CPD 2014017

Negotiation Skill
Your real world is a giant negotiating table, and like it or not, youre a
participant. (American author Herb Cohen)
By Hubert Hiew Project Director, Beria Consultants Ltd.

Bsc (Hons) FRICS MHKIS MCIPS RPS (QS)
Ref.
Its a Deal A practical negotiation handbook by Paul Steele, John
Murphy and Richard Russill
HKIS CPD Event 8th April 2014
Negotiation Skill by Hubert Hiew

Beria Consultants Ltd.
Contents
Case Studies (with questions requiring answers)

Who are the negotiators?
What is negotiation?
When/Why is negotiation necessary?
How
Approaches
Tactics & Ploys
Telephone negotiation
Preparation & Planning
Non-verbal communication
Success Checklists
Case Studies (revisit answers & discuss)
Case Study
Refer hand-out
Make a note of your preferred option
Who are the negotiators?
We all negotiate
We do it more than we think
At home, at work, in social lives
Good negotiators are born and not made:
Your real world is a giant negotiating table, and like it

or not, youre a participant. (American author Herb Cohen)
True or False?
What is negotiation?
Common definitions include:
Above not wrong, but just a limited view of a complex

process.
Give and take

Use of bargaining
Confer with another party
Discussions
Compromise
You can negotiate and reach agreement without compromising

Equally, two parties can trade without having to negotiate
Negotiation is a process through which parties move

from their initially divergent positions to a point where
agreement may be reached
Negotiation involves movement
When is negotiation necessary?
Every day deals discussed and agreements reached without negotiation
Discussion, meeting and interview not the same as negotiation:
Negotiation is necessary where the parties involved have difference of

viewpoint or objective and movement from positions is required.
Otherwise, a deadlock
Parties should recognize:
Parties reached agreement for some common problems without any negotiation, i.e. without either party
having to move
Possibility of agreement beneficial to them

Several different outcomes could result
Priorities may be different to those of the other party
Negotiations can begin before we realize it
E.g. with a casual telephone call to condition the behaviour of the other party
How: 5 Key Approaches to

Negotiation
Five key approaches (vs. tactics & ploys; checklist) (Ranking them from
most to least powerful/effective before and after explanation)
Compromise
Bargaining
Coercion (Threat)
Emotion
Logical Reasoning

Negotiation
Compromise
Involves a search for the middle ground, a process through which parties
make concessions until they arrive at an agreement
Typical statements:
Lets split the difference

Lets meet each other half way 50/50
Quickest & simplest way
Often used to break a deadlock
Least imaginative
Could result in conceding more to the other party than they would have
been prepared to accept (e.g. vendors selling to tourists)

Negotiation
Compromise (contd)
Rules
1.
2.
Try to take an extreme but credible posture

Only use it as a last resort (British tend to
use it first)

Negotiation
Bargaining
Where the parties trade options with each other, i.e. they give and
take with each party making concessions
Most books on negotiating focus on bargaining
Span a range of issues (compromise involves conceding on a single issue

only)
The more the issues, the more complex the negotiation (e.g. difficult
to put a value on the worth of two concessions where one concerns price and the
other after-dales services)
Research shows that once a person has given, he is more likely

to give again, thinking that the other party will respond sooner or later
10

Negotiation
Bargaining (contd)
Rules
1.
Do not indicate you are prepared to move quickly (youll

lose credibility)
2.
Move slowly, making the other party work for every

concession they get (so that they will put more value on even a small
concession)
3.
Avoid putting markers down (or else you are putting a ceiling on what
you want)
4.
Get a return for any concession you make
11

Negotiation
Coercion (Threat)
Negotiators who are (or think they are) in a powerful

position will sometimes seek to force the other party
into an agreement through coercion
Misused - can be counter-productive
Other party may take revenge

Use brains before brawn
When frustrated, one tends to threaten or bluff danger of

being seen through: loss of credibility
Usually only one party conceding
12

Negotiation
Coercion (Threat)
(contd)
Rules
1.
Before you threaten, think about the consequences
2.
Use mirrored or emotional threats rather than crude

ones
3.
You may need the other partys cooperation later

Mountain water will meet again
Mirrored threat: telling the other party what they would do if they were in your shoes
Emotional threat is a tactful technique, e.g. Dont force me to look elsewhere for this
product
If used, should not be used early
13

Negotiation
Emotion
Emotion affects negotiators behaviour:
How they feel towards the other party (warm or cold)

How passionately or dispassionately they put their case
How they react to a negotiating ploy: with surprise, anger, fear, etc.
Views may not be entirely founded on facts
Often results in one party conceding
Southern Europeans: use a lot
Japan and other Far Eastern Countries: good in controlling their own
emotions (while knowing how to trigger emotional reactions in the other party)
14

Negotiation
Emotion
(contd)
Rules:
1.
2.
Control your emotions; dont let them control you

Body language should be in tune with what one is
saying
15

Negotiation
Logical Reasoning
We can easily be moved by a well-reasoned case
The more factual, the greater the likelihood of winning (unless the
other party knows how to counter it)
E.g. price increase requested by seller
Usually one party will concede
16

Negotiation
Logical Reasoning (contd)
Rules
1. Careful how you use the why approach
Question, but dont nit-pick
2.
Get your logic in first
3.
Maintain credibility of your logic
17

Negotiation
Summing Up
In bargaining and compromise, both parties need to

concede before the approach will work
The above condition needs not apply in coercion,
emotion and logics
Any of the approaches can be used alone or with
others
You dont have to tell others what approach
Exercise: rate on a scale the most and least powerful approach
ELTBC
18
How: Tactics & Ploys
Definition of Tactics:
An action or strategy carefully planned to achieve a specific end
No general rules
Tactics may be different for different people
List not definitive

Dont be predictable
19

Building block technique
1.
Negotiate hard for only part of your needs and then the other party will give
more ground when you raise their expectations, e.g for 3-year contract,
negotiate hard for one-year contract first.
Back burner
2.
Put off later an item you have not planned for
Atom bomb
3.
Suggest that a failure to agree to a minor issue could lead to catastrophic

consequences
Broken record
4.
Repeat over and over again the point or demand you are making
20

Trojan horse
5.
Beware of too good to refuse offers may be some hidden problems or

disadvantages
Pre-emptive strike
6.
Can panic the other party into an agreement

E.g. I have an order here for 20 tons give me a price of X and I will issue the order
to you straight away.
Casino
7.
Suggest that the other partys proposals are a pure gamble

E.g. Youve got to be joking
Messenger
8.
Imply some absent 3rd party is responsible for the unpleasant point you are going to
deliver, e.g. Im only telling you what the engineers say
Make sure the other party cannot easily contact this 3rd party
21

Physically disturb them
9.
Use non-violent physical means to unsettle them

E.g. lean across the table; sit close to them; ask them (smokers) not to smoke
Silence
10.
Manage silence to your advantage.

E.g. sellers, faced with silence, may go on offering concessions until they get a verbal reaction
Recessing
11.
Seek an adjournment (including a natural break):
to consolidate, review and re-calculate or re-shape a deal
when some complicated calculations have to be done
when emotional temperature is rising
when your team is falling part
when there is deadlock
Personal favour
12.
Emphasize the effort you personally put in for the other party
E.g. I had to work hard to get the engineers to even look at your product
22

Dumbstruck
13.
Look astonished or horrified but say nothing, putting onus on the other party to explain or excuse
what has been said
Third party
14.
State, at the end of a negotiation or at a crucial stage, that you do not have the authority to make a
final decision, thus buying time
Danger: you may be by-passed in future negotiations!
To prevent this tactic being used against you, establish the authority level of the person you are
negotiating with.
Mr. Nice and Mr. Nasty
15.
One of the team makes very high demands at the start and indicates a firm stand; then another
member takes over and takes a more reasonable attitude
Requires close cooperation and pre-planning between members
If you are on the receiving end of this tactic, remember the objective of Mr. Nice and Mr. Nasty is the
same.
Openness
16.
Often used when both parties have been dealing with each other over a long period and trust has
been established
Demonstrated rather than stated
Beware of Im now going to be totally open with you
23

Lets go for lunch together
17.
Deals often concluded when surroundings are more relaxed and informal
E.g. lunch, golf
Side issue or red herring
18.
Highlight an unimportant issue so that when finally agreed, the other party
feels relaxed
When the real issue comes up, it gets less attention, to the benefit of the
party using this tactic
Divide & rule
19.
Pick up more positive or agreeable signals from a particular member of the

opposite team and then concentrate on them
Deliberate misunderstanding
20.
This is used to buy time after a complicated proposal, case or explanation
24

One more thing
21.
Used at the end of the negotiation especially after a lengthy session

Should not be a major or crucial issue
Incorrect summary
22.
Summarize in a way to tip the balance just in your favour.
New faces
23.
New faces may not be tied by what had been developed in the negotiation
todate.
25
How: Telephone Negotiation
Many negotiation preliminaries carried out on phone
Problems:
Lack of visual contact & conditioning of behaviour

When face-to-face, negotiators tend to work harder to reach an
agreement
Supportive data cannot be used
When face-to-face, difficult or unpleasant statements can be defused
by a smile
Gives the initiative to the caller whilst the recipient may not know why
the caller call
Tends to force closure
Gives the feeling that some definite result is demanded before end of the
call which can lead to decisions without thorough consideration
26
Positive aspects:
People tend to use longer sentences and

talk longer,
hence useful in obtaining info prior to negotiation
Useful way of conditioning expectations or

taking the sting out of a problem
27
Steps to avoid/minimize problems / dangers:

1.
Secretary to vet call, giving time to prepare
2.
Know who you are calling, best time to call
3.
Know why you are calling
4.
Matters to be negotiated on the phone should be simple

and clear
5.
Establish facts use closed questions (Yes/No)
6.
Check assumptions and then write down and clarify
28
Steps to avoid/minimize problems / dangers:

7.
Listen to what is said and not said
8.
Listen for moving signals e.g. What is, When could
9.
Close positively with a succinct summary
9.
What has been decided

Who to do what and by when
Confirm agreement in writing as soon as

practicable
29
How: the Process

PHASES
1. Preparation & Planning
Determines the course & outcome

Preparation: research the issues:
Market
Your requirements
The other party
Your targets including spectrum
Planning: how to proceed, strategy
30
How: the Process

PHASES
2. Opening Phase
Exchange salutations
Positions statement by each party
Testing Phase
3.
Promote and explain own position

Probe the others position to search out weakness and
areas where movement may be possible
Test any assumptions
Influence the expectations of the other party
31
How: the Process

PHASES
4. Moving Phase
Get the maximum amount of movement from the other party

while making the minimum movement from your own
Conclusion & Agreement
5.
Aim is to finalize an agreement

Clear & concise summaries
Written confirmation asap
32
How: the Process

SUMMARY
No sudden transition from phase to phase,
they tend to merge into each other
Should not move too quickly from the testing

to moving phase:
all variables should be fully explored
Measure success:
Assess your progress as a negotiator

Determine what has been achieved
Lessons learned
33
How: Non-verbal Communication
Non-verbal behaviour or body language communicates far more powerful

than spoken word
Success can be helped by warmth of feeling between the parties

Difficult to read, e.g a smile may be hiding impatience
Difficult to control
Seeing is more important than hearing
If verbal and non-verbal behaviour does not match, go carefully
Look for clusters of related gestures
Supporting gestures
Personal appearance and office environment
to reinforce a key message
also convey messages to others
Watch for change in non-verbal behaviour
e.g. when the body says Ive gone as far as I can go.
34
How: Non-verbal Communication

Non-verbal Signals
Eye contact
Eyebrows
Mouth
Head
Smile
Hands
Body seated
Body walking
Attitudes (Moods)
Positive attitudes
Negative attitudes
Confidence
Cooperation
Willingness
relaxation
Interest
Acceptance
Frustration
Nervousness
Boredom
Defensiveness
35
Checklists for Success

Some Dos
1.
Have a clear picture of your own position
2.
Dig in, early on, on a big issue
3.
Work out the relative bargaining power of both parties
4.
5.
with different members bearing specific responsibilities
Avoid premature commitment
9.
not just task (what) but also process (how)
Manage your team
8.
and make them appear important
Be prepared
7.
and use yours carefully
Try to avoid bargaining and compromise as long as possible

Trade or bargain on minor issues
6.
and stick close to your position
keep them selling
Recess:
to avoid premature commitment

to consider difficult issues
36

Some Dos (contd)
10.
Integrity rather than complete openness
11.
Listen rather than talk
12.
Summarize regularly:
13.
Lend a helping hand
14.
15.
small investment for a larger return
Aim high but be credible

Use the building block technique:
16.
17.
18.
try summing up points you like
each negotiable issue is a card in your hand do not play them all at
once
Elicit offers, dont make offers

Thank other party for any concessions offered
Ensure you understand the levels & extent of your authority
37

Some Donts
1.
Dont make things easy for the other party
2.
3.
4.
5.
Dont compromise early, if at all

Dont leave important issues to the middle or end of agenda
Never show triumph
Dont feel too successful
6.
They get more satisfaction from things they have worked hard to get
At the end make it a little better than they expect
Success is the brand on the brow of the person who aimed too low
(Bernard Shaw)
Dont paint yourself or the other party into a corner
Dont use either or, rather use if and then

Never ask
what is your lowest price?

Is that the best you can do?
38

Some Donts (contd)
7.
Dont go alone on protracted or complex negotiations
8.
Dont lack confidence:
Otherwise you wont ask questions and challenge positions and ideas
Fear of losing & facing experienced opponent
9.
10.
Dont get sidetracked

Dont bridge (e.g. 3 or 4 per cent)
11.
Signals uncertainty on your part and allows opponent to choose the

number that suits him best
Dont be greedy
12.
Can be avoided by preparing your groundwork

We learn from mistakes; mistake is not a final defeat
Risk of losing all
Dont move quickly
A slow concession pattern is a trait of a good negotiator
39
Case Study: Revisit
Re-visit the case study you have done

Review your preferred options
Any difference from your previous
preferred options?
Any difference from suggested answers?
40
The End
~The End~
41

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Negotiation Skill

By Hubert Hiew Project Director, Beria Consultants Ltd.

HKIS CPD Event 8th April 2014

Negotiation Skill by Hubert Hiew

Case Studies (with questions requiring answers)

HKIS CPD Event 8th April 2014

Negotiation Skill by Hubert Hiew

Beria Consultants Ltd.

Make a note of your preferred option

HKIS CPD Event 8th April 2014

Negotiation Skill by Hubert Hiew

Beria Consultants Ltd.

Who are the negotiators?

We do it more than we think

At home, at work, in social lives

Good negotiators are born and not made:

Your real world is a giant negotiating table, and like it

HKIS CPD Event 8th April 2014

Negotiation Skill by Hubert Hiew

Beria Consultants Ltd.

Common definitions include:

Above not wrong, but just a limited view of a complex

Give and take

You can negotiate and reach agreement without compromising

Negotiation is a process through which parties move

Negotiation involves movement

HKIS CPD Event 8th April 2014

Negotiation Skill by Hubert Hiew

Beria Consultants Ltd.

When is negotiation necessary?

Every day deals discussed and agreements reached without negotiation

Discussion, meeting and interview not the same as negotiation:

Negotiation is necessary where the parties involved have difference of

Parties should recognize:

Possibility of agreement beneficial to them

Negotiations can begin before we realize it

HKIS CPD Event 8th April 2014

Negotiation Skill by Hubert Hiew

Beria Consultants Ltd.

How: 5 Key Approaches to

HKIS CPD Event 8th April 2014

Negotiation Skill by Hubert Hiew

Beria Consultants Ltd.

How: 5 Key Approaches to

Lets split the difference

Quickest & simplest way

Often used to break a deadlock

HKIS CPD Event 8th April 2014

Negotiation Skill by Hubert Hiew

Beria Consultants Ltd.

How: 5 Key Approaches to

Try to take an extreme but credible posture

HKIS CPD Event 8th April 2014

Negotiation Skill by Hubert Hiew

Beria Consultants Ltd.

How: 5 Key Approaches to

Most books on negotiating focus on bargaining

Span a range of issues (compromise involves conceding on a single issue

Research shows that once a person has given, he is more likely

HKIS CPD Event 8th April 2014

Negotiation Skill by Hubert Hiew

Beria Consultants Ltd.