Description
The PPT explains about Negotiation Skills.
NEGOTIATION SKILLS
WHY NOGOTIATE?
• Professional negotiating skills are an essential part of a manager’s armory as “Collaboration is more functional and productive than conflict”
PROPOSALS CAN BE NEGOTIATED AND ARGUMENTS CAN NOT BE
WHY NOGOTIATE?
• The first offer you got is rarely the best offer you can get • Negotiators with great skills will end up with better deals than those who are less accomplished • Negotiation is not about trickery but it is all about MUTUAL TRUST • Opportunities to negotiate better deals galore • We need to enhance the value derived from a proposition on a repetitive basis • Successful negotiation leads to win–win situation
• Successful negotiations build long term relationships
What is negotiation ?
• Not another term for Selling
• Negotiation is concerned with resolving disagreement/conflict by exchanging concessions • Maximize your side’s benefit by agreement with the opposite side
• Both sides obtain benefits
Negotiation – What are peoples’ concerns
• • • • • Fear of personal rejection Fear of being disliked Fear of making a fuss It is bad manners to negotiate for a better deal If you are open, generous and amenable, you will be treated similarly • Fear of failure
Negotiator - Certain qualities
• Listening, quick thinking, analyzing and responding • Single mindedness and focused • Makes proposals, does not complain • Persistence • Lack of inhibition • Prepared to exploit the emotional range with no stiffer upper lips and mild sighs • Concern only with the present • Assertive (No aggression, No submission)
When to Negotiate?
• Both parties are willing to strike a deal • There is both agreement and conflict between the parties • There are variables to trade by way of concessions • Both parties have authority to change terms • One has carefully planned and prepared his case • When something out of the ordinary happens Please remember: We have nothing to lose when we ask for a better deal
When not to Negotiate?
• When you have nothing to bargain for • When you do not have the skill to say “ NO “ if needed • When you can win a battle but risk of losing a war • When you are more emotional than rational • When you are not well prepared or planned • When you are not empowered • When under threat or pressure of losing
Styles and possibilities
Style Action by by Party A Immutable Demand Action by Party B Acceptance or Refusal Sale or Purchase Negotiation Straight Offer Conditional Offer Acceptance Counter offer Refusal Conditional acceptance Counter proposal Acceptance Warfare or debate Purchase or sale Negotiation No deal Conditional settlement Defenseless Collapse Outcome
Battle
Negotiation
Charitable gifts
Charitable offer
Donation
WHO WINS
EVENT RESULT ENVIRONMENT
The Cold War
BATTLE
LOSE - LOSE
UNCERTAIN
DISTRUT, PARONIA
HOSTILE, HEATED ARGUMENTS
INFLEXIBILITY
COMPETITIVE NEGOTIATION
DEADLOCK
WIN - LOSE
INCOMPATIBLE DEMANDS, STUBBORN
AGGRESSION, CONFLICT
COLLABORATIVE NEGOTIATION
WIN - WIN
NON-COMBATIVE SHARING, MUTUAL UNDERSTANDING
LOSE – LOSE Situation
The seller seeks from the buyer more than what a buyer could afford A kind of bulldozing Unrealistic ambition of unions leading to situations like Strikes
Short sighted nature of the negotiators is a trigger
Some guidelines to avoid lose – lose situations
•Have the ability to say “no” •Express your feelings candidly and confidently •Enhance your self esteem •Build positive and fruitful relationships
BATTLES
How to defend against a battle?
• Develop a strong defense • Exhibit confidence borne out of preparation • Keep a balanced and detached view • Keep control of what you are discussing and the process • Monitor the pace and content of discussion. Be ready to redirect it if required • Avoid either an aggressive or submissive stance initially • Be flexible to change the tactics
DEADLOCK
In a deadlock the end result is intentionally held in suspense
It is a brinkmanship played to the limit where both parties are aiming at larger piece of the cake
• The party which offers the first concession will be less successful • The more successful party will be the one with higher aspirations • Do not provoke • Ask questions • Seek new variables • Be positive • Do not interrupt, listen carefully
DEADLOCK
(contd) • Make an offer to put the matter in abeyance • Create a diversion • Suggest a trade off • Restate and clarify • Trade minor concessions • Issue a deadline
• Let them put the cards on the table
• Propose an arbitration
Arguing
Rules
• Make only a few points at a time
• Build up a case logically (explain how you see the position) • Listen carefully and respond appropriately • Seek clarification • Demand justification of the opposing case • Check out priorities • Be positive
GAME THEORY
SEEK A WIN_WIN SITUATION. LET BOTH SIDES GET THE BEST OF THE BENEFIT IF THE OTHER SIDE PITCHES FOR A WIN-LOSE OUTCOME YOU SHOULD REVERT TO AN AGGRESSIVE, COMPETITIVE WIN-LOSE APPROACH THERE IS NO POINT IN CO-OPERATING IF YOU ARE THREATENED
THE OTHER SIDE SHOULD EXPECT TO BE PENALIZED FOR THEIR NON-COOPERATIVE APPROACH
COMPETITIVE OR WIN-LOSE NEGOTIATION
ACTIONS FOR A WIN-LOSE NEGOTIATION
• Make clear as to what you must have • State what the consequences will be if you do not get what you want • Try to prevent your opponents from demanding what they want • Provide some face saving option for them through a minor concession
COMPETITIVE OR WIN-LOSE NEGOTIATION
How to defend against win-lose tactics
• Adopt an equally strong position. Present clear, unemotional opposition • Seek an exchange information to clarify each party’s position • Establish why each party holds its respective position • Stress the consequences of failure of negotiation
The intention of the procedure is to enhance mutual respect. Set up a shared problem-solving approach so that you can move towards a win-win situation
Actions for a win-win negotiation
• Indicate that you want a win-win outcome. Seek confirmation from the opposite side as well • Initially identify problems and not solutions • Establish an atmosphere of mutual trust and respect • Tackle first, the most difficult problems, which result in win-win • Share information step by step and seek reciprocation from the opposite
• Reward positive signals with your intention of giving away concessions
• Avoid a defensive posture and be amenable • Avoid legalistic and contractual approach if possible
Qualities required for negotiators
• Talk only that much as required
• Listen carefully and show empathy • Talk with knowledge and confidence • Be shrewd and quick on the take and concentrate • Set up ambitious goals • Have credibility and respect from the opposite side • Think clearly under stress
• Be Positive
• Be Patient • Be Prepared
Preparation
• Sound planning and meticulous preparation of details • Why are we entering in to negotiation OBJECTIVE • Who will be in the opposite side, their style? Objective? • What are our objectives and priorities • When is the best time to negotiate?
• What should be our style, win-win, win-lose, Deadlock?
• What are the variables and parameters? • Who should be in our team?
• Where to meet, our area, their area, neutral ground?
• How much time we need to resolve the issues? • What are our assumptions?
Factors determining our style
• The potential to repeat the deal • The strength of the other party and their style • The strength of our side and our potential • The importance of the deal to our side • The time scale
• Our resources for negotiation
Concessions
• Imaginative and skilled trading of concessions is the heart of negotiation • Consider all the variables in your position that you might be prepared to exchange • Determine which concessions would offer maximum benefits to the other side at least cost/loss to your side
• Concessions should always be traded
• Our best hope/minimum acceptable to us • Their best hope/minimum acceptable to them
• Mid point: The difference between two party’s bids and this is where
normally settlement would happen • Mid points can be improved
Offering Concessions
• You give an impression that you have lot of concessions to offer • You leave less room for trading • If your initial offer is too large, you run the risk of giving too much at the end • Weakest party concedes first • Make a small concession, tie it with a condition that will give you some
concession in return
• Offer diversionary tactics • Set deadlines
• Let the concession be a one – off event
• Build the cost of your concession in the mind of the opposite • Offer alternatives • Give concessions reluctantly
Receiving Concessions
• Receive concessions reluctantly • Sometimes you may not give any reaction or response to the concession given by the opposite side • Then the other party may give more concessions to win over you • Evaluate the concession you receive Vs your expected concession
Linking Concessions
• Link all the issues in to a package • A net loss on concession – trading can be set off by the benefit with some other item
hard ware soft ware training support maintenance
documentation project management installation terminals communications
• Develop the skill of choosing what is best for you, a package deal or item by item
Qualities of negotiating team members
• Possess personal and functional skills, competency and credibility • Compatibility • Balance • Regarded by the other side • Leading
• Notes taking
• Listening • Reviewing
• Surveillance
OPENING
• Rehearse your opening statements and anticipate the responses
• Anticipate various roadblocks in the path of a solution and keep the plans ready to overcome the roadblocks • Represent your attitude as firm and fair • Give hints that you will provide collaboration and you do not believe in conflict
Bidding for the Best Bargain
• Establish your overall game plan
• Will I do better in a win-win or win-lose situation • Estimate how much concession the other party wants and how badly
• Determine, value and rank your objectives
• Value of benefits Vs cost of concessions • Offer concessions with least cost to you and maximum benefit to them
• Remember bargains also should build relationship and not destroy it
EXPLORING
• The more you explore about the other side, that much more stronger you are • You need factual information to build your case • Exploring early reduces surprises • You will control the negotiation better • Does the negotiator opposing you has the authority to close the deal? • Were you right to assume that your strategy(win-win or win-lose) is correct? • How accurate were you in your assumption of what the other side wants? • Do not enter blind alleys
PROPOSING
• When you understand the complete agenda of the other’s, start proposing • Proposals advance negotiations • Proposals help you to seize the initiative • Unrealistic proposals damage the spirit of negotiation • Interrupting proposals would provoke arguments • Any concessions that you want to propose must be traded for something you want • When making proposals try to be innovative
SEARCHING FOR VARIABLES
• Price, payment terms, delivery, special packaging, bundling of products, licenses, spare parts, after sales service, long term contracts • Quality assurance, return of goods • Special stationary • exclusivity • Stake holder status like stock options
Settling the deal
• Confirm the deal in writing with all key points • All contractual and legal considerations must be in place
• Preamble for the contract
• Scope of the contract • Delivery terms and schedules • Price including escalation clause if needed • Penalty clauses for defaulting • Terms of payment • Technical documentation and training • Warranty • Force Majeure • Arbitration
doc_824279903.ppt
The PPT explains about Negotiation Skills.
NEGOTIATION SKILLS
WHY NOGOTIATE?
• Professional negotiating skills are an essential part of a manager’s armory as “Collaboration is more functional and productive than conflict”
PROPOSALS CAN BE NEGOTIATED AND ARGUMENTS CAN NOT BE
WHY NOGOTIATE?
• The first offer you got is rarely the best offer you can get • Negotiators with great skills will end up with better deals than those who are less accomplished • Negotiation is not about trickery but it is all about MUTUAL TRUST • Opportunities to negotiate better deals galore • We need to enhance the value derived from a proposition on a repetitive basis • Successful negotiation leads to win–win situation
• Successful negotiations build long term relationships
What is negotiation ?
• Not another term for Selling
• Negotiation is concerned with resolving disagreement/conflict by exchanging concessions • Maximize your side’s benefit by agreement with the opposite side
• Both sides obtain benefits
Negotiation – What are peoples’ concerns
• • • • • Fear of personal rejection Fear of being disliked Fear of making a fuss It is bad manners to negotiate for a better deal If you are open, generous and amenable, you will be treated similarly • Fear of failure
Negotiator - Certain qualities
• Listening, quick thinking, analyzing and responding • Single mindedness and focused • Makes proposals, does not complain • Persistence • Lack of inhibition • Prepared to exploit the emotional range with no stiffer upper lips and mild sighs • Concern only with the present • Assertive (No aggression, No submission)
When to Negotiate?
• Both parties are willing to strike a deal • There is both agreement and conflict between the parties • There are variables to trade by way of concessions • Both parties have authority to change terms • One has carefully planned and prepared his case • When something out of the ordinary happens Please remember: We have nothing to lose when we ask for a better deal
When not to Negotiate?
• When you have nothing to bargain for • When you do not have the skill to say “ NO “ if needed • When you can win a battle but risk of losing a war • When you are more emotional than rational • When you are not well prepared or planned • When you are not empowered • When under threat or pressure of losing
Styles and possibilities
Style Action by by Party A Immutable Demand Action by Party B Acceptance or Refusal Sale or Purchase Negotiation Straight Offer Conditional Offer Acceptance Counter offer Refusal Conditional acceptance Counter proposal Acceptance Warfare or debate Purchase or sale Negotiation No deal Conditional settlement Defenseless Collapse Outcome
Battle
Negotiation
Charitable gifts
Charitable offer
Donation
WHO WINS
EVENT RESULT ENVIRONMENT
The Cold War
BATTLE
LOSE - LOSE
UNCERTAIN
DISTRUT, PARONIA
HOSTILE, HEATED ARGUMENTS
INFLEXIBILITY
COMPETITIVE NEGOTIATION
DEADLOCK
WIN - LOSE
INCOMPATIBLE DEMANDS, STUBBORN
AGGRESSION, CONFLICT
COLLABORATIVE NEGOTIATION
WIN - WIN
NON-COMBATIVE SHARING, MUTUAL UNDERSTANDING
LOSE – LOSE Situation
The seller seeks from the buyer more than what a buyer could afford A kind of bulldozing Unrealistic ambition of unions leading to situations like Strikes
Short sighted nature of the negotiators is a trigger
Some guidelines to avoid lose – lose situations
•Have the ability to say “no” •Express your feelings candidly and confidently •Enhance your self esteem •Build positive and fruitful relationships
BATTLES
How to defend against a battle?
• Develop a strong defense • Exhibit confidence borne out of preparation • Keep a balanced and detached view • Keep control of what you are discussing and the process • Monitor the pace and content of discussion. Be ready to redirect it if required • Avoid either an aggressive or submissive stance initially • Be flexible to change the tactics
DEADLOCK
In a deadlock the end result is intentionally held in suspense
It is a brinkmanship played to the limit where both parties are aiming at larger piece of the cake
• The party which offers the first concession will be less successful • The more successful party will be the one with higher aspirations • Do not provoke • Ask questions • Seek new variables • Be positive • Do not interrupt, listen carefully
DEADLOCK
(contd) • Make an offer to put the matter in abeyance • Create a diversion • Suggest a trade off • Restate and clarify • Trade minor concessions • Issue a deadline
• Let them put the cards on the table
• Propose an arbitration
Arguing
Rules
• Make only a few points at a time
• Build up a case logically (explain how you see the position) • Listen carefully and respond appropriately • Seek clarification • Demand justification of the opposing case • Check out priorities • Be positive
GAME THEORY
SEEK A WIN_WIN SITUATION. LET BOTH SIDES GET THE BEST OF THE BENEFIT IF THE OTHER SIDE PITCHES FOR A WIN-LOSE OUTCOME YOU SHOULD REVERT TO AN AGGRESSIVE, COMPETITIVE WIN-LOSE APPROACH THERE IS NO POINT IN CO-OPERATING IF YOU ARE THREATENED
THE OTHER SIDE SHOULD EXPECT TO BE PENALIZED FOR THEIR NON-COOPERATIVE APPROACH
COMPETITIVE OR WIN-LOSE NEGOTIATION
ACTIONS FOR A WIN-LOSE NEGOTIATION
• Make clear as to what you must have • State what the consequences will be if you do not get what you want • Try to prevent your opponents from demanding what they want • Provide some face saving option for them through a minor concession
COMPETITIVE OR WIN-LOSE NEGOTIATION
How to defend against win-lose tactics
• Adopt an equally strong position. Present clear, unemotional opposition • Seek an exchange information to clarify each party’s position • Establish why each party holds its respective position • Stress the consequences of failure of negotiation
The intention of the procedure is to enhance mutual respect. Set up a shared problem-solving approach so that you can move towards a win-win situation
Actions for a win-win negotiation
• Indicate that you want a win-win outcome. Seek confirmation from the opposite side as well • Initially identify problems and not solutions • Establish an atmosphere of mutual trust and respect • Tackle first, the most difficult problems, which result in win-win • Share information step by step and seek reciprocation from the opposite
• Reward positive signals with your intention of giving away concessions
• Avoid a defensive posture and be amenable • Avoid legalistic and contractual approach if possible
Qualities required for negotiators
• Talk only that much as required
• Listen carefully and show empathy • Talk with knowledge and confidence • Be shrewd and quick on the take and concentrate • Set up ambitious goals • Have credibility and respect from the opposite side • Think clearly under stress
• Be Positive
• Be Patient • Be Prepared
Preparation
• Sound planning and meticulous preparation of details • Why are we entering in to negotiation OBJECTIVE • Who will be in the opposite side, their style? Objective? • What are our objectives and priorities • When is the best time to negotiate?
• What should be our style, win-win, win-lose, Deadlock?
• What are the variables and parameters? • Who should be in our team?
• Where to meet, our area, their area, neutral ground?
• How much time we need to resolve the issues? • What are our assumptions?
Factors determining our style
• The potential to repeat the deal • The strength of the other party and their style • The strength of our side and our potential • The importance of the deal to our side • The time scale
• Our resources for negotiation
Concessions
• Imaginative and skilled trading of concessions is the heart of negotiation • Consider all the variables in your position that you might be prepared to exchange • Determine which concessions would offer maximum benefits to the other side at least cost/loss to your side
• Concessions should always be traded
• Our best hope/minimum acceptable to us • Their best hope/minimum acceptable to them
• Mid point: The difference between two party’s bids and this is where
normally settlement would happen • Mid points can be improved
Offering Concessions
• You give an impression that you have lot of concessions to offer • You leave less room for trading • If your initial offer is too large, you run the risk of giving too much at the end • Weakest party concedes first • Make a small concession, tie it with a condition that will give you some
concession in return
• Offer diversionary tactics • Set deadlines
• Let the concession be a one – off event
• Build the cost of your concession in the mind of the opposite • Offer alternatives • Give concessions reluctantly
Receiving Concessions
• Receive concessions reluctantly • Sometimes you may not give any reaction or response to the concession given by the opposite side • Then the other party may give more concessions to win over you • Evaluate the concession you receive Vs your expected concession
Linking Concessions
• Link all the issues in to a package • A net loss on concession – trading can be set off by the benefit with some other item
hard ware soft ware training support maintenance
documentation project management installation terminals communications
• Develop the skill of choosing what is best for you, a package deal or item by item
Qualities of negotiating team members
• Possess personal and functional skills, competency and credibility • Compatibility • Balance • Regarded by the other side • Leading
• Notes taking
• Listening • Reviewing
• Surveillance
OPENING
• Rehearse your opening statements and anticipate the responses
• Anticipate various roadblocks in the path of a solution and keep the plans ready to overcome the roadblocks • Represent your attitude as firm and fair • Give hints that you will provide collaboration and you do not believe in conflict
Bidding for the Best Bargain
• Establish your overall game plan
• Will I do better in a win-win or win-lose situation • Estimate how much concession the other party wants and how badly
• Determine, value and rank your objectives
• Value of benefits Vs cost of concessions • Offer concessions with least cost to you and maximum benefit to them
• Remember bargains also should build relationship and not destroy it
EXPLORING
• The more you explore about the other side, that much more stronger you are • You need factual information to build your case • Exploring early reduces surprises • You will control the negotiation better • Does the negotiator opposing you has the authority to close the deal? • Were you right to assume that your strategy(win-win or win-lose) is correct? • How accurate were you in your assumption of what the other side wants? • Do not enter blind alleys
PROPOSING
• When you understand the complete agenda of the other’s, start proposing • Proposals advance negotiations • Proposals help you to seize the initiative • Unrealistic proposals damage the spirit of negotiation • Interrupting proposals would provoke arguments • Any concessions that you want to propose must be traded for something you want • When making proposals try to be innovative
SEARCHING FOR VARIABLES
• Price, payment terms, delivery, special packaging, bundling of products, licenses, spare parts, after sales service, long term contracts • Quality assurance, return of goods • Special stationary • exclusivity • Stake holder status like stock options
Settling the deal
• Confirm the deal in writing with all key points • All contractual and legal considerations must be in place
• Preamble for the contract
• Scope of the contract • Delivery terms and schedules • Price including escalation clause if needed • Penalty clauses for defaulting • Terms of payment • Technical documentation and training • Warranty • Force Majeure • Arbitration
doc_824279903.ppt