Advanced Negotiation Training

Advanced Negotiation Negotiation Persuaders
Phases of a Negotiation
Facilitator: Dan Fielding Practice Game
Trust & Relationships
Confidential Tactics
All content copyright ArcBlue Consulting and not for copying or distribution in any form without prior permission Negotiating in Teams
Practice Role Play

arcblue.com.au
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+ 61 (3) 8400 4200

About ArcBlue

We have over 70 consultants as Hong Kong Broad experience
well as a pool of specialist delivering products and
project contractors. Singapore programs in hundreds of
organisations
Our team’s expertise spans all New Zealand
aspects of procurement and Across 8 countries
each of our consultants and Australia
contractors has practical internal In over 20 industries
procurement experience.
Worth with numerous
public and private
sector companies

Local government to
multi-national
corporations

Advanced Negotiation © ArcBlue Asia Pacific 2

Negotiation Persuaders Learning objectives
Phases of Negotiation To understand the key
Practice Game methods and how to use
Trust & Relationships them to persuade others to
Tactics your point of view
Negotiating in Teams
Practice Role Play

Advanced Negotiation © ArcBlue Asia Pacific 3

Definition: Negotiation

A process through which parties move
from their initially divergent positions to a
point where agreement may be reached

Advanced Negotiation © ArcBlue Asia Pacific 4

Negotiation is about…… © ArcBlue Asia Pacific 5

 Setting clear objectives + flexible targets
 Persuading others to move your way
 Using different strategies and tactics
 Knowing the key issues + their value to you
 Using variables
 Planning, planning and more planning
 Preparation and practice
 Showing warmth in working with people
 Influencing and managing people
 Being tough on the issues that matter

Advanced Negotiation

When does Negotiation begin?

 When you start to bargain over terms?
 At the start of a planned meeting to discuss commercial or contract terms?
 When the person arrives at your facility?
 With a telephone call to arrange a meeting?
 When you issue a tender document or make an enquiry?
 Over lunch or dinner………entertainment?

……..or is it happening all the time?

Advanced Negotiation © ArcBlue Asia Pacific 6

Task 1 – Bob the Builder

You are having a summer house built for a total price of $250,000.
The price was agreed with Bob following receipt of his estimate and after comparing it to several others. The
estimate contained the usual conditions that builders insist upon.
The conservatory is 50% complete and you have paid 50% of the total price against invoices which are
submitted weekly.
This morning Bob knocked at the door as you were about to leave for the office and stated………
“I am sorry to trouble you, but we need to increase our price with effect from this week’s invoice. We need to
add 10% to cover various items. I assure you we wouldn’t be doing this unless it was absolutely necessary
and without good reason!”
What responses/arguments could you use to persuade Bob not to pass on the increase?

Advanced Negotiation © ArcBlue Asia Pacific 7

The 5-6-7 Negotiation SIX
Framework
PHASES

FIVE SEVEN

PERSUADERS TACTICS

Advanced Negotiation © ArcBlue Asia Pacific 8

Negotiation Persuaders © ArcBlue Asia Pacific 9

Advanced Negotiation

We negotiate with human beings. To get
them to move our way we must persuade

them that the movement is worthwhile

Convince, Lure, Induce, Attract, Entice

Advanced Negotiation © ArcBlue Asia Pacific 10

Using Emotion © ArcBlue Asia Pacific 11

 Be in control of your emotions
 Use from a sincerely held belief
 Use early in the negotiation
 Use to increase the “perceived value”

of your bargaining
 Use to counter logic
 Don’t go over the top

Advanced Negotiation

Using Logic © ArcBlue Asia Pacific 12

 Don’t be too quick to ask “Why?”
 Get your own logic in first
 Do not dilute your argument…….KISS
 Be credible
 If others can’t see it, change tack
 Counter Logic with emotion

Advanced Negotiation

Using Threat © ArcBlue Asia Pacific 13

 Don’t be too quick to use threat
 Threaten at the business, not the person
 Hint at threat. Use mirrored or remote threat
 Never make a threat you can’t carry out
 Be credible

Advanced Negotiation

Using Bargaining © ArcBlue Asia Pacific 14

 If……then
 Don’t expose your position too early
 Don’t seem too eager to move
 Don’t be unresponsive
 Move slowly and in small steps
 Exchange things of small value for higher value items
 Give with blood, sweat & tears
 Thank and bank

Advanced Negotiation

Using Compromise © ArcBlue Asia Pacific 15

 50/50 is not the only compromise
 Don’t be too quick to compromise
 Compromise is a behaviour of last resort
 Compromise favours the more extreme party
 Let the other party suggest compromise…..
 …..the party suggesting compromise is more

likely to accept the other’s position

Advanced Negotiation

Movers Negotiation Persuaders Emotion 1 way movers
Logic
Advanced Negotiation Threat 2 way movers

Bargaining
Compromise

© ArcBlue Asia Pacific 16

Negotiation Profile © ArcBlue Asia Pacific 17

Advanced Negotiation

Attributes of a Good Negotiator

People Business

 Likeable  Knowledgeable
 Clear communicator  Focused
 Trustworthy  Clear objectives
 Credible  Quick thinking
 Interested  Testing options
 Engaging  Creative
 Decisive  Persistent
 Empathy  Determined
 Sincerity  Resilient
 Integrity  Maintains control
 Listening  Opportunistic
 Self awareness

Advanced Negotiation © ArcBlue Asia Pacific 18

The 5-6-7 Negotiation SIX
Framework
PHASES

Compromise
Bargaining

FIVE

Threat PERSUADERS

Logical SEVEN
Reasoning TACTICS

Emotion

Advanced Negotiation © ArcBlue Asia Pacific 19

Phases of Negotiation © ArcBlue Asia Pacific 20

Advanced Negotiation

Negotiation Persuaders Learning objectives
Phases of Negotiation To identify the key phases in
Practice Game any negotiation and apply
Trust & Relationships them in real world situations
Tactics
Negotiating in Teams
Practice Role Play

Advanced Negotiation © ArcBlue Asia Pacific 21

Six Phases 06 01

Advanced Negotiation Reviewing Preparation
and Planning

05 Negotiation 02
Six Phases
Concluding Opening
03
04
Testing
Moving

© ArcBlue Asia Pacific 22

Preparation and Planning

The objective here is…. 01

To place you and your organisation in the Preparation
and Planning
best possible position before the
negotiation commences Negotiation
Six Phases
Preparation ………researching the issues

Planning ….strategy, tactics, practicalities

Advanced Negotiation © ArcBlue Asia Pacific 23

Preparation – The What?

What are your Identifying Researching
targets variables … the other
party

Establishing the current state What your
of the market own

requirements
are

What are the key facts about 01
the other party
Preparation
and Planning

Negotiation
Six Phases

Advanced Negotiation © ArcBlue Asia Pacific 24

Possible variables 01

Advanced Negotiation Preparation
and Planning

Negotiation
Six Phases

© ArcBlue Asia Pacific 25

Set your ranges

For each key variable determine your: 01
 Walk away position
Preparation
- The point where it would not be commercially viable to do business. and Planning

 Realistic position Negotiation
Six Phases
- Where you feel you realistically might finish up.
© ArcBlue Asia Pacific 26
 Ideal position

- Aim high and credible
- Also what would WOW! Look like

Remember be flexible, objectives can be changed!

Advanced Negotiation

Target setting

BATNA and ZOPA

Initial Target BATNA
Marker

Their Position ZOPA Our Position

BATNA Target

BATNA – Best Alternative to a Negotiated Agreement © ArcBlue Asia Pacific 27
ZOPA – Zone of Possible Agreement

Adapted from Fisher, Ury, Patton

Advanced Negotiation

Anchoring/putting down a marker

 Anchoring is the common tendency to give too much weight to the first
number put forth in a discussion.

 Consider your knowledge of the ZOPA and your assessment of the other
side’s knowledge of the ZOPA.

 If you believe you have a better understanding of the ZOPA than the other
party, then it may be beneficial to put down a marker

 The Anchor/Marker should be ‘extreme but credible’

 If the other party puts down the first offer, then do not ignore it! Defuse it
clearly and forcefully “I’m not trying to play games with you, but we are
miles apart on price.”

Advanced Negotiation © ArcBlue Asia Pacific 28

Target setting

Variable Priority to Priority to Ideal Realistic Walk Away
us them
…
… 01
…
… Preparation
… and Planning
…
… Negotiation
… Six Phases

Advanced Negotiation © ArcBlue Asia Pacific 29

Planning – The How 01

 How will I open the negotiation? Preparation
 How are they likely to respond? and Planning
 How can I set the agenda?
 How can I condition them and reduce their expectations? Negotiation
 Roles of the team Six Phases
 Difficult questions and issues
 Rehearsal? With who? © ArcBlue Asia Pacific 30

Advanced Negotiation

Opening Negotiation 02
Six Phases
 Conditioning Statement Opening
 Building Relationships
 The Vital First Impression © ArcBlue Asia Pacific 31

- Timekeeping
- Politeness
- Physical Appearance and Dress
- Personal Hygiene
- The Hand Shake
- Eye Contact
- Smile
- The Opening Words

Advanced Negotiation

Testing

 To test the validity of the assumptions we have made Negotiation
 To see where movement in the other party is likely to come from Six Phases
 To understand what is likely to be expected of us
 Ask lots of questions, using the following types: 03

- Open Testing
- Closed
- Probing
- Multiple
- Leading
- Reflective
- Hypothetical

Advanced Negotiation © ArcBlue Asia Pacific 32

The Questioning ‘Path’

Start with open
questions

“What is your approach to…”

Follow up with
‘Probes’

“Tell me more about…”

Closed
questions

“Is it fixed or
variable cost?”

Negotiation
Six Phases

03

Testing

Johari Windows © ArcBlue Asia Pacific 34

Advanced Negotiation

Moving Negotiation
Six Phases
 Persuasion methods particularly one-way movers
 Take a recess resist moving yourself 04
 Get maximum movement from the other party
 Be persistent Moving
 Stay Warm and Tough
 Remember to remain creative, flexible, credible © ArcBlue Asia Pacific 35

Advanced Negotiation

Encouraging movement Negotiation
Six Phases
 A joint departure
04
- I’ll look at the quantity, can you look at the price
Moving
 Hypothetically linked concessions
© ArcBlue Asia Pacific 36
- Suppose I…, could you……

 Use of time

- Reminding of deadlines against them, avoiding deadlines against you
- Reminding them of time you have set aside

Advanced Negotiation

Encouraging movement

 Progressive and enthusiastic summary

- “So we’re agreed on the menus and the opening hours - we’re getting though it, let’s move on
to…”

 Thank and bank

- Thanks for that, I appreciate it. Can we move on to…
- Thanks for that, I do appreciate the offer, it’s a good move, however could you look again at…
- Get the chips on your side of the table

Negotiation
Six Phases

04

Moving

Advanced Negotiation © ArcBlue Asia Pacific 37

Encouraging movement Negotiation
Six Phases
 Emotional appeal to their good nature
04
- Surely, in your position, you could…..
Moving
 Don’t be predictable
© ArcBlue Asia Pacific 38
- Don’t use the same phrases and approaches
- Suppliers will know “what’s coming”

 Emphasise the value of your movements

- Use emotion to increase the perceived value

Move slowly, emphasise your movements

Advanced Negotiation

Concluding 05

 Don’t conclude too soon, look for: Concluding

- ‘The final offer’ Negotiation
- Repeated use of ‘No!’ Six Phases
- Concessions getting smaller
- Body language © ArcBlue Asia Pacific 39

 Know what has been agreed
 Summarise each point
 Agree next steps
 Condition for next time
 Finish with warmth

Advanced Negotiation

Reviewing 06

 Comparison with objectives Reviewing
 Extent of plan achieved
 What went well / what didn’t Negotiation
 What could I have done better Six Phases
 Hard and soft successes
 Personal, team, organisation or industry patterns © ArcBlue Asia Pacific 40
 Review Persuasion methods used by you and the other party
 Document relationship building information

Advanced Negotiation

The 5-6-7 Negotiation Moving Testing
Framework Concluding

Reviewing SIX Opening

PHASES

Preparation
planning

Compromise
Bargaining

FIVE

Threat PERSUADERS

Logical SEVEN
Reasoning TACTICS

Emotion

Advanced Negotiation © ArcBlue Asia Pacific 41

Negotiation Persuaders Learning objectives
Phases of Negotiation Understanding value,
Practice Game planning the questioning path
Trust & Relationships and other elements of a
Tactics negotiation
Negotiating in Teams
Practice Role Play

Advanced Negotiation © ArcBlue Asia Pacific 42

Trust & Relationships © ArcBlue Asia Pacific 43

Advanced Negotiation

Negotiation Persuaders Learning objectives
Phases of Negotiation Understanding the importance
Practice Game and fragility of trust in
Trust & Relationships negotiations
Tactics
Negotiating in Teams
Practice Role Play

Advanced Negotiation © ArcBlue Asia Pacific 44

Advanced Negotiation © ArcBlue Asia Pacific 45

Trust

1. An expectation that the other party will behave in a predictable and
mutually acceptable manner

2. Trust means being able to predict what other people will do and what
situations will occur.

3. Trust means making an exchange with someone when you do not have full
knowledge about them, their intent and the things they are offering to you.

4. Trust means giving something now with an expectation that it will be repaid,
possibly in some unspecified way at some unspecified time in the future.

5. Trust means enabling other people to take advantage of your
vulnerabilities—but expecting that they will not do this.

Advanced Negotiation © ArcBlue Asia Pacific 46

Types of Trust

Contractual Trust

 Keeping promises (written and oral) and abiding by the accepted rules of Site/Business
practice and behaviour as a whole.

Competence Trust

 That the partner will perform competently (technically, managerially etc.) and in
accordance with professional standards.

Goodwill Trust

 An ‘Open’ commitment, a willingness to do more than is formally required and being
prepared to accede to a request from the partner or to any observed opportunity that
would improve performance.

(Mari Sako)

Advanced Negotiation © ArcBlue Asia Pacific 47

3. Negotiation Styles Personal

Styles © ArcBlue Asia Pacific 48

Business

Advanced Negotiation

Styles Warm

PUSHOVER ASSERTIVE

Easy Business Tough

? AGGRESSIVEPersonal

Cold

Advanced Negotiation © ArcBlue Asia Pacific 49

Aggression versus passivity

Aggression Passivity

 Interrupt a lot  Avoid tough issues
 Raise voice  Compromise to avoid conflict
 Speak quickly  Find it hard to ‘break in’ to
 Express impatience
 Tell people what to do dialogue
 Stabbing or pointing gestures  Some times over talked
 Few contributions to dialogue

Advanced Negotiation © ArcBlue Asia Pacific 50