How to Win at Negotiation

ProjectManager.com

There’s no getting around negotiating. You need to negotiate scope choices with stakeholders, resources and budget with sponsors and role allocations with team members, to give just three examples.

In fact, arguably, project management is negotiation. Yet few project managers are trained in negotiation, and many find the idea uncomfortable, or even intimidating. We’ve written about negotiations before, but it deserves revisiting, so let’s take a simple crash course in the basics.

how project managers negotiate

The Secret Sauce Is Confidence

As with many things, confidence is a vital first step. It is lack of confidence that can turn a negotiation into an argument. After all, negotiation is just conflict with rules and respect.

The good news is that negotiating is a learnable process. Like much else in project management, if you follow the process, you will get a good result. Note, that it won’t always be the result you hoped for at the outset: that’s not the goal of negotiating. After all, there are two (or more) parties to please. 

Confidence, however, comes from a sound process. Negotiations is a process of searching for an agreement that satisfies all parties, and it follows four simple steps.

The Four Steps of Negotiation

Step 1. Preparation

Nothing will boost your confidence more than feeling well-prepared. Think through what you want, find out about the other person and mentally rehearse the sort of things you could say, and how they might respond. Run through the negotiation with different objections, so you can practice handling each of them.

This can give you an immediate edge but, realistically, will simply prevent you being at a disadvantage from the start. Its real importance is two-fold: to boost your confidence and to equip you to recognize and secure the best outcome available…or to know when to walk away. 

So, what to prepare? First and foremost, know what you want, and what your options would be if you failed to reach agreement. 

Flexibility is often the key to a successful negotiation. If you have options and alternatives in mind, you can shift your offer or even your request, to find an agreement. The ultimate alternative is your Best Alternative to a Negotiated Agreement (BATNA).

This is what you can achieve, if the negotiation fails. When you know what your BATNA is, you know when you need to walk away. Therefore, you can negotiate confidently, knowing that saying no is an option. 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 gives you your maneuvering space. Find out what you can about the other party so you can anticipate what they need, want and don’t want. Identify some likely scenarios and play them out.

Be ambitious about what you set out to achieve, but don’t be greedy. Research shows that women frequently ask for what they think is fair, while men tend to ask for the most they think they could get. Men tend to do better in negotiations. Remember: it’s a negotiation! Starting high is part of the process and entirely appropriate.

Lastly, assemble a file of all the relevant facts and figures so you’ll 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, so you can quickly find what you need.

Step 2. Opening

The opening sets the tone and can determine the outcome. So your priority is to make a positive first impression. Dress well, enter confidently and get your papers out to reveal an orderly file, smart notebook and classy pen. Show you are confident, well prepared, and you mean business. 

Don’t neglect rapport-building chat. Negotiation is a human activity and it’s harder to be aggressive or deceitful with someone you have a rapport with.

Next, establish any ground rules. The most important, is to know whether the person in the room has the authority to finalize the deal. If not, you should never make your best offer to them, because they can always go back for authority and return, demanding more concessions.

Once the opening bars are over and the dance starts: who will state their position first? 

If you are expecting to negotiate on familiar ground – which will usually be the case – invite the other person to go first. This way, you can respond to their position and thus control the first exchange by securing the first concession from them. If you respond with a silence to indicate this isn’t good enough, they may even make a second concession without you asking.

If, however, you want to change the game they are expecting to play, and your position would surprise them with its audacity, you should speak first. The opening move of a negotiation always sets the position around which you will negotiate. Speak confidently with a prepared statement. And then stop. Shut up.

Step 3. Bargaining

Now the give and take of the negotiation is underway. The secret is to listen actively, never respond immediately, and not to be defensive. Cultivate the art of ferocious listening. Shut up and pay attention to what they say, because the details matter. Then wait before you speak, so you can assimilate the importance of what you heard. If you are planning your next move while I am speaking, you will almost certainly miss something important.

Questions are also a powerful negotiating tool. You can defuse a potentially adversarial response by asking a question, rather than taking a stance or making a demand (or even a request). Questions reflect curiosity, and so are less threatening. You may also find it more comfortable to ask a question than to state a position or call for a concession.

Once you have clarified what you have heard, move one step towards where you think agreement lies. You can:

  • Accept a concession
  • Making a concession
  • Requesting a concession, or
  • Spell out the next step 

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.

However, it is important to never offer a naked concession. Always dress it with a request for something in return: if I were to offer you this, could you do that for me? And always make each concession smaller than the last – ideally, around half the value. That way, your concessions converge on a final value for your position, rather than have it run away from you.

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. This is why we prepare.

You can control your emotional state by taking your time in responding. Breaks, pauses, and silences are among your most effective negotiating tools and none involve asking for anything. Indicate that a response is not what you hoped for and then stop.

Better still, don’t even respond when they stop – often they will feel the need to say something to fill the silence, and will hint at (or even offer) the next concession in their list. If you need time to think, say you need to step away.

Step 4. Closing

Eventually, you will reach either a point of agreement where both of you are happy, or a point where one of you recognizes that no such agreement is possible and offers to walk away – or storms out (but don’t ever let that be you).

This is where inexperienced or nervous negotiators stumble and fall. They fear that saying they are happy and checking that the other party is too, will break the spell and cause the negotiation to falter. 

The opposite is true. Failing to declare you are close to agreement can 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 detail: handshakes, drafting, signatures and logistics. If they express doubt, at east you know there is still a gap to bridge, and you can ask questions to assess the remaining challenge.

Once you have done the deal, never revisit the terms. You have a deal and there is no way it can get better, so the only thing that will happen is that it gets worse. After you shake hands, stop negotiating and focus only on the formalities and logistics.

Can it be that simple?

Yes and no. 

Yes, this simple process works and is the basis of all negotiation. 

No, because every negotiation is different. And there is one fundamental characteristic of all negotiations that militates against simplicity: they are a human endeavor. But as such, if you are well prepared, you are in the same position as the other party – or a better one. 

You are a human; so are they.

Plan your next negotiation strategy and your next project with ProjectManager.com. The online collaboration tool includes project and portfolio planning features, sharing and collaboration tools, and online file sharing so you work in one central hub wherever your teams and clients are. Start your free 30-day trial today.

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