Negotiation in Project Management

1. Negotiationin Project Management David S. Maurer, PMP, LTC, USA (Ret.) PMI – 13 December 2005

2. Why Negotiate?Dictating is so much faster Buy-in Mutual gain Achieve more together than separately All boats rise Fairness Terrell Owens – what have you done to my team?????

3. Purpose • Provide you with some tools to prepare you to have difficult or challenging conversations • Provide you with an overview of powerful negotiation skills – the very same skill used in the highest levels of international diplomacy • These are LIFE SKILLS – equally useful at home, with the kids, at the office, at the plant or as part of or as the leader of a project team

4. Background • The THEORY – Interest-Based Negotiation • Professors William Ury and Roger Fisher developed Interest-Based Negotiation (IBN) which focuses on developing Win/Win solutions • The TOOL – The Negotiation Planning Structure • Breaks down elements of complex negotiations into manageable components • Helps organize thinking – adds structure • Helps to better understand, prepare, conduct and evaluate negotiations of all types • The BOOK – Getting to Yes. Negotiating Agreements without Giving In

5. Who Are These Guys (and where does this apply)? Couples Employees Bosses Customers Business People Families Neighbors Sales People Lawyers Nations

6. Positional Bargaining versus Interest-Based Bargaining Typical Method: Position Argument Concessions Compromise Solution? Does this method of negotiation produce a wise agreement (meets the legitimate interests of each side, resolves conflicts fairly and is durable)?

7. The Planning Structure MineCounterpart’s POSITION (assumed best alternative) INTERESTS (why)? BATNA Best Alternative To a Negotiated Agreement OPTIONS for MUTUAL GAIN (satisfy as many interests of both parties as possible) OBJECTIVE CRITERIA (industry standards, law, historical data, best practices code of ethics)

8. Separate the person from the problem Perceptions Emotions Communication Assumptions Keep your ego in check – Colin Powell Seek satisfaction not victory Some Things to Remember

9. Understand your position and theirs Understand your interests and theirs Understand your BATNA and theirs Think about options for mutual gain Identify and use objective criteria IBN

10. POSITIONS Solutions to problems Specific and definite Basis for argument Requires justification Ends discussion INTERESTS Why a particular solution is preferred Reasons underlying a position Requires explanation NOT justification Starts discussion Focus on Interests

11. Listen for: I have to do X because……. I can’t do Y because……. I am really concerned about……. Then ask: Why do you need……..? Could you tell me a little bit more about your reasons for……..? Identify Interests

12. Brainstorm possible solutions together Consider options for joint benefit Create together what neither of you could do on your own Look for possible trade-offs Exchange lower priorities for higher ones Options for Mutual Gain 1962!!

13. Negotiating (communicating) helps us identify What we know; What we don’t know; and… What we don’t know we don’t know! Knowledge is Good(The Faber College Credo)

14. Real and concrete Pre-determined before and outside the negotiation Your best worst case scenario If we don’t agree, I can always…. What alternatives do I have? What alternatives can I create? How can I weaken the BATNA of my counterpart? Remember your BATNA!

15. Kelley Blue Book Going rate for babysitters in your neighborhood Standard contract language Industry best practices Our code of professional ethics Objective Criteria

16. Active Listening Verbal and non-verbal signals Demonstrates attention to speaker Builds relationship Clarifies to ensure understanding Supports more disclosure…(and knowledge is good, remember)? Reason Together…it worked for The Godfather…(for a while) Win/Win Because Win/Lose is not acceptable Jim Thomas – Negotiating to Win Last Slide!