LICENCES AND THEIR NEGOTIATION

Transcription

1 LICENCES AND THEIR NEGOTIATION PART 2 NEGOTIATING SKILLS AN ACKNOWLEDGEMENT Some of the slides for this second session were provided, with permission, by Lisa J. Downs of the American Society for Training and Development 1

2 TO NEGOTIATE IS TO Use interpersonal communication effectively to achieve desired outcomes. Explore common interests, needs, and differences. Reach mutual agreement. 3 NEGOTIATION TYPES Adversarial (or Positional): A gain by one side is typically at the expense of the other; it s a contest of wills. Interest-Based (or Principled): Value for both sides is created through weaving common interests; decision is based on merit. 4 2

3 NEGOTIATION TYPES In Adversarial Negotiation Focus is on who will get the most out of the deal. Competition is key. Have you encountered this negotiation type? 5 In Interest-Based Negotiation Focus is on achieving maximum gain for both sides. Cooperation is key. Have you experienced this negotiation type? 6 3

4 IN PRACTICE. Two concerns: FIRSTLY, to reach an agreement that satisfies his or her employer s needs SECONDLY, to develop a relationship or rapport with the other side However, the communications (whether face to face, e mail, letter, telephone, videoconference, fax or what) are fraught with potential difficulties THE TWO CONCERNS CAN BE PLOTTED ON A GRAPH Concern about the outcome ( substance ) can range from low to high Concern about the existing and future relationship can range from low to high Five different types of negotiation style can be identified: low substance, high relationship; high substance, high relationship; low substance, low relationship; high substance, low relationship; and moderate of each 4

5 NEGOTIATION STYLES Low substance, high relationship N3 (accommodate) High substance, high relationship N2 (collaborate) Low substance, low relationship N4 (withdraw) High substance, low relationship N1 (win) Moderate N5 (compromise) TIME FOR A TEST TO FIND YOUR NEGOTIATION STYLE.. 5

6 N1: WIN Win-lose situation Defeat the other party Competition, pressure, intimidation, adversarial Be the winner at all costs N2: COLLABORATE Search for common interests Both parties must have their needs satisfied Creative problem-solving, collaboration, synergy Win-win outcome 6

7 N3: ACCOMODATE Promote harmony Avoid differences Yield to pressure to preserve the relationship Build friendly relationships - more important than the outcome N4: WITHDRAW Powerless, indifference, surrender, resignation Take whatever other party is willing to give Demotivated or uninterested (may well hate their job, or be about to leave the job) 7

8 N5: COMPROMISE Meet the other party half way Look for trade-offs Conflict reduction is the priority Split the difference and find an acceptable agreement FOUR NEGOTIATION OUTCOMES Lose-Lose; both sides are unhappy, e.g., what happens at the end of a typical strike or other industrial dispute Win-Lose; one side is unhappy Win-Win; both sides are happy No Agreement; not necessarily a problem - maybe a deal never was realistic; as long as there is a willingness to negotiate again in the future if circumstances change 8

9 WIN-WIN ONLY HAPPENS IF Explore a counterpart s needs rather than make assumptions about what they are. Appreciate that your needs may well be different from theirs. SOME DIFFERENT APPROACHES ONE CAN FOLLOW BATNA ZOPA Wants Versus Needs Empathy 9

10 BATNA The Best Alternative To a Negotiated Agreement Involves knowing what you will do if an agreement isn t reached always good to think about this in advance Helps you gauge when to walk away and when a deal makes sense Source: Watkins, Michael. Negotiation. Boston: Harvard Business School Press, KNOWING YOUR BATNA Decide your BATNA before you enter into a negotiation. For example, are there some free of charge resources we could use if you can t agree a subscription price for this service? Try to identify your counterpart s BATNA. How desperate are they to have this deal? Source: Watkins, Michael. Negotiation. Boston, Massachusetts: Harvard Business School Press,

11 A CASE STUDY OF BATNA National Health Service Scotland s negotiation with Copyright Licensing Agency for a photocopying licence (March 2011) Price of licence went from 500,000 to 1,000,000 p.a. NHSS was able to refuse to pay because it had enough alternative electronic and free resources available to it CLA could ill afford the loss of income CLA s approach to negotiation showed it had NOT adopted a BATNA approach Too easy to assume that because a licence was agreed last time, it will be agreed again this time around ZOPA The Zone Of Possible Agreement The agreements that can satisfy both sides in a negotiation Assumes overlap of needs and wants Source: Watkins, Michael. Negotiation. Boston, Massachusetts: Harvard Business School Press,

12 YOUR ZOPA Determine your ZOPA (i.e., a high and low range of acceptable terms) before you enter into a negotiation. Work to identify your counterpart s ZOPA. Consider all elements of value to both sides; have something in reserve to sweeten a deal, if necessary. Source: Watkins, Michael. Negotiation. Boston: Harvard Business School Press, WANTS VERSUS NEEDS Want = A desired outcome of the negotiation; nice to have Need = A must have The key to successful neogotiations is to explore options for wants without compromising needs. Source: Gosselin, Tom. Practical Negotiating: Tools, Tactics and Techniques. Hoboken, New Jersey: John Wiley and Sons, Inc.,

13 IDENTIFYING WANTS AND NEEDS Engage in a process of discovery by asking your counterpart questions. Pay attention to both explicit needs (verbalised) and implicit needs (see nonverbal behaviour later). Source: Gosselin, Tom. Practical Negotiating: Tools, Tactics and Techniques. Hoboken, New Jersey: John Wiley and Sons, Inc., THE ROLE OF EMPATHY All of this requires EMPATHY It involves understanding your counterpart s views and goals. Showing empathy leads to a focus on common interests and joint problem-solving. Difficult to achieve of the other party is patronising or aggressive It also leads to enhanced trust. 13

14 USING EMPATHY IN NEGOTIATION Recognise emotions both yours and theirs. Listen carefully and pay close attention. Identify interests by asking questions. Focus on the problem and look for a solution. WHAT WILL INFLUENCE Liking: We tend to say yes to people we like; can lead to a wish to please them based on superficial factors (e.g., looks, personality) rather than on an objective assessment of what is on offer/being asked for. Scarcity: Opportunities seem more valuable to us when their availability is limited. Source: Cialdini, Dr. Robert B. Influence: The Psychology of Persuasion (Collins Business Essentials Edition). New York: Harper Collins,

15 FIVE* STAGES OF NEGOTIATION Preparation Discussion/Debate Proposals Bargaining (+ Implementation) * Depending on what you read/hear, you ll come across other breakdowns of the stages, or different numbers of stages. Follow whatever you find most intuitively reasonable! PREPARATION Diagnose the negotiation situation (i.e., determine the issue at hand). Clarify the facts about the issue. Note barriers to resolving the issue. Examine the wants and needs of the other side in relation to yours. Source: Fisher, Roger, William Ury, and Bruce Patton, editor. Getting to Yes: Negotiating Agreement Without Giving In (2nd edition). New York: Penguin Group,

16 PREPARATION QUESTIONS TO ASK YOURSELF What is our objective? (to get a licence for stuff we want, at a reasonable price) What is our aim? (presumably to deliver information to patrons efficiently and cost-effectively) Why are they here? (to increase their sales/achieve targets) What sort of relationship do we already have with them? Do we have alternatives if negotiations fail? (BATNA again) How important is this negotiation to us? To them? How urgent is this for us? For them? PREPARATION Develop a shopping list of requirements - must have and nice to have Do the same for the other side if you can Consider the implications of any differences you identify Consider the people you are going to be dealing with - seniority, personality, etc. if known! Identify common interests in advance Agree in advance who will be main spokesman if there is more than one of you Prepare a list of objectives 16

17 PREPARATION BEFORE DISCUSSION STARTS Plan an appropriate opening statement or approach Be prepared to explore the other party s needs and priorities Be prepared to think laterally about alternatives when you hit an impasse Remember to use objective criteria to assess proposed agreement Know when to close and to define/summarise what has been agreed so far ALSO Learn who has the authority to make a deal. Know your and the other side s BATNA and interests. Source: Fisher, Roger, William Ury, and Bruce Patton, editor. Getting to Yes: Negotiating Agreement Without Giving In (2nd edition). New York: Penguin Group,

18 STILL ON PREPARATION Decide how to communicate (phone, , face-to-face, through third party). Ideally, the first meeting should be face to face. Exchange information with the other party where/when we shall meet, who will be attending, confirm purpose of meeting. A CASE STUDY OF OPENING STATEMENTS THAT WENT WRONG Reuters and Lexis What went wrong to start with How it got resolved Moral of the story?? 36 18

19 DISCUSSION Always best to have an initial meeting face to face Maybe a one hour initial discussion, break, quick consultation with others, before moving on to the next stage, maybe a few minutes later, maybe some time later Must have time to read documents, reflect on what has been learned or achieved so far Purpose is for each party to disclose what it wants, without giving away how badly it wants it DISCUSSION Explore differences and solutions. Develop rapport and build trust. Probe them, and also offer information Source: Fisher, Roger, William Ury, and Bruce Patton, editor. Getting to Yes: Negotiating Agreement without Giving In (2nd edition). New York: Penguin Group,

20 IMPORTANCE OF INTERESTS One of the most important aspects of effective negotiation is to identify shared interests with the other side. Each side in a negotiation has multiple interests; the key is to uncover them. Focus on the issue, not on individual personalities not always easy! QUESTIONS TO ASK YOURSELF What can they give me that I need? What can I give them that they need? 20

21 BARRIERS TO GOOD BARGAINING Judging an idea prematurely Looking for one answer Thinking that the other side s problem is theirs to fix (no joint problem solving) BRAINSTORMING Brainstorming is a powerful way to create options. It can be done among colleagues or with participants from the other party as long as there is trust between the parties. Focus on idea generation, rather than criticism or evaluation. Use of whiteboards/flipcharts/videoconferencing with brainstorming software.. 21

22 TIPS FOR COMMUNICATION Pay attention to cultural differences in both verbal and nonverbal communication (explored more later). Be sensitive to the mood or atmosphere during the discussion. Keep the people and the problem separate; avoid focusing on egos or personalities. 43 PROPOSALS This is where the draft contract is offered; sometimes well after the initial face to face meeting, sometimes prior to the first face to face meeting May require further meeting(s) to discuss; certainly there will be some bargaining required 22

23 BARGAINING Bear in mind what is cheap to you but valuable to them Which of our wants are we willing to trade? Don t concede too much without getting some concessions in return - OK to link two issues and give way on this if they give way on that People don t like to lose face, especially in Asian culture but also in western culture; don t bargain so hard they cannot sign Don t use power tactics We re bigger than you, so we don t have to talk to you can backfire in years to come Misunderstandings can occur, so always recap on what has been agreed and confirm in writing (BL Personnel case) PRINCIPLED VERSUS POSITIONAL BARGAINING Principled starts from basis of identifying common areas of interest Positional starts from the basis of clearly defined position from which one is not prepared to shift (e.g., unless they give way on this, we will walk away it s a deal-breaker ) Best negotiations are mainly principled and have few rigid positions, but that s not always possible 23

24 WHEN BARGAINING Offer a solution to the issue (specific suggestions for action). Determine any (realistic) deadlines and steps, engaging others if need be. Agree process for ongoing communication. Base suggestions on mutual interests and mutual gain. Focus on achieving the primary goals of the negotiation. Source: Fisher, Roger, William Ury, and Bruce Patton, editor. Getting to Yes: Negotiating Agreement Without Giving In (2nd edition). New York: Penguin Group, COMMON TACTICS Packaging (Bundling): Combining two or more negotiation items to add value Balancing the Scales: Illustrating what each party gives and receives to demonstrate a fair deal Objective Criteria: Adding credibility by presenting data from an objective source 24

25 MORE. Scaling: Asking the other side to rate the importance of an issue, that is, on a scale from 1 to 5 Examining Possibilities (What If?): Investigating alternatives by assessing what the other party will consider Asking for further explanation to buy time and clarify the counterpart s position Patience: don t allow yourself to be pushed into a decision Source: Gosselin, Tom. Practical Negotiating: Tools, Tactics and Techniques. Hoboken, New Jersey: John Wiley and Sons, Inc., TRUST The more the other party trusts you, the better the chances of reaching a mutually beneficial agreement. Characteristics such as dependability, honesty, and integrity are important when building trust

26 TIPS FOR BUILDING TRUST Be knowledgeable. Follow through on commitments. Dress and behave in a professional manner. Be responsive to the other side s needs. Communicate well; listen. Show genuine interest in their point of view. Ask good questions to probe for information and shared interests. 51 Source: Stark, Peter B., and Jane Flaherty. The Only Negotiating Guide You ll Ever Need: 101 Ways to Win Every Time in Any Situation. New York: Broadway Books, THERE MIGHT BE BARRIERS! These can include characteristics or the personalities of the parties involved and adversarial tactics. Communication Barriers: Examples include poor documentation of conversations, lack of dialogue, or bad listening behaviour. Cultural or Gender Barriers: Examples include language difficulties, misunderstandings, sexual stereotyping, perceived lack of importance of the individual Lack of trust can kill off a deal 26

27 OTHER BARRIERS A key stakeholder who tries to block the negotiation One or both sides fail to provide necessary information A counterpart views the negotiation as a test of wills; could lead to bluffing or attempts to trip up the other side. Source: Watkins, Michael. Negotiation. Boston: Harvard Business School Press, IMPLEMENTATION Secure commitment, not just agreement. Establish accountability to each other (i.e., what will be lost if either party fails to perform?). Gain signatures on the contract. Source: Fisher, Roger, William Ury, and Bruce Patton, editor. Getting to Yes: Negotiating Agreement Without Giving In (2nd edition). New York: Penguin Group,

28 IMPLEMENTATION Pay attention to social rituals (signs of respect and trust such as a handshake, offer of gifts Derwent/CAS example). Consider making the commitment public through an announcement. Know how to read and understand a contract. Source: Fisher, Roger, William Ury, and Bruce Patton, editor. Getting to Yes: Negotiating Agreement Without Giving In (2nd edition). New York: Penguin Group, DIRTY TRICKS Deliberate deception, e.g., misleading claims about coverage, or about one s authority to make changes Reneging on something that had been agreed at the last minute Psychological warfare put them in a low chair, sun shining in their eyes, deliberate interruptions/phone calls, attacks on their status, pretending to get angry, storming out of meeting. 28

29 MORE On the Clock: Setting an expiration date on an offer to pressure the other side to accept Good Guy/Bad Guy: In team negotiations, when one person pretends to be on your side whereas the other pretends to be tough and unreasonable Take It or Leave It: Making a final offer by signaling that a limit has been reached; stating that this is a last offer Source: Watkins, Michael. Negotiation. Boston: Harvard Business School Press, SOME COMMUNICATION SKILLS Questioning skills Listening skills Clues from non-verbal communication 29

30 QUESTIONING Tease out the needs from the formal position the other party is adopting A need allows for several solutions; a position allows for just one Uncover potential problems Uncover other party s shopping list Both sides should use questions Questions allow thinking time TYPES OF QUESTIONS Facts and other basic information Underlying needs Potential problems Develop areas of mutual interest Make questions open how do you feel about X?, what would happen if we were to?, if we proceed that way, what are the implications? or what if, rather than closed yes/no questions ALWAYS ask if you are in any doubt whatsoever, so use can I just confirm that, can you clarify what you mean by, are we then both agreed that. or simply what exactly do you mean by. 30

31 MORE ON TYPES OF QUESTIONS Bracketing or defining ( I guess you must be offering about journals in the collection ) Challenging ( Have you sold any subscriptions to an organisation of our size yet? ) Restatement ( Am I right in thinking Megacorp are doing a trial of your service right now? ) Suggestive ( Have you got any new features in the pipeline? ) LISTENING SKILLS I Be sensitive to your counterpart s feelings and mood. Listen closely as the person answers your questions; avoid interruptions (something I am very bad at!) Write down the responses; this will help capture information and show your counterpart respect. 62 Source: Stark, Peter B., and Jane Flaherty. The Only Negotiating Guide You ll Ever Need: 101 Ways to Win Every Time in Any Situation. New York: Broadway Books,

32 LISTENING SKILLS II Show you both understand and accept the other person s point of view. Accept is NOT the same as agree with Look out for comments made that show weaknesses or their fall back position they may not realise they are giving them away (example video conference on project progress) Don t think about what was said some time ago (and thereby stop paying attention) and don t jump to conclusions BODY LANGUAGE 60-80% of impact of message is (it is claimed) in non-verbal communication Gut feeling, hunch, sixth sense, female intuitio. are all based on your ability to read and decode non-verbal behaviours Mostly sub-conscious, but you can train yourself to become more aware So... 32

33 Be aware of your counterpart s nonverbal behaviours (i.e., gestures, tone of voice, posture, facial expression). Be aware of your own nonverbal behaviours and mood. Respond appropriately to the other side s nonverbal behaviours. 65 Gestures and signals must be taken as a whole, and not viewed in isolation Consider the context - arms crossed may be defensive, but can also mean the room is cold or the person is trying to cover his rumbling stomach Similar gestures can mean different things at different times, or when carried out by different people Cultures vary greatly in their use of, and their understanding of, gestures and other non-verbal clues I have a small exercise for you on this 33

34 NEGOTIATING ELECTRONIC LICENCES Negotiator should have patience, tact, good communication skills AND knows about content offered/needed, and understands electronic information licences Oppenheim s Law: it takes twice as long to conclude a licence negotiation as your most pessimistic estimate of how long it is going to take. MORE Have a back up plan if negotiations fail an alternative supplier? Make sure you negotiate with someone who has authority to sign or to recommend signature, and make sure you are in the same position Don t lose your temper or take things personally Keep records Never say unless I hear to the contrary, I assume this is OK with you dubious in law Be positive, but don t allow yourself to be rushed into an agreement Do not accept off the record verbal understandings they are, in Sam Goldwyn s famous comment on verbal agreements, not worth the paper they are written on 34

35 SUMMARISING.. The parties are neither friends nor adversaries; they are problem-solvers The goal is a wise outcome reached efficiently and amicable. An agreement may not be the wisest outcome. Victory rarely is. Try to avoid offering or demanding concessions too often Separate the person from the problem. Conflicts with someone you dislike might lead you to miss the solution. Trust is very important, but develops slowly. People must EARN trust. Avoid offers and threats until you have identified mutual interests. Avoid being penned in by an inflexible bottom line. Don t think of gains and losses, but of mutually beneficial solutions Don t insist they agree with you - it s not a test of will Reason with them, and be open to their reasoned arguments. 35

36 Support the goals of your organisation during the negotiation. Recognise potential obstacles and find ways around them. 71 AN EFFECTIVE NEGOTIATOR Builds relationships and earns support from others. Is trustworthy, ethical, and reliable. Keeps the negotiation about the issues and not about the people

37 SO WAS THE NEGOTIATION SUCCESSFUL? It is important to have measures of success to know if your approach to negotiation is effective. Did the result fulfill the needs of your organisation? Did the negotiation result in both parties being interested in working together again in the future? 73 SUCCESS? Commitment: Is a realistic, workable plan in place, with agreement from all parties? Experience: Did the overall experience improve negotiation skills and lead to the desire to engage in future negotiations? Finally, documenting and revisiting lessons learned will help with future negotiations. Good luck with your future negotiations! 37