Introduction & Purposes

Substance / Relationship Tension

Our Goal

Substance

Relationship

Workshop Purposes

Increase awareness:

Prevalence of negotiation Process, and different styles Your strengths and weaknesses For preparation, conduct, and review

Provide a framework:

Improve skills Help you keep improving

Workshop Methods

Exercises Cases and role-play Theory lectures Group discussions and debriefs Application to current situations

Focus of Our Efforts

What we control:

What we influence:

How we behave How we allow others to persuade us

The behaviour of others The process Our relationship The results

Our Focus

The Pepulator Pricing Exercise

Pepulator Instructions

You will be a Board Member for either Pulsar Pepulator or Consolidated Pepulator Your job is to set your company's Pepulator prices on a month-bymonth basis You have three price points to choose from: $10, $20, or $30 per unit Your goal is to make as much money as possible for your team Profits are determined by the Pepulator Profit Matrix to be explained shortly Pricing slips will be collected and exchanged

Pepulator Instructions (contd)

All forms of communication with your counterparts, other than through your price, are prohibited Pepulator prices were $20/$20 last month Before the first month: you have 10 minutes to discuss additional goals and your strategy and decide your price You will have 2 to 3 minutes between subsequent months You will be divided into groups independent universes Please record prices and profits on the profit ledger

Profit Matrix
Our Price 30 110 110 20 20 180 80 20 150 150 20 180 20 80 30 30 50 50 150 10 150

30 Their Price 20

10

Round

1 10 10 10 10 10 10 10 10

4 20 10 10 10 10 10 20 10

2 30 30 30 30 30 30 30 20

5 30 30 30 30 30 30 20 30

3 10 10 10 20 10 10 30 10

6 30 10 10 30 10 10 10 10

A 30 30 30 30 30 30 30 20

AA 30 30 30 30 30 30 20 30

1 2 3 4 5 6 7 8 Total SUM

1100 410 1510 1510 840 1510 3020

910 1510 1510 3020

1750

Learning Pathways
Results

Actions

Mindset
(Assumptions & Thinking)

Two Models for the Negotiator

Low value outcome Be aggressive Push hard Use force Competitive Claim value

Results

High value outcome Hard on problem, respectful of people Look for joint gains Collaborative Create value, and claim fairly Maximize total benefits available Pie can be expanded This is a puzzle to solve together

Actions Strategy

Beat them

Goal Assumptions

Pie is fixed This is a battle

Possible Assumptions
Debilitating:

Empowering:

Resources are scarce This is a battle They are my opponent The goal is to beat them This is a one-time negotiation Best to see what they do first Rules of the game are fixed Poor communication is their problem They are stupid, crazy, or evil

We can create resources This is a puzzle They can be a teammate The goal is to maximize value This has future impact I can lead and set the tone I can change the game Good communication is in my interest People do what they believe is in their best interest

Other Key Lessons

Communication:
Message sent message received Intent not same as impact

Relationship:
Consider the power of trustworthiness Trust = balance of risk and return Strong relationships help produce good substantive outcomes

Process:
Be proactive and purposeful Act with the end goal in mind

Defining Success

Process Overview
CONDUCT

PREPARATION

GOAL

REVIEW

Common Measures of Success

Winning:

Not Losing:

Got better result than other party did Made fewer concessions Got as much as possible They look bad They hurt more

Did not get taken Did not lose face Will not be criticized Equally unhappy with outcome No confrontation

Components of Negotiation

Multiple Issues Repeat Over Time Multiple Parties

Intangible Factors

Tangible Factors

Internal and

Trust, Reputation, Precedent & Relationship

External Factors

8-Element Framework
Defining Success
1.

Process

Measure:

Process felt fair and efficient to all parties How the parties interact and make decisions

Definition:

Two Functions for a Negotiator

Process

Substance

8-Element Framework
Defining Success
1. 2.

Process Alternatives (BATNA)

Measure:

Any agreement must be better than your Best Alternative To a Negotiated Agreement How you will meet interests and concerns if no agreement reached BATNA Bottom Line

Definition:

Note:

8-Element Framework
Defining Success
1. 2. 3.

Process Alternatives (BATNA) Interests and Concerns

Measure:

Parties interests and concerns are well met. Third parties interests at least tolerably met. Needs, wants, fears, objectives, goals, motivations Interests Positions

Definition:

Note:

Categories of Interests

Common Differing (but not in conflict) Conflicting

8-Element Framework
Defining Success
1. 2. 3. 4.

Process Alternatives (BATNA) Interests and Concerns Options

Measure:

Options selected create value for all parties and meet their interests and concerns Possible solutions Options Alternatives

Definition:

Note:

The Pareto Frontier

Wasted Value

Your Units of Satisfaction X

Other Partys Units of Satisfaction

8-Element Framework
Defining Success
1. 2. 3. 4. 5.

Process Alternatives (BATNA) Interests and Concerns Options Benchmarks

Measure:

Agreement is seen as fair based on agreed benchmarks Precedents, market practice, custom, law, usual procedures, comparables

Definition:

8-Element Framework
Defining Success
1. 2. 3. 4. 5. 6.

Process Alternatives (BATNA) Interests and Concerns Options Benchmarks Commitment

Measure:

The commitment is clear and operational Oral or written summary of what you will and will not do

Definition:

8-Element Framework
Defining Success
1. 2. 3. 4. 5. 6. 7.

Process Alternatives (BATNA) Interests and Concerns Options Benchmarks Commitment Communication

Measure:

We understand each others intended messages, and the flow of information is reciprocal (two-way) Verbal and non-verbal signals we send to each other

Definition:

8-Element Framework
Defining Success
1. 2. 3. 4. 5. 6. 7. 8.

Process Alternatives (BATNA) Interests and Concerns Options Benchmarks Commitment Communication Relationship

Measure:

Quality of relationship is maintained or improved The quality of the interpersonal dynamics i.e. trust, respect, goodwill

Definition:

8-Element Framework
Defining Success - Summary

The outcome is successful if:

Parties feel the process is efficient and fair The deal (if any) is better than your BATNA The interests and concerns of the parties are well met Options in the agreement create value for the parties If relevant, benchmarks are available to demonstrate the fairness of the outcome The commitment is clear and operational Communication among the parties is two-way and clear The relationship has been maintained or improved
Adapted from The Harvard Negotiation Project

Preparation Questions

Preparation
Questions to Consider

INTERESTS and CONCERNS:

What are our wants, needs, concerns, fears, objectives, and hopes that underlie our position? What are theirs? What is the priority of these interests and concerns? How certain are we of theirs? What third-party concerns should we consider?

OPTIONS:

What are possible solutions based on our interests and concerns? Where can we trade options based on differing interests? What benchmarks can we use to handle conflicting interests? What have others done to solve similar problems? Is there an ideal solution that we do not know how to implement yet?

Preparation
Questions to Consider

BENCHMARKS:

Are there precedents, market practices, norms, customs, professional guidelines, law etc that we can use to decide? What would a mediator or judge do (about the substance and the process)? What standard seems fairest to me?

WALK-AWAY ALTERNATIVES (BATNA):

What can I do on my own or with a third party to meet my interests and concerns if we do not reach agreement? Which single course of action is best? (My Best Alternative To a Negotiated Agreement) How can I improve my walk-away alternatives? What can they do on their own or with a third party to meet their goals and concerns? What can I do to reality-test or worsen their alternatives?

Preparation
Questions to Consider

RELATIONSHIP:

What is current state of relationship? Preferred? If gap exists, what are possible causes? Plan steps to address deficiencies in relationship: Apology? Explanation? New protocols?

COMMITMENT:

Which topics should be contained in the agreement? What steps need to be taken for successful implementation

Roles, responsibilities, timelines

What will we do if things go wrong?

Dispute resolution clause?

What is our level of authority to make decisions? Theirs?

Preparation
Questions to Consider

PROCESS:

How much time to allocate What order to address items in How many meetings? Purpose of each? Who should and should not participate in negotiation Should we use a facilitator, mediator, etc? Venue: where should we meet (their site, ours, neutral location?) How to open and close discussions What information should we gather? Share? What assumptions should we test? How can we manage anticipated communication problems? Are there issues we dont feel we adequately understand? Has the communication flow been reciprocal (two-way)?

COMMUNICATION:

Negotiation Groundrules

Role play, not acting No need to agree Confidential instructions Extra facts:
Immaterial: OK Material: Caution

If you finish early, review or improve Locations Pairings

Welcome to Day 2

Substance / Relationship Tension

Our Goal

Substance

Relationship

Two Models for the Negotiator

Low value outcome Be aggressive Push hard Use force Competitive Claim value

Results

High value outcome Hard on problem, respectful of people Look for joint gains Collaborative Create value, and claim fairly Maximize total benefits available Pie can be expanded This is a puzzle to solve together

Actions Strategy

Beat them

Goal Assumptions

Pie is fixed This is a battle

Possible Assumptions
Debilitating:

Empowering:

Resources are scarce This is a battle They are my opponent The goal is to beat them This is a one-time negotiation Best to see what they do first Rules of the game are fixed Poor communication is their problem They are stupid, crazy, or evil

We can create resources This is a puzzle They can be a teammate The goal is to maximize value This has future impact I can lead and set the tone I can change the game Good communication is in my interest People do what they believe is in their best interest

Process Overview
CONDUCT

PREPARATION

GOAL

REVIEW

8-Element Framework
Defining Success - Summary

The outcome is successful if:

Parties feel the process is efficient and fair The deal (if any) is better than your BATNA The interests and concerns of the parties are well met Options in the agreement create value for the parties If relevant, benchmarks are available to demonstrate the fairness of the outcome The commitment is clear and operational Communication among the parties is two-way and clear The relationship has been maintained or improved
Adapted from The Harvard Negotiation Project

Two Functions for a Negotiator

Process

Substance

The Pareto Frontier

Wasted Value

Your Units of Satisfaction X

Other Partys Units of Satisfaction

Advice for Effective Negotiations

Process Overview
CONDUCT

PREPARATION

GOAL

REVIEW

Traditional Positional Bargaining

Threat

Extreme Position

Small Concession Concession

Possible Deal
Concession Small Concession Extreme Position Threat

Orchestrating the 8 Elements

Adapted from The Harvard Negotiation Project

Process
Relationship
Interests & Concerns Options

Communication

Benchmarks

If No BATNA
(Best Alternative To A Negotiated Agreement)

If Yes Commitment

Advice: Process

Negotiate process before substance Inquire about one anothers process protocols and expectations

Surface assumptions about roles and responsibilities negotiate differences Share work style preferences e.g. frequency and mode of communication

Negotiate scope management approach early Balance your roles as facilitator and advocate Take a break when things heat up

Advice: Communication

Dont just collect information, give it as well Balance inquiry and advocacy Check your understanding

Use paraphrasing to clarify their message

Consider the medium in person, by phone, email, letter?

Advice: Relationship

Address relationship issues (e.g. strong emotions) before addressing the substance Manage relationship and substance on their own merits, parallel:

in

Dont make inappropriate concessions on the substance to buy a good relationship Dont reward bad behaviour with concessions

Be wary of blame, and give people the benefit of the doubt (but do test this assumption) Model the behaviour you want to see from others.

Advice: Interests and Concerns

Use preparation time to step into their shoes Focus on understanding stakeholder interests
Dig behind their positions Establish clear priorities among their interests

How to uncover interests and concerns:

Ask why, what is your core objective etc. Share some of your interests, then ask for theirs Share your understanding of their interests and ask whats missing Suggest possible options and solicit feedback

Use reciprocal disclosure to build trust and momentum

Advice: Options

Look for low-cost, high-gain trades Brainstorm as many ideas as possible Guidelines for brainstorming: remove commitment and evaluation

Negotiate a no commitment ground rule, or brainstorm without the other side present Invent options first, then evaluate them Remember, some of the best ideas are crazy at first

Draw upon shared experiences Use tentative commitments on options until you know the whole package

Advice: Benchmarks

Negotiate the benchmarks, as with options Use benchmarks that cannot be manipulated by either party Use benchmarks to say heres why or to ask show me why Consider the test of reciprocity Use industry and RBC Project Management best practices as benchmarks Use lessons from other projects as a guide Be open to persuasion

Advice: Commitment

Commit on process early, substance late Know all pieces of the deal before committing Revisit your BATNA before committing Ensure that parties understand what they are committing to, and by when Include operational details in the agreement Clearly define roles and responsibilities Use process commitments for issues that require more work

Advice: Alternatives

Use caution when discussing BATNA

It is generally heard as a threat and is counterproductive

If either party walks, dont burn bridges Instead of escalating unilaterally, try to negotiate a joint escalation Do not cave into scope change or timing demands based on pressure or threats

Decide on the merits based on benchmarks

Advice: Alternatives (contd)

Discussing their BATNA

When

They mention it; or You feel they are overestimating or overstating it First, acknowledge it as a choice Then, ask openly how it would meet their interests better than your proposal. Be curious and open to learning. Be open to being wrong

How

Disclosing your BATNA:

When

Its better than they think and their offer is inferior As a warning, not a threat. Emphasize your preference to reach agreement they are willing to work with you.

How

Orchestrating the 8 Elements

Adapted from The Harvard Negotiation Project

Process
Relationship
Interests & Concerns Options

Communication

Benchmarks

If No BATNA
(Best Alternative To A Negotiated Agreement)

If Yes Commitment

Communication Skills

Brief your partner on your personal case

1. Who are the parties? 2. What is the subject? 3. What were your key interests and concerns? 4. What, if anything, are you upset about? 5. What was your goal in the conversation? 6. What made it difficult?

Effective Communication: Four Skills

Inquiry:

Asking questions to learn information Summarizing what you think they said Of their view or feelings (without agreeing, per se) Explaining your point of view

Paraphrasing:

Acknowledgement:

Advocacy:

Exercise: Your Personal Case

Review the dialogue and label it:

A beside dialogue that is Advocacy I beside Inquiry P beside Paraphrasing Ack beside Acknowledgement

Having reviewed your dialogue, what do you notice?

Words to be Cautious With

But vs And I understand how you feel vs I imagine you feel (etc.)

Stages of Conflict
(or response to bad news)

1. Denial

I cant believe this is happening Blaming others and/or self

1. Anger

1. Bargaining

Can begin working out a solution Implementation and closure

1. Acceptance

Adapted from the Kbler-Ross Model: Five Stages of Grief

Managing Differing Views

Differing Perceptions
Some Useful Assumptions

I may not have all the relevant information There may be more than one right answer If they see it differently, there must be a logical explanation Theyre probably not stupid, crazy, or evil Its in my interest to be curious:

If I want to change their mind, I need to know what theyre thinking

Understanding without agreeing is still valuable

Explore Each Others Reasoning

Use the Ladder of Inference
SHARE
From Argyris & Schon

My Conclusions
ASK

Their Conclusions

SHARE

My Interpretations
ASK

Their Interpretations

SHARE

Data I noticed
ASK

Data they noticed

DATA POOL

Differing Perceptions
How to Discuss

Acknowledge:

That you may be missing info That there may be more than one valid conclusion

Signal your desire to understand, even though you may still not agree later Ask what data they see, discuss their interpretation of it Share the data you see, discuss your interpretation of it Be open to changing your view

Dealing with Difficult Negotiators

Dealing with Difficult Negotiators

Typical Choices

Play their game Give in Walk

Dealing with Difficult Negotiators

A General Approach

Regain your balance:

Pause Ask a question Take a break (10 minutes, a day, a week) Why might they be acting this way? Cause/Purpose? How might I be contributing? What might an observer say about whats happening?

Diagnose:

Act purposefully with the end goal in mind

Dealing with Difficult Negotiators

A Hierarchy of Strategies

Just play your game:

Use same element differently, or move to another element Reframe to interests, options, benchmarks

(Name the game) and negotiate the process Add or change players Walk to your BATNA; consider leaving door open

Dealing with Others Strong Feelings: Empathy

Inquire about their feelings Acknowledge their emotions (without necessarily agreeing)

E.g. It sounds like youre disappointed, and maybe angry too.

Dealing With Others Strong Feelings

Allowing them to vent may be enough Acknowledgement goes a long way:

It diffuses strong feelings It meets their interest in being heard You can demonstrate understanding and still disagree with their feelings or their viewpoint

Empathy with feelings is not agreement:

Discussing feelings productively builds a strong working relationship

Best Practices for Project Professionals

Best Practices: Process

Build in regular scope checks and health checks throughout the project Hold a project kick off event that clarifies the roles and responsibilities, AND includes informal social time Take joint responsibility for monitoring scope Agree to joint escalation protocols (use form) Establish methods for managing conflict (e.g. mediation, arbitration)

Best Practices: Process

In the Project Management Framework, define roles, frequency, and who is on different governance bodies Recognize that circumstances will change be prepared to adapt Incorporate the use of the 8-Element Negotiation Preparation in project documentation and start-up processes

Best Practices: Relationship

Include time and budget for relationship building and milestone celebration

Bring people together at key points (e.g. big decisions), or when a new team member has joined.

Do things to build the relationship that are unconnected to the substance of the project Position yourself as a collaborative partner Remember that your identity/reputation and theirs are both implicated Take responsibility for building a team dynamic among all three partners in the project

Best Practices: Relationship (contd)

Remember that the business sees IT and Enterprise Ops as one GTO team serving them (as client) Put the challenge of managing the relationship on the table as a shared task Think long term Walk your talk Identify and be sensitive to external influences that may affect team member performance

Best Practices: Relationship (contd)

Be clear on who the key parties are Take the time to really understand the goals of team members

Best Practices: Commitment

Include conflict management protocols in the agreement (e.g. escalation, mediation, etc) Assume you will have to renegotiate certain commitments, based on new information

Build in processes for managing broken commitments, requests for more resources, scope creep, etc.

To maximize follow-through, secure executive buy-in Incorporate governance considerations into the project management framework. Recognize that there are constant negotiations and renegotiations

Best Practices: Commitment

Consider your authority: who the players and decisionmakers are Consider writing out the intention behind complex deal terms

Best Practices: Alternatives

Always know and develop your BATNA Have a BATNA buddy

Someone to encourage you and to brainstorm with

Be sure the whole team understands the BATNA Your BATNA must be viable before you choose to exercise it

In addition, be sure to have organizational permission to walk to your BATNA

Use PAC (Project Action Committee) as a vehicle for soliciting help and key decisions

Maximizing The Value Going Forward

Immediate next steps

Identify new actions you want to implement Identify at least one situation within the next week where you will use that new skill or idea Check in with your learning partner every 2-4 weeks Share successes and challenges, coach each other

Select a Learning Partner

Electronic version of preparation tool Tips via email

Arm Exercise

Pair Up Objective:

Get as much money for yourself as possible No talking You earn $1 Million each time their hand touches the table (or plane of the table) 10 second time limit

Rules:

Golden Nugget Game

Get into small groups Objective:

Get as many nuggets for yourself as possible No talking You can grab all the nuggets you can get at the beginning of each round If any nuggets are left at the end of a round, they will double, but: There will never be more than the initial amount of nuggets No punching, eye gouging, etc.

Rules: