The Vehicle of Negotiations:
The Criteria of Negotiations:
Cooperation
Communication
Self Knowledge Flexibility Empathy Timing
What signals success?
You met or exceeded your goals Your success is good in the short
run and in the long run You strengthened the relationship You had an efficient bargaining
process
What signals success?
No damage to relationship“Bringing them to their senses, not to
their knees.” Long term – Took care of the other
person
Barriers to Negotiations
1. Anger2. Fear of Rejection3. Manipulation4. Criticism
Barriers to Negotiations
5. Assumptions6. Failing to Listen7. Bottom Line – Sole Focus
Special Considerations for Public Officials
1. Client2. City Council or Board Approval3. Confidentiality4. Fiscal Limitations
Special Considerations for Public Officials
5. “Deep Pockets”6.Fairness and Equality7.Precedent8.Municipal Bond Rating
Special Considerations for Public Officials
9. Code of Iowa Requirements 10. Costs of Litigation11. Public Accountability 12. Integrity
Understand yourself as a negotiator
Competitor – Win/Lose Person Accommodator – “Door Mat” Collaborator – “Win/Win” Style Avoider – No interest
In any given situation we all have some of these styles.
Which style is best?
Collaboration Accommodation
Competition Avoidance
Substantive outcome
important? YES NO
YES
NO
Relational outcome important?
What is your predominate style of Negotiations?
Work Life? Personal Life?
Group Discussion
Keys to managing style
Develop flexibility Know your strengths and
weaknesses Compensate for your weakness –
outside assistance Know your “hot buttons” – take a
break
Know your power sources & strengths
Information or other resources Personal traits Skills – Especially communications Expertise Experience (your or someone
else’s)
Know your power sources & strengths
Problem solving Trade Information – “Buy Points” Do not make too many
assumptions – Check it out!
Take history into account
Your general negotiating experience
Your negotiating experience with this person or company
Look for how your experience creates an advantage or bias
Know your beliefs & attitudes
What are your beliefs and attitudes about negotiations?
Do they apply here? How will they affect this deal? Know your attitude on money Your attitude towards the boss –
i.e. city council
Authority & constituencies How much authority or power do you have
to affect the outcome of this negotiation? Do city or state laws or policies restrict or
protect you? Are there rules by which you must abide? Are you negotiating on behalf of someone
higher up who has the final say? City council?
Why are negotiators unprepared?
People assume “just talking” is low risk
Preparation takes too much time People don’t know how to prepare
Why are negotiators unprepared?
Many deals are lost or missed due to poor preparation
Not ready? Postpone it Know how to prepare
Path to preparation Stakeholders Challenge Position Interests Options
Alternatives Legitimacy Communication Relationship Commitments
Group Discussion The Path to Preparation
Two Examples TIF Rebate Agreement Construction Project – Contractor
change order
1. What are some actions that could be taken to prepare for negotiations?
2. How do you maintain a good working relationship after negotiations?
Preparation: Identify stakeholders
Who has a stake in the outcome? Anyone at the table Anyone who stands to gain or lose
anything they value Any “invisible” players or
constituencies Anyone on either side who is affected
by the outcome
Preparation: Interests Look for the interests behind
positions Ask “why?” and “for what purpose?” Ask yourself, “What will happen if I
get this?”
Preparation: Interests Consider the other side’s interests
Probe for their underlying interests Record this information and use it Verify it
Preparation: Four kinds of interests
Content (substantive) Be specific and measurable Break complex goals into strategic stages
Relationship Present Future
Preparation: Four kinds of interests
Identity Your sense of “who I am” and the other
side’s Process
How to communicate
Preparation: What can be traded
Define the bargaining “mix” What are the pieces? Are any pieces linked?
Preparation: What can be traded
Prioritize your interests Content, relationship, identity and
process Identify limits (upper and lower
constraits) for substantive issues
Preparation: What can be traded
Hold off on commitment until your know their needs and desires
Not sure on their priorities – Ask them
Goal – Give away low value stuff
Preparation: What do people want?
Consider short and long term interests
Check to make sure your interests include the needs of your constituents in your organization Political mistakes cost you later
Look beyond this first deal What is the order of priority
Preparation: What’s most important?
Order tells relative importance Order tells relative value in terms
of dollars Order helps avoid making
concessions on the wrong things Order helps you decide on
packages later on in the deal
Preparation: Developing supporting arguments
What facts support your view? What validates those facts?
Who can help you elaborate or clarify facts?
What data do you need? Get help, if necessary
Preparation: Exploring their interests
Why are these objectives important to them?
How did they come to this position? What if they can’t reach your goals?
Preparation: Exploring their interests
How have their needs changed since you last talked?
Last, outline what you don’t know. Inquire about those things as you go along.
Researching the other party
Things to learn Their objectives Their interests Their alternatives
Researching the other party
Things to learn Their resources Their reputation, style, and behavior Their authority to make an agreement Their likely strategy and tactics
Researching the other party
Need a network of contacts to call Check on-line for information Keep track of the information Remember their style and
credibility Try to get to know them
Consider options An option is a possible agreement
or parts of an agreement Key element
Ability to design the “bargaining mix”
Consider options Common mistakes
Taking a narrow, one-sided focus Having only one option, with no fall-
backs Thinking that the only approach is to
close the gap between differences
Building options & packages
Step 1 Examine interests Figure the “give-aways” from their list
that are easily fulfilled and record those
Identify your “throw-aways” (confidential)
Expanding the pie
Step 2 Don’t divide the pie, EXPAND the pie
Remember – the deal is not just about the money.
Finalizing options Evaluate the risk and benefits of
options, use sub-groups for complex options
Narrow the range to a few of the best Be willing to justify personal
preferences
Finalizing options Be alert to the influence of intangibles Cool off and come back Keep decisions tentative till the end –
conditional language
Relationship
When done – get it in writing
When done – Shut up
Consider alternatives
Best Alternative to Negotiated Agreement (BATNA)
What will you do if you can’t agree? BATNA What are your options if the deal fails How good is your Plan B, really?
Legitimacy What criteria can you use to
persuade each other that you are not being ripped off? Legitimacy is a tool to persuade others Legitimacy is a shield to protect yourself
Examples Collective bargaining – salary survey Change orders – Unit prices
Relationships
Common mistakes Confusing relationship and substance
Assuming that’s how the relationship is, it is a given and it is “their fault”
Relationships
Prepare to address relationship and substance independently
Prepare to take unconditionally constructive steps to improve the relationship
Do not give up on a bad relationship
Commitments
Common mistakes Not knowing what “done” looks like Failing to determine actions needed
to reach agreement
Nailing down the agreement Selective paraphrase Ask for paraphrase of what you’ve
said Reinforce ideas you like in their
proposal
Nailing down the agreement Resist movement away from
agreement Remember your BATNA Get them to make a public
announcement and A Acknowledge the agreement to their
team
Sealing agreements
Reciprocity (back scratch) Use their commitment to seal the
deal – make sure they articulate it a few times
Name those will agree Name similar deals in the past Note scarcity of time or other
resources
More steps to agreement Plan the steps to agreement
Decision makers – who will sign? Who should we be consulting for buy-in?
Steps necessary to get a binding agreement
More steps to agreement Implementation – What happens next to
make this? What to do – offer to write the agreement Possible obstacles to implementation Ways to deal with obstacles
Group Discussion
A. Past Negotiations1. What have you done that helped “seal the
deal”?2. What did you learn about yourself as a
negotiator?
Group Discussion
B. Future Negotiations1. What did you learn today that could help
you with future negotiations?2. What will you do differently during your
next negotiation session?
Special Considerations for Negotiations
1. Location of Negotiations2. Setting of Negotiations3. The Art of Body Language4. Interpersonal Relations
Special Considerations for Negotiations
5. Good Guy/Bad Guy Roles6. Exploring Creative Solutions7. Always bring a Calculator to the
Negotiation Table.
The Negotiation Model
1. Prepare2. Establish the Objectives3. Define the Issues4. Clarify the Interests
The Negotiation Model
5. Identify Objective Criteria6. Explore the Alternatives7. Select the Best Form of
Agreeement
When you have no time
Consider the situation – then… Prep the most goal-critical areas Prep the most problematic areas
The Art of Negotiations
“How to Improvise Agreement in a Chaotic World”
ByMichael Wheeler
Simon & Schuster 2013
Embracing Chaos
We cannot script the process The Other Party
Smart Determined Fallible
Embracing Chaos
Learn Adapt Influence
Prepare your strategy
1. Should I negotiate?2. Is now the time?3. Do I hedge or go all in?
“Manage uncertainty should be the cornerstone of your negotiation strategy.” - Michael Wheeler
“The time to stop negotiating is when the risk of pressuring further outweighs possible gains.” - Michael Wheeler
9 Key Principals of Negotiations
1. Set a provisional goal2. Have a Plan B3. Envision the End Game
9 Key Principals of Negotiations
4. Make Learning a priority5. Adapt when you have to6. Think like a competitor
9 Key Principals of Negotiations
7. Be multilingual8. Guard your exit option9. Always be closing
12 Tips for Negotiating and Compromising with Difficult People
1. Have a positive attitude2. Meet on mutual ground3. Clearly define and agree on the
issue4. Do your homework
- Ryan Lynch at Dale Carnegie Training
12 Tips for Negotiating and Compromising with Difficult People
5. Take an honest inventory of yourself6.Look for shared interests7.Deal with facts, not emotions8.Be honest
- Ryan Lynch at Dale Carnegie Training
12 Tips for Negotiating and Compromising with Difficult People
9. Present alternatives and provide
evidence10. Be an expert communicator11. End on a good note12. Enjoy the process
- Ryan Lynch at Dale Carnegie Training
Negotiation Handouts
1. 12 Tips for Negotiating and compromising with difficult people by Ryan Lynch – Dale Carnegie Training
2. Union/Labor Negotiations – Municipal Policy Leaders Handbook – Institute of Public Affairs
3. 28E Agreement Checklist – Institute of Public Affairs
4. Suggested Reading – Complied by Lynn M. Walding
Choose 3 small steps to improve your negotiation skills and outcomes
YOUR PLAN OF ACTION Getting to Yes: How to Negotiate
Agreement Without Giving In by Roger Fisher and William Ury
Any Questions?
Patrick CallahanCallahan Municipal Consultants LLC
www.callahanmunicipalconsultants.com