How to negotiate with success by Toronto Training and HR October 2011
Oct 21, 2014
How to negotiate with success
by Toronto Training and HR
October 2011
Contents
3-4 Introduction to Toronto Training and HR5-7 Preparing to negotiate8-9 The negotiation formula10-11 Core concerns of negotiation12-18 Negotiating with the public sector19-20 Pinpoint a strategy21-22 Establishing price targets23-24 Leaders and negotiations25-29 Ethics and negotiating30-34 Constraints and guidelines35-37 Winning at auctions38-40 Proposals41-44 Win-win scenarios45-46 Typical negotiation mistakes47-48 Negotiating effectively49-50 Drill51-52 Conclusion and questions
Page 3
Introduction
Page 4
Introduction to Toronto Training and HR
• Toronto Training and HR is a specialist training and human resources consultancy headed by Timothy Holden
• 10 years in banking• 10 years in training and human resources• Freelance practitioner since 2006• The core services provided by Toronto Training and HR
are:- Training course design- Training course delivery- Reducing costs- Saving time- Improving employee engagement &
morale- Services for job seekers
Page 5
Preparing to negotiate
Page 6
Preparing to negotiate 1 of 2
THE OTHER PARTY’S POWER SOURCESKnowledgeCompetitionPerformance and reputationPatience
Page 7
Preparing to negotiate 2 of 2
QUESTIONS TO ASKWhat is it that they want?What is important to the other side?Why are they willing to negotiate?What does the other side bring to the equation?What resources do they have?
Page 8
The negotiation formula
Page 9
The negotiation formula
Recognizing conflictStating claimsConceding points
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Core concerns of negotiation
Page 11
Core concerns of negotiation
Autonomy or a person’s freedom to make decisions for himselfAppreciation or having actions acknowledgedAffiliation or being treated as a colleagueStatus or feeling that others respect one’s standingHaving roles and activities that are fulfilling
Page 12
Negotiating with the public sector
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Negotiating with the public sector 1 of 6
POWER SOURCESMonopolyPrivilege and immunityThe public interestProtocol
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Negotiating with the public sector 2 of 6
POWER TOOLSThe power of precedentThe power of “no surprises”The power of relationships
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Negotiating with the public sector 3 of 6
USEFUL THIRD PARTIESGovernment affairs departmentsLobbyistsLawyersPR expertsTechnical expertsOther governments
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Negotiating with the public sector 4 of 6
THE GOVERNMENT AS GHOST NEGOTIATORTo what extent does the government have an interest in our deal?How might the government intervene to protect its interest?
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Negotiating with the public sector 5 of 6
PROTECT YOUR ORGANIZATION AGAINST CORRUPT OFFICIALSResearch what is legal in the country or region where you will be negotiatingIf your company has a code of business ethics, offer it to your counterpart as part of your introductory material prior to or at the start of talksWhen faced with a demand for a bribe, explain thatyou respect your counterpart but that you would riskprosecution under the Foreign Corrupt Practices Actif you were to make illegal payments.
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Negotiating with the public sector 6 of 6
PROTECT YOUR ORGANIZATION AGAINST CORRUPT OFFICIALSTry to deflect a demand for a bribe by making a donation to a local charity—as long as you can be sure that the payment reaches the intended destination.If corruption is pervasive within an organization, you may need to walk away from the deal. If it is not pervasive, try to involve more honest individuals in the negotiation process.
Page 19
Pinpoint a strategy
Page 20
Pinpoint a strategy
AnchoringFraming
Page 21
Establishing price targets
Page 22
Establishing price targets
BEFORE THE NEGOTIATIONAn asking price, that as the starting point for negotiation, is the highest possible price that may be expectedA price that would be extremely favourableA price that would be favourableA price below which the deal would be unacceptable
Page 7
Leaders and negotiations
Page 24
Leaders and negotiationsRecognize that negotiation is not just an individual skill, but an organizational capabilitySpecify the criteria that define a successful negotiationEmbrace negotiation as a core capabilityCreate opportunities—through coaching, training, and leadership development experiences—for your people to confront their own emotional barriers to conflictRecognize that negotiations are a potent source of feedback regarding strategy
Page 25
Ethics and negotiating
Page 26
Ethics and negotiating 1 of 4
IDENTIFY YOUR OWN ETHICAL LAPSESCreating value at the expenses of outsidersStereotyping some, favouring othersIgnoring a conflict of interest
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Ethics and negotiating 2 of 4
IDENTIFY THE ETHICAL LAPSES OF OTHERSOverlooking behaviour that would harm us if exposedExcusing those who delegate unethical behaviourJudging outcomes rather than processes
Page 28
Ethics and negotiating 3 of 4
GUIDELINES FOR MORE ETHICAL NEGOTIATIONSWeigh benefits achieved at the table against harms inflicted on outsidersAccept that we’re all susceptible to stereotypes, and don’t give favours to insidersSpeak up against policies that implicitly promote or condone unethical behaviourWhen negotiating as an agent, try to align your incentives with your client’s
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Ethics and negotiating 4 of 4
GUIDELINES FOR MORE ETHICAL NEGOTIATIONSDon’t excuse unethical behaviour that’s been delegated to another partyHold negotiators accountable for their decisions, not just their results
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Constraints and guidelines
Page 31
Constraints and guidelines 1 of 4
Never accept the first offer (regardless of how good you may feel about it). Go through a process to make the other side feel good about the final agreement.Always ask for something in return for any concession offered and make a “big deal” out of any concession.Never “gloat” over a concession given to you. Instead congratulate the other side for hard bargaining to make them feel good.
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Constraints and guidelines 2 of 4
Never disclose your time requirements but find out their time constraints.When possible, invoke “The Power of the Pen” to record negotiation results.Play the “Reluctant” party by never appearing enthusiastic about trade-offs. Make the other party feel a win.Ask for far more than what you expect. Concessions will set it up for the other to win within your threshold. Apply flexibility to have a reason to continue.
Page 33
Constraints and guidelines 3 of 4
Concentrate on the real interests. Do not react to emotional behaviour. Maintain a professional approach and stick to the real issues.Maintain a perspective. Don’t be greedy regardless of the power you may have.When you lack a power position, set up the concession to make the other party feel good. Do not just give away.
Page 34
Constraints and guidelines 4 of 4
Negotiate small deals before large ones.Keep the option open to walk away. Deal with minimum acceptable, not ego!Express in writing. Written words are often more believable than verbal.Offer reasonable concessions up front then follow with smaller. Create the feeling of being pushed as far as you can go.
Page 35
Winning at auctions
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Winning at auctions 1 of 2
Determine what kind of asset is being auctionedFigure out if you have “an edge”Look forward and reason back
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Winning at auctions 2 of 2
AVOIDING THE WINNER’S CURSEAnalyze whether the asset has a common-value element. If so, bid with caution.Assess your capabilities and compare them with those of other bidders.Before placing each bid, pause to consider how you would feel if you won the auction.
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Proposals
Page 39
Proposals 1 of 2
Don’t overwhelm themMake several offersBe willing to be rejectedLeverage the status quoUse social proof
Page 40
Proposals 2 of 2STRATEGIES FOR WINNING OFFERSResist the temptation to offer an abundance of choicesIssue a few slightly different but equivalent offers at the same timeMake relatively aggressive offers to increase the appeal of moderate onesRather than requiring others to act, set defaults that match your goalsDemonstrate how others have benefited from your assets or services
Page 41
Win-win scenarios
Page 42
Win-win scenarios 1 of 3A win-lose approach focuses on obtaining power over the opposing party. Both parties treat the other as an enemy and try to use power to bully other side into a losing position. This is not so bad if you ‘win’ but at least 50% of all parties in a disputed negotiation lose. Sometimes everyone loses.A win-win approach focuses on good communication to develop more value, and hence the interests of both parties can be satisfied. Value negotiations focus on creating value and away from power. Focusing on gaining power will not guarantee value whereas creating value will.
Page 43
Win-win scenarios 2 of 3
A MOMENTUM-BUILDING EXERCISEI start persuading you little by little by example, and leading by my own behaviour that you don’t have to fear me.Therefore, you don’t have to defend yourself because I’m not attacking you.
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Win-win scenarios 3 of 3
A MOMENTUM-BUILDING EXERCISETherefore you don’t have to resist and you don’t have to bring your power to the table because I’m not bringing mine. It’s not that we don’t have the power; we’re just not bringing it to the table.If we don’t have to fight over power, we can cooperate to create a valuable outcome for both of us.
Page 45
Typical negotiation mistakes
Page 46
Typical negotiation mistakes
Lack of trustValue proposition is not understoodGiving” without “Getting”Inability to check your emotions at the doorFocus on Position vs. OutcomeLack of preparation
Page 47
Negotiating effectively
Page 48
Negotiating effectively
Always askKnow what you wantPrepare for the type of negotiating you will be doingUnderstand cultural differencesPractice, practice, practice
Page 49
Drill
Page 50
Drill
Page 51
Conclusion & Questions
Page 52
Conclusion
SummaryQuestions