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Four Powerful Steps for Effective Negotiation | Negotiation

Negotiation

Negotiation is a discussion aimed at reaching an agreement. Procurement negotiation clarifies the structure, rights, and obligations of the parties and other terms of the purchases so that mutual agreement can be reached prior to signing the contract. Final document language reflects all agreements reached. Negotiation concludes with a signed contract document or other formal agreement that can be executed by both buyer and seller Negotiation among team members is used to reach consensus on project needs. Negotiation can build trust and harmony among the team members.
Negotiation-tools-techniques2Negotiation-tools-techniques

Negotiation is used as a technique in the following processes

Process Group

Knowledge Area

Process

Execution

Project Resource Management

Acquire Resources

Execution

Project Resource Management

Develop Team

Execution

Project Procurement Management

Conduct Procurement s

Execution

Project Stakeholder Management

Manage Stakeholder Engagement


Acquire Resources

 In many projects the Project Management team need to negotiate with

  • Functional Managers to ensure that the project receives best possible resources in the required time frame.
  • Other Project Management teams to share scarce or specialized resources.
  • External Organizations and suppliers to provide qualified, certified, specialized team or physical resources, according to organizations defined policies and guidelines.

Develop Team

According to this process negotiation among team members is used to reach consensus on project needs. Negotiation can build trust and harmony among the team members.

Conduct Procurement

Where in this process the negotiation involves seller and members of the procurement team. The negotiation should be led by a member of the procurement team that has the authority to sign contracts. The project manager and other members of the project management team may be present during negotiation to provide assistance as needed.

Manage Stakeholder Engagement

 Negotiation is used to achieve support or agreement that supports the work of the project or its outcomes and to resolve conflicts within the team or with other stakeholders.

How to Negotiate:

The following are four “golden rules” to be the most helpful towards productive negotiation outcomes. The rules parallel different stages of a negotiation:

  1. The background homework: Before any negotiation begins, understand the interests and positions of the other side relative to your own interests and positions. Put these points down and spend time in advance seeing things from the other side.
  1. During the process: Don’t negotiate against yourself. This is especially true if you don’t fully know the position of the other side. Much is learned about what the other side really wants during the actual negotiation process. Stay firm on your initial set of positions and explain your rationale but don’t give in too early on the points. Wait to better understand which points are more important to the other side.
  1. The stalemate: There will often come a point in a negotiation where it feels like there is zero room for either side to budge. Two sides are stuck on their positions and may have lost sight of the overall goals of the negotiation. Emotion may have overtaken logic at this point. If you recognize that you’ve reached this point, see if you can give in to the other side on their issue in exchange for an unrelated point that is relatively more important to you. An example helps clarify: during a friend’s recent car purchase he negotiated the price to a level that the dealer did not want to move any more. My friend was going to leave when he asked if they would do the deal if he took the car price the dealer wanted, but give him a substantial discount on a brake job he needed on his second car. They said yes – likely since the discount on the brake job was an easier give (less profit on a job, but on a job they would not have gotten). Yet there was higher relative value of that discount for my friend who would have had to pay higher on the brake repair elsewhere. Bottom line – there is usually negotiation currency outside of the last area you are focused on negotiating. Use different “currencies” and you might get there.
  1. To close or not to close: My partner John Hamel always reminds me that the uber golden rule of negotiation is to always let someone else walk away. Whether you drive too hard a bargain, cannot reconcile on key terms, or feel that the deal is just too rich for your blood, make the offer you want and let the other side walk if they don’t want it. This is not to say to be offensive or to low ball, but rather to be honest, straightforward on what you are willing to do and explain that you understand if it does not work for them and that it is the best you can do. A great example to end on is how John Hamel recently purchased his new home. He had found a unit in a townhouse complex that he liked and was ready to close on it at price x per square foot. That said, he thought he’d take a shot on a larger and more recently renovated unit by advising that owner (who he knew was interested in selling) that he was going to be accepting a price on the other unit in 24 hours, but would take their unit at an even more aggressive price per square foot if they were interested with an immediate close. Remarkable thing, he ended up with the larger unit and one of the best units in the complex

Source: HBR: https://hbr.org/2009/07/four-rules-for-effective-negot

Useful link(s) : The Art of Negotiation | Maria Ploumaki | [email protected]https://www.youtube.com/watch?v=pjlPgJ1wBdM

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