A CSC Company UNCLASSIFIED Negotiation Skills Presenter: Jennifer Kupec, CPCM, PMP®

A CSC CompanyUNCLASSIFIED

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Negotiation Skills

Presenter:Jennifer Kupec, CPCM, PMP®

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Anticipated benefits which are greater than the sacrifice, a negotiated agreement should be beneficial

Limit yielding so neither party believes that concessions would be more costly than the benefits of agreement

Finding ways so both parties interests are optimized

Goals of Negotiation

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Steps to Negotiate Prepare Completely and thoroughly advise all parties

of strengths and weaknesses of the negotiation

Know who is leading Negotiations Determine Alternative Approaches Know your offeror’s position (if possible) Develop strategies Perform Execution

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Negotiation Skills Required Communication Required - in an attempt to reach a

mutually satisfactory result Listening Required - Not one party dictating or

imposing terms on another Preparation Required - To obtain agreement, you must

generally sacrifice or yield something in order to get something in return

Execution Required


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Communication

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Communication Is More than Verbal

Verbal exchanges account for only a fraction of the messages people send and receive

70 - 90 percent ofthe entire communication spectrum is nonverbal

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Areas of Nonverbal Communication

Body language - using facial expressions, body movements, gestures, and posture

Physical environment Personal attributes such as:

• Physical appearance • Vocal cues • Touch particularly the handshake

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Cultural Differences

A message that has a particular meaning in one society can have a completelydifferent meaning inanother society

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Attitudes.

This illustration depicts the body language demonstrated by two negotiation teams

The nonverbal messages provide substantial information about both teams

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Winning Attitude? Positive attitudes signal a sincere effort Speakers show respect and honesty by keeping

their eyes focused on the eyes of the listeners Confidence is often exhibited by:

• Hands in pockets with thumbs out • Hands on lapel of coat • Steepled fingers or hands • Good body posture • Hands on hips

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Winning Attitude? (Cont) Interest may be exhibited by :

• Tilted head toward speaker • Sitting on edge of chair • Upper body leaning in sprinter's position • Eyes focused on speaker

Careful evaluation is frequently indicated by: • Peering out over eyeglasses • Chin cupped between thumb and fingers • Putting hands to bridge of nose • Stroking chin

Eagerness is often demonstrated by: • Rubbing hands together • Smiling excessively • Frequent nodding of the head

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Negative Attitudes Deception or dishonesty is demonstrated by:

• Frequent eye blinking • Hand covering mouth while speaking • Frequent coughing • Looking away while speaking • Sideways glances

Defensiveness may be indicated by: • Arms crossed high on chest • Crossed legs • Pointing

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Negative Attitudes Insecurity is often exhibited by:

• Hands completely in pocket • Fidgeting • Biting fingernails

Frustration is frequently shown by: • Tightness of a jaw • Rubbing back of neck • Drawing eyebrows together

Listener boredom or indifference is generally indicated by: • Eyes not focused at speaker or looking elsewhere

• Head in hand

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The Effects of the Physical Environment on Negotiations

Key elements of the environment: Negotiation facility Conference table configuration, size, and

seating arrangements Physical distance between negotiators Relative elevation of the negotiators

Visual aids

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Negotiation Table Configuration Table arrangement transmits important conscious and subliminal

messages

Winning negotiation attitudes can be promoted with table configurations that convey trust

Win/lose attitudes are created by table settings that communicate disparity or mistrust

Table should be large enough to comfortably seat all participants Ideal place for principal negotiator is the middle seat

• Central position conveys a message of authority

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A: B:

C: D:

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Physical Distance Between Negotiators

Distance closer than 1.5 feet - intimate communication

Distance of 1.5 to 4.0 feet - close interpersonal contact

Distance of 4.0 to 12.0 feet - most business transactions or consultations

Distance beyond 12.0 feet - Communicate only briefly or formally

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Personal Attributes and Negotiations Attractive people are perceived to:

• Have more self-esteem and social power

• Receive preferential treatment

Height affects perceptions: • Taller people are perceived as more dominant

Body type affects perceptions: • Athletic people are more assertive and self-reliant

• Less athletic looking people can be perceived as more lazy, sympathetic, and dependent

• Skinny fragile looking people can be perceived as more suspicious, nervous, and pessimistic

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Physical Appearance Dress for negotiations as you would for a

promotion or job interview If you adopt more casual dress:

• Advise the contractor of your intent If wearing a uniform, wear it properly Personal grooming

• Can communicate unfavorable nonverbal messages about you or your negotiation position

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Vocal Cues Loudness Changes in pitch Rate of speech Quality Rhythmic voice pattern Speaking clearly Correct sounds and emphasis Silence

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Handshake Cues Firm - conveys positive attributes Loose - may send unflattering messages Vice-like grip - rarely sends a positive message Smile and look person in the eye Prolonging the handshake

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Preparation

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Negotiator's Preparation Many negotiators do not understand the importance of preparation

Preparation is everything from conducting market research to conducting exchanges

Poor preparation leads to poor contracts that require constant clarification, modification, and more negotiation

Use 90% of your time in preparation Detailed preparation produces substantial rewards, including:

• Fewer contract modifications

• Better technical performance

• Cost estimates closer to actual costs

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Be Prepared Successful negotiators are generally

the best prepared No amount of negotiator experience,

skill, or persuasive ability can fully compensate for the absence of preparation

Other bargaining rules can not be entirely effectivewithout preparation

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Preparation Dividends Adequate preparation includes a careful

study of the strengths and weaknesses of both positions

No other aspect of negotiation continually pays better returns

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Contract Risks Every contract involves risks

One negotiator may gain power by reducing the risk exposure perceived by the other party

It can be reduced or controlled but cannot be eliminated completely

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Issues Issues are the basis for the

differences between negotiation positions

Identify the key issues before you developyour objectives

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Negotiation Priorities Prioritize Issues - Rank potential negotiation

issues in relative order of importance Determine whether each issue is a:

• Must point - Nonnegotiable issues

• Give point - Issues open to concession

• Avoid point - Issues to avoid during negotiations

• Bargaining point - Issues open to bargaining

Must

Bargaining

Give

Avoid

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Cost or Price Objectives Technical, rates and factors issues will

eventually effect cost and price objectives

Without an overall price objective, negotiations can result in settlements that can’t be explained or defended

Negotiating cost element by cost element can be risky

Price objectives should be planned in terms of a definite dollar amount

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Contractor Approach to NegotiationKey Questions to consider: What objectives and priorities has the contractor

probably established? How will the contractor's general business objectives

and priorities affect the negotiation? How will the individual objectives and priorities of the

contractor's negotiator affect negotiations? What negotiation styles and tactics will the

contractor's negotiator likely use?

What pressures and constraints will affect the contractor's approach to negotiations?

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Negotiation Plan Draft a negotiation plan The plan should include information such as:

• Background • Issues & objectives

Review the plan with the negotiation team Revise the plan as necessary Define the role each team member will play in

putting the plan into action

• Priorities and positions

• Approach


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Bargaining Techniques

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Aim High Expectations influence behavior which

influences the outcome of the bargaining session

You have a better chanceat success if you thinkyou will do well

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Aim High (Cont) Sellers who expect to receive more for their product

generally receive a higher price Pressures and limitations affect expectations Develop positive assumptions Have high expectations on price and non-price issues

• Quality• Timely delivery• Long term relationship

Negotiating a price that is not fair and reasonable will likely result in a win/lose or lose/lose outcome

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Leave Room to Compromise Choose opening that allows compromise State initial position below expected price Contractors normally ask for more than what they

expect Based on one objective, the contractor will never

fully understand your compromises Contractor expects compromise

When you fail to offer compromise, the negotiator's expectations are lowered

Never establish an unreasonable position just to give yourself room to compromise

Opening position should be your minimum position

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Pressure the Contractor Believe that there are unknown pressures Identify specific pressure elements Refer to potential alternatives:

• Canceling and re-soliciting • Changing product requirements • Changing terms and conditions • Investing in new source development • Using in-house resources

Do not let artificial pressures increase the negotiating pressure If contractor's negotiator is a company vice-president, it should not

be any more stressful than if you were negotiating withany other salesman

Do not allow certifications adorning walls or on business cards intimidate you

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Execution

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Do Not Volunteer Weaknesses Never volunteer information that would

weaken your position Respond to questions without telling

falsehoods or volunteering information Carefully word statements or, if

needed, avoid a direct response to a direct question

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Use Concessions Wisely Do not appear overly generous or rush

Concede slowly and in small amounts

Concessions too large or given too quickly may:• Unnecessarily raise expectations • Give the impression that the concessions were not that

important • Leave little room for further maneuvering

Link concessions with the spirit of compromise

Never make a concession without getting, or asking for, a concession

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Problems with demands for equal concessions • Only equal if both are equally far from their objective • Once you get away from the issues, it may be impossible to return

Splitting the difference is a form of the equal-concession trap• Most often offered in price negotiations • No guarantee that the price will be fair and reasonable

Avoid repetitive splitting the difference

Use Concessions Wisely (Cont)

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Say it Right Sell yourself and your Ideas

• Show politeness and cordiality • Think before you speak• Anticipate negative reactions

Never use provocative terms Negotiate from strength Do not use a first name or nickname if that

the person might be offended Keep it simple Never personalize differences

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Say it Right (Cont) Project strength and confidence Do not

• Sound insincere, tentative, or overly eager

• Chance slighting the other negotiator Be cautious about expressing unrelated opinions Be calm Penalty for not saying it right

• Irrevocable harm to the process

• Might set an adversarial tone

• The offended negotiatormight resist every offer

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Satisfy Non-Price Issues Most negotiations will not end in agreement

unless the price & non-price issues are satisfied Successful negotiators are able to identify the

non-price needs Common non-price issues:

• Technical requirements • Data requirements • Contract start • Contract type • Contract financing • Delivery • Options • Furnished property

Non-PriceIssuesNon-PriceIssues

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Use the Power of Patience Use patience to:

• Increase the stress of contractor • Display resolve or firmness • Dissipate emotional feelings

Extra time may translate into thousands and even millions of dollars in concessions

The best deal for both sides takes time

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Be Willing to Walk Away From or Back to Negotiations

Deadlock cannot always be avoided Good negotiators are neither afraid to walk away

nor too proud to return Willingness to deadlock when a fair deal cannot be

obtained is important Deadlocks are frequently caused by personality

conflicts A walkout or even the threat of a

walkout may be used to your advantage, but not without risk

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Be Willing to Walk Away From or Back to Negotiations (Cont)

When a walkout appears eminent, consider your best alternative to negotiated agreement (BATNA)

Consider questions such as:• Is your position reasonable • What is your BATNA? • What is the contractor's BATNA? • How can you make the your position stronger?

Return from a walkout• Never walkout unless other alternatives appear more

attractive• Remain open to returning to the negotiation table

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Negotiation Success Factors that contribute to success in any negotiation always include: The specific circumstances surrounding

each negotiation Skill of the negotiators Motivation and fairness of

each party

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Negotiator Abilities The best negotiators exhibit the ability to: Plan carefully Gain management support Effectively apply bargaining techniques Communicate effectively Tolerate conflict while searching for agreement Project honesty Foster team cooperation Apply good business judgment

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Negotiation StyleGreat Negotiators: Attack the problem not each other Focus on long-term satisfaction Consider available alternatives Base results on objective standards Focus on positive tactics to

resolve differences Do not rely on deceptive behavior

or bargaining ploys

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Negotiation Style (Cont) Emphasize the importance of a result

Remain positive during and after negotiation

Behavior during and after negotiation is often a primary influence on the other side's perception

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Execution That Lead To Successful Negotiations

Think Win• The winning is the meeting of the objectives in the

outcome of any negotiation• Avoid tactics that might be perceived as a win/lose

style

Sell Your Position• Strive to be persuasive while being respectful and

polite

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Execution That Lead To Successful Negotiations

Win Results Not Arguments Everything Is Negotiable:

• No negotiation position is off limits if it prevents the goal of a mutually satisfactory outcome

Your goal is a mutually satisfactory outcome - find a way to make it happen

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Thank You for Coming!

Presenter:Jennifer Kupec, CPCM, PMP®

(703) 980-3943

Documents

A CSC Company UNCLASSIFIED Negotiation Skills Presenter: Jennifer Kupec, CPCM, PMP®