1. Mutual Gains Negotiation

2. Course Objective
Gain a useful and practical understanding of Concepts of the Mutual Gains Negotiation Process, Strategies, Techniques, and Purpose
Develop the Ability to Apply Mutual Gains Concepts and Techniques to everyday negotiations, and Consultant Agreements
G – Lead
S – MGN = Process
SHEG = Tool

3. What is Negotiation?
Negotiate: To confer, bargain, discuss with a view to reaching agreement; to make agreements for; to settle; to conclude; to succeed in crossing, surmounting, accomplish
Latin: Negotium-business or Negotiatus-to carry on business
S – Not negotiating against companion across table; but overcoming obstacle

4. What is Negotiation? Negotiation = Business
Negotiation can determine profitability and livelihood
Negotiation protects the interests of all parties
Negotiation is a critical step toward the successful completion of any project
G -

5. Negotiation Is NOT…. A Contest or Game
A method of determining a Winner and Loser
A means of carrying out a personal vendetta or grudge
A “one-size fits all” formula
G -

6. Negotiations are Everywhere
In everyday life with friends and family
In politics and government
In business
In scholastics
In law; in and out of the courtroom
In every organization, regardless of its size or complexity
G -

7. The Issue Negotiations fail often Mutual agreement is rarely achieved
Preconceived Arguments or positions are pushed onto the issue at hand
Time, efforts, and money are wasted
Relationships are damaged
Often parties leave in a worse position than they started
S – Credibility
Reputation
Trustworthy
Perception

8. Why Negotiations Fail
Negotiations are viewed as a trade-off process (zero-sum)
Parties give into the three “E”s: Ego, Emotion, Escalation
Parties never develop a systematic, step-by-step approach to negotiation
Parties never realize how their behavior will affect others
We let “What we have always done” dictate what we do today.
S – Star Trek? Shields up
your entry position has nothing to do with your actual need
loss of big picture

9. Three Areas of Negotiation
The Process- how we go about our negotiation
The Substance- what we are negotiating for; what we see as “on the table”
The Relationships- often overlooked, and underestimated, and regularly the first thing sacrificed
G -

10. Traditional Negotiations
Establish Extreme Positions: Always start at one end or the other and work toward the middle
Never accept or make the first offer
Never tell them what you really want
G -

11. Traditional Negotiations
If you concede, concede reluctantly
Always be skeptical of the other side
Give them as little as possible
S –
opposite is to be candid and express what you want

12. Traditional Negotiations
Usually involves “giving in”
Becomes a contest of wills
Strains relationships
S -

13. Productive Negotiations
Achieve Set Goals
Produce Agreements that benefit all parties
Improve and sustain healthy relationships
G -

14. Goals of Negotiation
Achieve an agreement that is acceptable to all- Satisfies all of our interests and enough of theirs- no one feels taken
Explore all options and select the best using legitimate criteria
Establish an agreement that can succeed
G -

15. How to Achieve Goals of Negotiation
Focus on Interest- not position
Interest: “we have to really watch our budget”
Position: “there’s no way we are going to pay more than…”
Invent Options for Mutual Gain
Establish legitimate Criteria for evaluating interest
Determine your Best Alternative To a Negotiated Agreement
S – Detail explain BATNA
G – Reinforce no harm if BATNA exercised

16. A New Model 4 Steps to Mutual Gains PREPARE CREATE VALUE
DISTRIBUTE VALUE
FOLLOW-UP
S -

17. Step 1: Prepare Determine your purpose and define your team
Estimate your BATNA
Try to improve your BATNA
Define your Interests
Try to estimate their interests
Prepare options that could benefit both parties
S – BATNA is not walking away; is walking to another alternative
Interests = Expectations

18. Determine Your Purpose and Define Your Team
What is my role in the negotiation, and who will assist me in the process?
Who will gather what information?
Who will participate in the negotiations?
Who has the authority in the negotiations?
S -

19. Focus on Interests What are Interests?
Interests are the reason for positions
More than one position can achieve a particular interest
G – Interests = Expectations

20. Focus on Interests Identify the interest of all your stakeholders
Analyze and Prioritize your interests
Consider the other party’s interests
Identify personal and professional interests
Communicate interests in a clear and concise manner
Identify conflicting and compatible interest to establish common ground
G – List, then prioritize & categorize interests

21. Estimate Interests YOURS THEIRS OURS S – 3 minute exercise – 3x5’s
1 interest per card
No names / affiliations
Shuffle, read
Identify common

22. Estimate Interests
THEIRS
YOURS
OURS
S -

23. Estimate your BATNA BATNA’s are not negative
A BATNA is your best option to not agreeing
Your BATNA has to be something you are willing to accept
Your BATNA should not be detrimental to your business
No Party should be forced into a contract they cannot live with
S – First 3
G – Last 2
No hard feelings if BATNA exercised

24. Prepare Options for Mutual Gains
Think about negotiations in a different light
Brainstorm, invite outside suggestions, be creative
Note the obvious without focusing on it
List options with positive statements (recognize the down-side, but emphasize the up-side)
G -

25. Step 2: Create Value Suspend criticism
Discuss the interests of all parties
Make suggestions without making commitments
Make the pie larger
G -

26. Suspend Criticism Listen Evaluate, without criticism
Remove the person from the idea
View your counterpart as a partner not an opponent
Ask “Why?”
S – No ego
No emotion
No escalation
Common enemy is lack of agreement

27. Discuss Interest Always reveal your interest not your BATNA
State what you believe their interest may be
Listen, listen, listen…
Take careful notes
Focus on the issues, not the position
Ask “Why?”
S – Redefine interest vs. position

28. Make Suggestions Brainstorm with all parties
Invent without committing- “What if we…”
Propose multiple ideas together
Put the extremes on the table
Avoid the “Fixed Sum Game”- the “split the difference” solution
Load the table with ideas
S – Think outside the box
Don’t make a project more complicated than it needs to be
Define brainstorming

29. Step 3: Distribute Value
Develop the relationship-build trust
Establish legitimate criteria
Suggest possible distributions
Settle on the strongest agreement
G -

30. Develop the Relationship
Separate substantive issues from relationship issues
Honesty builds trust
Listen to their views and interests
Clarify-restate what’s been said
Recognize emotional reactions
G -

31. Develop the Relationship
Examine preconceptions and biases
Attempt to identify their preconceptions
Try to understand their mind set- Where are they coming from?
Attempt to take a fresh approach
Remember, take a partnering approach
G -

32. Establish Criteria External standards of fairness
Market value, historical data, indices, averages, etc.
PennDOT Staff Hour Estimating Guide (SHEG)
Develop criteria to support your interests
Be open to theirs
S – SHEG a living, evolving document
MGN an evolving process

33. Suggest Possible Solutions
Work to improve each suggestion
Get as far away from the BATNA as possible
At minimum – develop one solution that is fair to both parties
S -

34. Step 4: Follow Up Conduct Biennial Review of SHEG
Establish periodic reviews of process
Ensure controls/incentives are in place
Have a dispute resolution plan
Improve relationships
Continual metric evaluation
G – First 3
S – Last 3

35. Strategies for Success
Change the game to problem solving
Reveal your interests and discuss theirs
Ask why (why not) to get past positions
Invent options without committing (what if)
G -

36. Strategies for Success
Analyze mutual interests and conflicting ones to strike balance
Foster cooperative atmosphere
Discuss process and logistics before substance
Be creative
S -

37. Strategies for Success
Ensure your interests have legitimate criteria
Identify examine and challenge all your assumptions
Listen for their assumptions without judging
Respond to reasoned arguments, never to pressure
Use objective criteria
S – First Two
G – Last Three

38. QUESTIONS? DISCUSSION?