NEGOTIATING EFFECTIVELY Building Negotiation Leadership Awareness Increase awareness

NEGOTIATING EFFECTIVELY

Building Negotiation Leadership Awareness � Increase awareness and understanding of the negotiation process and negotiation tendencies Framework � Use of framework and tool for preparing, conducting, reviewing and improving negotiations and negotiated results Action skills � Improve real-time negotiation skills through practice

Conflict Process

Conflict: Resolution Modes

Negotiation is a process of two or more parties working together to arrive at mutually acceptable resolution of one or more issues Negotiation is back-and-forth communication designed to reach an agreement when you and the other side have some interests that are shared and others that are opposed. Negotiation refers to a process of seeking to influence others

What Negotiation is Not? To respect the order of boss and act accordingly Making a decision between parties using arbitration where the parties are legally bound to follow the arbitrator’s decision Negotiation is not a competitive sport (we are contesting but not competing to opposition with the aim of crushing them)

Negotiation Operational Definition Negotiation is a process of two parties working together to arrive at mutually acceptable resolution of one or more issues dealing with the conflicting situation mostly in an organizational/ workplace setting. Conciliation, Mediation, Arbitration, Litigation don't fall under the scope of today’s discussion.

Negotiation Styles Accommodating- seeks to accommodate the interests of the other side Avoiding- seeks to avoid outcomes, common in bureaucracy Collaborating- tries to find synergy among interests Competing- views negotiators as competitors Compromising- concedes easily (Each style can be used depending upon circumstances) (A combination of these styles can be applied)

Negotiation Styles 9 Dimensions Characteristics Outcome Avoiding Desire to withdraw or suppress a Lose-Lose conflict. Accommodati willingness to place opponent’s Lose-Win ng interests above own. Build friendly relationships Compromisin Willingness to give up something. Some Wing some Lose Competing Collaborating Desire to satisfy one’s interest regardless of impact of other party to the conflict. Creatively solves problems so both parties win Win-Lose Win-Win

Imagine the Following: As chief of the planning unit of the Ministry of Health and Population, you are responsible for leading the recently established health reform team. Donor agencies fund a major portion of your budget. They and Go. N are putting pressure on you to reduce the health inequalities that exist between rich and poor. To address this problem, you hope to reallocate public expenditure to the currently poorly-funded maternal and child health and childhood infectious disease programs that will benefit the poor. To make this financially sustainable, you know you must decrease allocations to the hospital sector, a move that will be vigorously opposed by your colleagues in the

Health Development Negotiation Process The Road to Health Outcomes Select priorities and strategic options Prepare for Create conditions for informed decision- successful implementation making Implement for results and learning

Negotiation in Bureaucracy Increasingly complex environment Requirement of “trouble-shooter” role Conflicting interests of peers, supervisor and juniors Stakeholder and beneficiary pressure Increasing availability of facts and figures Media chase Political influence /politicization Involvement in diplomatic negotiations Pressure to deliver outputs

Standard Ways to Negotiate Wants to avoid personal conflict Makes concessions readily in order to reach agreement Wants an friendly resolution Ends up exploited and feeling bitter Soft Negotiator Sees any situation as a competition Wants to win Ends up producing response that exhausts him and his resources and harms the relationship Hard Negotiator

Principled Ways to Negotiate Focuses on both parties’ merits If interests conflict, insists that the result be based on some fair standards Be empathetic Hard on the merits but soft on the people No tricks and no posturing Shows how to obtain what you are entitled and still be decent Be innovative and creatively solve the problem Neither Soft Nor Hard

Using the Elements Communication Relationship Copyright © 2008 CMPartners. All rights reserved. Interests Options If “No” Alternatives Legitimacy If “Yes” Commitment

Key Elements in Negotiation Interests � The concerns, wants, needs, hopes and fears that underlie and motivate our positions, demands and disagreements Options � All possibilities on which we might reach agreement; an agreement is best if it explores all potential solutions for mutual gain Legitimacy � The fairness of an agreement as measured by criteria, benchmarks, principles, laws, regulations,

Key Elements in Negotiation Alternatives � Available walk-away possibilities in case we do not reach an agreement; neither party should agree to a deal that is worse than its Best Alternative to a Negotiated Agreement (BATNA) Commitments � Statements about what we will or won’t do; good agreements are well planned and crafted to be practical, durable, easily understood and verifiable

Key Elements in Negotiation Communication � The message and media through which we convey information; we understand each other even if we disagree, and we minimize resources spent in coming to agreement Relationship � The overall pattern of interaction among the other parties within and outside the negotiation and us; interactions should improve, not damage, our relationships.

Strategic Guidelines Skilled Advocacy for Make statements and invite discussion Be sensitive to the impact of words and body language Reduce emotion

Strategic Guidelines Skilled Inquiry for Cultivate curiosity Practice strategic listening Earn the right to inquire Facilitate two-way communication Deal separately with the relationship between the parties and the substance issue – each on their own merits Rather than react to positions, probe for underlying needs

Circle of Value Circle of value as a guide in creating value in a negotiation When we are in the circle of value, our inquiry skills become very important then that

Orange Story Two sisters are quarrelling over an orange Both sisters are implicitly claiming the orange for themselves “I absolutely want this!” What should they do?

Orange Story They finally agreed to divide the orange in half

Orange Story Are you with the agreement made by the two sisters?

Orange Story The first sister took her half, ate the fruit, and threw away the peel, while the other threw away the fruit and used the peel from her half in baking a cake.

Orange Story What the two sisters could have done to produce a better outcome? q Please share your views regarding the solutions? q Too often negotiators ‘leave money on the table’. Why? q

Circle of Value Rather than react to positions, probe for INTERESTS �Ask ‘why’, ‘what else’ and ‘in what order’ �Share some of your interests �Share your understanding of theirs; ask for feedback �Ask for criticisms, not concessions

Circle of Value Rather than focus on what concessions to make, generate OPTIONS for mutual gain �Jointly brainstorm multiple options �Positional negotiations limit optimal solutions �Separate inventing from deciding �Consider informal processes for brainstorming

Circle of Value Use LEGITIMACY to ‘build a golden bridge’ �Negotiation is not giving in, or bowing to the will of another party �Explain your reasoning, inquire into theirs �Consider how they will explain their results to their constituents �Focus on why an option is ‘fair’ or ‘appropriate’

Motorcycle Example A teacher wants to buy a motorcycle. The reasons and needs for doing so is INTEREST.

Motorcycle Example q INTEREST qneed for transportation qtransportation that is reliable qeasy to park qnot too expensive q…

Motorcycle Example Since, he does not have the money to buy a bike today, what can be the options?

Motorcycle Example q OPTIONS q. Rent/lease until having the sufficient funds q. Loan and pay back interest q. Take a job at the shop and pay off with the hours/time he works q. Buy a used bike q…

Motorcycle Example q LEGITIMACY q. Website showing comparative prices q. Visit another shop selling bikes q. Visit another shop selling the same used motorcycle with similar mileage q…

Alternatives/BATNA Acknowledge Al. TERNATIVES/BATNA as a choice � Reality test theirs – how well does it satisfy their interest? � Use discussions about BATNA as an opportunity to learn about interest and to invite options that exceeds all BATNAs � If useful, explain yours � Can we present them with a fading opportunity? � Are there other decision makers we can deal with

Commitments Make COMMITMENTS with care, after learning all you can � Commit early to process, late on substance � Break up ‘decision making’ Inventing options Evaluating options Refining options Committing to options � Design appropriate interim products at different stages � Verify parties know exactly what they are

Relationship Deal separately with the RELATIONSHIP and the substance – each on its own merits �Be friendly on relationship, firm on substance �Use people techniques to deal with people problems �Do not try to threaten or buy the relationship

Communication Facilitate two-way communication �Explicitly discuss/negotiate the process �Communicate meeting purpose/products/process �Listen actively and inquire �Frame what we say in light of what they will hear

Case The Grant

Strategic Inquiry Guidelines: INTERESTS What are you trying to accomplish in these negotiations? What are your key motivations in these negotiations? What are you concerned about? Do you feel we “must” do a deal here? I would prefer to work something out jointly. Would you? What interests would be better met if we don’t agree?

Strategic Inquiry Guidelines: OPTIONS What would be wrong with…? What other ideas might we brainstorm on this problem? If we work together, how might we make this better for both of us? Do you have the authority to make a decision on this? Do others need to be here to get this done? What would be your reaction to a possible offer like…? If I were able to offer you “x, ” could you say “yes” today?

Strategic Inquiry Guidelines: LEGITIMACY Why do you think we ought to do that? What benchmarks do you see in our field of work that make this appropriate? If you were I, how would you justify that to others?

Strategic Guidelines for Achieving LEGITIMACY Identify relevant benchmarks, precedents, researched evidence, objective criteria, fair or established practices Consider fairness and relevance from our perspective, theirs, and that of a neutral third party Consider steps to gain and share data before or at the table. Legitimacy can be used to persuade or defend

Strategic AGREEMENT Guidelines Agree early on process, late on substance Create a sequence: for example, delegate roles, invent options, evaluate, refine, then seek agreement Verify that parties know what they are agreeing to, how they will keep their agreements, and how implementation can be verified

Strategic BATNA Guidelines Develop our Best Alternative to a Negotiated Agreement Assess its probability and attractiveness given our interests Consider ways to improve our BATNA Estimate their BATNA Assess if it is operational and attractive given their interests Consider ways to weaken their BATNA

Finally, Strategic negotiation is not to “make a deal. ” It is to make wise decisions. So, q Clarify interest q Consider options with no commitments q Test legitimacy q Consider walk-away alternatives q Sequence commitment q Plan communication q Develop a relationship strategy

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