Step_by_Step_Negotiation_Presentation.ppt
- 1. Step-by-Step Negotiation This presentation contains the basics on how to negotiate with potential vendors, contractors and employees.
- 2. Negotiation = Compromise • Goals for negotiation for a project: – Establish realistic pricing – Prompt payment – Appropriate resources – Extend deadlines – Agree on terms of project success
- 3. What Project Managers Negotiate-1 • Cost reductions. – You’ll need to negotiate if you’re talking about changing the specifications of the project or coming up with less expensive staff to finish the job. • Faster delivery. – You’ll have to negotiate if you’re going to change product specifications, extend the budget, or come up with new task sequences.
- 4. What Project Managers Negotiate-2 • Adding or changing people on the team. – This goes for staff, contract employees and vendors. – Negotiating will involve removing dead wood, revising team roles, or getting better people. – If you get stuck with lesser skills than desired, you’ll have to negotiate a new schedule, or negotiate changes to the quality of the project, or even both.
- 5. What Project Managers Negotiate-3 • Delivering different product or a different quality than originally specified. – If stakeholders change their mind about what they want in the middle of the project, you will negotiate to provide more or less quality, compromise on the budget, the schedule, and possibly even staffing resources. – Make sure this is what the client really wants before doing anything to reduce quality. This is your absolute last negotiating option.
- 6. What Project Managers Negotiate-4 • Accepting the budget without looking at the details. – Don’t be swayed until you fully understand the compromises you need to make if you take less money than you originally asked for. • Beware of holding out too long for a better deal. Beware of anyone who promises the world for a reduced rate. Something that sounds too good to be true probably is.
- 7. Characteristics of Negotiations • They stress mutual self-interest. – Both parties want something they need in a symbiotic relationship. • Appeal. – One party has something the other party really wants or needs. • Power plays (use as last resort). – One side pressures and strong-arms another to join the team. • Win-win (the ideal scenario). – Compromises are made so that each side gets something it wants and needs.
- 8. Prepare Yourself • If you don’t know what you really want and what you can really do without, you’ll never get what you really need. • Nail down in writing exactly what you are looking to achieve. • After you understand what you want and need and would like, then consider alternatives that would be bad, good and better. – Decide on the most likely outcomes. – After listing the alternatives, decide which are both acceptable and feasible. – Assess value, analyze options, and study what the other side might bring to the table.
- 9. Be and Act Cool • Always let time be on your side. – Go slowly. – Accommodate your people and suppliers, but don’t pay too much or look rushed because this will affect your ability to work things out. – Keep a lid on your emotions. Poker faces are good for more than just card playing!
- 10. What to Do-1 • Know your adversaries and your allies. – What are their credentials? – What is their reputation? – What can they contribute to your project? – Determine their worth if you’ll have to pay them. This goes for internal employees, contractors or outside vendors.
- 11. What to Do-2 • Avoid confrontation. • Be pleasant. • Listen to the other person. • Consider all arguments. • Encourage discussion. • Emphasize how you can work together. • Do not put the other party on the defensive.
- 12. What to Do-3 • It sounds trite, but taking someone out to lunch or dinner allows you to begin a working relationship in a neutral, non- threatening environment.
- 13. What to Do-4 • Be clear on your situation. • Be clear on project status. • Everyone involved in the negotiation must be fully up to speed on the project and must know what the negotiation is about.
- 14. What to Do-5 • Slow down if things aren’t going well. • If the other party is completely unreasonable or confrontational, try: – Working it out – Choosing someone else – Structuring the negotiation so it can be done in writing and not in person. • For outrageous demands and attitudes, offer the other party the bottom line. • If that fails, walk the other party to the door. • If you must have a particular person because s/he possesses some skill you can’t find elsewhere, be prepared to meet that person’s terms.
- 15. What to Do-6 • Don’t get forced into anything. • Take time to understand the ramifications of each proposal, but not too much time. • Have an idea about each alternative before you get into negotiating mode.
- 16. What to Do-7 • Get back to the person as promptly as possible. • Accept only acceptable alternatives. – Refuse substandard work or contributions. – Once you have accepted any kind of work, you have accepted it legally. – Once work is accepted, your bargaining power is limited, and all you can do is withhold payment.
- 17. What to Do-8 • GET IT IN WRITING!!!!! – Provide potential contributors with requests for information (RFI) and requests for proposal (RFP). – Alternatively, potential contributors can offer a proposal drafted from scratch without much input from you. – You will still need to negotiate the final document. – Sometimes proposals are just springboards for price negotiations and hammering out of terms. • Read such documents carefully to understand their terms fully. • If things go south, the document could be used against your company. • Provide a written response acknowledging terms and changes you agree upon.
- 18. Where to Negotiate-1 • If you negotiate in your office: – Hold your calls. – Relax and treat your guest(s) to beverages. – Make the room physically comfortable. – If your office is too small, use the conference room. – You could also take everyone out to lunch on your tab.
- 19. Where to Negotiate-2 • If you negotiate in a conference room with parties from all sides: – Have an agenda so everyone sticks to the topics at hand. – Set and stick to a start and end time for the meeting. – If you can’t reach consensus in an hour or two, you might be working with the wrong people. – Laying groundwork before critical agreement meetings saves time and nerves on both sides.
- 20. Final Thoughts • Negotiation is a skill developed over time. • You can negotiate for almost anything in a project, including: – Better team members – Lower prices – More realistic schedules • Know the needs and motivations of your opponent before opening negotiations. • Getting to a win-win compromise is preferable to beating your opponent into submission. • Take a step back in any negotiation before committing to something you do not understand.