the fine art of negotiations course: fx230mpi
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The Fine Art of Negotiations Course: FX230MPI. Presented by: Patrick Callahan Municipal Consultant Snyder & Associates 563-599-3708 [email protected]. The Final Art of Negotiations General Overview of Session. City Government – Examples of Negotiations - PowerPoint PPT PresentationTRANSCRIPT
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The Fine Art of Negotiations
Course: FX230MPIPresented by:
Patrick CallahanMunicipal ConsultantSnyder & Associates
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The Final Art of NegotiationsGeneral Overview of Session1. City Government – Examples of
Negotiations2. Introductions – Speaker & Participants3. The Elements of Negotiation4. Styles of Negotiations5. The Path to Preparation6. Preserving the Relationship7. Sealing the Agreement8. Tips for Negotiating
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Definition of Negotiate Negotiate – to settle by bargaining;
to arrange; to transfer (a bill, etc..); to surmount; v.i. to discuss with a view of finding terms of agreement; to bargin
Webster’s Dictionary 1987 Edition
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Patrick Callahan Work Experience City Experience
City of Fort Madison, IA - 1974 to 1977 City of West Point, IA – 1977 to 1978 City of Maquoketa, IA – 1978 to 1993 City of Anamosa, IA – 2005 to 2010
Consulting Experience Institute of Public Affairs – 1993 to 2005 Ruan Securities Corporation – 2000 to 2005 MCMS Consulting – 1993 to 2005 Synder & Associates – 2010 to Present
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Patrick Callahan Education Formal Education
Cascade High School – 1968 Loras College – 1972 Political Science The University of Iowa – 1974 Public
Administration Recent Class - Negotiation – Get More
and Give More at Kirkwood Community College by Julia King Tamang March 12, 2012
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Professional Experiences Negotiations Maquoketa – Union Negotiations Anamosa – Contractor Disputes Consultant – Cable & Gas
Franchise Renewals Consultant – Employment
Agreements on Searches for City Administrators
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Negotiations in Your Daily Lives Major agreements – union
contracts and franchise renewals Routine agreements – payment
plans and employee issues Personal business – car purchases,
service fees, etc Personal lives – spouses, children
and grandchildren
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City Government – Examples of Negotiations1. Collective Bargaining Agreements –
Labor Unions2. City Employees – Salary adjustments,
Fringe benefits, and Hiring3. Department Heads – Employment
Agreements4. City Budget Discussions – Meetings to
balance the budget5. Lawsuit Settlements
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City Government – Examples of Negotiations 6. Contractors – Change orders on
projects7. Engineers – RFQ, RFP, & Fees8. Utility Company Franchise
Agreements9. 28E Agreements – Multiple Agencies
and Government Units10. Citizens – Utility Payment Plans
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City Government – Examples of Negotiations11. Employee Termination Agreements12. Regulatory Agencies – DNR, EPA,
IRS, DOT13. Vendors – Purchase of City Supplies14. Economic Development Incentive
TIF Rebate Agreements TIF Grants Tax Abatement Agreements
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Negotiations in Your Personal Lives1. Spouse/Significant Other2. Children3. Grandchildren4. Service Providers – Cable
Company5. Vendors – Car Dealers
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Class Participants - Introductions Your Name Your City and Population Your Position Negotiation Experiences What is your City known for?
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The Executive SummaryThe Elements of NegotiationWhat is
Negotiation?
Negotiations:
Agreement:
A process we all use instinctively
When used consciously, it can help fulfill our needs
An exchange between two or more parities for the purpose of reaching an agreement
Occurs when both parties accept the terms of the arrangement – They do not have to like it.
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The Executive SummaryThe Elements of NegotiationThe Essence of
Negotiations:
The Vehicle of Negotiations:
The Criteria of Negotiations:
Cooperation
Communication
Self Knowledge Flexibility Empathy Timing
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What signals success? You met or exceeded your goals Your success is good in the short
run - and in the long run You strengthened the relationship You had an efficient bargaining
process
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What signals success? No damage to relationship
“Bringing them to their senses, not to their knees.”
Long term – Took care of the other person
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Barriers to Negotiations1. Anger2. Fear of Rejection3. Manipulation4. Criticism5. Assumptions6. Failing to Listen7. Bottom Line – Sole Focus
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Special Considerations for Public Officials 1. Client2. City Council or Board Approval3. Confidentiality4. Fiscal Limitations5. “Deep Pockets”6. Fairness and Equality
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Special Considerations for Public Officials7. Precedent8. Municipal Bond Rating9. Costs of Litigation10. Public Accountability 11. Integrity
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Understand yourself as a negotiator Competitor – Win/Lose Person Accommodator – “Door Mat” Collaborator – “Win/Win” Style Avoider – No interest
In any given situation we all have some of these styles.
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Which style is best?
Collaboration Accommodation
Competition Avoidance
Substantive outcome
important? YES NO
YES
NO
Relational outcome important?
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What is your predominate style of Negotiations? Work Life? Personal Life?
Group Discussion
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Keys to managing style Develop flexibility Know your strengths and
weaknesses Compensate for your weakness –
outside assistance Know your “hot buttons” – take a
break
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Know your power sources & strengths
Information or other resources Personal traits Skills – Especially communications Expertise Experience (your or someone
else’s)
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Know your power sources & strengths
Problem solving Trade Information – “Buy Points” Do not make too many
assumptions – Check it out!
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Take history into account Your general negotiating
experience Your negotiating experience with
this person or company Look for how your experience
creates an advantage or bias
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Know your beliefs & attitudes What are your beliefs and attitudes
about negotiations? Do they apply here? How will they affect this deal? Know your attitude on money Your attitude towards the boss –
i.e. city council
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Authority & constituencies How much authority or power do you have
to affect the outcome of this negotiation? Do city or state laws or policies restrict or
protect you? Are there rules by which you must abide? Are you negotiating in behalf of someone
higher up who has the final say? City council?
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Why are negotiators unprepared?
People assume “just talking” is low risk
Preparation takes too much time People don’t know how to prepare
well
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Why are negotiators unprepared?
Many deals are lost or missed due to poor preparation
Not ready? Postpone it Know how to prepare
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Path to preparation Stakeholders Challenge Position Interests Options
Alternatives Legitimacy Communication Relationship Commitments
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Group Discussion The Path to Preparation
Two Examples Collective Bargaining Agreement Construction Project – Contractor
change order
1. What are some actions that could be taken to prepare for negotiations?
2. How do you maintain a good working relationship after negotiations?
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Preparation: Identify stakeholders Who has stake in the outcome?
Anyone at the table Anyone who stands to gain or lose
anything they value Any “invisible” players or
constituencies Anyone on either side who is affected
by the outcome
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Preparation: Interests Look for the interests behind
positions Ask “why?” and “for what purpose?” Ask yourself, “What will happen if I get
this?” Consider the other side’s interests
Probe for their underlying interests Record this information and use it Verify it
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Preparation: Four kinds of interests Content (substantive)
Be specific and measurable Break complex goals into strategic stages
Relationship Present Future
Identity Your sense of “who I am” and the other side’s
Process How to communicate
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Preparation: What can be traded Define the bargaining “mix”
What are the pieces? Are any pieces linked?
Prioritize your interests Content, relationship, identity and
process Identify limits (upper and lower
constraits) for substantive issues
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Preparation: What can be traded Hold off on commitment until your
know their needs and desires Not sure on their priorities – Ask
them Goal – Give away low value stuff
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Preparation: What do people want? Consider short and long term
interests Check to make sure your interests
include the needs of your constituents in your organization Political mistakes now, cost you later
Look beyond this first deal What is the order of priority
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Preparation: What’s most important? Order tells relative importance Order tells relative value in terms
of dollars Order helps avoid making
concessions on the wrong things Order helps you decide on
packages later on in the deal
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Preparation: Developing supporting arguments What facts support your view?
What validates those facts? Who can help you elaborate or
clarify facts? What data do you need?
Get help, if necessary
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Preparation: Exploring their interests Why are these objectives important to
them? How did they come to this position? What if they can’t reach your goals? How have their needs changed since you
last talked? Last, outline what you don’t know.
Inquire about those things as you go along.
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Preparation: Researching the other party Things to learn
Their objectives Their interests Their alternatives Their resources Their reputation, style, and behavior Their authority to make an agreement Their likely strategy and tactics
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Researching the other party Need a network of contacts to call Check on-line for information Keep track of the information Remember their style and
credibility Try to get to know them
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Preparation: Consider options An option is a possible agreement
or parts of an agreement Common mistakes
Taking a narrow, one-sided focus Having only one option, with no fall-backs Thinking that the only approach is to
close the gap between differences Key element
Ability to design the “bargaining mix”
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Preparation: Building options packages Step 1
Examine interests Figure the “give-aways” from their list
that are easily fulfilled and record those
Identify your “throw-aways” (confidential list)
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Preparation: Expanding the pie Step 2
Don’t divide the pie, EXPAND the pie
Remember – the deal is not just about the money.
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Preparation: Finalizing options Evaluate the risk and benefits of options,
use sub-groups for complex options Narrow the range to a few of the best Be willing to justify personal preferences Be alert to the influence of intangibles Cool off and come back Keep decisions tentative till the end –
conditional language
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Preparation: Relationship When done – get it in writing
When done – Shut up
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Preparation: Consider alternatives Best Alternative to Negotiated
Agreement (BATNA) What will you do if you can’t
agree? BATNA What are your option if the deal fails How good is your Plan B, really?
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Preparation: Legitimacy What criteria can you use to
persuade each other that you are not being ripped off? Legitimacy is a tool to persuade others Legitimacy is a shield to protect yourself
Examples Collective bargaining – salary survey Change orders – Unit prices
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Preparation: Relationships Common mistakes
Confusing relationship and substance
Assuming that’s how the relationship is, it is given and it is “their fault”
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Preparation: Relationships Prepare to address relationship
and substance independently Prepare to take unconditionally
constructive steps to improve the relationship
Do not give up on a bad relationship
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Preparation: Commitments Common mistakes
Not knowing what “done” looks like Failing to determine actions needed
to reach agreement
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Preparation: Nailing down the agreement Selective paraphrase Ask for paraphrase of what you’ve said Reinforce ideas you like in their
proposal Resist movement away from agreement
Remember your BATNA Get them to make a public agreement and
acknowledge the agreement to their team
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Preparation: Sealing agreements Reciprocity (back scratch) Use their commitment to a position –
make sure they articulate it a few times
Name those will agree Name similar deals in the past Note scarcity of time or other
resources
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Preparations: More steps to agreement Plan the steps to agreement
Decision makers – who will sign? Who should we be consulting for buy-in?
Implementation – what about happens next to make this happen?
What to do – offer to write the agreement Possible obstacles to implementation Ways to deal with obstacles
Steps necessary to get a binding agreement
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Group DiscussionA. Past Negotiations
1. What have you done that helped “seal the deal”?
2. What did you learn about yourself as a negotiator?
B. Future Negotiations1. What did you learn today that could help
you with future negotiations?2. What will you do differently during your
next negotiation session?
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Special Considerations for Negotiations1. Location of Negotiations2. Setting of Negotiations3. The Art of Body Language4. Interpersonal Relations5. Good Guy/Bad Guy Roles6. Exploring Creative Solutions7. Always bring a Calculator to the
Negotiation Table.
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The Negotiation Model 1. Prepare2. Establish the Objectives3. Define the Issues4. Clarify the Interests5. Identify Objective Criteria6. Explore the Alternatives7. Select the Best Form of Agreement
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Preparation: When you have no time Consider the situation – then…
Prep the most goal-critical areas Prep the most problematic areas
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12 Tips for Negotiating and Compromising with Difficult People
1. Have a positive attitude2. Meet on mutual ground3. Clearly define and agree on the
issue4. Do your homework5. Take an honest inventory of yourself6. Look for shared interests
- Ryan Lynch at Dale Carnegie Training
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12 Tips for Negotiating and Compromising with Difficult People
7. Deal with facts, not emotions8. Be honest9. Present alternatives and provide
evidence10. Be an expert communicator11. End on a good note12. Enjoy the process
- Ryan Lynch at Dale Carnegie Training
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Negotiation Handouts1. 12 Tips for Negotiating and
compromising with difficult people by Ryan Lynch – Dale Carnegie Training
2. Union/Labor Negotiations – Municipal Policy Leaders Handbook – Institute of Public Affairs
3. 28E Agreement Checklist – Institute of Public Affairs
4. Suggested Reading – Complied by Lynn M. Walding
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Choose 3 small steps to improve your negotiation skills and outcomes
YOUR PLAN OF ACTION Getting to Yes: How to Negotiate
Agreement Without Giving In by Roger Fisher and William Ury