Adam Hindle a.j.hindle@lancaster.ac.uk

1. Negotiation Skills Adam Hindle a.j.hindle@lancaster.ac.uk

2. a short history of me… PhD Research - Modelling of Costliness of Rurality with Dr. David Worthington at Lancaster Teaching: Project Management and Negotiation Skills Mathematical Modelling and Optimisation Excel Modelling Techniques for OR/MS Public Sector Applications Simulation - Flow Modelling, Queueing Data Analysis and Statistical Modelling Emphasis on case study work and the Process of OR Consultancy: Health Consultancy Services Ltd. A range of public sector projects. Clients include: Northern Ireland DHSS&PS, Countryside Agency, ODPM, Slovenian Health Service, PSCU in Canberra

3. Why Negotiate? • There is no single, optimum solution • Negotiation can reveal the true value • It’s a creative dialogue process that can generate a better “win-win” • Every task that you don’t perform alone is negotiated – it’s rational thought, trust and relationships

4. and because … …everything is negotiable! • Partner: managing free time, child care • Housemate: jobs around the house • Friends: which pub/club to go to, favours • Children: almost everything! Signing a contract, agreeing a sale price, deciding project scope, accepting a job, determining your workload

5. The Main Stages • Pre-Negotiation (Preparing the Ground) • Argument (Getting the difficulties out into the open) • Signalling (Indicating where movement might be possible) • Bargaining (Proposal and Counter-proposal) • Closing (Reaching a deal or contract)

6. Value • If you don't know what you want ... you won’t get it • and if you don't ask for it ... no-one's going to give it to you • Know what you want, how much you want it and then ask/offer/propose it

7. “… it’s not the will to win, it’s the will to prepare to win.” Billy Bland, Bob Graham Round Quoted by R Askwith in ‘Feet in the Clouds: A Tale of Felling Running and Obsession’ “I take nothing for granted. I now have only good days or great days” Lance Armstrong “Genius is one per cent inspiration and ninety-nine per cent perspiration. Accordingly, a  'genius' is often merely a talented person who has done all of his or her homework” Thomas Edison

8. Preparing the Ground • The more each party is prepared for entering the so-called Negotiating Arena the better for everyone involved: • Informal Discussions • Workshops • Presentations • Prepared Position statements (inc. bids & tenders) • SWOT analysis • Brainstorm innovative options for mutual gain • Anything to better understand your situation

9. Preparing a Position • (LIM)it the negotiation: • Like to Get(Would like) • Intend to Get(Want) • Must Get (Need) • Think big (the first number is the most dangerous, don't limit yourselves) • Anchoring • Know your TRUE 'walk away' point • Tactical and Strategic gain

10. Preparing a Position • Try and anticipate the negotiation, e.g. • what's going to be discussed? • how much movement is likely to be needed? • what's feasible? • what are the alternatives? • have a portfolio of equal value packages to offer • Anticipate likely threats and promises • Examine and list your own leverage & value • Prepare Decision Supporting Systems • paper based? • spreadsheet based?

11. Triple Think • What do we want? • What do they want? • What do they think we want?

12. No freebies!! • You want something they don't value (maybe you can get it for free) • They want something you don't value (but can concede for a high price) • They want something from you that you want to do (and can sell it) Do not offer any free gifts

13. Roles Leader • empowered to make unilateral decisions • does most of the talking Summariser • buys thinking time by interviewing • asks for clarifications or summarises Recorder (often technical or legal expert) • observes for visual and verbal clues • writes terms of offers made Analyst • operates DSS model • quickly assesses the implications of any offers and • supports the leader by guiding the process talk listen think write plan

14. Early Stages - Argument? • Be constructive by: • being assertive (i.e. clear and unemotional), • looking for mutual advantage (win/win) • and being prepared to LISTEN - it is more like a problem solving interview than a presentation • Seek to understand and satisfy their interests - not necessarily their stated positions • Avoid: aggression, point scoring, blaming, interrupting, speaking for long periods • Be non-committal, never say never, and caveat everything with conditions. Nothing is black & white, keep it grey.

15. Signalling • Signalling means indicating a possibility of movement towards another parties wishes but without commitment (formal or informal) • “these are our standard contract terms” • “we never negotiate on price” • “we do not normally give discounts” • “as it stands, this wouldn’t be particularly attractive” • “we are looking to improve” [direct signal] • Note that a signal often relies on the spoken emphasis given to a word or phrase • Some signals are less direct than others (see above) • It is important to be able to formulate and send signals and hear them and receive them • When hearing a signal, react quickly and question the meaning of the signal

16. Proposing • Go first! • Use ‘if you .....then we’ rather than ‘if we ..... will you?’ • Keep proposals and explanations separate • Avoid negative statements: ‘couldn’t you give us a bit more?’ • Never reject out of hand - seek clarification - then reject if necessary • Incentivise not ‘negativise’ – focus on the positives • Once definite proposals have emerged, bargaining on the deal and its details can commence. • Learn to shut up

17. Tactics • ‘Shot gun’: unless this, then … • ‘Off-limits’: we can’t negotiate that • ‘Goodcop/badcop’: nice guy negotiates • ‘The Bully’: be prepared… • ‘Russian front’: better of 2 alternatives • ‘Salami’: slice by slice • ‘Bluff’: pretend to walk • Collaborative, Principled • ‘Out of time’ (careful)

18. Win-Win: Expanding the Pie What win-win is not : • intuitive • simply a compromise or even-split • how the pie is divided but how the pie is enlarged • feeling good/happy • simply about building a relationship (although this is important)

19. Win-Win: Expanding the Pie win-win is: Exploiting and developing all creative opportunities, where no resources are left on the table (integrative negotiation) signs: • is there more than one issue? • can other issues be brought in? • can side deals be made? • are there different preferences across issues? • can we tie the deal to future performance?

20. Closing the Deal • Normally aim for a ‘final concession’ close – have one final small ‘gift’ up your sleeve! • Try to avoid hitting your true bottom line – leave a little in the tank • Record all relevant outcomes and agreements • Ensure there is sufficient binding commitment (signatures etc.) • Do not allow the negotiations to unravel due to ‘dubious definitions’ (intentional or otherwise) “sorry, I thought you meant…” • Do not allow negotiations to be re-opened (assuming that you are happy with the outcome) • If you have ‘lost’ try and link to other deals to be negotiated but, if you have ‘won’, do not allow this to happen • A great deal is when both parties are still smiling