the art of effective negotiations
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September 14, 2012 Phoenix, AZ. Steven J. Isaacs, PE, Assoc. AIA Division Manager FMI Corporation. The Art of Effective Negotiations. A Primer for Getting and Keeping Business. Goals of the session. A broader understanding of the fundamentals of Interest Based negotiations - PowerPoint PPT PresentationTRANSCRIPT
The Art of Effective Negotiations
Steven J. Isaacs, PE, Assoc. AIA Division Manager FMI Corporation
A Primer for Getting and Keeping Business
September 14, 2012
Phoenix, AZ
Goals of the session
A broader understanding of the fundamentals of Interest Based negotiations
Techniques for appropriate preparations for negotiations
Specific tools to use and barriers to overcome in all negotiations
CONFLICT
Conflictis a difference of
interests
Is conflict good or bad?
Neither!
It is HOW you solve conflict that is either good or bad.
Three ways to resolve conflict:
avoid
fight
negotiate
The goal of a NEGOTIATIONis to satisfy
[my | their | both] interests.
Goals and Methods
Negotiation is a dialogue for the purpose of satisfying my interests.
Method is to focus on their interests.
A New Approach to Negotiations
A Brief Survey of Negotiating Strategies
Strategy No. 1Goal: Achieve my interestsMeans: Defeat their interests
Strategy No. 2Goal: Achieve my interestsMeans: Focus on my interests only
Strategy No. 3Goal: Achieve the interests of both sidesMeans: Focus on the interests of both sides
A Better Way to Negotiate
Goal: Achieve my interests
Means: Focus on their interests
Key points of interest based negotiation
Focus on interests, not positions
How do you focus on interests?
Key points of interest based negotiation
Separate the people from the problem
BATNA (Best Alternative To a Negotiated
Agreement)
Invent options for mutual gain
Source: Getting to Yes, Roger Fisher, William Ury
Focus on interests, not positions
ROI on negotiation preparation
Average Labor per hour(Raw) $30
% Profit
Effective Multiplier
Total Average Billing Rate
Profit per billable hour
How many work hours to make $1000 profit?
3
$90
10%
$9
111
ROI on negotiation preparation
What if I assured you that if you put
ONE more hour into preparation,
you could make $1000 in profit?
Negotiation Preparation
Begins at marketing Don’t make promises you
cannot keep Set the stage for a successful
negotiation
Preparation (continued)
Obtaining knowledge
Figure out your interests
Establish the BATNA
Client’s interests
Previous experience with client
Prepare for the actual
negotiation Analyze what you think are the
client’s interests
Discover the implications
Explore as many elements as you
can think of
Preparation (continued)
The Actual Negotiation: Negotiating to build a lasting agreement
Clarify goals and the means to achieve them:
Vigorously pursue your interests Focus on the other party’s interests Option hunting - based on knowledge
of interests, search for opportunities for mutual gain
Reaction to intractable or highly aggressive counterparts
Or…The art of having the other party have it your way
Don’t react Disarm your counterpart Change the game Make it easy to say “Yes”
Source: Getting Past No, Roger Fisher, William Ury
Personal Illusions
Winning = Excellence Survival = Closedness Negotiation =
Competition Negotiations require trust
Psychological Roadblocks
Reactive devaluation Attribution Loss aversion Certainty Convictions of naïve realism Dissonance
Closing
Reaching an agreement Do all parties have the
same impression of the agreement?
Reviewing the terms of the agreement
Four Steps of Negotiation
Analyze your interests Hypothesize their interests Decide on your BATNA Discover the commonalities
between your interests and their interests
Step 1: Prepare, prepare, prepare
Vigorously pursue your interests Focus on their interests Option hunt and problem solve to
achieve creative solutions Remember to use problem-solving
techniques
Step 2: Clarify the goals and the means to achieve them
Four Steps of Negotiation
Avoid the traps that detract from your interests: Reaction to intractable opponents Personal illusions Psychological roadblocks
Step 3: Keep your balance
Four Steps of Negotiation
Make sure all parties agree on all elements of the solution, and make a record of negotiations.
Step 4: Close with Accuracy
Four Steps of Negotiation
Questions?
About FMI
Founded in 1953 by Dr. Emol A. Fails, FMI provides management consulting and investment banking for the worldwide construction industry.
FMI delivers innovative, customized solutions to contractors; construction materials producers; manufacturers and suppliers of building materials and construction equipment; facility owners, managers and developers; engineers and architects; surety companies; and industry trade associations.
FMI’s experienced professionals assist businesses with strategic planning, leader and organizational development, business development, research, mergers and acquisitions, peer groups, private equity placement, project execution and training.
Knowledge • Expertise • Relationships
Visit us at www.fminet.com
Steven J. Isaacs,
P.E., Assoc. AIA
Division Manager