A large part of Project Management is negotiation. The need to negotiate is not negotiable. Whether you are negotiating for resources, settling scope, or trying to agree on a compromise with a stakeholder, it’s a skill you’ll need, if you want to be successful.
But the prominence and practices of negotiation vary widely from culture to culture. In the Arabic souk, or in the north of the Indian subcontinent, it is more than a way of life, it is a ritual to be savored. Everyone is familiar with its ploys and gambits, and is comfortable with the give and take, the spirited competition, and the feigned offense. Not negotiating is what gives real offense.
In other cultures, the idea of negotiating to settle the price of that next consumer purchase is alien to us. And we don’t think of haggling over whether to eat at the Italian, Indian, North African, or Chinese restaurant as a negotiation: it feels more like an argument. So, not every Project Manager feels comfortable with the idea of negotiating.
In this article, we’ll cover why you need negotiating skills, the basic four-step negotiation process, and a few helpful tricks:
So let’s start with answering a simple, but important question
Seriously, everything is negotiation. You’ll negotiate with:
One of the commonest questions I hear is whether Project Managers should get involved in contract negotiations with suppliers, contractors, or consultants. Here is my answer to that question (spoiler: yes).
The good news is that negotiation is a learnable process. Once you assimilate the four basic steps, you can practice each, carrying them out diligently, and you will get a result every time. Note, that it won’t always be the result you hoped for at the outset: that’s not the goal of negotiating. There are, after all, two (or more) parties to please.
Put very simply…
Negotiation is a process of searching for an agreement that satisfies all parties.
It’s kind of like conflict, but with rules and a respectful attitude. It is a means of getting what you want, but in a way that everyone feels they have a fair result.
And, although many people find the idea of negotiation challenging, we do it all the time. And, when you think about it, we can break it down into a simple four-step process:
We’ll focus on each one in turn.
If you prefer a video to text, here are the basics…
The secret of success lies in going into the formal ‘let’s negotiate’ part fully prepared. This can give you an immediate edge but, realistically, will simply prevent you from being at a disadvantage from the start. Its real importance is two-fold:
You got to know when to hold ’em, know when to fold ’em,Kenny Rogers: The Gambler
Know when to walk away and know when to run.
Songwriters: Don Schlitz
The Gambler lyrics © Sony/ATV Music Publishing LLC
First and foremost, know what you want. And second, determine what your best option would be if you failed to reach an agreement. This is known as your BATNA, or your ‘Best Alternative to a Negotiated Agreement’. This tells you when to walk away. If you reach a stage in the negotiation where the deal on offer is worse than your BATNA, stop negotiating. It forms your bottom line.
You also need to inventory all the variables in your negotiation: what you can trade, offer, concede, request, and tweak, in terms of money, goods, services, or relationships. This will give you an understanding of your maneuvering space.
Next, find out what you can about the other party and do your best to anticipate what they need, want, and don’t want. As a result, develop some likely scenarios. Then play them out with alternative strategies. This kind of preparation increases your chances of knowing how to act for the best, as your negotiation progresses.
Lastly, assemble a file of every relevant fact or figure so you have them to hand. Ideally, learn it all – the impact of that on your counter-party can be stunning. If not, at least be familiar with it all, so you can quickly find what you need.
The opening is a dance. So, like a debutante, your first priority is to make a positive first impression. Dress appropriately, enter confidently, and get your papers out to reveal an orderly file, smart notebook, and classy pen. Show you are confident and mean business.
Don’t neglect rapport-building banter. A few minutes of this recognizes that all negotiation is a human activity. It’s harder to be hard with someone you have a rapport with, so soften up the other side.
Next, establish any ground rules – above all, does the person in the room have the authority to seal the deal? If not, you will never want to make your best offer to them. If you do, they will still have to take that back to the person who does have authority. And that will give them leverage over you.
Finally, the opening bars are over and the main part of the dance starts…
There are two different circumstances. And each one gives a different answer.
Now the dance is in full swing. The give and take of the negotiation are underway.
The secret here is to:
Everything you do or say should move you one step towards where you think agreement lies. This means either:
Anything else shows you to be focused on the wrong thing. The right thing is the big picture: progress towards an agreement that satisfies all parties.
Let any raising of emotional temperature, defensive behavior, or outrage come from the other side of the table. You will look wiser, more confident, and more powerful when you stay calm and focused. This is why you prepared.
There are lots of useful tips and tricks in the last section of the article. But first, we need to close the deal…
Eventually, you will reach a point where either:
This is where weak, inexperienced, nervous negotiators stumble and fall. They fear that saying they are happy and checking that the other party is too, will break the magic spell. The opposite is true. Failing to declare this point will mean the magic will wear off. So, screw up your courage and go for a close. The simplest and safest approach is a trial close:
I think we are at a point where we can both agree? Is that how you see it?
If you get the right signals, express your pleasure and move straight into the formalities of finalizing the details:
Never, ever re-visit any of the terms after you have both agreed*. You have a deal, so both of you are happy. Re-opening any part of the discussion can do nothing but make one of you doubt what you have. There is nothing better than having an agreement, so the only thing that will happen is that it gets worse. Stop.
* The only exception is where you realize you have made an agreement that misses something important to you. That is, you got something wrong, either because your preparation was flawed, you weren’t paying attention, someone above you changes their mind or re-sets the rules, or you realize they deceived you in some way.
Negotiation isn’t just the big commercial set pieces. It is a day-to-day activity that every manager does to get done what they need.
Now we have seen a simple four-step process for negotiation, I’d like to offer you ten of my best tips to help you make the best of that process.
Yes and no.
Yes, this simple process works and is the basis of all negotiations. Just four steps, followed with care.
No, because every negotiation will be different and there is one fundamental characteristic of all negotiations that militates against simplicity: they are a human endeavor. But, if well prepared, you are in the same position as the other party. You are a human; so are they. Think of it as a game in which you are both trying to win as much as you can. But, if you don’t win, you can always walk away with your best alternative to a negotiated agreement; your BATNA.
I’d love to hear your experiences and your tips. Please share them in the comments section below and I’ll respond to every contribution.
Dr Mike Clayton is one of the most successful and in-demand project management trainers in the UK. He is author of 14 best-selling books, including four about project management. He is also a prolific blogger and contributor to ProjectManager.com and Project, the journal of the Association for Project Management. Between 1990 and 2002, Mike was a successful project manager, leading large project teams and delivering complex projects. In 2016, Mike launched OnlinePMCourses.
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