love, don't dread, negotiations

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Love, Don’t Dread, Negotiations Presenter: Terrilynn Million Short SWE Conference October 2014 Los Angeles, CA

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Presented by: Terrilynn Million Short and Cheri Chappelle

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Page 1: Love, Don't Dread, Negotiations

Love, Don’t Dread, NegotiationsPresenter: Terrilynn Million ShortSWE ConferenceOctober 2014Los Angeles, CA

Page 2: Love, Don't Dread, Negotiations

ITW’s Enterprise Strategy at Work

Purpose of This Session

●Increase your comfort with negotiations, both in professionaland personal settings

●Identify 2-3 easy tactics each participant can take away toimprove negotiation comfort and outcomes

Page 3: Love, Don't Dread, Negotiations

ITW’s Enterprise Strategy at Work

Negotiations Happen All the Time

●Supplier or customer contracts and pricing

●Budgets and sales plans

●Chores and duties at home

●Getting help when schedules are tight

●Parking and locker spaces

●Buying cars and major household items/services

●Kids’ bedtime, allowances, screen time…

●And, many other examples

Page 4: Love, Don't Dread, Negotiations

ITW’s Enterprise Strategy at Work

What Is the Impact of Not Negotiating?

●If a man and a woman start their careers at the same time…– She accepts the initial offer of $25,000– He negotiates for $30,000

●QUESTION: How much more will he make by the end of his44-year career if they only increase their salary 3%annually?

●QUESTION: How much more in savings will he have if justbanks all of the differences?

●QUESTION: What if he invests this money at 5%?

There is a high cost to dreadingnegotiations

Source: Women Don’t Ask, The High Cost of Avoiding Negotiation – and Positive Strategies for Change; Linda Babcock and Sara Laschever

Page 5: Love, Don't Dread, Negotiations

ITW’s Enterprise Strategy at Work

Perception Can Create a NegativeReality for Negotiators

●No Trust: 40% say they are trustworthy, but give a far lowerscore to their counterparty

●Dislike: 87% are apprehensive about negotiations, 32%are fearful, 18% say it is inherently unpleasant

●Irrational: Noble Prize winner did a study showingnegotiations are typically guided by emotion and intuition

●There is hope…

– Research shows negotiators get 42% more value byditching a zero-sum approach and instead using atrusting, collaborative style

5

Source: Forbes.com, “Why Negotiators Still Aren’t Getting to Yes”, Keld Jensen, 2/5/13. Data from study by Prof. Karen Welch, Salary.com survey, andCopenhagen Business School research, respectively.

Page 6: Love, Don't Dread, Negotiations

ITW’s Enterprise Strategy at Work

Let’s Get A Few Essential, ButImportant, Concepts Out of the Way

●Every negotiations course or book I have experiencedfeatures a few terms that every negotiator must know

– BATNA

– Reservation Value

– Target Value

●This session will be no different since understanding anddefining them are critical to negotiation success

●… And, attempting to anticipate the values for yourcounterpart is also key

Page 7: Love, Don't Dread, Negotiations

ITW’s Enterprise Strategy at Work

What Happens If Your Deal Blows Up?

●Best Alternative to a Negotiated Agreement

– BATNA is your best option if this negotiation fallsthrough

– Knowing this is powerful, because it helps define whatyou will and will not accept

– The better your option, the better your position

– Make sure it actually meets your objectives

Page 8: Love, Don't Dread, Negotiations

ITW’s Enterprise Strategy at Work

What Is Your Walk-Away Point?

●Reservation Value

– Worst outcome you would be willing to accept beforeyou would resort to your BATNA?

– Typically it is not an exact value, but instead a range

– Define your absolute “deal breakers”

– You need to know your BATNA to define this… But, theRV is related to the deal at hand, not the BATNA

– Gives you “peace of mind” and discipline in anegotiation

Page 9: Love, Don't Dread, Negotiations

ITW’s Enterprise Strategy at Work

What Is Your Ideal or Desired Outcome?

●Target Value

– What do you consider a successful outcome for thenegotiation?

– Make it ambitious, but ground it in reality

– Defined in the context of both party’s interest andobjectives

– Ideally the answer is multi-dimensional and considers allpotential sources of value

If you don’t anticipate some “No’s”, youmay not be asking for enough

Page 10: Love, Don't Dread, Negotiations

ITW’s Enterprise Strategy at Work

A Few Other Terms to Keep In Mind

Parties: Who are the negotiators? Which ones are atthe table? Which ones are silent/invisible?

Objective: What is the big picture? What needs to beaccomplished?

Issues: What are the different factors that you willnegotiate? Single or Multiple? Splitable?

Positions: What does each party want relative to eachissue, and how will they approach it?

Interests: What are the goals/objectives for each? Whatother things might influence their position?

Page 11: Love, Don't Dread, Negotiations

ITW’s Enterprise Strategy at Work

It’s Time to Start Loving Negotiations!!

Now you have the essential terms and ideas(or, at least you’ve been reminded from other negotiations work)

You probably don’t dread negotiations quite as much(at least hopefully you don’t)

Now… Let’s work on LOVING negotiations

Page 12: Love, Don't Dread, Negotiations

ITW’s Enterprise Strategy at Work

Negotiating Has a Bad Rep

●Staking out extreme positions

●Digging in your heels

●Ultimatums

●Bullying, hardball tactics

●Stonewalling

●Pounding fists

●Storming out

●Impasses

It doesn’t have to be that way

How can

you build or

maintain a

relationship

like that?

Page 13: Love, Don't Dread, Negotiations

ITW’s Enterprise Strategy at Work

From Dread to L-O-V-E!

●Prepare BEFORE

●Want to Say “Yes”

●Trust the Other Party

●Active, Solution-Oriented Listening

●Speak About Interests, Not Rights or Positions

●Get Creative

Page 14: Love, Don't Dread, Negotiations

ITW’s Enterprise Strategy at Work

The Most Important Word…PREPARATION!!

●Get ready before you engage in the negotiation, includingany pre-meetings or signaling

●Use the obvious and easy sources forinformation

●Also find creative ways to gather information

●WRITE IT DOWN!! Create a simple tablewith the information for all parties

●Don’t forget to prepare your demeanor

Information is POWER!Confidence is POWER!

Page 15: Love, Don't Dread, Negotiations

ITW’s Enterprise Strategy at Work

Sample Preparation Table

Party #1 Party #2 Comments

Key Players/Role

Objective#1

Issue #1 • Interest• Target Value

Issue #2 • Interest• Target Value

Issue #3 • Interest• Target Value

Objective#2

Issue #1 • Interest• Target Value

Issue #2 • Interest• Target Value

Issue #3 • Interest• Target Value

NegotiationRules/Norms

Strategy/Approach

15

Prioritize the issues for you vs. them…Weighted scoring is a good tool

Page 16: Love, Don't Dread, Negotiations

ITW’s Enterprise Strategy at Work

It’s Not So Bad Being a “Yes Man”

●L-O-V-E means… Wanting to say Y-E-S!

●Wanting to say “yes” doesn’t mean you are a pushover(especially if you know your BATNA and RV)

●It means you find solutions that maximize value for you,as well as the other party

●Requires a solution-oriented,collaborative mindset

●Requires listening and sharing…working together

●Helps if there are MULTIPLE issues!!

Cooperative negotiations build value

Page 17: Love, Don't Dread, Negotiations

ITW’s Enterprise Strategy at Work

It’s Time to Do a Trust Fall (sort of)

●L-O-V-E means… Trust, like other good relationships

●At its most basic, a negotiation is a relationship

– Either the start or an inflection point

– Sets the path for a happy future

●Maximizing the pie requires info sharing…This requires trust and vulnerability

●Info sharing (e.g., trust) helps identifythe full range of issues/interests(e.g., value)

●Establish “rules” with the counterparty

Be a bridge-building value maximizer!

Page 18: Love, Don't Dread, Negotiations

ITW’s Enterprise Strategy at Work

Listen Up!!

●L-O-V-E means… Active listening!

●Info gathering before and during the negotiation will helprefine RV and TV and clarify issues and interests

●This means getting comfortable with being silent andperiods where no one is talking

●Too much focus on your own goals, maycause you to miss something

●Goal is to use this info to connect the dotsand find value-maximizing solutions

Info = Power = Confidence = Listening

Page 19: Love, Don't Dread, Negotiations

ITW’s Enterprise Strategy at Work

You’ve Gotta Fight for Your RightsInterests

●L-O-V-E means… Focusing on interests

●Position = wants for each issues

●Interests = underlying motivators

●Interests influence positions

●Creative solutions can be found when true, underlyinginterests are understood

●Interests help break a problem down into multiple issues(e.g., opportunities for value/solutions)

– Integrated, multi-issue negotiation vs. distributive,single-issue negotiation

– Pie is no longer finite or fixed, can be expanded

Page 20: Love, Don't Dread, Negotiations

ITW’s Enterprise Strategy at Work

Put Picasso to Shame When YouNegotiate

●L-O-V-E means… Getting Creative!

●It’s not just for artists, it’s also for negotiators

●Now that you L-O-V-E negotiations, you…

– … Want to say “yes”

– … Trust the other party

– … Use this trust to actively listen for solutions

– … Understand interests and create multiple issues

●Now the fun begins!

●Key factor is to maximize value by maximizing variables

Going outside of the box = bigger pie

Page 21: Love, Don't Dread, Negotiations

ITW’s Enterprise Strategy at Work

Dealing With a “Dreaded” Negotiator

●Everyone is not a collaborativenegotiator (unfortunately)

●Now what?!?

●Model the style that you want

●Show how the pie is larger with collaboration

●Leverage others that influence them

●Make the first offer to set the target zone (and tone)

●Keep calm and know your BATNA and RV(no need for hostilities if you know your walk point)

Page 22: Love, Don't Dread, Negotiations

ITW’s Enterprise Strategy at Work

Now you L-O-V-E– instead of dread –

negotiations

Page 23: Love, Don't Dread, Negotiations

ITW’s Enterprise Strategy at Work

Sources and Acknowledgments

– “Women Don’t Ask: The High Cost of Avoiding Negotiations”, LindaBabcock and Sara Laschever

– “Ask For It: How Women Can Use Negotiation to Get What TheyReally Want”, Linda Babcock and Sara Laschever

– “Negotiating Globally: How to Negotiate Deals, Resolve Disputes,and Make Decisions Across Cultural Boundaries”, Jeanne M. Brett

– Kellogg School of Management Executive Education Negotiationscourse (Vicki Medvec, Lea Thompson)

Page 24: Love, Don't Dread, Negotiations

ITW’s Enterprise Strategy at Work

THANK YOU

THANK YOU