PM news – from Axiomaplus

What makes us feel good about our work?

Posted in Leadership, Teams, Uncategorized by Michael Tomasik on 13/04/2013

20 minute presentation discussing some research that identifies why we hard, or why we don’t.

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Negotiating- the Proposing and Bargaining Phases

Posted in Negotiating by Michael Tomasik on 11/04/2013

The third phase of Negotiating, called Proposing, involves offering “if….then”  types of proposals, where the offeror presents a scenario that requests action by his counterpart in turn from some possible movement on the offeror’s part.  After several rounds of offers and counter offers, one party to the negotiation has a sense that there is a possibility of a settlement.  That is when negotiations move to the Bargaining Phase.

Bargaining Phase

The Bargaining Phase is quite similar to the Proposing Phase, except that the offers are very, very specific.  If you remember the Proposing Phase involves offers that are:

If (specific or fuzzy condition presented to your counter part)…………then (fuzzy response on your part)

An offer conveyed during the Bargaining Phase is called a Bargain.  It is structured like this:

If you agree to (specific condition for your counterpart)…………then I will (specific reward for the desired action)

Key points:

  • The offer is always conditional (if….then)
  • It always, always starts off with a demand of your counterpart, then follow up with what you will do in exchange.
  • Since it seeks to establish agreement, it is always completely clear and specific.

A Bargain offered without  a reward offered by you is an ultimatum. (not good!)  Remember the example from the last issue where you were trying to get Mark to pay an invoice promptly.  Here is how in might go if you made an incorrect offer of a Bargain:

You

“Okay Mark, I think we have talked this through.  Please pay the invoice in 30 days.  That is what we just discussed, correct?”

Mark

“Do you remember that balcony at the end of the corridor on this floor?  Well you can take a run at it and just keep going!!!”

What happened here? You forgot the second part of the bargain.  Or maybe you thought you might get it settled for little or low cost on your part.  Perhaps it was a bit of a dramatic response on Mark’s part.  But, nevertheless, however softly, you presented him with an ultimatum–a reliable way to end negotiations on a sour note.

A Bargain without a condition is a concession.

You

“Okay Mark, I’ll come over tomorrow to help you sort out your budget problems.

Mark

“Great, see you at 2:00pm”

You

“How about the invoice?  Will you pay it in 30 days?”

Mark

“Let’s talk about that later.”

In this instance, you probably linked the two issues of helping Mark and getting paid in your mind, but didn’t present them that way.  Your offer wasn’t a Bargain, it ended up being a concession.  Mark jumped on it and put your issue off.  If this happened to you, there would be very little you could do about it, except go away and try to figure out another approach.

A Bargain with the condition presented last is a weak offer.

Or, you might have said:

You

“Mark, if I come over this afternoon at 2:00pm, will you get the invoice paid in 30 days?”

Mark

“Sure, thanks.  I think I can make that happen.”

This might seem like a perfectly fine Bargain, but it is not.  When you present the reward first, particularly in the form of a question, it always sounds like a request, or even worse, some form of begging.  Don’t do this.  It is almost as bad as offering a concession.

A true Bargain follows the format at the beginning of this post and would look like this:

If you…..then I

You

“Mark, if you can get the invoice paid in 30 days from today for sure, I will come over and help you this afternoon with your budget problems.  I will stay until 5:00 if necessary.”

Mark

“Sounds good.  I can promise payment in 30 days.  Let’s start at 2:00 this afternoon.  I think it will only take about an hour.”

Done negotiations complete–on this issue—-for the moment.

More on the Bargaining Phase

You might think  the above examples are silly.  Perhaps you cannot imagine how anyone could make mistakes like that.  Don’t be fooled.  The mistakes are extremely common.  It is the real bargain offer that is rare.  Sloppy bargains result in concessions, prolonged negotiations and animosity.  At worse, they could lead to the unnecessary failure of negotiations.

If the other side offers a bargain that you find acceptable, just say: “Yes, I can agree with that”.  If you wish, you can restate it in your own words for confirmation.  But don’t do that unless it is absolutely necessary for clarification purposes.  Unnecessary conversation extends the negotiation and creates unnecessary risk.

If you don’t accept the bargain, offer a counter bargain of your own.  If you have no counter bargain, put the issue on hold for later discussion and go on to the next issue.

If the other side rejects a bargain of yours, request a counter bargain.

If the other side refuses a counter bargain, put the issue on hold and move on to the next issue.  Perhaps something associated with other issues will dislodge the blockage on the current issue.

Never argue.  It is not productive.  If the other side wants to argue, just listen until they are quiet and say: “Thanks, I understand your point of view.  Let’s move on to another issue.  Perhaps we will find agreement there”  One person cannot argue by themselves.  Have and exhibit patience.

Important Ideas

In an earlier post, I emphasized the importance of keeping the whole deal open until everything is settled.  Never, never, never, agree that one issue is finalized ahead of all of any others.  All issues are open, until they are all settled.  When a bargain is accepted just say: “Okay, I agree, let’s move on to the next issue.”  In multi-issue negotiations it is very likely that a change to a previously accepted bargain is a possible solution to a deadlock on a different issue.    Don’t reduce your flexibility.  It will only weaken your position and cost you concessions.

Understand that all issues are linked in some way.  Use that understanding to improve the efficiency of your negotiations.  Resist settling issues one at a time.

Never give something away without getting something in return.

Negotiations Are Complete.  Now You Have To Close

In the next and final post in this series on negotiations, I will write about what happens after negotiations are done—The Closing.

Negotiating – More About the Proposing Phase

Posted in Negotiating by Michael Tomasik on 25/03/2013

Picking up where we left off a few weeks ago.

You have done your preparation, completed the debating phase.  Since you, and your counterpart hold some hope for successful negotiation, you have moved on to the proposing phase.  Remember that proposals follow this format:

If you…..(vague or specific), then I….(vague).

When making and receiving proposals you should be looking for a set of conditions (yours and your counterpart’s) that overlap or have a negative gap.  The diagram below shows positions that cannot result in a negotiated settlement without one or both of the parties compromising on their exit positions.

Image

The diagram below  shows conditions that may result in a settlement.  Keep in mind, when you enter negotiations, you will not know the other person’s exit position.  That is what proposing is all about; finding the exit positions that overlap or have a negative gap.

Negative gap

Look at the diagrams above as though you were just starting the proposing phase, and do not know the other person’s exit position.  The first diagram would look more promising than the second since the distance between the entry positions is less in the first diagram than in the second.  But, the second diagram has a higher probability of succeeding, since there is a negative gap waiting to be discovered with the negotiation process.

Making Proposals

When you wish to make a proposal, just state your proposal in an “in you, then I” format.  Then just stop talking.  Do not explain.  Do not elaborate.  Do not restate it.  Do not break the silence.  Force you counterpoint to respond.   If you talk after your proposal, you will weaken your position, or even give away a concession.  If you are silent, you have gained the initiative.  You will force your counterpart to explain why the proposal doesn’t meet his or her needs.

As an alternative to the simple proposal above, you might consider giving a proposal with alternatives:

“If you do abc, or xyz, I will do EFG”.  

This displays a bit more flexibility and suggests movement.  Obviously, you must be willing to agree with either of your conditions; and let your counterpart have the choice.  Doing so will allow you to learn more about the other side’s positions.

Be sure to listen carefully immediately after your proposal.  Never interrupt or argue if your proposal is met with resistance or is rejected.  Simply ask for a counter proposal.  It is not a good idea to offer a counter proposal yourself if your proposal has been rejected, since that will encourage your counterpart to keep saying ‘No’ until you have reached your exit point without a concession on his part.

Receiving  Proposals

When you receive a proposal or a counter proposal, listen carefully.  Don’t respond instantly.  Show that you are thinking about it for a couple of seconds.  Then, because it is a proposal, it will have some vagueness in its terms.  Ask questions.  Remember the proposal that you made to Mark in our hypothetical situation in my last post?

YOU

“Mark, if you can approve this request and get us paid quickly, I will help you out with your budget problem.”

As the recipient of the proposal, Mark should have listened, hesitated a second or two, then asked:

MARK

Tell me,  what kind of help do you have in mind?

Mark is being a bit cagey here, since he could have said:

MARK

Interesting.  How about you spending an afternoon with me to help me sort out the budget figures?” (or something similar)

If he had, that would have become a counter proposal.  Then you, as the recipient would have thought about it for a second, then perhaps asked another question in return about the timing of his payment.  Eventually, you get to the point where it seems like you have a potential agreement (negative gap).  If so, then summarize the final offer, particularly if you are the recipient.  If you gave the last offer that seems to have agreement, and your counterpart doesn’t summarize it, then do so yourself.

Don’t finalize the issue.  Don’t indicate in anyway that the issue is settled.  Just move on to the next issue.

IMPORTANT IDEA:  All issues are linked.  None are settled until they all are settled.  Even though you have some sense of agreement on an issue, you may need the flexibility of  reopening in in order to settle a second issue.

Never say ‘No’ to a proposal, ask a question, offer an alternative.  Instead, put the issue on hold and return to it.  At some point near the end of negotiations, you may have to say ‘No’, but hold that answer until the end.  Saying ‘No’ leaves you with little flexibility.

Next post:   Finishing Proposing and Moving on to Bargaining, the last of four stages.

Negotiating – Wrapping Up Debate and Getting On To The Proposing Phase

Posted in Negotiating by Michael Tomasik on 05/03/2013

Since you were well prepared for negotiations, you were able to clearly describe your issues and associated wants during the Debating Phase.  You also listened carefully and asked a lot of open ended questions, so you have a pretty good idea about what your counterpart wants.  You are close to starting the next phase: Proposing.  But let’s clarify the Debating Phase a bit more.

Movement

Remember that the Debating Phase is about establishing positions and the art of signaling.  During an active Debate Phase we will experience both giving and receiving signals.  Signals are used to suggest possible movement in seemingly fixed positions.  After all, if one party is unwilling to move, then it is not a negotiation, it’s an argument.  When you hear a signal, be sure to acknowledge it by asking for clarification or reward it with a signal of your own.  But don’t misunderstand, signalling is not where you describe possible resolutions, that is the Proposing Phase.  Signaling is the giving of subtle suggestions that indicate your willingness to move in order to move the Debate Phase along.

In the last installment, you starting negotiating with Mark about a request for additional compensation.  One of your wants was a 15 day payment time from the date of the invoice.  Mark signaled that something less that his company’s 30 day payment time might be possible and you followed up with an open ended question.  Here is some additional dialog on that subject:

MARK

“We don’t usually pay in 15 days, normally it’s 30 days”.

YOU

“If I understand you, it is possible to get paid in less than 30 days.  How does that happen?”

MARK

“After I approve it, hopefully today, I have to walk it over to accounting and put in a special request.”

YOU

“How long would it normally take for a special request to to get us paid?”

MARK

“Normally, about 7 days.”

YOU

“Boy, with this issue settled, I’ll be able to focus better on other project problems, particularly your budget problem   I hope we can do this.”

Let’s review.  There was a lot going on in just a few words.

  • Mark signaled that it might be possible for a less  that 30 day pay cycle.
  • You acknowledged his signal with an open ended question. (Good!)
  • Mark explained what he would have to do in order to speed payment up; and gave you a second signal.
  • Mark said, “hopefully today” signalling you that he is a bit soft on his earlier refusal when you first talked.
  • You asked him another open ended question about the length of time.
  • Mark gave you specific information that is better than your entry position, with another signal. (normally 7 days)
  • You rewarded his signal with a signal of your own, i.e. your willingness to help out with his problem

It’s a bit like a dance when you think about it.  The better you know the dance steps (4 phases) and the more you practice the better dancer you will be; and the more likely you will be the leader in the dancing.

Note, it isn’t necessary for Mark to have read my articles.  In fact he will likely have a whole different notion of how to negotiate.  No matter, just keep the 4 phases in mind, organize what is happening in your mind, and nudge the talks along to accomplish your goals.  It’s not a war, it’s a dance.

Deadlock

I wouldn’t want you to think that following these 4 phases, Preparing, Debating, Proposing and Bargaining, is a formula for a smooth, effortless negotiation experience.  Negotiations are messy and unpredictable.  They are not linear.  Rather, conversation jumps all over the place.  People say silly things, have bad days, get angry, impatient and misunderstand.  This can lead to a deadlock.

Deadlocks occur when parties, for whatever reason, refuse to move from their current position, even though the space between their entry and exit positions might allow them to do so.  Deadlock often starts with one of the parties stiffening up, followed by the second party doing the same.

Presumably, during debating, each party would have moved a bit from their entry positions.  But a deadlock means that one or both parties view the pre-negotiation situation to be better than where the negotiations are headed.  If the other party was the one to initiate a deadlock, you have the following choices:

  • Announce that you can’t go further and call off negotiations
  • Extend the debate with open ended questions to get at the root of the deadlock
  • Give a signal that movement on your part is possible.

Not on the list of how to respond to a deadlock

  • Sighing and rolling your eyes
  • Arguing
  • Expressing anger or impatience
  • Threatening or giving ultimatums

Announcing the end to negotiations is not likely to be your first choice since you are there to improve your situation not maintain it is it is.  Use this only as a very last resort.  But you can extend the debate by trying to get at the root of the deadlock.  Your goal should be to find out if you are at a deadlock with further movement possible, or at your counterpart’s exit position.  Ask questions starting with:

What if we did…………?

How about this?

How are you feeling about X, Y, or Z issue?

Once you learn more about your counterpart’s unexpected firmness (a deadlock is always a bit of a surprise), you can send a small, subtle signal.

But be careful.  This is one place that you don’t want to give very much, if anything away.  That’s why a signal works well.  It communicates the possibility of change without actually offering it.  If you actually soften your position at this point, it is very likely that the other side will view this as weakness and hold out for more “free” concessions.  Soon you will have nothing more to give.  So, signal, then wait for the other person to acknowledge it and  move on.

Ultimately breaking a deadlock is about helping the other side to see that further movement is better than going back to the pre-negotiation conditions.

Once you feel you have learned all you can from debating: that both parties’ wants are fully understood and there is still some movement possible, it is time to move on to Proposing.  You should be able to summarize your counterpart’s issues, wants and have a good idea about their priorities.  Sometimes, in complicated negotiations, the end of the Debate Phase is an ideal time to take a break to organize this information.

Phase 3 – Proposing

The Proposing Phase is the process of giving and receiving proposals.  A proposal is a tentative answer to the following question:

What do I have to I give up in order to get what I want?

Notice, it is tentative, meaning it is delivered as a suggestion.  A proposal must have two parts: a condition and an offer (VERY IMPORTANT):

Structure

It is structured like this:

If you give me XYZ, then I will give you ABC. or….  If you do XYZ, I will do ABC.

It is always started with a condition (If you give me XYZ)

Followed by an offer (Then I will give you ABC).

If you………………Then I

I can guarantee one thing about this.  You will instinctively want to do it the other way around:  If I………., then You.  Train yourself not to to do that.  It is a weaker statement. It emphasizes what you are willing to give rather than the condition you place upon your giving.  Emphasize the condition, SAY IT FIRST.  If you say it politely and consistently, you will not offend.

Specificity

The next important aspect of your proposal is its specificity, meaning;  is it vague or precise?   Surprise!!!   It should generally be vague!!!  The condition part of your proposal can be either precise or vague, but the offer part must always be vague, because  it leaves you room for more movement later in the negotiations.  Let me give you an example from our previous scenario.

YOU

“Mark, if you can approve this request and get us paid quickly, I will help you out with your budget problem.”

This is a vague/vague (condition/offer) proposal.  You don’t specify exactly what you mean by “quickly” and you don’t specify exactly how you could help.  This is a good proposal.  An alternate would be a precise/vague proposal.

YOU

“Mark, if you can approve this and get it to accounting by the end of business today so that we are paid within 15 days, I will help you out with your budget problem.”

This a precise/vague proposal because you were specific in the condition, but retained the vagueness in your offer.  But please be careful here.  A vague proposal should not be unclear, just that it has some room for movement.

Remember

Propose an “If you…..Then I”   and……

Vague/Vague  or Precise/Vague

Next Time: More on Part 3 Proposing

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Second Phase – Debating Part 2

Posted in Negotiating by Michael Tomasik on 26/02/2013

Just to review: You are well prepared (first of the four phases) and sitting in your first negotiating meeting.  By the way, the person with whom you are negotiating is a client named Mark.   Since this is the beginning of the negotiations, you and Mark are in the Debating Phase (second of the four phases).  Recently, you submitted a claim for additional compensation for work outside of a contract you have with Mark’s company.  You have both made some opening statements that demonstrate a willingness to consider each others positions and you are in a listening mode.  What happens next?

1. Set the agenda

Your negotiations should be organized and follow a logical progression.  If you believe you only have one issue, you might lead off by stating the issue and setting a time frame to resolve it.  This would be a good time to summarize the issue and introduce the concept of the debate phase.  Of course you won’t use the phrase “debate phase”.  You start at setting the agenda by saying something like this:

YOU:

“Mark, as you know, I got your email where you said you were not going to approve our request for additional compensation; and I am glad you are willing to talk about this further.  We have 30 minutes, before your next meeting right?”

MARK:

“Yeah, well, I’m pretty angry about the project being over budget and this request (shoving a piece of paper forward on his desk) doesn’t make things any easier”

YOU:

Mark, I think I understand where you are coming from.  Since we only have 30 minutes, can we talk about this additional service request, then talk about the budget after that?”

Mark:

Sure, I guess so.

Did you notice anything significant about this short conversation?

  • First, what seemed to be one issue, is really two or more issues.
  • In your first sentence, you introduced the idea of the Debate Phase, softly, by announcing you are here to talk about the issue.  If you had anticipated that Mark would have been more aggressive, you might have been more forceful by saying; “Tell me where you are coming from, then I’d like you to hear me out, okay?”
  • Also, when you ask questions (like the 30 minute question), you don’t always get direct answers.  Just keep on going unless the answer is absolutely critical to the discussion.  If it is critical, summarize his answer, then ask the unanswered question in a different way.  In this case, it was not critical, so you  just kept going.
  • Finally, you received a big signal from Mark when he told you that there are other issues, but his willingness to discuss your immediate issue first indicates that there is a loose connection between the two issues.  But, you can be sure that there will be future discussions about the budget.

In this example the agenda  has been set. Talk about the extra compensation request first, then the budget for 30 minutes.  If there are a lot of issues, then setting the agenda might be complicated.  You might even have to write it down.

2. Describe What You Want

The purpose of the Debate Phase is to have a good understanding of each side’s wants in order to find some common ground for agreement on all of the issues.  Either that, or there is a determination that there is no common ground on important issues and no resolution is possible.

In our example, you might say next:

YOU

“What I’d like by the end of this meeting is that you approve this request for additional services so that it can be submitted to your accounting group tomorrow for payment in 15 days.  I really need to get this issue off my “to-do” list.”

MARK

“We can try for that, but I will need to understand more of the detail on it.  Honestly, it came as quite a surprise.  Also, I need some kind of commitment from you to help me out with this budget problem.”

What happened during that last exchange?

  • First, you described your entry position, namely that you expect payment of the extra service in full and payment will occur 16 days from today.  Of course, you said nothing about your exit positions on each of your two wants, but you can assume that Mark knows that you will accept less under some set of conditions.
  • You also told Mark that the issue is important to you
  • Mark accepted your opening position as a possibility, but told you that he needs more information.
  • Mark also told you that he wants “help” from you on his budget problem.  He didn’t say what kind of help.  Fortunately, he didn’t absolutely make it as a condition of his approving your request for extra compensation.

3. Further Description of Wants by Both Parties

Clearly Mark needs some additional information.  If you have it with you, proceed to give Mark more detail on the your request.  Be careful not to be defensive, or argumentative.  Don’t play the “poor me” card by explaining about all of your cost, or how difficult the contract has been.  Don’t blame it on anyone else or be tempted into the “I’m just the messenger” role.  If you are with an associate, don’t play the “good cop/bad cop” game.

Be honest.  Provide Mark with useful information.  Help him to understand your request in a straightforward way.  Remember, when someone asks you for more information, they are asking you to help them to reach agreement with you!!!  You might even ask Mark, if you have given him enough information to approve your request.  If he says no, ask him what more he needs.

If you don’t have the information in hand, suggest an adjournment and reschedule a second meeting.

Make sure you give Mark enough space to describe his wants in more detail.  In this example, you don’t really want Mark to get into his budget problems because it will make the negotiations more difficult.  So you probably should not ask him any questions about it.  Let him bring up the issue.  If he brings it up, listen, listen, then ask questions to fully understand what he wants.

Let’s assume that Mark explained that the budget overage of the project, although not your fault, was causing him some serious problems.  Let’s also assume that he asked you to help him devise some strategies to get the budget back under control.

At this point, you haven’t agreed to anything.  Both of you have just described what you want out of the negotiations.

  • You want approval of your request and payment within 16 days.
  • Mark wants more info (you gave it to him) and help with a strategy for his project problems.

If both agree that there is potential for agreement here, then you can move on to the next phase: PROPOSING.

4. What Didn’t Happen In This Example

  • There were no threats.
  • There were no insults.
  • No intimidation or real anger.

Tips for avoiding non-productive dialog

Avoid questions that will result in a “yes” or “no” answer.  Ask open ended questions that begin with:

  • who
  • what
  • where
  • when
  • how
  • why

Listen for clarity and understanding.  Do not listen to be argumentative; and do not argue.  You cannot win by convincing the other person you are right, you can only succeed by having a dialog dedicated to finding a common ground for agreement.

5. Signals

As I mentioned in the last installment, a signal is an indirect statement indicating potential movement.  What do I mean by that?  Every negotiation start out with two positions that could end the negotiations quickly:

  • Your entry position
  • The other side’s entry position

In order for the negotiations to be successful, there must be movement from those positions.  Movement, of course will be towards the exit positions.  Signals are subtle statements that give hints of movement.  It is vital that you listen for them and acknowledge them positively.

For example:

When you said you wanted payment 15 days from tomorrow, Mark might have said:

“We don’t usually pay in 15 days, normally it’s 30 days”.

Or, Mark might have said:

“I had decided yesterday, not to approve this request until the budget overages were settled.”

In the first instance the word “usually” is the signal.  It tells you that it is possible for payment to be something other than 30 days.  In the second example, the phrase “I had decided” signals you that although there was a decision yesterday, today it might be different.

It is vital that you reward signals by acknowledging them.  There are two ways to do that:

  • Summarize and rephrase the signal to confirm you understand it; or…
  • Ask an open ended question to get more information.

With regard to the payment timing in our example you might say in response to Mark’s signal:

“If I understand you, it is possible to get paid in less than 30 days.  How does that happen?”

And with regard to the extra compensation approval:

“Good, I take it then Mark, that you are considering approving the request today?  What do we need to do to make that happen?”

What if Mark had said both things?  How would you have responded in a single sentence covering both subjects?

Signals are important.  Learn to recognize them and reward them with a response.  Never, never ignore a signal, or even worse, say something negative about it.

In Summary

After Phase 1, Preparation, follows Phase 2, Debating.  Debating is about setting the mood, the agenda and listening.  Listening for the others side’s wants and issues and listening carefully for signals.  You must also be sure that your wants and issues are clearly on the table also with your entry position on each want.

NEXT ISSUE: WRAP UP ON PHASE 2, DEBATING; THEN ON TO PHASE 3, PROPOSING

Second Phase – Debating

Posted in Negotiating by Michael Tomasik on 21/02/2013

Okay.  You completed the task of Preparing, as I suggested in my previous posts, and you are in the car driving to the negotiations.  What’s next and what should you expect?

Debating

Debating is next.  I struggle a bit with that term because I think most people think of debating as structured arguing to win a point.  That is not what this phase of negotiating is about at all.  But let’s use it anyway.rapport

The purpose of debating is to set the stage for finding a position mutually acceptable compromise.

In setting that stage, when you enter into debate, you should be trying to achieve:

  • A reduction in tension
  • Establishment of rapport
  • Clarification of the order of business
  • Disclosure of your entry position
  • Understand the other side’s position through active listening
  • Perception of any signals the other side is sending

Notice what is NOT included as objectives for you:

  • Arguing your point
  • Threats
  • Blaming
  • Talking a lot
  • Interrupting
  • Point Scoring
  • Mocking, shouting, attacking, etc, etc

If you find this a bit counter-intuitive, don’t feel bad.  Basically, I do too.  I’d be embarrassed to tell you how many times I have prepared for a negotiation and entered it with the belief  that the facts (as I know them, of course), if properly explained (by me, of course) will eventually sway the other side to understand that a particular  position (mine, of course) is right.

Sorry.  It just does’t work that way.  You and your negotiating counterpart have a lot invested in the proceedings and your logic is not going to make much of a difference except to extend the negotiations and make them more hostile.

The debating phase, is thought to represent about 80% of the time spent negotiating.  Getting it right will have a big impact on the efficiency of the negotiations.

Talk, Listen, Listen, Listen, Talk, Listen, Listen, Listen    ear

Who starts the debate portion of negotiations?  Here is where the finesse enters the picture.  In general, I don’t think it makes a great deal of difference who starts the debate, but there are some subtle advantages if you assume the leadership position, which is a bit easier if you start the debate.

You should be the person to start debate if one of these is true:

  • You were the person who pushed the hardest for the negotiations
  • You are the client in the relationship
  • You think you have the stronger position (the other side wants what you have more than you want what they have)
  • You have a bigger personality, physical presence, better verbal skills.
  • You are the buyer

You should let the other side start the debate phase if:

  • You have  little idea about the other side’s position
  • Your listening skills are weak
  • The other person invites you to start

When you start the debate, you have a chance to set the tone of the discussions.  That tone should be one of a respectful, thoughtful, exploration of mutual needs to arrive a compromise position that satisfies each parties Wants. (somewhere between the entry and exit positions)

Regardless of who starts, make sure you listen very, very actively.  About 60% of your time should be spent listening, summarizing what you have heard, writing it down, asking clarifying questions and so on.  The balance of your time, about 40%, should be spent explaining your issues, wants and entry positions.  By explaining, I don’t mean justifying or defending, I mean simply explaining.

Listening For What?

You should be listening for two things.

  1. The other side’s issues, wants and entry positions.
  2. Signals (meaning, indirect statements that indicate potential movement)

Next Post: I’ll talk more about the debate phase with some examples.  I’ll focus on what you might say to open the debate phase, and set the rules.  Signals are very important.  I include some thoughts on those too.

Preparing to Negotiate – Part 2

Posted in Negotiating by Michael Tomasik on 14/02/2013

If you followed my first post on negotiating, then you have established your “wants” clearly by listing them and defining them in measurable terms.  What do you do next?

Prioritize Your Wants

You are heading into a negotiation, so, by definition, you probably will not get everything you want exactly the way you want it.

You need to prioritize!!

Use any system that makes sense to you, but keep it simple.  I suggest 3 levels are all that you need:

  • High Importance–These are the wants that you must have in order to agree to anything.
  • Medium Importance–These wants are important, desirable, but not essential.
  • Low Importance–Wants that you would like to attain, but would not sacrifice the deal for them.  If you had to give them all up to arrive at agreement, you would.

Think about these priorities carefully since,…….

in the heat of negotiation you will need to know them and use them to make decisions without hesitating.

Assign a range of values…

to each of the wants, realizing that you will need to be flexible to succeed during negotiations.

For example, if payment timing is one of your issues (and it almost always is), you might decide that 15 days from the invoice date is your goal, but that you would accept up to 60 days.

A common mistake is to think about the ideal position, but not clearly establish the minimum.  At, best, this leads to inflexibility on your part and extended the negotiations.  (Negotiations are risky and expensive, get in and get out at quickly as is practical.)

At worst, your lack of internal clarity leads you to give confusing or mixed signals which will weaken your position.

Entry/Exit Positions

After you have established the ideal and minimum positions for each want on each issue, you must establish the entry and exit positions.

The entry position could be your ideal position, or it might be higher, but it must be reasonable.  You will start negotiations from your entry position, so your negotiating counterpart will learn it quickly.  It does little good and potentially a great deal of harm to inflate your starting point unreasonably.  You will likely have to back away from it and in doing so undermine trust and credibility.

The exit position for each want is the lowest acceptable value that causes you to stop negotiating on that issue.

Exit positions for high priority wants are easy to understand.  It means that you won’t go below them to settle.  But what does the exit position mean in medium and low priority want?

When you set an exit position on a medium or low priority want, you should think of them as the place where you will stop expending energy negotiating and use the issue to get something else that is more important.

For example, if 60 days for payment is your exit position, and it is not a high priority want, don’t spend energy trying to move a stubborn opponent from 75 days towards 60 days.  Just put it on hold to talk about later.  This is particularly true if it is a low priority want.

Finally, where you place the entry and exit positions during your preparation is dependent upon how flexible you can be and your judgment about the strength of your position.  If you have lots of options (other customers if you are a seller or other products if you are a buyer); then you will have higher entry and exit points that are relatively close together.  If your position is weak (you have already done the extra work and now want to get paid) your entry and exit points will be lower and a bit more widely spaced.

Writing it down

A final step in preparation is actually writing all of this down.  It is a step often skipped, usually a result of incomplete preparation.  When you write it down you can be sure that you have really completed it.  Also, writing helps you to remember it while you are negotiating.  In complex negotiations, you might even have to refer to the document.

Here is a simple format for documenting your preparation.

preparing to negotiate

A couple of things to notice.

Issues are really just categories of wants.  An issue can have multiple wants.

The Issues and Wants should cover the full breadth of negotiations.  It will probably be a much longer list than this.  Frequently there is a lengthy list of legal issues associated with contract negotiations.

Don’t worry about putting them in priority order.  It is more important to organize them by Issue in the order you think they may be discussed during negotiations.

Be 100% specific with your Entry and Exit positions.  Make them quantifiable!

Lastly,

Spend time preparing by:

  • Identifying your Wants
  • Group them by Issue
  • Prioritizing your Wants
  • Establishing Entry and Exit positions that are realistic
  • Writing it down

You may have noticed

There hasn’t been any discussion about what the other side might want.  I purposely left that out because I think it is overemphasized.  Do a complete job with your own preparation and after you have written it down, if you have the time and the energy, think a bit about the other side’s issues, wants and priorities.

Jot down your thoughts if it helps you to relax, but don’t over think this.  You will learn fully what the other side wants during negotiations and probably it will be different that what you think.  Often when we try to anticipate the other side too much, we believe we have it all figured out and we stop listening….a recipe for failure in negotiating.

NEXT POST:  PHASE 2 of NEGOTIATING : DEBATING

Preparing To Negotiate

Posted in Negotiating by Michael Tomasik on 29/01/2013

At a recent seminar, hosted by the American Chamber of Commerce – Slovenia, I described the four phases of successful negotiation: Preparing, Debating, Proposing and Bargaining.

I think that for most negotiations Preparing is the most poorly executed phase.

The more you sweat in training, the less you bleed in battle.

motto of the U.S, Navy Seals

Preparing – Part 1

You have negotiated before and have an idea about what you want to get out of the negotiations, so why prepare?  It’s worked before, right?……Wrong!.   You may have negotiated successfully  read a couple of books, taken a class and watched the History Channel reality show “Pawn Stars” but, in my experience, you are probably not prepared enough when you enter into negotiations.

If you are not well prepared:

  • Negotiations will take longer
  • You will be reactive and defensive
  • The other side will lead the action (assumes they will be prepared)
  • You will end up with less

Defining Your Wants

One of the purposes of negotiating it to get what you want.  So, it only makes sense, before you negotiate, to carefully decide what you want.  This seems simple and obvious, but your thinking should go a bit deeper that just one or two the the most obvious issues.  For example, if you have a buyer for your auto, it’s not just about price, but timing, accessories, type of payment and so on.

Issues

The best way to organize your wants is to define issues about which you have some flexibility.  Typical issues for buy/sell commercial transactions are:

  • Price
  • Quantity
  • Packaging
  • Schedule
  • Payment Timing
  • Discounts
  • Quality
  • Phasing (staged delivery)
  • Return policy

Each of your issues must have at a “want”.  A “want” is a description of your preferred position on the issue.  For example, for price you might want, 95% of list price

  • Price: 95% of list price or,
  • Schedule: An order placed within the next 30 days or,
  • Phasing: Sell X quantity but be will to ship 20% per shipment (just in time), and so on.

Preparation is mostly about you and your issues and wants.  Get them totally clear.  Be totally familiar with them and their nuances.  It’s a good time to speculate a bit about what the other side might have as issues and wants, but don’t be too distracted by that the main goal this part of the Preparation phase is Issue and Wants definitions.

Common Mistakes

  • Not preparing (thinking you can just “wing” it)
  • Not thinking about all of the issues – invites confusion and hesitation during negotiations
  • Not being clear about your “wants” – again invites confusion and takes you out of a leadership position
  • Thinking more about the other side – preparing is not about trying to guess the others person’s position.  Knowing it gives you little advantage, particularly if it comes at the cost of knowing your own position.

Next

In part two of Preparing To Negotiate, I will explain how to finish up preparations by establishing priorities, entry positions and exit positions as well as give you an example to think about.

Managing Change

Posted in Leadership by Michael Tomasik on 07/04/2010

Certainly, as a team leader, you have foreseen the need to change something that your team is producing.  Also, as a team leader, you have spent time thinking about how to implement the needed changes.  Unfortunately, you have also probably made one or all three of these mistakes:

Mistake 1. Assuming that strong, clear and logical arguments will convince your team to change

Try to remember it took you time to arrive at your “strong, clear, logical argument”.  Your team will need the same, if not more, time to understand and accept it.

Mistake 2. Assuming that stubborn persistence will wear people down

Pushing hard on your team in an uncompromising way doesn’t wear them down and buy you change acceptance.  It just strengthens their natural resistance to change.  Push hard enough and you will get an open rebellion, if you are lucky.  If you are unlucky,the resistance will go underground, slowly eroding the performance of team.

Mistake 3. Assuming that a one time persuasive effort will transform your team.

At least once in each episode, Michael Scott, played by Steve Carell in the U.S. version of the TV comedy “The Office”, says:

“Okay, everyone in the conference room in 5 minutes.”

This is usually followed by a short explanation of how his coworkers should change the way they are performing.  This, of course, changes nothing.

So, how does one manage change

While there are many models to explain the change process, V. Nilakant  and S. Ramnarayan, in their book, Change Management, explain that implementing change happens with four, complicated,  overlapping tasks

  • Appreciating Change-the act of understanding the need for change and defining what needs to change
  • Mobilizing Support-building the political, emotional and intellectual support for change
  • Building Change Capability-constructing the capability within your company, region, department or project team to welcome and accept change
  • Executing Change-planning and delivering change as a project with its own plans, resources, schedule and budget

The impact of fast global communications, increasingly open economies and collaboration fostering technologies has, and will continue to, offer companies who can change quickly large competitive advantages over those who cannot.  As a project manager, learn how to lead change successfully.  It will be a powerful tool.

Learn more about this in Axioma plus’ monthly newsletter, PMnotes.

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Leadership Defined

Posted in Leadership by Michael Tomasik on 20/03/2010

You know a definition or an explanation of something is really very good when it sticks with your for a long time…..say 10 years.  You also know it’s good when you quote it to others and they find it inspiring.  John P. Kotter’s description of the difference between leadership and management from his book, A Force For Change, How Leadership Differs From Management, is such a definition.  It goes something like this:

Management is:

Directing your crew of wood cutters, while walking into the forest, making sure everyone knows their role.  It is assuring all the tools are available and that the axes and saws are sharp.  It involves stopping and briefing everyone on the cutting and loading processes and making sure everyone knows and observes the safety procedures.  The crew manager knows the daily quota of logs to be delivered to the mill and drives the crew to achieve that goal.

Leadership is:

Climbing up the nearest tree to the top, looking around, and saying : Damn, we’re in the wrong forest!”

This is what makes being a strong project manager so difficult.  It requires a balanced mix of performance related management skills along with the courage to stand up and say:  “Stop, we are doing the wrong thing.  Let’s go back and start over.”

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