Hello, readers, and welcome to another interesting topic in our project management series. Today, we will be considering the art of negotiation and how we, as project managers, need to intervene, mediate, or compromise (when necessary) when faced with conflicts during the project cycle. What should be done when something needed or desired cannot be gotten simply by asking (or using brute force)? How do you reach an agreement without causing future barriers to communication? How do we effectively negotiate in order to guarantee the continuity and success of the project?
PMP Training – Resources (Intense)
Dissimilarities are bound to occur when people from various backgrounds work together. If these differences are not properly addressed, the situation will steadily degenerate. This is often avoided by finding a central meeting point for parties involved while focusing on the best possible outcome that suits the project goal.
As project managers, we live in a world of limited resources. Of these resources, the “human resource” is arguably the most important and must be properly managed in order for a project to succeed. They have disagreements from time to time and it is the job of the project manager to manage such issues. The management of these disagreements is what is known as Negotiation.
What Is Negotiation?
Negotiation is one of the conflict resolution techniques. It is a method by which people settle their differences when they have to make compromises or partial agreement in order to avoid argument and disputes. It involves two or more parties attempting to reach acceptable agreement in a situation characterized by some level of disagreement. Negotiation takes place at any point in a project and may be formal or informal in nature.
Formal negotiations: This form of negotiation is typically done with contractors, clients, or service providers on such issues as agreeing to contracts.
Informal negotiations: These involve discussions to resolve conflicts or disagreements to obtain internal resources.
Forms of Negotiation
Competitive style—Competitive negotiation implies getting the best deals regardless of the interest of the other party(s). This form of negotiation easily becomes a battle; the winner takes all and maintaining a relationship is not of any importance. This type of negotiation should be avoided, if possible. It is, however, valuable in a one-off contract situation.
Collaborative style—Collaborative negotiations seek to create a “win-win” scenario, where all parties involved are able to get all or part of what they were looking to achieve from the negotiation. This approach produces better results, as it preserves relationship and avoids the possibility of conflict. It is essential for project managers to maintain good relationships after negotiations, especially for long-term relationships. Roger Fisher and William Ury, authors of the book titled Getting to YES: Negotiating Agreement Without Giving In, came up with a method of principled negotiation using the collaborative style. The key elements of this method are:
Separate the people from the problem
Focus on interest not position
Invent options for mutual gain
Insist on using an objective criteria
The Effective Negotiation Process
Project managers need to apply their negotiation skills at every stage of the project life cycle. Early on in the project, at the planning stage, the project manager negotiates with stakeholders on time, cost, quality, and scope of requirement. At the phase of resource mobilization and procurement, the manager negotiates with the resource suppliers and other potential providers. During the project, conflicts arise and it is the responsibility of the manager to proffer solutions to these conflicts, which usually is done via negotiation.
Successful negotiation must be guided by the principles of fairness, seeking mutual benefit and maintaining a good relationship. It entails the disagreeing parties coming together and fashioning an agreement that is acceptable to all involved. In a bid to achieve productive negotiation outcomes, skills such as Good attitude, Knowledge of when and how to close a negotiation, and Interpersonal skills (excellent verbal communication, listening and emotional control) must be possessed. Active listening is an essential skill the manager needs for an effective negotiation process. It puts a solid foundation of faith in the other parties’ minds and helps to create a “win-win” outcome. A manager who has been able to harness these skills leads the negotiation process and holds a higher possibility for a positive outcome. The negotiation process cycles through a number of distinct phases. They are:
The importance of planning before going into any negotiation cannot be overemphasized. Decisions have to be made as to where the meeting is to be held, the issue(s) to be negotiated, the people attending, etc. All information and related facts of the situation should be gathered and understood. Set goals and ensure that they are in accord with pre-agreed tolerances. Investigate the negotiating conventions if dealing with people of different cultures. Undertaking preparation before discussing the disagreement will help avoid further conflict and time wastage during the meeting.
Often the project manager is required to open the scene through discussions. The discussion stage allows each individual or party to put forward the situation as they understand it. Key skills to be possessed by the manager at this stage are; listening, probing, questioning, and clarifying for better understanding. Taking notes is important at this stage in case the need arises for reference, further clarification, or decision-making.
This involves communicating openly and plainly a proposal to the other party. It is crucial at this stage to clarify the goals, interests, and viewpoints of both sides to ensure that everyone is on the same page. Through clarification, it is often possible to establish common grounds which are beneficial for a successful outcome.
At this stage, the project manager should be prepared for trade-offs and compromises. Concerned parties or individuals have expressed their interests and are looking to attain a “win-win” outcome. Although this may not be possible every time, it should be the ultimate goal of every negotiation. Alternative strategies and solutions for the benefit of all should be considered here also.
Agreement can be achieved once the viewpoint of all concerned is understood. It is important to keep an open mind in order to get an acceptable solution. Agreements should always be confirmed clearly and formally in case it is challenged later in the project. There is no substitute for a written record.
Review and Implementation
On resolution, the outcome needs to be communicated to all parties and the course of action incorporated into the project management plan.
Skilled negotiators follow through with these processes religiously, but they also abide by certain RULES that guide the effectiveness of every negotiation. These rules are:
1). Know your BATNA—Before negotiations, it is important to know your BATNA – best alternative to negotiated agreement. The reason we go into negotiation is to produce a result better than is obtainable without it. The result you can obtain without negotiating is your BATNA. Knowing it allows you to focus on the desired goal(s).
2). Do the background homework—Prior to negotiations,the project manager ought to understand the interests, positions, and points of view of the other side and the upper and lower limits of tolerance that exist around the negotiating position.
3). Don’t negotiate against yourself—When the process commences, the project manager is duty-bound to state and stand firm on his position and interest, explaining the rationale behind it while also trying to understand the points that are most important to the other party.
4). Be flexible (ready to compromise)—When at a stalemate, where all parties are stuck on their position, the project manager should endeavor to reach a compromise. It usually involves giving in to the other parties on their issues in exchange for something unrelated but relatively more important.
5). Know when to walk away—If, after negotiating, you realize that you cannot reconcile on key terms or the bargain is not rich enough, be honest and straightforward on what you are willing to do and explain that you understand if it does not work for the other party. Do this without being offensive.
On several occasions negotiations fail; some simply die a “natural death” when no agreement could be reached by either of the opposing groups. In cases like these, the meeting should be rescheduled in order to avoid heated arguments and damaged relationships. The subsequent meeting should repeat the process but with new ideas or interests presented. It is also important to consider alternative solutions and, if possible, a different person to mediate.
The other causes of failed negotiations are “self-inflicted,” i.e., a result of the actions or inactions of the negotiator. As a skilled negotiator, the project manager is expected to avoid making certain blunders. Some of these include:
Opening negotiations with unreasonable offers
Not taking “time-outs” when negotiations are unduly prolonged
Rushing negotiations in order to secure a quick agreement
Failing to walk away if an agreement is not possible without breaching tolerances
Not remaining calm
Negotiation is an essential tool the project manager needs virtually every day. Turner (2007) mentions that projects are structured upon controversial stakeholders’ interests, goals, and expectations; so conflict is a common event in the project life cycle. The mastery of negotiation is of utmost importance because it helps to manage conflicts. According to Chester L. Karass, “You don’t get what you deserve, you get what you negotiate.” A project manager able to negotiate effectively is a goal-getter and can achieve anything. The effective negotiation process is achievable and everything is negotiable.
We appreciate you once again for taking time out with this article. As usual, if you have any questions or suggestions, do leave us a comment and we will get back to you.