EFFECTIVE NEGOTIATIONS

Deb Houden Senior Consultant

Family Business Consulting Group Madison, Wisconsin deb@houden.com

608-695-2502

August 8 & 9, 2019

Effective Negotiations

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August 8 & 9, 2019

Deb Houden, Ph.D

What Is Negotiation?

Human Interaction

Every human interaction offers you the chance to make things better or to make things worse. Barbara Brown Taylor

Anatomy of a Negotiation• Who you are• Goals and expectations• Standards and Norms• Interests• Relationships• Leverage (BATNA)

1. Preparation 2. Information exchange3. Proposing and

concession making4. Commitment

Negotiation Strategies

• Distributive• Interest (Integrative)

Which will you use?

Which strategy is most effective?

Either strategy can be effective if ...• You are willing to prepare for negotiation• You have high expectations for your own results

and achievements• You are a good, patient listener

Have a plan but be adaptive!

Issues

Position

Interests

Three Tactics to Use• Goals and Expectations

• Reservation often determined by the “BATNA”?• Beware of escalation beyond your reservation• Be specific• Write them down• “Confess” to a third party

• Norms and Standards• Consistency• Rationalization• Deference to Authority

• Framing and Reframing

What is a good outcome in a negotiation?

• Are your economic interests met?

• What other interests do you have?

We see things not as THEY are, but as WE are.

Anäis Nin

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W AT AR OU EA IN ?

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WHAT ARE YOU DREAMING ?

Communication Strategies Understand yourself as a communicator.

You and I do not see things as they are. We see things as we are. Understand your motivation to listen – to understand or

to rebut?Keep an open mind -- FORCE YOURSELF AND

PRACTICE OFTEN

Emotion

A FELT Experience

Questions!• Know where your questions are going• Ask for permission to ask• State why you want to ask

Examples: Does that make sense? (determines factual information)How do you feel about that? What’s your opinion on that? What do you like best about that? (determines other’s feelings)Are you trying to save your department money? Are you looking for the best price? (presumptive questions allow the other side to correct you)

Give and Take• Label them (prepare)• Trade low value for high value (Logrolling)• Make them conditional• Make them in installments• Make sure the other side knows how they will

benefit • Use documentation with their standards and norms

Offers• Always listen• Tell them you want to consider it; let them know

you will answer them• Can you anchor the negotiation?

How Do We Find Value from Interests• Emphasize relationships• Build trust to share information (reciprocity norm)• Ask lots of questions

• Skilled ask twice as many• Test for understanding (active listening)• Summarize (active listening)• LISTEN to the answers

• Give away some information• Make multiple offers simultaneously• Trying to uncover those compatible and integrative issues

Common Errors in Negotiation• There is a fixed pie• Letting tension escalate• Failing to frame and reframe• Over-confidence of position• Under-confidence of position

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DilemmaIn a single negotiation, I am better off using

competitive tactics If my counterpart is collaborative I can gain more for

myself If my counterpart is competitive, I must protect myself

I can “win” the negotiationDon’t be the chump!

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• My counterpart faces the same situation!• If we are both competitive, we may miss

collaborative solutions that make us better off jointly

• We may even miss deals entirely!

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Additional Steps• Invent options for mutual gain

• Don’t settle• Brainstorm• Be curious

• Fine tune• Consider offer• CLOSE!

Remember. . .• Open ears, close mouth (2 ears 1 mouth)• Note your body reaction and detach if possible• Reverse normal reaction• Detach mentally• Listen carefully• Restate exact words• Ask open ended questions• Walk away