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The Basics: The 4 Phases of Negotiation

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Obvious but true: Project professionals must know how to negotiate. Whether they're dealing with customers, suppliers, contractors, colleagues or other departments, negotiating skills are crucial in pushing ideas through, securing finances or resources, and agreeing to contract terms. 

William Ury, co-founder of the Program on Negotiation at Harvard University, stresses that successful negotiations must generate efficiency, reach wise settlements and maintain good, or enhance, relationships between the negotiating parties.

There are four phases to the negotiation process. The first is preparation, when you acquire all the documentation, facts, data and information necessary to bring others into agreement. For example, when negotiating contract details with external contractors, a project manager must gather the number of project phases, breakdown of deliverables, milestones, time scales, resource requirements and expectations.

During preparation, it helps to look for win-win agreements that focus on shared interests. This opens the door to finding solutions and options that favor all parties. 

In case an agreement is not reached, you should also prepare a fall-back position before entering into bargaining. For example, when preparing for negotiation for a vital resource from another department, a good fall-back plan would include details on the following: 

  • A "best alternative to a negotiated agreement," such as outsourcing that activity or employing externally for that role. 
  • A "worst alternative to a negotiated agreement," which may include canceling or delaying an activity. 
  • A "walk away point or price." This is the point at which parties agree to step away from the issue to regroup later to consider the options — or end the negotiations because options are unacceptable. 
  • A "zone of possible agreement," where interests overlap with the other negotiating parties. For example, that could be an agreement to have the resource part-time, do a resource swap or take some responsibilities from the department.

The second stage is to exchange information and disclose necessary details with the other party. This aids efficiency and reduces frustration by ensuring relevant information is available to all and appropriate considerations are made prior to meeting. On a project, this information may include cultural or environmental considerations, company standards, rules and policies.

Bargaining is the third phase. It is at this stage that most of the interaction between parties takes place, and individuals display a range of different negotiation styles and tactics to make their case. It is during bargaining that the risk of unsuccessful or troublesome negotiations is highest, with increased potential for tempers and frustrations to flare.

To bargain successfully, focus on common interests and objectives at the start to clear any assumptions. 

You should also acknowledge your own triggers — the things others can say or do that make you react in a hostile or arrogant manner. If faced with a trigger, pause, ask questions so others can explain their point; listen, and then respond objectively and professionally.

It helps to bargain with the mindset that everyone is a problem solver, not an adversary. This paves the way for more questions, encouraging everyone to listen and collectively look for ways to agree. 

The final phase of negotiation is closure. Like in a project life cycle, this phase formally seals and binds the parties into the outcomes of the agreement.

What negotiation advice or practices do you recommend on a project?

 

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2 Comments

Hello Saira,

I was reading your article with a great deal of interest. It just so happens that I belong to a recently launched SSO (Share Services Organization). Our presence creates a tremendous amount of hostility when dealing with our clients since our mission is to centralize what they claim to be their territory, IT.

The area of 'triggers' and being aware of them is so important and it was not until I read your article that I realized how critical this is in my environment, which lends itself to be 'antagonistic' as we have to prove ourselves on a daily basis.

Thanks for your insights.

Regards,

Luis Berrios - PMP
Alpharett, Georgia

Sorry, but you have forgotten Game Theory from John F. Nash that is the best theory to be applied in case of negotiation !


So, cooperative mode is the best solution, not share, not bargain, etc...

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