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Ten Rules of Negotiating
The mindmap on the next page summarizes ten rules for guiding behavior during all negotiations. None are optional. Some may come easier than others, and some may happen in milliseconds of thinking time before speaking. The more rules are adopted into a belief system, the more they are practiced, the more readily they become internalized and result in natural action.
Rule Project Management Example1
1. Be patient - Dealing with an underperforming team member—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 a 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 an agreement; the other side may then nibble to gain additional concessions, such as extending a resource’s time on the project or reducing features 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 an agreement quickly. When you are the decision-maker, have someone else negotiate on your behalf so you cannot be pinned down by hardcore negotiating tactics. This provides an opportunity to practice patience, review the proposal more thoroughly (instead of in an emotional moment), and 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 a better product but has a strict budget limit of $10K. Negotiations with the higher-priced vendor proceed 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 a quick resolution. Preparation avoids being caught by surprise and having to invent options where none previously existed.
10. Never reward intimidation tactics - A PM who’s 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.”