Dynamic Negotiation v.03-2023

Dynamic Negotiations
Negotiation Skills by
Swiss Management Training GAF

“Negotiation is a two-way communication process designed to
reach agreement with someone who shares some of your
interests and has a different view than you on others.”
What is
Negotiation?
Roger Fisher, William Ury and Bruce Patton,
Getting to Yes: Negotiating An Agreement Without Giving In
“Negotiation is a process through which parties move from their
initially divergent positions to a point where agreement may be
reached.”
Paul Steele, John Murphy, and Richard Russell,
s, p. 3
2

Expectation vs.
Reality
…Optimism is not a negotiating strategy
3

• Content, substance:
• Issues, definition, and understanding, CRD,
Separate
Content from
Procedure
• Procedure:
• Hard, Soft, or Principled, Tools,
• ...other processes?
This class will touch both these topics.
4

Workshop
Structure
Welcome and Training Intro
Case Study 1: “The Tangelo Deal”
The five stages of negotiation,
the negotiation life cycle.
Preparing the negotiation:
• SWOT-Analysis,
• BATNA,
• Yield/Shield and ZOPA,
• Motivators and hygiene
factors.
Case Study 2: “Veggie
Connection”
Negotiating Approaches:
• Hard vs soft negotiation,
• 5 approaches,
• The 4 pillars of principled
negotiation,
Case Study 3: “Cable TV”
Applied negotiation
techniques:
• Building on Principled
Negotiation: the CRD“
• Recognizing ploys and
“slippery” tactics,
Case Study 4: “Garden Way”
Training Wrap-up: Conclusions,
Growth-Plan, & Take-aways.
5

Before During After
Negotiation
Phases
Preparation
& Planning
Protocol &
Probing
Moving
toward
agreement /
“Bargaining”
Concluding
with
agreement
Measuring
success
A negotiation is a process…
6

Preparing the
Negotiation
Preparation and planning
7

What problems or information gaps exist?
Project
Negotiations Key
Preparation
Questions
What is our history with this party?
What is their history with us?
What exactly do we want out of this negotiation?
What do we have to do to achieve that goal?
8

Preparation
phase:
To Agree or
Not to
Agree…
Qualitative
Hygiene
factors vs
motivators
Yield / Shield
Table
SWOT
Quantitative
Zone Of
Possible
Agreements
BATNA
(Description)
BATNA
(Impacts)
9

The SWOT
Analysis
Internal
Factors
Strengths
Weaknesses
(my SWOT/your SWOT…)
External
Factors
Opportunities
Threats
Positive
Factors
Negative
Factors
10

The
BATNA
Best
Alternative
To a
Negotiated
Agreement
✓Definition: The course of action that could be taken by a party if the current
negotiations fail and an agreement cannot be reached
✓You do not want to accept an outcome that is worse than your BATNA
✓Only one BEST ALTERNATIVE! Do not have various options
✓The higher the BATNA the greater the power…
✓What is the BATNA of the other party?
✓If failure to negotiate is not an option, you are open to the wrong end of a
win-lose situation: without a BATNA…
✓Difficult retreat
✓Pressure to succeed
11

Example: using BATNA to determine the
Zone Of Possible Agreements:
Example
“Selling a
used
machine”
Discussion: The seller
suddenly discovers that he
can donate his old machine
to a museum and deduct this
from his taxes as a charitable
donation – which will bring
him € 2‘500.–.
How does this change the
negotiating situation?
Scrap value
Asking price = € 20’000 >
< New machine price = € 12’000
Scrap value = € 500 >
< min value = € 1
BATNA of the seller
BATNA of the buyer
Negotiating Room (ZOPA)
€ 500.– € 12'000.–
New machine
12

Prioritize key issues, break them down into separately
negotiable parts and decide which ones are:
Yield / Shield
Table
• key (must have, hygiene factors), and which are
• very important (motivators), and which
• you can leave on the table.
For each issue define a Zone Of Possible Agreement (ZOPA)!
Open negotiation
issues:
Yield Shield Border
Rational / what
could change?
13

Aim higher ...
Tips:
• If you want more, aim higher!
• Above all: define your goals precisely
• Mental training
• Concretely imagine the most successful conclusion
• Do not fear winning!
• Simply: “give less/take more” is NOT an objective negotiation
approach!
14

Checklist “Planning a Strategy”
Tips:
• My goal:
• BATNA
• My BATNA
• The other party‘s BATNA
• Mutual gain
• My strategy
15

Checklist “Tactics”
Tips:
• Agenda
• What MUST be on it &
• What will I under no circumstances bring to the table?
• Which issues are the most important to me?
• Have I allowed enough time for them?
• Tactics
• Grounds for taking a break?
• Deadline pressure?
• Dead ends?
• Those “small” practical details:
• Computer/Tablet
• Which materials do I bring with me?
• Which materials will I hand out?
16

Checklist “Psychological preparation”
Tips:
• Am I 100% convinced?
• Mental training?
• If necessary: Role play “Negotiation Training”
• Don‘t forget
• I should not underestimate my power
• The other party does not know my weaknesses
• The other party has something to win… otherwise they would not be here.
17

Worksheet: BATNA
Example
Possible Scenarios/Alternatives Attainable? Ranking
A
B
C
18

Worksheet: Yield / Shield Table
Example
Negotiation Issues
“On the Table”
Position / Rank
within Position
Rationale for Position
Circumstances that Could Change
Issue description Yield Shield Border Why and what might change?
Issue 1.
Issue 2.
Issue 3.
19

Worksheet: ZOPA
Negotiation Issues
“On the Table”
Issue description (taken from the Y/S above)
Issue 1.
Seller’s
low
Buyer’s
high
ZOPA boundaries
Our target description
Example
Issue 2.
Issue 3.
20

Negotiating
Approaches
Execution of the negotiations
21

The most
common
Negotiating
Strategies
Hard
Soft
Principled
• Fixed positions-based
• Traditional, win-lose approach
• “Zero-Sum Game” mentality
• Compromise-based
• Traditional, “don’t lose” approach
• “Feel good” mentality
• Results-based
• Progressive, win-win approach
• “Common ground” mentality
22

Focus, concern (effort) for your goals
Soft
Hard
Dictate / Win-lose
Win-win
Abundance mindset/
infinite game
Which approach
would you choose?
Avoid
Accomodate /
Lose-win
Focus, concern (effort) for the other’s goals
23

Separate the people from the problem
The four
pillars of
Principled
Negotiation
Focus on interests (yours and theirs), not positions
Generate a variety of possibilities before deciding
Insist the result be based on an objective standard
From: “Getting to Yes: Negotiating An Agreement Without Giving In”, Roger Fisher,
William Ury and Bruce Patton.
24

During
Negotiation
Execution
Phase:
Protocol &
Probing
Before
Preparation
& Planning
Protocol &
Probing
Moving
toward
agreement /
“Bargaining”
Concluding
with
agreement
After
Measuring
success
25

Remember:
Separate
People from
the Problem
• Show your interest in the person, but
defend your principles and interests
• This may lead to an apparent contradiction
But…
• The other party will be forced to take a step
back from the problem
26

1
2
3
4
Protocol:
Entry Phase
Take your
time
Choose the
“style” of the
relationship
Build a
relationship
based on trust
Get to know
each other
Don‘t forget:
Those who ask,
lead !!!
27

•Decision maker or Gate keeper?
Probing: who
am I talking
to?
•What is their mandate? Their
authority?
•Verify your assumptions:
• Their hygiene factors and motivators?
• Their BATNA?
28

Preparing and
Planning for
Negotiations
• Preparing:
• People + Politics
• Planning:
• Strategies & Tactics
29

Authority
H
People: in
Perspective
L
L
Influence
H
Adapted from a model created by Rudy Pilotto, Serious Consulting Pty Ltd.
30

Checklist: “The negotiation partner”
Tips:
• How has he/she done business in similar situations?
• What are his/her most important qualities?
• What are his/her hobbies?
• What are his/her personal interests?
31

Checklist: The interests of the other side”
Tips:
• Have I tried to put myself in their shoes ?
• Interests of the firm
• Interests of the negotiation partners
• How my partner prioritises his/her interests
32

During
Before
After
Negotiation
Execution
Phase:
Bargaining
Preparation
& Planning
Protocol &
Probing
Moving
toward
agreement /
“Bargaining”
Concluding
with
agreement
Measuring
success
33

• Concentrate on interests, not on positions.
Interests vs.
positions
Positions
(Demands vs.
Needs)
Interests
34

• Objectives Standpoints!
Objectives
and
Standpoints
• Make a list of your
objectives, with priorities
• Common denominator for your objectives ?
• What are your concealed objectives ? (feeling of one’s own value,
ambition, strategic interests, power struggles, etc.)
• You MUST know and take into account the vested interests
and preferences of the other party
• What are their concealed objectives?
35

• The Conflict Resolution Diagramming (CRD) helps understand
the context and build a conclusion that all parties perceive as FAIR.
The Conflict
Resolution
Diagam
Positions/Demands
Interests/Needs
Common Objective
Assumptions
Injections
What are we fighting about?
What are the unsatisfied, underlying needs
driving the demands of each person?
Why are we willing to be in the same room
discussing the matter?
Why do we believe we can only meet our need by
having our demand?
What can we do to reach a win/win resolution?
36

Tool: Conflict Resolution Diagram
Example
ASSUMPTIONS & INJECTIONS
NEED 1
DEMAND 1
B
D
COMMON OBJECTIVE
A
CONFLICT
C
D’
NEED 2
ASSUMPTIONS &
INJECTIONS
DEMAND 2
37

To Avoid… Develop Skills in… To Produce More Desirable Behaviors
Getting stuck on “my
position”
Pattern recognition
Asking more probing questions to
uncover other options.
Critical Skills
Address
Common
Negotiating
Pitfalls
Getting defensive Mental simulation Talking less (including that “voice” in the
back of your mind), listening more and
allowing your brain to process
possibilities.
Reacting
inappropriately to or
missing important
cues
Reflection-in-action
Observing and managing non-verbal
clues, e.g. body language and voice
tone.
38

Difficult
communications
39

• One’s perception = own reality.
• There are as many perceived “realities” as there are
people.
Awareness:
• Take the time to understand customers and
stakeholders' perceptions…
• …to understand their reality and compare it to
yours.
40

Environment
Topic
Communication
Process
Us
Me

4-Step Approach
for Handling a
Difficult
Conversation
42

• Acknowledge the request and state your
position.
• Rephrase your need and speak in the conditional
tense.
5 Tips to Help
You Say “No”
• Be open about what you can and cannot do.
• Take a chance by refusing unreasonable
requests.
• Investigate alternative ways to overcome a
deadlock situation.
43

Common negotiating
challenges
44

Common
Negotiating
Challenges
You may find negotiating a particularly challenging experience when
facing:
• A negotiating power advantage (or they “hold better cards”)
• Arrogance or disinterest (or they “play hard to get”)
• Strategies with hardball tactics (or they “use dirty tricks”)
45

Principled
Negotiations’
Answers
When Facing
“Better Cards”
• When facing a stronger position or party, your objectives
should be to:
• Protecting yourself against making an agreement that puts
you or your organization in worse shape than just walking
away,
• Maximize your assets, so that any agreement you do make
serves your interests as best as possible, given the
circumstances
Adapted from Getting to Yes, by Fisher, Ury, and Patton 1991
46

Typical “Better Cards” Tactics
Example
Tactics Description Possible Response(s)
Non-negotiable demands
The other party presents demands so extreme
that no agreement appears to be possible.
Test your current estimate of a Zone of Possible
Agreement (ZOPA) to put possibilities on the
table.
One-upmanship
The other party comments on your
disadvantage, e.g., recent poor performance
or what they have heard from other sources.
• Recognize the tactic as an attempt to throw
you off balance
• Be patient and work off of a Yield and Shield
Table
“Big-pot” tactic
The other party may have created “straw”
issues to appear to be at an advantage over
your position.
Patience and/or the CRD process to probe
assumptions and weed out the “straw” issues
47

Principled
Negotiation
Answers to
“Playing Hard
to Get”
In some negotiations, the other party becomes arrogant and
refuses to engage, then re-engage the other party by
• Concentrating on the merits: talk about common interests,
related options and criteria
• Focusing on what the other party may do: try and identify the
other party’s interests and the principles underlying their
position
• Considering what a third party can do: bring in a third party
to assist (if steps 1 and 2 aren’t successful)
Adapted from Getting to Yes, by Fisher, Ury, and Patton 1991
48

Typical “Hard to Get” Tactics
Example
Tactics Description Possible Response
Authority games –
type 1
The person (s) in the room does not have
authority to make the deal.
• Do your homework on their formal structure / informal
political landscape
• Suggest a recess and reconvene only when authority
issue is resolved
Authority games –
type 2
They ask if you have the authority to
make the deal.
• Assure them you have the authority to make a fair deal
and move to the issues
High hopes
The other party starts with a higher
demand than you expected, thinking it
always gets better results.
• Acknowledge that you know those studies too, and they
also show the tactic may often result in a “no deal”
• Request more realistic expectations immediately
49

Principled
Negotiations’
Answer to
“Dirty Tricks”
When facing “dirty tricks” negotiating tactics:
1. Separate the people from the problem.
2. Focus on interests (yours and theirs), not positions.
3. Generate a variety of possibilities before deciding.
4. Insist that the result be based on an objective standard.
5. If all else fails, turn to your BATNA and walk out.
S. Covey referred to this kind of a scenario as: “Win-Win or No Deal”!
50

Typical “Dirty Tricks” Tactics
Example
Tactics Description Possible Response
Delaying tactics
The other party does not really want a deal
but is stalling for some reason.
Acknowledge that you know what is happening and give
them a chance to regain your confidence. Otherwise,
BATNA!
Deliberate errors
The other party inserts errors advantageous
to their position into the process or even in a
written agreement.
• Check everything at every stage.
• Point out any errors and request immediate
corrections, otherwise BATNA!
Hostage tactic
“If you don’t meet my demands, you won’t
get back what I’m holding.” Typical business
hostages include money, property or
reputation.
Call out the tactic as soon as it is recognized and find a
way to neutralize the threat, e.g., report unethical
behavior. Then deal with replacement or take your
BATNA and go home.
51

Create many
alternative
solutions
• Find win-win options that lead to common gain
52

Mutual gain
• Listen
• Show that you have understood the other party
• (that does not mean that you agree with them!)
• Quote the other party often
• Use the words and standards of the other party
• Transform the competition into a search for
mutual gain
53

• Separate searching and decision-making
• Brainstorming, eventually with other people
Find Win-Win
Options
• From “against-one-another“ to “next-toone-another“
• See the problem through the other party‘s eyes
• Ask about the preferences of the other party
• Take advantage of different interests
• Vary the consequences,
and the scope
54

Checklist
“Concessions”
• Concessions that don’t cost
anything ?
• Reciprocity: not compelling, but
the pressure is very high!
• Concessions, slowly and
according to plan
• Sell each concession as
exceedingly painful
• For each concession: write out
examples of things you would
like to have in return
• The party which makes the first
concession on an important point
usually ends up worse off
• Keep a record of concessions
made (from both sides)
• Concessions can be withdrawn at
any time in response to new
circumstances
• The value of a concession can be
increased beforehand and
afterwards
55

During
Negotiation
Execution
Phase:
The
agreement
Before
Preparation
& Planning
Protocol &
Probing
Moving
toward
agreement /
“Bargaining”
Concluding
with
agreement
After
Measuring
success
56

• Fight over positions
• Research various criteria
use commonly
recognized criteria
Use objective
criteria
• The criteria must be accepted by both sides
• The other party should participate in the search for criteria
• If two criterion lead to different results
• 50 – 50 split between both results
• Higher level discussion about criteria
57

The Contract
• Whoever formulates the contract has the
advantage
• A good contract = each side has the feeling they
have won something
• Questionable intentions ->Rules of execution of
the deal
• Deadline to obtain in-house approval
• Which concessions for the conclusion?
58

Checklist
“Conclusion”
• Which concession will I hold onto until the end as the
icing on the cake?
• Have I drawn up a draft contract?
• What MUST the contract contain?
• Who will drawn up the definitive contract?
• Deadline for obtaining in-house approval?
• Watch out for rounded numbers:
• It is very easy to go from € 102'500 to € 100'000,
• Likewise for € 97’500.
59

During
Before
After
Monitoring
the
agreement
Preparation
& Planning
Protocol &
Probing
Moving
toward
agreement /
“Bargaining”
Concluding
with
agreement
Measuring
success
60

Quality
Control
• The review is the quality assurance for the
negotiation
61

Reviewing ->
Learning
effect
• Compare the achieved goals with the planned ones
• Analyse processes and concessions
• Analyse mutual gains
• Were they properly divided?
• Ask a knowledgeable person to look at your
reviewing
62

Checklist
“Reviewing”
• What percent of my goals
have I reached ?
• Were new mutual gains
discovered during the
course of the negotiation?
• Where did I make
concessions too fast /
too soon?
• Did the level of mutual
trust increase during the
course of the
negotiations?
• Do both sides have the
feeling that they won?
• What do I think went
particularly well?
• What should I do better
next time?
• What should I leave out
next time?
63