PNO Week 4

  1. the more difficult the negotiation
    the more intensive your preparation needs to be
  2. Rule of Thumb
    think about preparing a minute for every minute of interacting with the other side
  3. Mapping Out the Way to Agreement
    • five import points to a mutually satisfying agreement
    • 1. Interests
    • 2. Options
    • 3. Standards
    • 4. Alternatives
    • 5. Proposals
  4. 1. Interests
    • Joint problem-solving revolves around the interests that lie behind each side's position
    • Interests are intangible motivations that lead to take a position -
    • Needs
    • Desires
    • Concerns
    • Fears
    • Aspirations
  5. Figuring out your interests
    • What problem am I trying to solve?
    • Rank your interests so you do not trade off an important interest for a less important one
  6. Figure out their interests
    • Understand their interests
    • Just as important as the facts are people's perceptions of those facts
    • Put yourself in their shoes
  7. 2. Options
    • The purpose of identifying each side's interests is to see if you can devise creative options to satisfy them
    • Inventing options for mutual gain is a negotiators single greatest opportunity
    • Explore how to expand the pie
    • While it may not be possible to obtain your position, it is often possible to satisfy your interests
    • Common mistake is to dwell on a single solution, your original solution
  8. Consider a multitude of options
    • Criticism and evaluation interferes with your imagination
    • Invent first, Evaluate later
    • Many of the best ideas in the world started out as wild ideas everyone disparages
  9. 3. Standards
    • How to divide up the pie
    • Common method is to use a contest of wills
    • Each side insists on its positions, try to get the other to give in
    • Becomes a conflict of egos
    • Turn the selection process into a joint search for a fair and mutually satisfactory solution
  10. Independent Standards
    • Is a measuring sick that allows you to decide what is fair solution
    • Common Standards are
    • Market Value
    • Equal Treatment
    • The Law
    • Simply the way the issue has been resolved before
  11. 4. Alternatives
    • Mistake
    • go into a negotiation looking for an agreement and examine their alternatives only if things go badly
    • The purpose of negotiation is to explore whether you can satisfy your interests better through an agreement than BATNA
    • BATNA is your walkaway alternative
  12. BATNA
    • If you have a viable alternative, then you have leverage in the negotiations
    • The better the BATNA the more power you have
  13. Identify your BATNA -
    3 kinds of Alternatives
    • 1. Walkaway alternative
    • do by yourself to pursue your interest
    • 2. Interactive alternative
    • strike or go to war
    • 3. How to bring a third party into the situation to further your interests
    • Keep your BATNA in your back pocket!
  14. Boost your BATNA
    • a good BATNA needs to be developed
    • If BATNA is not very strong, take steps to improve it
  15. Decide if you should negotiate
    • Once BATNA is formulated, ask yourself
    • Should I negotiate at all?
    • It is easy to overestimate how good your BATNA is
    • Knowing in advance that your alternative is unattractive ought to make you work hard to reach an agreement
  16. Identify their BATNA
    • Knowing the other side's BATNA is just as important as knowing your own
    • Develop an agreement that is superior to their best alternative
    • An objective look at a client's BATNA can give more confidence in a difficult negotiation
    • If the other side's BATNA is to use coercion, you can prepare in advance to counter it
  17. 6. Proposals
    • To formulate a solid proposal
    • option should also meet the other side's interests better than their BATNA
    • meet on fair standards
    • What distinguisheds a proposal from a simple option is COMMITTMENT
    • select an option better than your BATNA
    • Have 3 proposals in mind
  18. What do you aspire to?
    • What you don't ask for, the other side is unlikely to give you
    • Those who begin with realistically high aspirations often end up with better agreements
    • 'Realistic' mean within the bounds set by fairness and the other side's best alternative
    • Aim High
  19. What would you be content with?
    What agreement, far from perfect would still satisfy my basic interests sufficiently
  20. What could you live with?
    • What agreement would satisfy my interests marginally better than my BATNA could?
    • If you cannot reach an agreement that is at least that good, WALK AWAY!
  21. Rehearse
    • Preparation is easier to do when you're talking it over with someone else
    • Rehearse what you will say to the other side and how you will respond to what they say

    Anticipate what tactics the other side may try and think in advance of how best to respond
  22. Preparing to Navigate
    • Ideally, conduct a negotiation in the same way that you have prepared
    • Begin by exploring interests
    • try to understand what each side is genuinely concerned about

    In the real world, efforts to engage in joint problem solving runs up against powerful reactions, hostile emotions, rigid positions, strong dissatisfaction, and aggressive power plays

    • Challenge is to change the game from face-to-face confrontation into side-by-side problem-solving
    • Turn your opponent into a negotiating partner
  23. Negotiating with the Unknown
    • reality of a police negotiation clashed with conventional wisdom about good negotiation strategy, which emphasizes the need to prepare
    • Hostage negotiation
  24. Establish Respect and Trust
    • figure out what substitutes may be available
    • demonstrate respect for the person they are talking too
    • the hostage negotiator must respect people, whom no one else may care to respect
  25. Respect is demonstrated in several ways
    • greetings
    • taking the time for small talk
    • articulate ground rules
    • clarifying assumptions
  26. Greetings
    Politeness gives the hostage taker a dignity
  27. Schmoozing
    recognition that the other person, regardless of what they have done, is a human being
  28. Ground Rules
    • begin the negotiation itself by establishing boundaries for the enduring exchanges
    • Negotiators explain what they are going to do and explain again whey they are going to do it
    • key part of preparing the other party to deal with the officers constructively
  29. Clarifying the Assumptions
    • Easy for hostage negotiators to think that everybody else understands what they are doing
    • Assumptions are dangerous and can backfire on the negotiator
    • Avoid assuming that what you are doing is understood
  30. "The Drill"
    The hostage negotiator explains to all of the people involved what the hostage team's role is and what will be done
  31. "A Theme"
    • Is like a working paper
    • not etched in stone and it certainly can change
    • Continuing Function: helps the hostage taker understand that no sudden action, such as a surprise attack, is contemplated, and also demonstrates to others that the negotiation team has a plan and had the situation under control
  32. Decent Police Work
    • Compassion
    • The showing of respect comes first; only then can you get to the heart of the matter
  33. Negotiating Team
    • Primary Negotiator
    • At least one backup Negotiator
    • Scribe
    • Coordinator
  34. Coordinator
    • Brings corporate memory to the situation
    • provides external insight to external police commanders and to the tactical team
    • Run interference on behalf of the other negotiators

    • Critically Important Function
    • buffers the negotiator from the "Chief's"
    • (shorthand for all levels of supervision)
    • Handle all of the external negotiations that threaten to disrupt the all-important negotiations "at the door"

    Purpose of team structure is to ensure that the negotiator who is talking is not overwhelmed by all the other tasks that have to be done
  35. Should You Make the First Offer?
    Negotiators who make the first offers come out first
  36. Anchors
    How we perceive a particular offer's value is highly influenced by any relevant number that enters the negotiation environment

    First offers have a strong anchoring effect

    often impossible to resist its influence

    Anchors affect the judgement of even those who think they are immune to such influences
  37. High Anchors

    Low Anchors
    High Anchors - direct our attention toward an item's positive attributes

    Low Anchors - direct our attention to their flaws
  38. When You Should Make the First Offer
    The probability of making the first offer is related to one's confidence and sense of control at the bargaining table

    Power and confidence result in better outcomes because they lead negotiators to make the first offer
  39. Initial Offers
    Better predict final settlement prices than subsequent concessionary behaviors do
  40. When not to make the initial offer
    when the other side has much more information than you do about the item to be negotiated or about the relevant market/industry
  41. Don't Be Afraid to be Aggressive
    First offer should be aggressive but not absurd

    Most negotiators make first offers that are not aggressive enough
  42. Aggressive Offers work in you favor
    more extreme first offers lead to higher final settlements

    • a non-aggressive first offer leaves you with 2 unappealing options
    • make small concessions
    • or
    • sand by your demands
    • making an aggressive first offer and giving your opponent the opportunity to "extract" concessions from you
    • Not only leads to a better outcome, but increases the other side's satisfaction
  43. First Offer
    provide preliminary insight into the bargaining zone and range of possible agreements

    An absurd first offer can lead the receiver to believe that no agreement exists that will be acceptable
  44. Focus on the Target Price
    • Two values to focus on
    • First consider your alternatives to agreement
    • and create a reservation price - specific value at which you prefer to walk away rather than reach a deal

    Now prepared to accept any agreement that exceeds your reservation price and reject any value that falls below it

    Second determine your ideal your ideal outcome or target price - the agreement or values that would fulfill all of your negotiation hopes and desires

    It's your target price that you should pay attention to when constructing your first offer
  45. Target Price - Focus
    make more aggressive first offers and reach more profitable agreements that those who do not
  46. How to ensure that the first offer is not so aggressive that it drives your opponent away?
    Focus on your opponents alternatives to the agreement and try to determine their reservation price (while being cognizant of market trends)

    best first offer fall outside the bargaining zone beyond your opponent's reservation price but not so far outside to be ignored by the recipient
  47. A Caveat
    negotiators who focus too much on their ideal outcomes sometimes curse themselves by rejecting profitable agreements that surpass their alternatives

    Be willing to concede so you avoid rejecting favorable agreements
  48. Protect Yourself Against a First Offer
    Your counteroffer should be based upon the same information you would use to construct a first offer

    try combining an aggressive counteroffer with a joke that will not only lighten the mood but discount the other side's anchor
  49. A satisfied oppenent
    more likely to live up to the terms of the agreement and less likely to seek future concessions or revenge
  50. Team Negotiations Required a Team Approach

    Build the Team
    Select team members with the expertise relevant to the negotiation at hand

    • skilled negotiators
    • number crunchers
    • subject matter expert
    • experienced in group dynamics
    • consensus building and tension diffusion

    • Decide ahead of time the hierarchy of team decision-making
    • majority vote or boss rules

    • pick which team members sit at the table
    • select few members as possible to be at the table
  51. Preparing for a Team Negotiation
    Prepare, rehearse, practice - but most importantly do the homework

    Get agreement in the company on what is and what isn't negotiable

    Research the customer's business and culture

    Touch base with the customer prior to actual negotiations

    Examine the deal from the customer's perspective

    Important to understand and interpret another culture's style.  Emphasize graciousness to overcome cultural misunderstandings

    • Decide key issues in advance
    • desired outcome
    • goal
    • bottom line
    • Alternatives
    • Identify throwaway items
    • sticking points
    • Anticipate other team's opening position
  52. Time to negotiate
    • Provide a casual environment including refreshments conducive to small talk
    • No question who the lead negotiator is
    • Don't get off track
    • Negotiating in not arguing
    • look for common ground and avoid aggressiveness or manipulative behavior
    • build mutual trust
  53. Strategies to follow
    • Team speaks with one voice
    • One voice does not mean only one team member speaks
    • Listen until it hurts
    • Caucuses, caucuses, caucuses
    • Avoid whispering
    • everything is negotiable.  Reserve resources for critical items
    • At the close of session, lead negotiator to summarize what has been agreed upon and action items and deadlines for the next session
    • After each session, share written summary of decisions, open concerns and next steps
  54. The Top 10 Ways that Culture can Affect Your Negotiation
    • 1. Negotiating Goal: Contract of Relationship
    • 2. Negotiating Attitudes: Win-Lose or Win-Win
    • 3. Personal Style: Informal or Formal
    • 4. Communications: Direct or Indirect
    • 5. Sensitivity to Time: High or Low
    • 6. Emotionalism: High or Low
    • 7. Form of Agreement: General or Specific
    • 8. Building an Agreement: Bottom Up or Top Down
    • 9. Team Organization: One Leader of Group Consensus
    • 10. Risk Taking: High or Low
  55. Face with a risk-averse counterpart
    • 1. Don't rush the negotiation process
    • 2. Devote attention to proposing rules and mechanisms
    • 3. Make sure your counterpart has sufficient information
    • 4. Focus efforts on building a relationship and fostering trust
    • 5. Consider restructuring the deal, so deal proceeds step by step

    Negotiation style are like personalities, have a wide rage of variation
  56. How Location Impacts International Business Negotiations
    critical aspect of cross cultural negotiation is place, a choice of the actual site and its effect on a particular negotiation strategy
  57. Cross Cultural Negotiations
    the potential for misunderstandings and distorted messages increase significantly
  58. Strategic Failure
    associated with communication "noise," namely any factor, including stress which interferes with the receiver's comprehension of the sender's intended message

    for example, nervousness due to unfair surroundings
  59. Fully understanding one's negotiating counterpart(s).  This understanding is used to improve one's own advantage by
    • 1. Recognizing and identifying each party's expectations
    • 2. turning negotiations into a win-win outcome for all parties
  60. Site Selection
    choice of location is a focal point during the pre-negotiation phase.

    The host country typically assumes responsibility for the protocols that govern location, transportation, orientation, business cards, dress codes, social event, seating arrangements, and accommodations
  61. Location of the negotiation will favor one side or the other
    Negotiators tend to prefer neutral settings
Card Set
PNO Week 4
PNO Week 4