Negotiating Planning & Discussion Guidelines

CONTINUUM
Where do you want to be on the Negotiating Continuumand where do you think the other party will be?

Negotiation II

Adversarial

Positional

Value-Added

Collaborative

GOALS AND OBJECTIVES

What goals/results do we want to acheve? Where do we have mutual interests to build upon?

Negotiation I and II

OUR GOALS

COMMON GOALS

THEIR GOALS

What are the associated motivators for each key issue? (e.g. Issue: Price; Motivators: meeting firm forecast , getting a raise; Issue: timing, Motivators: meeting initiative timing, getting on the BU leadership team) Are these captured for all functions/disciplines involved in the negotiation? Are there personality motivators on our side and/or their side? Are there any existing motivators where agreement will be very difficult, easy?

Negotiation I and II

MOTIVATORS

OURS

THEIRS

POWER/PORTER ANALYSIS
Who has what power? - knowledge - legitimacy - social proof - confidence - Porter Analysis - time - alignment - alternatives - reward/punish - reputation Porter Analysis: - Rivalry among existing suppliers - Threat of new entrants - Threat of substitutes - Power of feedstock suppliers - Buyers power SWOT Analysis OUR POWER SOURCE/HOW WE USE IT THEIR POWER SOURCE/HOW THEY USE IT

Negotiation I

What specific items will you be negotiating? Important: Must set a bottom line! What are the minimum conditions that we will accept? What are the implications of not coming to agreement?
Priority Issues Us Them Optimistic Our Negotiating Positions BottomEst. of Their Realistic line Realistic

Negotiation I and II

ISSUES

Best Alternative to a Negotiated Agreement (BATNA)

What is the next best alternative outside this negotiation? How do we make our BATNA look more attractive than their BATNA?

Negotiation I

OURS

THEIRS

POSSIBLE VALUE-ADDED OPTIONS/TRADEOFFS/CONCESSIONS

What are the possible options we should consider in this negotiation? (e.g. We fund all the capital but get a higher price or, we share the capital and give a lower price, or we have the other party pay all the capital and we give the lowest price.) Which option(s) do we prefer? How do our options satisfy their motivators? Identify Must Haves Identify Throwaways/Unimportant Items and how they might be used to get Must Haves or Negotiable Items Consider possible tradeoffs (e.g. lower price for longer contract; mutual exclusivity; schedule stability for lower pricing) Consider concession scenarios (e.g. a longer contract period in return for a lower price) Which option(s) do we think the other party will prefer?

Negotiation I and II

VALUE-ADDED OPTIONS

BENEFITS/OBSTACLE

STRATEGY

What is the logic/rationale/operational details or framework we will use to influence the other party to accept our solution/option? (e.g. substitutes, new entrants and our global volumes ) What logic/rationale/operational details will the other party attempt to use to influence us?

Negotiation I

OURS

THEIRS

TACTICS/INITIAL POSITION
What tactics will we use in our opening negotiation session? On-going? What counter-tactics will we use against their initial tactics? What will our negotiation process be? (e.g. alternate locations, limit number of participants, use of telephone, use of exploratory meetings, etc.) What influence/persuasion principles will we use? Will we present an opening offer or ask them for one first? If we open first, what will our opening/initial offer be? Which items do we want to deal with first? What tactics might the other party use in the opening session? On-going What influence/persuasion principles will we the other party use? What do we think the other partys initial offer might be?

Negotation I

OURS

THEIRS

ASSUMPTIONS/ QUESTIONS

What additional information do we need to get before we meet with the other party? What information do we need to verify or get from the other party during our initial session? What information will the other party try to get from us? What information will we NOT share with the other party?

Negotiation I and II

Negotation II

Discussion Guidelines
1. OPEN THE DISCUSSION
* Identify and deal with obstacles to developing a positive climate. * Identify and build areas of common ground and shared goals. * State purpose of meeting and major items to be discussed. * Use process suggestions to structure an overall agenda for the discussion. * What tactics will you use and what will they use? TRANSITION:

Tactical Planning

Discussion Notes

Clarity check/Summary

Process adjustments

Climate check

2. EXPLORE MOTIVATORS
* Identify relevant issues to discuss. * Check out your assumptions and questions. * Probe for their motivators. * Communicate your own motivators * What tactics will you use and what will they use? TRANSITION:

Clarity check/Summary

Process adjustments

Climate check

3. CREATE ADDED VALUE (Options)

* Keep options tentative. * Build on the other party's ideas. * Link motivators to options. * Trade ideas to get both parties' primary motivators met. * What tactics will you use and what will they use? TRANSITION:

Clarity check/Summary

Process adjustments

Climate check

4. BUILD THE AGREEMENT (Proposals)

* Keep firm proposals to a minimum (if on right side of Continuum). * What tactics will you use and what will they use? TRANSITION:

Clarity check/Summary

Process adjustments

Climate check

5. CLOSE
* Check under-standing by summarizing the agreement. * Agree on next steps and follow up. * End the discussion on a positive note. * What tactics will you use and what will they use?