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©2011 IC2 Institute at the University of Texas at Austin ©2011 IC2 Institute at the University of Texas at Austin
Negotiation Strategies
In Licensing and Deal Making
©2011 IC2 Institute at the University of Texas at Austin
Workshop Topics
1. Win-Win Negotiations
2. Communication in Negotiation
3. Negotiation Tactics
4. Practice Makes Perfect
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©2011 IC2 Institute at the University of Texas at Austin
Communication
• The Heart of Negotiation
• Exercise
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©2011 IC2 Institute at the University of Texas at Austin
Negotiation Strategy
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©2011 IC2 Institute at the University of Texas at Austin
Next time I suggest you try “Win-Win” Negotiating”
5 Barry Benator, Benatech, Inc. acknowledge for some slide materials.
©2011 IC2 Institute at the University of Texas at Austin
Negotiation Skills Learned or Natural Ability?
• Definition: Negotiation: Mutual discussions for the purpose of arriving at the terms of a transaction or agreement.
• “Successful negotiating is a skill. It is not something you have or don’t have.” (Gerard Nierenberg, The Art of Negotiating)
• Like playing a sport, flying an airplane, or driving a car, becoming an effective negotiator is a skill that can be learned.
• Some people have a natural talent for it. Others do not.
• If you do not have a natural inclination for negotiating, you can learn how to do it, and do it well!
• If you do have a natural talent for it, you can improve that skill with training and practice.
• This presentation will give you some tools to help you become an effective negotiator
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©2011 IC2 Institute at the University of Texas at Austin
Possible Negotiating Strategies
You Command/ My way or highway
You Give In/ Need Any Deal
Collaborate/ Win-Win
Compromise
HIGH
LOW
Your
appare
nt
win
HIGH Other side’s apparent win
Win-Lose/Short
Lose-Lose/Long
Okay/Short Term
Lose-Lose/Long
Win-Win/Short
Win-Win/Long
This is our goal!
Lose-Win/Short
Lose-Lose/Long Avoid, don’t
negotiate
Your needs satisfied
Counterpart’s needs satisfied
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©2011 IC2 Institute at the University of Texas at Austin
Possible Negotiating Strategies
You Command/ My way or highway
You Give In/ Need Any Deal
Collaborate/ Win-Win
Compromise
HIGH
LOW
Your
appare
nt
win
HIGH Other side’s apparent win
Win-Lose/Short
Lose-Lose/Long
Okay/Short Term
Lose-Lose/Long
Win-Win/Short
Win-Win/Long
This is our goal!
Lose-Win/Short
Lose-Lose/Long
Winner’s Circle!
Avoid, don’t
negotiate
Your needs satisfied
Counterpart’s needs satisfied
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©2011 IC2 Institute at the University of Texas at Austin
Principles of Win – Win Negotiating
• What it is not: A game — where one side wins and the other side loses
• What it is: A relationship whereby We both win (1+1 = 4)
• Why?
• Fundamental principle in negotiations — need satisfaction
• Look for creative ways to satisfy your and your counterpart’s needs
• Establish a friendly climate of mutual interests and trust
• Negotiation is the beginning of a process, not the end — Look for a long-term mutually beneficial relationship
• Don’t be afraid to give up something to get something
• Be open to creative ways to satisfy critical needs — look beyond current situation for win - win
• Everyone is better off than before the negotiation
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©2011 IC2 Institute at the University of Texas at Austin
Understanding Key Motivators Think back to the last time you were blindsided by an unexpected motivator. What was it? Typical tangible motivators: •Fiscal impacts (Enterprise & for their own or department) •Competition for internal projects •Contractual/Organizational issues, etc Less Tangible: •Desire to be heard and have their needs acknowledged •Desire to save face/look good in the eyes of others •Resistance to change (fear of unknown/untried) •Desire to satisfy their own or bosses hidden agenda •Biases, dislikes, ethnic customs, political alliances, etc •Emotional (and why should they trust you?) TIP: Learn to read body language
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Negotiation Exercise
• Handout 2
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©2011 IC2 Institute at the University of Texas at Austin
Negotiation and Conflict
• Handout 3
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©2011 IC2 Institute at the University of Texas at Austin
Handling Emotions
Emotional Challenges
Anger/exasperation
Insulted
Guilt
False flattery
Recommended Response
Allow venting. Probe for why
What wouldn’t be insulting?
Focus on issues
Re-focus
Tips:
•Don’t lose your cool (remember the swan!).
•Try to defuse with acknowledgement, empathy, patience, impartiality.
•Consider dealing with less emotional issues first
•Know your own “Hot Buttons”
•Practice (consider Toastmasters, etc)
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Negotiation Discussion
• Handout 4
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Negotiation Tactics
• Handouts 5 and 6
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©2011 IC2 Institute at the University of Texas at Austin
Negotiation Techniques
• Be knowledgeable: know the customer, their problems, how much money your invention will make or save them
• Be cool: just the negotiations phase can take six months to a year, depending on how fossilized the company is
• Be persistent: keep things moving on your end
• Be assertive, but fair: negotiate a win-win deal
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©2011 IC2 Institute at the University of Texas at Austin
Practice Win-Win Negotiations
1. Establish rapport and common goals 2. Probe for understanding of beliefs, goals, win-win options, and hidden
stakeholder motivators 3. Paraphrase for confirmation/affirmation 4. Analyze outcomes and risks 5. Summarize what was agreed on, and next steps (even if these are only
“baby steps”)
Tips: • If stalled, back up to a fundamental that you can agree on (e.g. “We both
want to make this a profitable venture”) • Build on this common ground (recycle if necessary) • Avoid emotional responses (even if insulted) • Consider interim options (or postponement) if undesirable outcome is
imminent or key information is missing.
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©2011 IC2 Institute at the University of Texas at Austin
Successful Negotiation Exercises
• Handout 7
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©2011 IC2 Institute at the University of Texas at Austin
Negotiation Resources Books: “Human Resources Skills for the Project Manager” Vijay Virma “Principles of Project Management” John R Adams “The Power of Nice” Ronald Shapiro “Swim with the Sharks Without Being Eaten Alive” Harvey Mackay “Getting Ready to Negotiate: The Getting to Yes Workbook” Roger Fisher and Danny Ertel “Negotiating Skills for Dummies” Michael and Mimi Donaldson
19 [email protected] acknowledged for some slide materials.
©2011 IC2 Institute at the University of Texas at Austin 20