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Negotiation Skills

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Negotiation Skills

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  1. Negotiation Skills “Getting to a ‘win’ for clients and for IMS”

  2. Agenda In the next two days, we will provide instruction and experience using negotiation in the IMS Sales process • Introductions and Course Objectives • Current Pitfalls of Positional Bargaining • IMS Principled Negotiation • Uncovering Interests • Exploring Options • Using conditional Offers • Handling Bad Behavior • Practice • Wrap-up Negotiation Skills

  3. Introductions and Course Objectives “Only 17% of surveyed companies plan for negotiation. Barely 15% use formal negotiation process to execute that plan. 62% have not integrated selling and negotiating processes, and 80% do not effectively get something in return for customer demands” Think! Inc Negotiation Skills

  4. Introductions and Course Objectives Introductions “Let us never negotiate out of fear. But let us never fear to negotiate.” JFK • Please give us your … • Name and role • … and describe a negotiation challenge Negotiation Skills

  5. Introductions and Course Objectives Leaving this course, you will know more about the best practices of successful negotiators and… Course Objectives Understand the business rationale for doing better in negotiations Understand and practice the IMS Negotiation Process Learn and practice the ‘Critical Negotiation Behaviors’ Learn and practice tips and ideas for handling ‘tough situations’ Negotiate high-pressure tactics, especially by procurement teams, without the negotiation breaking down Negotiation Skills

  6. Introductions and Course Objectives … use these skills to realize greater sales opportunities Expected Benefits and Results: Include Principled Negotiation concepts in account planning and thereby using it earlier in the process to realize untapped potential Offer clients a wider range of IMS value propositions, and close more ‘high quality’ opportunities Experience fewer ‘stalled’ or ‘failed’ sales conversations with clients Receive improved feedback from clients on the quality of sales interactions Experience fewer sales situations where price alone is surrendered in response to procurement pressure Negotiation Skills

  7. Introductions and Course Objectives Over the next two days, we will review and practice the IMS Principled Negotiation process Day 1 Day 2 Using conditional offers (cont.) Steps to ‘yesable’ offers Handling Bad Behavior Reading Body Language Tips and tactics to handle bad behavior Role play Practice Complete negotiation role plays Wrap-up • Introductions and course objectives • IMS Principled Negotiation Process • Uncovering Interests • Active Listening • Critical Negotiation Behaviors • Exercises • Exploring Options • Brainstorming and role play exercises • Using conditional offers • Role play exercises Negotiation Skills

  8. Agenda Agenda • Introductions and Course Objectives • Current Pitfalls of Positional Bargaining • IMS Principled Negotiation • Uncovering Interests • Exploring Options • Using conditional offers • Handling Bad Behavior • Practice • Wrap-up Negotiation Skills

  9. Pitfalls of Positional Bargaining Positional Bargaining is a common but NOT a recommended approach • It tends to result in compromise or no agreement • Approaches in positional bargaining may be soft or hard • Positional bargaining is a negotiation strategy that involves holding on to a fixed idea, or position, of what you want and arguing for it and it alone, regardless of any underlying interests. • Adam Sandler video • http://www.youtube.com/watch?v=898OUCyBulM Negotiation Skills

  10. Pitfalls of Positional Bargaining How do you usually negotiate? Source: Fisher and Ury, (2011) Getting to Yes. Penguin Negotiation Skills

  11. Pitfalls of Positional Bargaining We recommend using Principled Negotiation which will produce satisfying outcomes more efficiently and maintain strong relationships Positional Bargaining • Drives a Win/lose situation; divide the pie • Fosters an “us vs. them” relationship • Results in odd, arbitrary results • Endangers relationship • Inefficient time and effort Principled Negotiation • Increases the pie • Solves problem to satisfy collective interests • Work as colleagues with openness and trust • Fosters long term relationships • Efficient negotiation time Negotiation Skills

  12. Agenda Agenda • Introductions and Course Objectives • Current Pitfalls of Positional Bargaining • IMS Principled Negotiation • Uncovering Interests • Exploring Options • Using conditional Offers • Handling Bad Behavior • Practice • Wrap-up Negotiation Skills

  13. Principled Negotiation Principled Negotiation session objectives • By the end of this session, we will have: • Defined what we mean by negotiation • Introduced a framework for Principled Negotiation that we can use in IMS • Put negotiation skills in context alongside the IMS sales process Negotiation Skills

  14. Principled Negotiation IMS has put together a customized Negotiation Process based on Best In Class principles IMS Principled Negotiation Process: Putting it all Together Uncover Interests Explore Options Use conditional offers Handling Bad Behavior Source: Fisher and Ury, (2011) Getting to Yes. Penguin Negotiation Skills

  15. Principled Negotiation When do we typically start to negotiate in the IMS Sales Process? IMS Sales Process Stage 3 Develop Opportunity Stage 4 Develop Proposal Stage 5 Negotiate Contract Stage 1 Identify Opportunity Stage 2 Qualify Opportunity Stage 6 Close Deal Negotiation Skills

  16. Principled Negotiation The best negotiators start at the earliest stage to uncover interests and develop options IMS Sales Process Stage 3 Develop Opportunity Stage 4 Develop Proposal Stage 5 Negotiate Contract Stage 1 Identify Opportunity Stage 2 Qualify Opportunity Stage 6 Close Deal Negotiation Uncover Interests Explore Options Use Conditional Offers Start EARLIER!! Negotiation Skills

  17. Principled Negotiation IMS Principled Negotiation Process IMS Principled Negotiation Process: Putting it all Together Uncover Interests Explore Options Use Conditional Offers Handling Bad Behavior • Uncover Interests: • Planning • Identify the stakeholders • State your interests and guess the other sides interests • Relationship and deal • Communication • Active listening • Practice critical negotiation behaviors • Focus on interests • Explore Options: • Planning • Brainstorm on options that may fit interests • Determine BATNA (Best Alternative To a Negotiated Agreement) • Use Conditional Offers: • Planning • Develop potential “yesable” offers • Search for objective evaluation criteria • Handling Bad Behavior: • Planning • Practice Power Pose • Brainstorm on potential reactions • Study body language • Apply tactics and critical negotiation behaviors to handle bad behavior Negotiation Skills

  18. Agenda Agenda • Introductions and Course Objectives • Current Pitfalls of Positional Bargaining • IMS Principled Negotiation • Uncovering Interests • Exploring Options • Using conditional offers • Handling Bad Behavior • Practice • Wrap-up Negotiation Skills

  19. Uncovering Interests Uncovering Interests session objectives • By the end of this session, we will have: • Defined the difference between interests and positions in a negotiation • Discussed some typical interests (especially those of the client) and identified where they may come from • Demonstrated and practiced some general skills for uncovering a client’s interests during a negotiation • In particular, introduced the Critical Negotiation Behaviors and practiced applying them • Reviewed a success story which demonstrates application of these principles within IMS Negotiation Skills

  20. Uncovering Interests Positions are often obvious; uncovering interests in Principled Negotiation requires some care Positions Interests Negotiation Skills

  21. Uncovering Interests Uncovering Interests Group Discussion: • What are my clients' typical interests? • What are my interests as an IMS sales person? • How can I describe them to my client? Negotiation Skills

  22. Uncovering Interests Every negotiator has two kinds of interests: in the relationship and in the deal • Take care with the Relationship • Treat them as colleagues and with respect • Separate the relationship problems from deal • Understand the Deal • Focus on the client's perception of problems and interests • Communicate your interests and reasons Positions Interests Negotiation Skills

  23. Uncovering Interests When uncovering interests, it helps to respect the relationship while asking questions about the deal • Here are some sample uncovering questions : • Help me understand how you see things • Of all the things we’ve talked about today, what do you see as most important? • What are some of the other things that you care a lot about in this negotiation? • We certainly face a real challenge in coming up with something both our bosses can be happy with! Let’s jot down your concerns and mine and go forward from there • Before going any further, I think I should stop and ask for your ideas and your advice on how we can best proceed • Other tips • Sit side by side with them • Speak about yourself, not them; don’t blame them for the problem Negotiation Skills

  24. Uncovering Interests While discussing interests, it is key to be inquisitive, open and to express yourself clearly Make your interests come alive Acknowledge their interests as part of the problem Put the problem before your answer Look forward, not back Question 'Why' and ‘Why Not’ constructively Be concrete, but flexible Be hard on the problem, soft on the people Negotiation Skills

  25. Uncovering Interests Research has shown that the most successful negotiators apply different behaviors than average negotiators Source: Adapted from Richard Graham, Developing Effective Negotiation Skills, Huthwaite white paper, undated Negotiation Skills

  26. Uncovering Interests Eight distinct behavior differences between Successful and Average negotiators were uncovered through research Failing Behaviors Successful Behaviors Source: Adapted from Richard Graham, Developing Effective Negotiation Skills, Huthwaite white paper, undated Negotiation Skills

  27. Uncovering Interests Successful negotiators apply strong communication skills *Use by Successful Negotiator over Average Negotiators Source: Adapted from Richard Graham, Developing Effective Negotiation Skills, Huthwaite white paper, undated Negotiation Skills

  28. Uncovering Interests These Critical Negotiation Behaviors are not only key for negotiation but your entire sales process IMS Sales Process Stage 3 Develop Opportunity Stage 4 Develop Proposal Stage 5 Negotiate Contract Stage 1 Identify Opportunity Stage 2 Qualify Opportunity Stage 6 Close Deal Negotiation Uncover Interests Explore Options Use Conditional Offers Information Seeking Testing and Summarizing CNB Feelings Commentary Behavior Naming Negotiation Skills

  29. Uncovering Interests Successful negotiators avoid these irritating and defensive behaviors *Use by Averagenegotiators over successful negotiators Source: Adapted from Richard Graham, Developing Effective Negotiation Skills, Huthwaite white paper, undated Negotiation Skills

  30. People will tolerate all sorts of rudeness, but the inability to pay attention holds a special place in their hearts. When you’re not listening you’re sending out an armada of negative messages. Marshall Goldsmith (on “Not Listening”) Most sales people have two modes of communication: speaking and waiting to speak - Anonymous Uncovering Interests Listening behavior can affect negotiation success Negotiation Skills

  31. Time for a quick exercise – Active Listening Uncovering Interests Objective • To practice basic active listening Process • Break into pairs and decide which one will be the Talker and which one will be the Listener • Talker, decide what you will talk about; it can be anything you wish so long as you can talk about it for 1 minute • Listener, listen actively for 30 seconds, stop listening for 20 seconds, then return to active listening for the last 10 seconds. We will signal when you should switch modes Timing: Up to 5 min: Carry out the exercise 5 min: Discussion Total: 10 min Negotiation Skills

  32. Uncovering Interests We will debrief by asking the Talker how it felt to be listened to actively; then hear the Listener’s views • Talker: • How did you feel when the Listener stopped actively listening to you? Was there a difference? • Listener: • What did you notice about the conversation when you were actively listening and when you were not? Negotiation Skills

  33. Time for another exercise –Listening for Interests Uncovering Interests Objective • To practice listening and uncovering interests Process • Work in trios (2 negotiators and one observer) • One negotiator decides on a topic that has a preference or debating point with some personal or emotional content • For example: • Our clients respect and trust us more than they used to • Socialized (and rationed) healthcare is inevitable in modern democracies with ageing populations • Chilli and chocolate taste fantastic together • Role plays are a great way to do training Timing: 5 min: Individual thinking time 5 min: Discussion Total: 10 min Negotiation Skills

  34. Uncovering Interests What did we learn from the Active Listening practice? • Did the negotiator uncover your interests behind your preference? • Did you feel they were actively listening? • Observers: • What worked well? • Even better if? • What CNBs did you observe? Negotiation Skills

  35. Time for another exercise – Uncovering Interests Uncovering Interests Objective • To practice listening and uncovering interests Process • Facilitator will play the client • Class participants will play IMS Sales • Client states: “we need to involve procurement in order to get IMS's monopolistic sales behavior under control“ • Class will ask questions to uncover client’s interests Timing: 15 min: Discussion Total: 15 min Negotiation Skills

  36. Uncovering Interests What did we learn from the Uncovering Interests exercise? • What techniques seemed to work best in uncovering interests? • What worked well? • Even better if? • How can you apply this into your discussions / practice? • With clients? • With colleagues? • What are some barriers we face when applying this in practice? Negotiation Skills

  37. Uncovering Interests Uncover Interests Wrap-up: IMS & StoreCo • Questions: • What other parts of the business might have interests that need to be uncovered? • What might lie behind their 15 years of ‘non IMS buying’ behaviour? • What would IMS like to get from this account? Situation StoreCo (not their real name!) is a US retailer with an in-store pharmacy business IMS trying to open up a relationship that had been 'dormant' for many years - StoreCo had been buying limited pharmacy data from a competitor, to inform their marketing strategies, without much coverage of their in-store pharmacy revenue In addition, IMS had been buying sell-out data from StoreCo. All conversations had been with procurement Trying to win back the data business, IMS had uncovered new interests - specifically the interest of a newly appointed senior leader who was used to having extensive market insight. This leader is tasked with achieving an extremely aggressive revenue target in a fiercely competitive market Negotiation Skills

  38. Uncovering Interests Uncovering Interests: Digging deeper at StoreCo • Questions: • What objections might StoreCo still have to entering a relationship with IMS? • What kind of options can we think of that could overcome them? Process The sales team got some support from a consulting colleague within IMS to help conduct senior level interviews IMS had a conversation with an affiliate business of StoreCo which offered online pharmacy services, and were receptive to a relationship not predicated on paying for data IMS simultaneously pursued a conversation with StoreCo's IT department to address privacy / HIPPA / data feed technical issues IMS described the benefit of an IMS-StoreCo partnership to the senior leader and the potential use of IMS information and services (including a team of onsite people) in helping him to achieve his growth objectives Negotiation Skills

  39. Uncovering Interests Uncovering Interests: A new relationship Outcomes: StoreCo entered a barter deal with IMS - StoreCo would provide sell-out data at zero cash cost to IMS, in return for data on customer buying trends in in-store pharmacy as well as benchmarking information to help them understand competition and the marketplace Uncovering the interests of non-procurement people in depth was vital, and took time. Gaining access to these individuals was a key first step IMS was not necessarily looking for the barter as the only solution, although barter is now a favored strategy for this kind of client, but had been interested in recruiting StoreCo as a data supplier The StoreCo relationship with the online pharmacy service provider offered legitimacy to the option of the barter deal Negotiation Skills

  40. Agenda Agenda • Introductions and Course Objectives • Current Pitfalls of Positional Bargaining • IMS Principled Negotiation • Uncovering Interests • Exploring Options • Using conditional Offers • Handling Bad Behavior • Practice • Wrap-up Negotiation Skills

  41. Exploring Options Exploring Options session objectives • By the end of this session, we will have: • Reviewed why it is important to identify options at this stage in the process • Discussed and practiced some the basic skills and tasks involved in inventing new options for a negotiation • Practiced inventing options, based on uncovered client interests, in a role play example • Reviewed a success story which demonstrates application of these principles within IMS • Defined the concept of BATNA and how it helps us to prepare and test options Negotiation Skills

  42. Exploring Options There are four major obstacles that are encountered when exploring options • Hasty judgement • Separate the act of inventing options from the act of judging them • Searching for a single answer • Brainstorm and broaden options; invent options of different strengths • The assumption of a fixed pie • Don’t assume either party has to give up on their interests; search for mutual gains • Thinking that “solving their problem is their problem” • Solve the problem that meets both sides’ interests Negotiation Skills

  43. Exploring Options There are four basic steps in inventing options In the Real World In Theory Skill at inventing options is one of the most useful assets a negotiator can have What is Wrong? What Might be Done? Negotiation Skills

  44. Time for an exercise – Exploring options (1) Exploring Options Objective • To practice using simple brainstorming to come up with options in response to client interests Process • Our client has announced that they want to shorten the deadline for a previously agreed piece of work – we don’t have the resources to deliver on their new time deadline • Our goal, working together as a group, is to brainstorm some options that we could suggest to them • The client’s interests are that they: • Need to feel confident that IMS data will address concerns of senior management • Need to get the chance to validate IMS's methodology • Need to show senior management that they have control over IMS • Want to see IMS output early so that they have time to take it to their conference Timing: 5 min: Individual thinking time 5 min: Brainstorm 5 min: Review Total: 15 min Negotiation Skills

  45. Exploring Options Exploring options debrief – What did we learn? What was easy about the exercise? What was more difficult? What might stop us from thinking broadly when we have these problems in practice? Negotiation Skills

  46. Exploring Options – IMS Data Asset Role Play Exploring Options Objective • To practice all of the techniques we have used so far in an in-class role play Process • Work in trios – one client, one IMS person, one observer • The IMS person has an asset to sell and the client may be interested in buying it. This is a simple one-off sale; more details are on your briefing sheets • First, prepare for the negotiation – how will you uncover interests? How will you describe your own interests? What signals might you look for that there are options available to explore? • Conduct the negotiation - your aim is to conclude a deal, if possible, within the time available Timing: 10 min: Prepare 15 min: Conduct negotiation 5 min: Debrief with coach Total: 30 min Negotiation Skills

  47. Exploring Options What did we learn from the IMS Data Asset exercise? • How happy are you with the results? What were they? • Buyer • Seller • Did anyone negotiate items other than price? • Observers: • What worked well? • Even better if? • What CNBs did you observe? Negotiation Skills

  48. Exploring Options Exploring options wrap-up: Technology Services client • Questions: • What options do you think IMS could consider? Situation The client was using an IMS technology solution with a support & maintenance contract The was trying to find a way to negotiate a short-notice discontinuation of the support and maintenance contract for this system The client’s interests were focused on making a short-term adjustment to their costs and commitments – hey felt they didn’t use the service enough to warrant it IMS’s interests were defense of our profit margin, and maintenance of the long-term relationship; our BATNA was to stock to te contract and force them to pay! Negotiation Skills

  49. Exploring Options Exploring Options – Technology Services client Outcome IMS did consider just ‘walking away’ and letting the client dissolve the contract, in order to maintain the relationship Instead we prepared and presented a business case to show how we could still provide value for money, but in a different way, with a different solution The client it still participating in the conversation – the short-term requirement to end the contract has evolved into a longer process IMS has been able to keep up with client needs, and possibly get a new service embedded that will be better both for the client and for IMS Negotiation Skills

  50. Exploring Options While discussing options and preparing conditional offers, it is important to evaluate your negotiation power • Negotiation power has many sources • One is following the Principled Negotiation process: uncover interests (relationship, deal), explore options, and objective criteria • Another is having a good BATNA (Best Alternative To a Negotiated Agreement) • Know your BATNA • One final option is no option at all: • Understand what is your best option if you are not able to come to an agreement • Speculate what is your client’s best option if you are unable to come to an agreement • Knowing your BATNA will: • Protect yourself against making an agreement you should reject • Help you make an agreement that will satisfy your interests • Judge every offer against your BATNA; your client will be doing the same Negotiation Skills