Leading global excellence in procurement and supply ©PMMS Consulting Group All rights reserved. CIPS Negotiation Challenge Round 1

Leading global excellence in procurement and supply ©PMMS Consulting Group All rights reserved. A process through which parties move from their initially divergent positions to a point where agreement may be reached Negotiation – A definition

Leading global excellence in procurement and supply ©PMMS Consulting Group All rights reserved. HOUSE OF NEGOTIATION 3

Leading global excellence in procurement and supply ©PMMS Consulting Group All rights reserved. The warm and tough approach Warm Cold Tough Easy Warm and tough Assertion Value and respect Good communicator 4

Leading global excellence in procurement and supply ©PMMS Consulting Group All rights reserved. Both groups have 10 minutes to prepare for the negotiation. Each group list all the variables you may need in order to persuade the other party to your way of thinking. Remember you can’t make the other party agree but you can persuade them. 17 th birthday – persuasion practice session

Leading global excellence in procurement and supply ©PMMS Consulting Group All rights reserved. Team A = Parents Team B = Teenagers approaching 17 th birthday Parents - You are looking forward to your son/daughters 17 th birthday. You have already told them that you have bought them a series of driving lessons. You feel this is an extravagant present as most teenagers have to work and pay for their own lessons. Teenagers - You are grateful for receiving driving lessons and appreciate how hard your parents work. However, ALL your friends get driving lessons plus a car for their 17 th. You express how you feel and work to persuade your parents you should have a car too. 17 th birthday – persuasion practice session

Leading global excellence in procurement and supply ©PMMS Consulting Group All rights reserved. Be in control of your emotions – don’t let them control you! Use from a sincerely held belief Use early in the negotiation Use to increase the “perceived value” of your bargaining Use to counter logic Using Emotion

Leading global excellence in procurement and supply ©PMMS Consulting Group All rights reserved. Don’t be too quick to ask “Why?” Get your own logic in first Keep to one powerful argument – don’t dilute Be credible If others can’t see it, change tack Counter logic with emotion Using logic

Leading global excellence in procurement and supply ©PMMS Consulting Group All rights reserved. Be slow to threaten Threaten at the business, not the person Use a discreet or veiled threat Never make a threat you can’t ….. Be credible Add “if” to transfer threat to bargaining Using threat

Leading global excellence in procurement and supply ©PMMS Consulting Group All rights reserved. Don’t expose your position early Don’t put a marker down Don’t seem too eager to move Move, in small steps, Get a return for any concession you make Thank and bank Using bargaining

Leading global excellence in procurement and supply ©PMMS Consulting Group All rights reserved. The behaviour of last resort 50/50 is not the only compromise Compromise favours the more extreme party Let the other party suggest compromise… …..the one suggesting compromise probably accepts or moves towards the position of the other….. Using compromise

Leading global excellence in procurement and supply ©PMMS Consulting Group All rights reserved. Preparation & Planning OpeningTestingMovingConcludingReviewing The negotiation cycle

Leading global excellence in procurement and supply ©PMMS Consulting Group All rights reserved. Flipchart interactive exercise The negotiation cycle

Leading global excellence in procurement and supply ©PMMS Consulting Group All rights reserved. The objective here is…. To place you in the best possible position before the negotiation commences Preparation ………researching the issues Planning ….strategy, tactics, logistics Preparation and planning

Leading global excellence in procurement and supply ©PMMS Consulting Group All rights reserved. We need to set clear targets for each variable IDEAL Our ideal settlement, we strive to achieve it – our AIM HIGH figure or STRETCH target! REALISTIC Realistically we feel that this is where we might finish up! FALLBACK The point beyond which it is not commercially viable to do business Plan to be flexible as objectives may need to be changed Preparation and planning objective setting

Leading global excellence in procurement and supply ©PMMS Consulting Group All rights reserved. Opening The Vital First Impression Timekeeping Politeness Physical appearance and dress Personal hygiene The hand shake Eye contact Smile The opening words

Leading global excellence in procurement and supply ©PMMS Consulting Group All rights reserved. To test the validity of the assumptions we have made To see where movement in the other party is likely to come from To understand what is likely to be expected of us Testing

Leading global excellence in procurement and supply ©PMMS Consulting Group All rights reserved. Types of question Open Closed Probing Multiple Leading Reflective Hypothetical Testing – questioning techniques

Leading global excellence in procurement and supply ©PMMS Consulting Group All rights reserved. To achieve the maximum movement from the other party and make minimum movement yourself, in relation to your targets Moving

Leading global excellence in procurement and supply ©PMMS Consulting Group All rights reserved. Progressive and enthusiastic summary “So we’re agreed on the menus and the opening hours - we’re getting through it, let’s move on” Thank and bank “Thank you. 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…” Encouraging movement

Leading global excellence in procurement and supply ©PMMS Consulting Group All rights reserved. To reach a workable agreement To record what has been agreed To agree the next steps To condition for next time Concluding

Leading global excellence in procurement and supply ©PMMS Consulting Group All rights reserved. comparison with ‘SMART’ targets extent of plan achieved what went well / what didn’t what could I have done better hard and soft successes personal, team, organisation or industry patterns Review

Leading global excellence in procurement and supply ©PMMS Consulting Group All rights reserved. Share two key learning points Learning review