CIPS Mini Negotiation Challenge Leading global excellence in

CIPS Mini Negotiation Challenge Leading global excellence in procurement and supply

CIPS Mini Negotiation Challenge CIPS Negotiation Challenge is a team-based competition providing students with negotiation skills and knowledge. Resources are provided by the Chartered Institute of Procurement and Supply (CIPS) along with a mentor from industry and incorporates ‘learning-by-doing’ activities. ’ Activity breakdown • CIPS has prepared a Negotiation Skills lesson plan and pack of slides for the school teachers to use providing an overview of the techniques used in negotiation. These slides may be used in their entirety or may tweaked to suit. • The students are then put into teams and work together on given scenarios to establish what their negotiating strategy would be to achieve optimum results. • Groups then present back to the teacher and CIPS mentor who use a scoring mechanism to find a winning team. • All students will be awarded with a CIPS certificate. Leading global excellence in procurement and supply

CIPS Mini Negotiation Challenge SESSION PLAN This challenge can be set over two lessons with group work set in students own time as home work. Activity Delivery Content Support material Negotiation Skills School teacher with examples from CIPS mentor ( tutor helps with groups) An introduction to negotiation skills with small break out discussion groups Set the rules Clarify the assessment process Clarify the marking scheme Negotiation challenge teaching slides with lesson plan provided in slides’ notes pages Negotiation challenge dilemmas Group work students Discuss scenarios CIPS mentor / tutor inputs (10 mins per group) Students score scenarios Students prepare their arguments including checking application of negation skills (learnt in morning) Each student has paper copy of the scenarios & the negotiation skills slides 1 hr Panel assessment Students & tutor / mentor panel Each group presents (15 mins) Panel discussion Certificates available on-line to be printed and issued Feedback & Announcement of winner Negotiation challenge first round dilemmas with answers CIPS mentor @ 6 groups <15 m each <30 min panel 15 min feedback The Negotiation Challenge Estimated timing 1 hr 10 mins Leading global excellence in procurement and supply

CIPS Mini Negotiation Challenge Leading global excellence in procurement and supply

Negotiation – A definition A process through which parties move from their initially divergent positions to a point where agreement may be reached Leading global excellence in procurement and supply

HOUSE OF NEGOTIATION P E O P L E P E R S U A S I O N P R O C E S S P L O Y S Leading global excellence in procurement and supply

The warm and tough approach Warm and tough Assertion Value and respect Good communicator Easy Tough Cold Leading global excellence in procurement and supply

17 th birthday – persuasion practice session • Both groups have 10 minutes to prepare for the negotiation. • Each group list all the variables you may need in order to persuade the other party to your way of thinking. Remember you can’t make the other party agree but you can persuade them. Leading global excellence in procurement and supply

17 th birthday – persuasion practice session • Team A = Parents • Team B = Teenagers approaching 17 th birthday • Parents - You are looking forward to your son/daughters 17 th birthday. You have already told them that you have bought them a series of driving lessons. You feel this is an extravagant present as most teenagers have to work and pay for their own lessons. • Teenagers - You are grateful for receiving driving lessons and appreciate how hard your parents work. However, ALL your friends get driving lessons plus a car for their 17 th. You express how you feel and work to persuade your parents you should have a car too. Leading global excellence in procurement and supply

Using Emotion • Be in control of your emotions – don’t let them control you! • Use from a sincerely held belief • Use early in the negotiation • Use to increase the “perceived value” of your bargaining • Use to counter logic Leading global excellence in procurement and supply

Using logic • • • Don’t be too quick to ask “Why? ” Get your own logic in first Keep to one powerful argument – don’t dilute Be credible If others can’t see it, change tack Counter logic with emotion Leading global excellence in procurement and supply

Using threat • • • Be slow to threaten Threaten at the business, not the person Use a discreet or veiled threat Never make a threat you can’t …. . Be credible Add “if” to transfer threat to bargaining Leading global excellence in procurement and supply

Using bargaining • • • Don’t expose your position early Don’t put a marker down Don’t seem too eager to move Move, in small steps, Get a return for any concession you make Thank and bank Leading global excellence in procurement and supply

Using compromise The behaviour of last resort • 50/50 is not the only compromise • Compromise favours the more extreme party • Let the other party suggest compromise… …. . the one suggesting compromise probably accepts or moves towards the position of the other…. . Leading global excellence in procurement and supply

The negotiation cycle Preparation & Planning Reviewing Opening Concluding Testing Moving Leading global excellence in procurement and supply

The negotiation cycle Flipchart interactive exercise Leading global excellence in procurement and supply

Preparation and planning The objective here is…. To place you in the best possible position before the negotiation commences Preparation ………researching the issues Planning …. strategy, tactics, logistics Leading global excellence in procurement and supply

Preparation and planning objective setting We need to set clear targets for each variable • IDEAL Our ideal settlement, we strive to achieve it – our AIM HIGH figure or STRETCH target! • REALISTIC Realistically we feel that this is where we might finish up! • FALLBACK The point beyond which it is not commercially viable to do business Plan to be flexible as objectives may need to be changed Leading global excellence in procurement and supply

Opening The Vital First Impression • Timekeeping • Politeness • Physical appearance and dress • Personal hygiene • • The hand shake Eye contact Smile The opening words Leading global excellence in procurement and supply

Testing • To test the validity of the assumptions we have made • To see where movement in the other party is likely to come from • To understand what is likely to be expected of us Leading global excellence in procurement and supply

Testing – questioning techniques Types of question • Open • Closed • Probing • Multiple • Leading • Reflective • Hypothetical Leading global excellence in procurement and supply

Moving To achieve the maximum movement from the other party and make minimum movement yourself, in relation to your targets Leading global excellence in procurement and supply

Encouraging movement • Progressive and enthusiastic summary “So we’re agreed on the menus and the opening hours we’re getting through it, let’s move on” • Thank and bank “Thank you. I appreciate it. Can we move on to…” “Thanks for that, I do appreciate the offer, it’s a good move, however could you look again at…” Leading global excellence in procurement and supply

Concluding • To reach a workable agreement • To record what has been agreed • To agree the next steps • To condition for next time Leading global excellence in procurement and supply

Review • • • comparison with ‘SMART’ targets extent of plan achieved what went well / what didn’t what could I have done better hard and soft successes personal, team, organisation or industry patterns Leading global excellence in procurement and supply

Learning review • Share two key learning points Leading global excellence in procurement and supply

CIPS Mini Negotiation Challenge Dilemmas Leading global excellence in procurement and supply

Party Animal You are in negotiation with your flatmates, trying hard to convince them you should have a party at your house on on Saturday. You have been revising hard for crucial exams and feel you all deserve “just one night off”. You have presented your case well and think they might agree but an uneasy silence has developed as they look at each other to see who is going to respond. Which of the following would you do and in what order? 1. Go over your argument again 2. Ask them a question 3. Stress that if ALL your friends are invited it will be the best houseparty ever 4. Smile gently and say nothing 5. Excuse yourself for a comfort break for a couple of minutes. Leading global excellence in procurement and supply

Take it or leave it You are out shopping with a friend and see a great shirt which you have your heart set on. However, the shirt on display is the only one in your size and has a small black mark on the collar. You request a discount and the sales assistant wants more for the shirt than you suggest. In order of priority which of the following would you do? 1. Ask for five minutes to think and discuss with your friend 2. Accept the deal 3. Stay silent, smile and maintain eye contact 4. Ask to speak to the manager 5. Try to make him/her feel unreasonable 6. Say ‘No’ and decline. Leading global excellence in procurement and supply

Still apart You need to replace your laptop prior to starting University. You are in a negotiation in ‘Laptop World’ proposing a discount plus extras. The sales assistant insists it would be very difficult to give any discount so only token movement has been made. What would be the order of your preference of these 6 possible courses of action? 1. Ask a friend to return to the shop with you for moral support 2. Agree to move considerably from your opening proposal 3. Agree to move slightly from your opening proposal 4. Allow the negotiation to go to deadlock and return home without the laptop 5. Be open about your feelings and the lack of movement 6. Explain to the sales assistant your reasons for asking for a discount Leading global excellence in procurement and supply

Fair and reasonable You are buying your first car with your savings. You have set your mind on a particular second hand model and have obtained prices from three garages. Garage A B C Price £ 5100 £ 5300 £ 5295 Write down your negotiation objectives for each garage – (three actual amounts, an Ideal price, a realistic price and a walk away price. The various features of the purchase (tax, mot, car mats, fuel etc) are identical for each. Leading global excellence in procurement and supply

A testing phone-in You are home alone and receive a phone call from your mobile phone provider about this years price increase. Which would you do and in what order? 1. Stay on the line in order to ascertain the specific details 2. Suggest you will go into your local mobile phone shop to discuss the situation 3. Tell the caller you will not be accepting any price increases 4. Request they send you the relevant information through the post or via email 5. Express your disappointment and mention that you wanted to stay a loyal customer but this would make you consider taking your custom to another provider. Leading global excellence in procurement and supply

Signal, manoeuvre You and 6 friends are enjoying an evening meal at the local Italian restaurant. The main meal was great but the service was poor and desert took over an hour to arrive. You complain and request a reduction in the bill. Which of the following responses suggests the waiter is prepared to reduce the cost of your meal? 1. We are prepared to offer you a free soft drink on the house but a reduction in the bill would be very difficult 2. Our standard policy is to apologise and offer a free drink on the house 3. Please accept our apologies. We do not give discounts as it is against company policy. 4. I wouldn’t be in a position to offer you a discount I’m afraid 5. As you ate everything and haven’t mentioned the service until now it’s almost impossible for me to pass a reduction through the till. Leading global excellence in procurement and supply

CIPS Mini Negotiation Challenge Dilemmas ASSESSOR PACK Leading global excellence in procurement and supply

Scoring Mechanism • Teams are awarded 1 point for each correct answer in the right sequence, a total of 29 points overall. • Up to 5 points per dilemma are then awarded based on the students justification and understanding of why they choice that approach. These scores help ensure those students who have a thorough understanding of negotiation have a higher score than those who have had a ‘lucky guess’. Leading global excellence in procurement and supply

Party Animal You are in negotiation with your flatmates, trying hard to convince them you should have a party at your house on Saturday. You have been revising hard for crucial exams and feel you all deserve “just one night off”. You have presented your case well and think they might agree but an uneasy silence has developed as they look at each other to see who is going to respond. Which of the following would you do and in what order? 1. Go over your argument again 2. Ask them a question 3. Stress that if ALL your friends are invited it will be the best houseparty ever 4. Smile gently and say nothing 5. Excuse yourself for a comfort break for a couple of minutes. Leading global excellence in procurement and supply

Party Animal • 4, 3, 1, 5, 2 • 4, Remember – silence is golden! The first person to break the silence in a negotiation generally concedes • 3, Emotion is the most powerful of any persuasion methods • 1, A credible logical argument supporting your issue is second in the power of persuasion • 5, Taking a recess is another way of holding silence for longer and gives you time to review your strategy • 2, Asking questions will simply re-open dialogue and remove any pressure. Leading global excellence in procurement and supply

Take it or leave it You are out shopping with a friend and see a great shirt which you have your heart set on. However, the shirt on display is the only one in your size and has a small black mark on the collar. You request a discount and the sales assistant wants more than you proposed. In order of priority which of the following would you do? 1. Ask for five minutes to think and discuss with your friend 2. Accept the deal 3. Stay silent, smile and maintain eye contact 4. Ask to speak to the Manager 5. Try to make him/her feel unreasonable 6. Say ‘No’ and decline Leading global excellence in procurement and supply

Take it or leave it • 5, 3, 4, 1, 2&6 • 5 - The use of Emotion in a Negotiation is most powerful and when the other party feels unreasonable they will generally concede • 3 - Silence is uncomfortable and the other party will mostly break the silence within 10 seconds with small movement • 4 - Always ensure you are talking to the decision maker • 1 -Taking time out to re-asses and consider any proposal from the other party is preferable to reacting to their offer immediately and without thought • 2 - is acceptance which is non-assertive behaviour • 6 - could escalate into conflict. Neither option 2 or 6 will get you the best deal. Leading global excellence in procurement and supply

Still apart You need to replace your laptop prior to starting University. You are in a Negotiation in ‘Laptop World’ proposing a discount plus extras. The sales assistant insists it would be very difficult to give any discount so only token movement has been made. What would be the order of your preference of these 6 possible courses of action? 1. Ask a friend to return to the shop with you for moral support 2. Agree to move considerably from your opening proposal 3. Agree to move slightly from your opening proposal 4. Allow the Negotiation to go to deadlock and return home without the laptop 5. Be open about your feelings and the lack of movement 6. Explain to the sales assistant your reasons for asking for a discount. Leading global excellence in procurement and supply

Still apart • 5, 6, 1, 3, 4, 2 • 5 - Emotion – The most powerful persuasion method has the best chance of getting you to the best possible outcome • 6 - Logic – Get your logic in first with compelling argument to support your position and you will have a greater chance of gaining movement • 1 - Change Negotiators – Sometimes changing personalities will help gain movement • 3 - There is a cost to this option. Always get something back in return for any movement you make • 4 - Threat – If threat is used be prepared to carry it through and use with care as it can damage relationships • 2 - Compromise – The behaviour of last resort. The movement will be costly for you. Leading global excellence in procurement and supply

Fair and reasonable You are buying your first car with your savings. You have set your mind on a particular second hand model and have obtained prices from three garages. Garage Price A £ 5100 B £ 5300 C £ 5295 Write down your negotiation objectives for each garage – (three actual amounts, an Ideal price, a realistic price and a walk away price. The various features of the purchase (tax, mot, car mats, fuel etc) are identical for each. Leading global excellence in procurement and supply

Fair and reasonable • Whatever target price you have decided to set through effective preparation and planning, your targets should be the same for each garage • Garages B and C are simply conditioning you to change your starting point • The make, model and various features of the purchase (tax, mot, car mats, fuel etc) are identical for each garage so therefore your target price should be the same • E. g. Targets for Garages A, B and C – Ideal=£ 4335 Realistic=£ 4590 Walk-Away=£ 5000 The price students record is largely irrelevant. We are looking for a clear understanding on how to recognise prices as a conditioning tactic plus strategies to counter these tactics from each garage. Leading global excellence in procurement and supply

A testing phone-in You are home alone and receive a phone call from your mobile phone provider about this years price increase. Which would you do and in what order? 1. Stay on the line in order to ascertain the specific details 2. Suggest you will go into your local mobile phone shop to discuss the situation 3. Tell the caller you will not be accepting any price increases 4. Request they send you the relevant information through the post or via email 5. Express your disappointment and mention that you wanted to stay a loyal customer but this would make you consider taking your custom to another provider. Leading global excellence in procurement and supply

A testing phone-in • 5, 3, 4, 2, 1 • 5 – Linking Emotion with a warm veiled threat will put you securely in a position of power within the negotiation • 3 – Both warm with the caller and tough on the issue. Assertive behaviour will ensure your credibility throughout the negotiation. Getting your logic and reasoning in first will also add to your position of power. Care to use good, sound, logical reasoned argument • 4 – This option simply delays the inevitable need to negotiate. That said, it allows you time to make comparisons with other providers • 2 – Suggests you are willing to accept some kind of increase when you arrive at the shop. This option will however buy you time to plan and prepare • 1 – You will react rather than respond and will not be in a position to drive a good deal due to lack of preparation and planning. Leading global excellence in procurement and supply

Mirror, signal, manoeuvre You and 6 friends are enjoying an evening meal at the local Italian restaurant. The main meal was great but the service was poor and desert took over an hour to arrive. You complain and request a reduction in the bill. Which of the following responses suggests the waiter is prepared to reduce the cost of your meal? 1. We are prepared to offer you a free soft drink on the house but a reduction in the bill would be very difficult 2. Our standard policy is to apologise and offer a free drink on the house 3. Please accept our apologies. We do not give discounts as it is against company policy 4. I wouldn’t be in a position to offer you a discount I’m afraid 5. As you ate everything and haven’t mentioned the service until now it’s almost impossible for me to pass a reduction through the till. Leading global excellence in procurement and supply

Mirror, signal, manoeuvre • 1, 2, 4, 5 • 1 – ‘Very difficult’ does not mean impossible and is a signal of movement from the other party • 2 – ‘Standard policy’ means that with good negotiating skills the other party could be persuaded to move. With the service being so poor we were looking for much more than your ‘standard’ policy in terms of discount • 4 – ‘I’ wouldn’t be in a position suggests someone else is the decision maker. Ask to speak to the manager • 5 – ‘almost impossible’. A signal for movement as the waiter is not saying it is impossible. The skill is to master the art of listening and pick up on any signals of movements throughout a negotiation Leading global excellence in procurement and supply