Negotiations: Elevating Instinct
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1 Negotiations: Elevating Instinct JEFF LOCKE, Stewart McDannold Stuart, Victoria, BC The starting point: We are all experienced negotiators 1
2 What is a successful negotiation? Convincing the other side that your proposal is their least worst alternative This is the key objective Process is accomplished by making all possible alternative choices worse than what you are proposing Start with identifying the goal of the negotiation as clearly as possible What do you need to achieve? Identify this for each party What is the most you can give up? How do you measure success? Rank possible outcomes on the continuum from optimal-to-acceptableto-unacceptable 2
3 What is the nature of relationship between the negotiating parties? Is this is a one off or is it part of a longterm relationship? Are the parties choosing to negotiate or are they required to? Identify the interests each party seeks to protect or advance The more specific you are able to identify these interests, the better as you will be able to more precisely determine your strategy Is usually related to money, but can be intangibles: reputation, pride, offence to a sense of justice Negotiation representatives, and those impacted by the negotiation may have the same, or different, or additional interests at stake. Identify these interests for each player 3
4 Preparation First three rules of negotiations: 1. Preparation 2. Preparation 3. Preparation Be the most knowledgeable person in the negotiation Knowledge, or the lack thereof, can turn the tide of a negotiation Understand the impact of the failure of the negotiation Understand the consequences of negotiation failure for both sides i.e. then what happens?? Are there alternatives for the parties? understand BATNA (Best Alternative To Negotiated Agreement) 4
5 Leverage Leverage = influence or power to obtain a desired result (a.k.a. bargaining power ) Understand the cards the parties are holding and their value (e.g. who is the asker and who is the giver?) Important to understand the leverage which can be created (e.g. legal action, bankruptcy) Building Trust and Educating Warm up schmooze dialogue Show courtesies Possibly give unsolicited appropriate favours Make connections with trusted third-party Make careful references to previous outcomes NEVER give a reason for your resolve or your word to be doubted 5
6 Develop Your Negotiation Plan Understand that negotiation is a process and not an outcome and it cannot be avoided Develop the theme to your negotiation narrative Each word, move and element must have a purpose Know when to hold your cards, when to play them and when to fold them Know when to walk away and when to run Decide on Communication Mode(s) Face-to-face are you better in person? Telephone make sure you prepare! Letters sets a formal tone usually sets a more informal tone o o is the most volatile and unstable mode Think about whether an in writing only protocol is required 6
7 Language Applies to written, spoken and body language Be an expert and active communicator Do not depart from your personality (will be recognized as disingenuous) Deploy measured responses only Avoid weak language and disclaimers Value of empathy and appropriate humour Control Your Message Every communication is part of the message, part of the education, part of the persuasion Deploy your leverage-linked information in a deliberate and planned manner Do not offend the listener s sense of justice, equality or value Don t panic or rush it 7
8 Understanding Offers and Proposals Understand the true value of what is being offered to you Understand the value of your offer to you and to the other side Any formal approvals required (e.g. Council/Board or Strata or Corporate approval)? Law of Contracts offers & counter-offers Bargaining Never lose track of the interests you have identified Understand the why of a no Psychology of the deal Control the forum and pace of your communications 8
9 Sealing the Deal Work out the mechanics of the deal ahead of time Doing so allows you to be decisive Address all relevant terms Always in writing, sometimes a contract (value of a confirming ) Leave on good terms My Thoughts About Rules Generally Rules Schmooles My view = absolutes give you less to work with and can stifle creativity and options Never bid against your own bid Always make the first offer Never make the first offer You know a good deal when each party is unhappy with the outcome Always be prepared to walk away from a deal Never negotiate at the other side s location 9
10 A Bunch of Tips 1. Let the phone ring to message and then call right back will defuse 2. Call before sending an 3. Leave your ego behind. Invest in making the other side feel good about the outcome 4. Do not become emotionally involved 5. You are not THAT clever. smart negotiators will see through your careful plans 6. Never lose your sense of humour More Tips 7. Self-deprecating humour will show vulnerability and build trust - but never ever joke about anything that matters 8. Opening offer sets the tone of what can be expected as the final outcome (called anchoring ) - will work to adjust the other side to the upper or lower limit of their range 9. Persuasion and the Rule of Three 10
11 And More Tips 10.Do not challenge the listener with generalities (avoid using always and never ) 11.Even if you have decided upon your next move, take time before you make it - doing so will help prepare the other side to better accept your offer 12.Silence creates tension, but can be a grenade More Tips 13.Ultimatums = The big gamble. Only if you are prepared to back them up 100% 14.Caution about metaphors and analogies - they can be turned and used against you 15.Appeal to reason - (e.g. We are trying to make a deal here, this is a good outcome for you, why the resistance? ) 11
12 Last Few Tips 16.Don t be locked into splitting the difference (can fall victim to an extreme outside position) 17.Control the timing avoid negotiating ping-pong 18.Ask How am I supposed to do that? You will know there is room for the other side to move until the other side tells you That is your problem Negotiations: Elevating Instinct JEFF LOCKE, Stewart McDannold Stuart, Victoria, BC 12
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