The Skill and Art of Negotiation: Strategies for Negotiation Success

1. The Skill and Art of Negotiation: Strategies for Negotiation Success Mark J. Heley Heley, Duncan & Melander, PLLP May 3, 2019

2. You Negotiate all the Time • Daily Lives • Getting your kids organized in the morning • Agreeing on weekend activities • Making consumer purchases • Business • Entering into business contracts • Construction Administration • Changes • Dispute resolution • Claims and Lawsuits

3. Initial Points • Plenty of Articles and Research, including studies and empirical Data • Design and Construction World is Small • Your Negotiation Style will impact your business • Your Negotiation Style will Impact your Client’s business • Goals of Negotiation • Agreement • Successful Implementation of Agreement

4. What is “Negotiation”? • From the Latin expression, "negotiatus", "to carry on business" • It is a dialogue intended to resolve disputes, to produce an agreement upon courses of action, to bargain for individual or collective advantage, or to craft outcomes to satisfy various interests.

5. What is “Negotiation”? • A Discussion where terms can be varied • No Common Ground – No Need to Negotiate • Complete Agreement – No Need to Negotiate • Competing Interests – Time to Negotiate • Have something that others want – Time to Negotiate • Need something that others have-Time to Negotiate

6. Definition of a Skilled Negotiator • Prepares for Negotiation • Routinely Reaches Agreement • Agreements Usually Implemented Successfully • Other Side or Sides willing to Negotiate again on other matters

7. Definition of Unskilled Negotiators • Views Negotiations as a confrontation • Tries to “Win” at all costs • It’s a solution that should benefit both parties not a win lose confrontation • Being Emotional • It’s important to maintain control • Not trying to understand the other person’s perspective

8. Bargaining StylesCompetitive v. Collaborative • COMPETITIVE NEGOTIATORS • Traditionally Focuses on Outcome Only • Set Starting Point at Extremes • Get as Much Information as Possible • Give as little Information As Possible • Don’t Share Alternatives or Resistance Points

9. Bargaining StylesCompetitive v. Collaborative • COLLABORATIVE NEGOTIATORS • Uses Interest and Options to Build Common Ground • Consider a Variety of Starting Points and Trade-off Options • Consider and Look Behind Other Side’s Starting Point • Share Alternatives or Resistance Points

10. 5 Basic Bargaining Styles • Competitor: win-lose • Problem Solvers: win-win • Compromisers: each win and lose a bit • Accommodators: lose-win • Conflict Avoiders: lose-lose

11. Competitor They like to win and be in control of the situation. They believe if they win, you lose.

12. Problem Solvers The most imaginative thinkers who think about fair “win/win” solutions and greater solutions that “make the pie bigger.” This is the one you want to be!!!

13. Compromisers Their priority is to maintain a productive relationship. So they will make a compromise first, giving the other person what they want in order to reach an agreement and preserve the relationship.

14. Accommodators They like to resolve conflict by solving the other person’s problems. If the other person is also an accommodator then they return the favor and help solve their problems. If not, the other person takes and gives nothing in return.

15. Conflict Avoiders The most imaginative thinkers who think about fair “win/win” solutions and greater solutions that “make the pie bigger.”

16. Scenario • 2 partners, Tom and Sarah, are working on a team project that has a midnight deadline, and must finish so they can present it at work the next morning. Its 2pm now. • Tom’s parents from out of town are flying in that evening to visit. • Sarah has dinner reservations to celebrate her 10 year anniversary with her husband. Neither want to work late- how do they get the work done? • The outcome varies depending on their bargaining style:

17. Approach: Competitor • Tom wont budge, he absolutely will not miss a minute of his parents visit. • He argues that either Sarah stays late and finishes it by herself , or it doesn’t get done at all, which he knows Sarah won’t allow. • Result: • Tom wins, Sarah Loses

18. Approach: Problem Solvers • Ideal situation where both get what they want (I win, you win) • Tom and Sarah talk to the Boss and determine there is some float in the schedule. They work out a deal with their boss who gives them an extension so they can both go home on time, and neither misses out on any plans that evening • Result: • Both Tom and Sarah win

19. Approach: Compromisers • Balance of consideration for both self and others (I win/lose some- you win/lose some) • Tom and Sarah each agree to stay until 7pm to finish it together, each misses a little bit of their evening plans and neither has to cancel any plan • Result: • Both Tom and Sarah win and lose a little, but neither totally concedes

20. Approach: Accommodator • If I give in, you’ll get what you want (I lose- you win) • Tom agrees to bail on his parents so Sarah can go to dinner • Result: • Tom Loses, Sarah Wins

21. Approach: Conflict Avoiders • Both Concede (I lose- you lose) • Tom and Sarah both stay late, not realizing that the other partner is working on the same task, and as a result of their avoidance, they both miss their plans • Result: • Both Tom and Sarah lose

22. TEN NEGOTIATION TIPS • Prepare for the Negotiation • Set your goals for the Negotiation • Determine Strategy to Achieve your Goals • Understand the Other Side’s Goals and Interests • Understand your Strengths and weaknesses; • Understand Other Side’s Strengths and Weaknesses • Information is Power –to negotiate the best deal and to know when the deal is right or to walk

23. TEN NEGOTIATION TIPS • CONSIDER AND NEGOTIATE THE PROCESS • When to Meet • Where to Meet • Who should be Present • Set Agenda

24. TEN NEGOTIATION TIPS • BUILD RAPPORT • Small Talk • Introductory Phone Calls • Sets collaborative atmosphere • Be Friendly • Supported by Research or Preparation

25. TEN NEGOTIATION TIPS • LISTEN ACTIVELY • Attempt to understand Key Interests • Read between the lines • Pick up on Cues • Adapt to your Partner in the Negotiation – for example -If the other side is formal, don’t be too casual (visa-versa) • Maintain a sense of humor if its appropriate • Paraphrase discussions and Ask Questions

26. TEN NEGOTIATION TIPS • BODY LANGUAGE IS IMPORTANT • What body language message are you telling the other person? • What should you do: Maintain Eye Contact Smile confidently Nod in agreement when the other party is talking Keep hand gestures natural Sit up straight • Things to Avoid Avoid crossing arms tightly Avoid putting hands on face Avoid fidgeting and messing with your clothes Try not to talk too fast or increase your pitch if you get nervous Don’t get defensive or aggressive • Read your partner’s body language

27. TEN NEGOTIATION TIPS • INITIATE PROPOSALS – ASK FOR WHAT YOU WANT • Plan your first request/proposal carefully • Consider value/risks of extreme numbers • Concept of Anchoring • Set the Atmosphere of the Negotiations. • Define Rules of Engagement

28. TEN NEGOTIATION TIPS • CONSIDER ONLY REASONABLE COMPROMISE • Develop Strategy for Compromise • Develop hierarchy of compromise • Do not Compromise Unless you Receive Something in Return (or Expect to Receive Something in Return) • Look for Smart Tradeoffs – Consider Interests versus Positions • Be Prepared to Walk Away and Know When to Walk Away

29. TEN NEGOTIATION TIPS • BE PATIENT AND PERSISTENT • Don’t take Negotiations Personally • Understand every position is negotiable. • Understand you may have to ask more than One Time for Certain Items or Concessions.

30. TEN NEGOTIATION TIPS • OPTIONS WHEN NEGOTIATIONS APPEAR TO BE AT AN IMPASSE –BREAKING IMPASSE • Don’t Leave without a Plan for Advancement • If Impasse is imminent, Stop before Impasse • Impasse is Fleeting – No means no “at this time” and “under these circumstances” • Ask for Options • Restructure Offer • Consider alternative offers • Explore BATNA and WATNA from each Perspective

31. TEN NEGOTIATION TIPS • PLAN FOR IMPLEMENTATION • Know Next Steps if Agreement is Reached. • Facilitate Implementation • Send over contract form; • Deliver Product; • Set Meeting • Document/Confirm Agreements in Writing

32. TEN NEGOTIATION TIPS • PRACTICE NEGOTIATIONS – ROLE PLAY

33. PUSHERS AND PULLERS PULLERS GOOD QUESTIONS SKILLFULLY ASKED ENERGY COMES FROM INDIVIDUAL TO BE PERSUADED • PUSHERS • STRONG ARGUMENTS • WELL PRESENTED • ENERGY COMES FROM THE PERSUADER

34. WHEN PUSH AND PULL STYLES WORK BEST PULLERS GOOD QUESTIONS SKILLFULLY ASKED ENERGY COMES FROM INDIVIDUAL TO BE PERSUADED WORKS BEST WHEN ADEQUATE TIME FOR NEGOTIATION – LONG TERM RELATIONSHIP IS PART OF THE GOAL • PUSHERS • STRONG ARGUMENTS • WELL PRESENTED • ENERGY COMES FROM THE PERSUADER • WORKS BEST IN TIGHT TIME CONSTRAINTS – ONE OFF NEGOTIATIONS

35. CONCLUSION