negotiation

Negotiations Myths Obstacles

Negotiations is a life skill and an art. As a life skill, you negotiate every day whether you are aware of it or not. As an art, it has to be cultivated and developed over time. Developing this talent requires thinking differently about negotiations.

In today’s world, both in government and commercial contracting, there are negative comments and antagonistic attitudes about negotiation. There are many myths about negotiation – often because either one or both parties look at the process as “war”. Much of the negativity and destructive behavior is based on pessimistic experiences. If we look at the potential for both sides, we find that the outcome of negotiations can be positive, and it can lead to long-standing affable relationships.

Myths and Misconceptions

Most organizations, be they contractor or government, approach negotiations with either one or several of these views:

  • The opposing negotiator’s position is unmovable so our position should likewise.
  • In any negotiation, someone wins and someone loses.
  • We don’t want to bid too low and “leave money on the table”.
  • The other side has at least an extra ten to fifteen percent to work with.
  • The opposing negotiator has an advantage and we will be taken advantage of.

Let’s examine the myths and misconceptions. The desired outcome of any negotiations should be both sides believing that they achieved a fair and reasonable price and terms, rather than either feeling that they won or lost something.   We know that mutual winning is the main objective. There are several keys to achieving that end result. Here are a few of those keys.

Keys to Winning

Key #1 – Establish a non-defensive game plan early. Outline your main objectives for price as well as terms and conditions. Don’t forget that negotiation is not only about price – it also involves terms and conditions that may make your important price objectives agreeable and workable for both parties. Know what you want before you enter negotiations and prioritize your requirements. Be flexible and open to the possibility that your game plan may need to change during negotiations. Don’t let the plan get in the way of the goal. Your objectives must be helpful rather than a hindrance.

Key #2 – Communicate. The primary reason that most negotiations break down is the parties’ failure to communicate and keep on communicating. Communication involves listening and patience. It involves communication within your organization as well as with the other party to the negotiation. A hard and fast position which does not allow for hearing the other side or for you to consider slight changes to your position will mean that you may win a point but will surely lead to losing the negotiation. If you don’t communicate, neither you nor your colleague will achieve the desired result. You need to look at the other party as a colleague. You will meet that person again and need her cooperation. It might happen on the next contract.

Key #3 – Attitude and Consideration. Understand both your position and the opposing position.   By seeing both sides of the situation you may better comprehend rationale and allow the process to proceed more smoothly. Taking a position without listening to the other perspective is a prescription for losing. Approach the table with a positive attitude.   Negotiating is about both sides winning. By exploring areas of mutual benefit you can both achieve success.

Preparing Yourself for the Negotiation

You already know the substance of those technical things you need to do – become confidentially familiar with the details of the winning cost and price; review the contract terms and conditions and note items that need to be deleted or added; and review the scope of work, deliverables, and schedule. While you should not underemphasize the importance of being prepared. In these three areas, it is at least equally, if not more important, to refresh your people skills and prepare your attitude.

People Skills Refresh and Right Attitude Renewal

Practice listening. Use a recent controversial news story as a discussion piece. Ask a colleague or friend to tell you what they believe is the gist of the story. Practice just listening to them while they relay their viewpoint. Don’t interrupt and when they are finished, restate their point of view as you heard it. This is key. Then present your perspective and ask them to do the same. Ask them to tell you how well you listened and communicated their viewpoint.

Work on understanding “the gray”. This means you have to accept that you won’t get everything you are looking for and neither will the other person. Again, practice with a colleague or friend. Use a situation that you both have an interest in and decide that you will each take opposing sides. Present your views and then find several possible “gray” positions. Negotiations are not black or white and there are many shades of gray. If you understand this, you will feel better about the end result.   Separate the real needs from your positions and focus on those rather than someone’s posturing.

Be respectful of the other person. This does not mean collapse under the slightest pressure, or conversely overpower them. It means that you are mindful of their position and the effort they have made to prepare for this important meeting. The other person is also human and deserves the same respect that you would want afforded you.

Be friendly. Friendliness will get you further than defensiveness. This does not mean become fast friends with the person you are negotiating with. What it does mean is that you are not hostile and rigid about your positions. If you approach the negotiation with a friendly attitude you succeed and achieve good results.

Be sensitive and aware. Sensitivity and awareness is the “softest” skill and the most difficult to cultivate. It means virtually having a sixth sense about what is going on. Rely on intuition refined from all of your experiences. Being sensitive and aware means viewing how the other person is reacting to your statements or presentation, hearing what the intonations and volume are telling you, and, most importantly, just letting your inner voice tell you what to do – that’s the non-verbal conversation. Rely on it. Again, practice with a colleague or friend. After you have finished the news story practice session, tell your colleague or friend what you “saw” or “heard” that was not spoken. Ask for feedback to confirm or refute the accuracy of your sensitivity meter.

Enlisting the Participation of Your Project Team

It is important to remember that you should not be alone in negotiations. You should include at least the project manager or technical leader, a pricing analyst, and perhaps a member of the technical staff. Negotiating is not only about pricing and contractual terms and conditions. You may encounter questions and issues that require technical input, strategizing, and discussion of technical points. The technical people are members of the team who will be required to deliver product or service. If they are included, they have a better chance of understanding what the technical, contractual, and pricing issues were and can make a more successful project. Remember, you are the focal point in negotiating the business agreement and therefore, must maintain control of the agenda and the progress of the negotiation.   Seek input from the technical staff about issues or potential problems and solicit your project manager’s or technical leader’s advice. It is also always desirable to run some rehearsal negotiation sessions in advance to uncover any hot issues and practice your roles. At that time, explore options and discuss merits and weaknesses with your position or your team. Determine in advance who has responsibility for what and note it on your agenda.

Continuing the Relationship After Negotiation

When you leave the negotiation you should expect that you may, and probably will, encounter the same players again. Sometimes, they will be on your side of the table. With this in mind during the negotiations, it is likely that you will end up with a more favorable attitude toward the process. That will foster cooperation during the project, and potentially an easier negotiation next time. It is critical for you, as the negotiator, to continue the relationship after you are complete. Check in with your counterpart on a regular basis to find out how the project is proceeding from their point of view. Often you find out things about the project or the process of negotiations that you would not otherwise learn.

The Finale

Negotiations are about give and take – where you feel good about the decisions and compromises that were made. Victory is achieving a mutual positive outcome.

KEY NEGOTIATING POINTS

  • Prepare yourself well
  • Research both positions
  • Develop flexible positions and options to consider
  • Be alert to non-verbal communications

See Harvard Business article: http://hbswk.hbs.edu/Pages/browse.aspx?HBSTopic=Negotiation%20Preparation

Marsha Lindquist