Project Practitioners > Getting Prepared to Negotiate

Getting Prepared to Negotiate

By Randy Englund

As I'm in Milan, Italy presenting a paper on "Negotiating for Success:  Are You Prepared?" for the PMI Global Congress EMEA 2010, I'm reminded that in a previous blog about "Negotiating for Results," I referred to ten rules of negotiating.  In this blog I present examples of applying those rules.

First some background.... It is important to embrace a mindset that everything about a project is negotiable and that a project leader needs to be a skilled negotiator.  Right up front is the necessity to define project success and establish desired outcomes.  With an intention to negotiate in mind, review basic negotiation principles, including how to use the four basic forces in every negotiation:  power, information, timing, and approach.  Understand and use negotiating techniques as a means to move people from stalemate to solution.  Case studies and examples help to reinforce and apply the concepts.

I first took a negotiating course about twenty years ago.  It was a weekend elective held at a techmart.  The course changed my life.  The instructor, who was an attorney, said it is only necessary to get a 5-10 percent improvement in the outcome of each negotiation for improved negotiating skills to prove their merit.  The objective is not to win every negotiation; the objective is to consistently achieve better outcomes for both parties in the negotiation.  I learned the ten rules of negotiating and have applied them ever since.

The project world includes all kinds of personalities with various styles and approaches to relationships.  The rules help get through all interactions, regardless of being within or outside my comfort zone.  One of the amazing lessons that keeps getting repeated is how much more you can get, simply by ASKING FOR IT!

Below are the "rules" and examples of how to apply them.  Please accept my best wishes as you apply them daily.

Randy Englund, Englund Project Management Consultancy

Rule

Project Management Example

1.    Be patient

Dealing with a team member who is underperforming—and perhaps defensive—may be uncomfortable for a project manager, so the tendency is to get the encounter over with as quickly as possible.  A better approach is to develop rapport with the person, ask for permission to provide feedback or suggestions, carefully answer any questions that come up, and take the time to reach satisfactory agreement.

2.    Be positive

A principle of persuasive influence is to deal with people you like.  A positive attitude with project sponsors helps build confidence and credibility in their minds.  This means they engage more willingly with the PM in supporting the project and maintaining that support throughout the project lifecycle.

3.    Gather information

Clients or customers have challenges that may be addressed by the outcome of your project.  Ask probing questions about what they are doing…and listen to the answers.  Review the relationship history, especially if support issues have come up and whether or not they were adequately addressed.  Find out their timetable or deadline, both to purchase and then to implement the solution.

4.    Float trial balloons

Ask “What if we could provide key features in Phase 1 and address other wants in later phases?”  These questions make no commitments but do explore reactions from the other party about possible approaches they may be willing to consider.

5.    Know your status

Project managers are closest to the action on most projects and have significant status attributable to the information they possess.  Other stakeholders have status via the authority they have to allocate resources or dispense funds.  The real opportunity to achieve better outcomes is when one side is anxious to reach agreement; the other side may then nibble to gain additional concessions, such as extend a resource’s time on the project or reduce features in order to meet cost or time pressures.

6.    Know your opening offer

You estimate the project will take between 4 to 6 months.  Ask the customer when they want it, and they may respond in 8 months, in which case you have a cushion.  If the PM were aggressive and quoted first, saying 4 months (the bottom line), there is no room to negotiate.  If the customer has no clue and may ask for 2 months, the PM can open first by quoting 6 months (the edge of the envelope) and have room to negotiate something in between.

7.    Limit your authority

Try to negotiate with the decision-maker so you deal with them directly and get agreement quickly.  When you are the decision-maker, have someone else negotiate on your behalf so you cannot be pinned down by hard core negotiating tactics.  This provides opportunity to practice patience, review the proposal more thoroughly (instead of in an emotional moment), and to come back with counter proposals.

8.    Know your bottom line

Two vendors have similar products where one has a slight edge and costs more.  The PM wants the better product but has a strict budget limit of $10K.  Negotiations with the higher priced vendor proceed in order to get a lower price or arrange terms that fall within the budget limit.  Use the limit to stand firm, negotiate with due diligence, and fall back on the other vendor if not successful.  Knowing these limits determines whether to continue or walk away.

9.    Be prepared

Have a risk management plan that provides advance notice of technology that may not work or tasks that take longer than planned.  Clear trigger points invoke contingency plans calling for negotiations on the pros and cons of various options, leading to quick resolution.  Preparation avoids being caught by surprise and having to invent options where none previously existed.

10.    Never reward intimidation tactics


A PM whose does not push back against unreasonable scope, schedules, or resources is training sponsors to continue a demanding behavior.  Instead, set expectations by negotiating the triple constraints at project start-up and when changes occur.  Make concessions when the other side makes them as well.  Do not give in to intimidation tactics or “the beatings will continue until morale improves.”





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