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The Fine Art of Negotiations

The Fine Art of Negotiations. Presented by: Patrick Callahan Callahan Municipal Consultants - LLC 563-599-3708 Callahan.cmc@gmail.com. The Final Art of Negotiations General Overview of Session. City Government – Examples of Negotiations Introductions – Speaker & Participants

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The Fine Art of Negotiations

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  1. The Fine Art of Negotiations Presented by: Patrick Callahan Callahan Municipal Consultants - LLC 563-599-3708 Callahan.cmc@gmail.com

  2. The Final Art of NegotiationsGeneral Overview of Session • City Government – Examples of Negotiations • Introductions – Speaker & Participants • The Elements of Negotiation • Styles of Negotiations

  3. The Final Art of NegotiationsGeneral Overview of Session • The Path to Preparation • Preserving the Relationship • Sealing the Agreement • Tips for Negotiating

  4. 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

  5. Professional Experiences Negotiations • Maquoketa – Union Negotiations • Anamosa – Contractor Disputes • Consultant – Cable & Gas Franchise Renewals • Consultant – Employment Agreements on Searches for City Administrators

  6. 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

  7. City Government – Examples of Negotiations • Collective Bargaining Agreements – Labor Unions • City Employees – Salary adjustments, Fringe benefits, and Hiring • Department Heads – Employment Agreements • City Budget Discussions – Meetings to balance the budget

  8. City Government – Examples of Negotiations 5. Lawsuit Settlements • Contractors – Change orders on projects • Engineers – RFQ, RFP, & Fees • Utility Company Franchise Agreements

  9. City Government – Examples of Negotiations 9. 28E Agreements – Multiple Agencies and Government Units 10. Citizens – Utility Payment Plans • Employee Termination Agreements • Regulatory Agencies – DNR, EPA, IRS, DOT

  10. City Government – Examples of Negotiations 13. Vendors – Purchase of City Supplies 14. Economic Development Incentives • TIF Rebate Agreements • TIF Grants • Tax Abatement Agreements

  11. Negotiations in Your Personal Lives • Spouse/Significant Other • Children • Grandchildren • Service Providers – Cable Company • Vendors – Car Dealers

  12. Class Participants - Introductions • Your Name • Your City and Population • Your Position • Negotiation Experiences • What is your City known for?

  13. What 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 Negotiation

  14. The Essence of Negotiations: The Vehicle of Negotiations: The Criteria of Negotiations: Cooperation Communication Self Knowledge Flexibility Empathy Timing The Executive SummaryThe Elements of Negotiation

  15. 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

  16. What signals success? • No damage to relationship “Bringing them to their senses, not to their knees.” • Long term – Took care of the other person

  17. Barriers to Negotiations • Anger • Fear of Rejection • Manipulation • Criticism

  18. Barriers to Negotiations • Assumptions • Failing to Listen • Bottom Line – Sole Focus

  19. Special Considerations for Public Officials • Client • City Council or Board Approval • Confidentiality • Fiscal Limitations

  20. Special Considerations for Public Officials 5. “Deep Pockets” • Fairness and Equality • Precedent • Municipal Bond Rating

  21. Special Considerations for Public Officials • Code of Iowa Requirements • Costs of Litigation • Public Accountability • Integrity

  22. 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.

  23. Which style is best? Substantive outcome important? YES NO YES NO Relational outcome important?

  24. What is your predominate style of Negotiations? • Work Life? • Personal Life? Group Discussion

  25. Keys to managing style • Develop flexibility • Know your strengths and weaknesses • Compensate for your weakness – outside assistance • Know your “hot buttons” – take a break

  26. Know your power sources & strengths • Information or other resources • Personal traits • Skills – Especially communications • Expertise • Experience (your or someone else’s)

  27. Know your power sources & strengths • Problem solving • Trade Information – “Buy Points” • Do not make too many assumptions – Check it out!

  28. 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

  29. 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

  30. 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?

  31. Why are negotiators unprepared? • People assume “just talking” is low risk • Preparation takes too much time • People don’t know how to prepare

  32. Why are negotiators unprepared? • Many deals are lost or missed due to poor preparation • Not ready? Postpone it • Know how to prepare

  33. Stakeholders Challenge Position Interests Options Alternatives Legitimacy Communication Relationship Commitments Path to preparation

  34. Group Discussion The Path to Preparation Two Examples • TIF Rebate Agreement • Construction Project – Contractor change order • What are some actions that could be taken to prepare for negotiations? • How do you maintain a good working relationship after negotiations?

  35. 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

  36. Preparation: Interests • Look for the interests behind positions • Ask “why?” and “for what purpose?” • Ask yourself, “What will happen if I get this?”

  37. Preparation: Interests • Consider the other side’s interests • Probe for their underlying interests • Record this information and use it • Verify it

  38. Preparation: Four kinds of interests • Content (substantive) • Be specific and measurable • Break complex goals into strategic stages • Relationship • Present • Future

  39. Preparation: Four kinds of interests • Identity • Your sense of “who I am” and the other side’s • Process • How to communicate

  40. Preparation: What can be traded • Define the bargaining “mix” • What are the pieces? • Are any pieces linked?

  41. Preparation: What can be traded • Prioritize your interests • Content, relationship, identity and process • Identify limits (upper and lower constraits) for substantive issues

  42. 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

  43. 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

  44. 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

  45. 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

  46. 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?

  47. 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.

  48. Researching the other party • Things to learn • Their objectives • Their interests • Their alternatives

  49. 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

  50. 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

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