Tuesday, December 7, 2010

Negotiation Knowledge

If you are going to negotiate you need to build an understanding of Negotiation.

To be successful in negotiating you need three things:

1.     The appropriate negotiation strategy or strategies for the leverage you have and relationship you want to establish or maintain.
2.     The right tactics to help get what you need.
3.     Significant knowledge about what you are negotiating, including all the terms.

How well you manage the phases that lead up to the actual negotiation will determine whether your strategy is appropriate and will work. How well you manage the phases that lead up to the negotiate will also determine whether your tactics will work. How well you manage the phases after the negotiation will determine how much of the benefit of the bargain you negotiated you will keep. So the first thing you need to do is build knowledge of the different phases, what is occurring in each, and what you should be doing to maintain your leverage so your strategy and tactics work. 

Negotiation is all about determining who bears the costs and risks in the relationship. If a risk materializes it becomes a cost, so negotiations are all about cost.  To be successful in negotiating you need to understand the costs and risks that are represented by the contract terms and what the cost or risk impact is if you were to change a term.

You need to know how to prepare for a negotiation.
  1. Assemble team, establish roles
  2. Analyze Needs and Motivation of both parties
  3. Determine the relationship you want or need to establish
  4. Assess the leverage of both parties
  5. Understand the different Negotiation Strategies
  6. Prepare the strategy for the negotiation
  7. Determine tactics you plan to use
  8. Establish the Negotiation Plan and Goals

How to manage the Negotiation
  1. Negotiating Concessions
  2. Negotiating Contract Terms
  3. Negotiating a Clause
  4. Negotiating Performance
  5. Negotiating Specific Terms

In the materials that will be added I’ll review all of these.