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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)