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Working Your Way Through Negotiations: A Guide for the Project Manager

written by: Ronda Bowen • edited by: Michele McDonough • updated: 5/19/2011

If the thought of negotiating with others brings to mind the image of a used car lot, you're not alone. The negotiation process can be an overwhelming and tricky subject area for many successful individuals. However, negotiation skills are a cornerstone of business, especially in project management.

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    Wait, Can We Bring That Price Down - Just a Little More?

    "I'll meet you halfway." Many of us have heard these words spoken in movies and television programs when two individuals are negotiating out terms. We're taught growing up that compromise is the key to great relationships and friendships, and we're coached to create win-win situations for ourselves and others.

    Regardless of the prominence of negotiation talk in pop culture and in our mentorship days, what may be unclear is just how someone is supposed to work through a negotiation. What does it mean when a company is trying to get a new client? How much is too far when you compromise? It's vital for individuals, in all stations of their career development - but especially in project management - to learn how to negotiate.

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    Let's Make a Deal

    Negotiating is about coming to an agreement that works for both individuals 

    The goal of every business negotiation is to ensure that at some point, there is a deal that is reached between two people. Often, negotiation arises out of conflict, but it doesn't have to. There are many different categories of negotiation that individuals may engage in. While conflict resolution is a popular goal of negotiation, there may also be negotiations to bring the price down of a project, to make the project scope more narrow, or to overcome difficulties in creating a schedule.

    At its most basic, the negotiation strategy - no matter what the method of getting to an agreement there is - is to determine what each party in the deal wants, what is feasible, and what will make the best compromise. Then, the parties need to agree upon that deal and put it in writing.

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    When Conflict Strikes

    It's quite unusual for two people to agree on something, especially if you're planning a project. For example, your customers may want a feature included in the project requirements that may be very expensive to create for a bargain price. While this is an extreme example, requirements negotiations are a common ground for conflict in project management. It's an old tale that the project management triangle - scope, cost, schedule - forces project teams to choose two to focus on. When team members and stakeholders do not pick the same two components of the project to focus on, conflict may arise.

    When this happens, the most important first step is to define the conflict. What is it that is being disagreed on? Without definition, it will be hard to negotiate a compromise. Give each side a chance to voice what they feel the conflict is. Many times, this simple act will uncover the fact that individuals were disagreeing on a semantic point - one party believed the other meant something he or she did not mean.

    When the underlying cause is a difference in values or perspective, further negotiation will need to take place where each side will need to come to an understanding of the other and give up a little bit of its position to meet the other in the middle.

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    The Win-Win Negotiation

    The win-win negotiation is a strategy most commonly used that focuses on keeping both parties happy. This is only possible if both parties agree that compromise and amiability are the most important thing when coming to an agreement about what needs to happen with the project. This style of negotiation is most often used in project discussions involving cost or scheduling, but you may also find it when it comes to the scope. For instance, if a client wants an intricate software program, but such a program will either cost more to create quickly or take a long time to program, the win-win negotiation might lie in giving up some of the desired frills in exchange for a lower project cost.

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    Distribution Negotiations

    On the other hand, when the negotiation involves the allocation of work, distribution negotiations may take place. Perhaps some employees wish to take on more work than they could reasonably handle while others shirk from responsibility. This type of negotiation is best handled by making sure that everyone gets a piece of something, and then once everyone has a first serving, they can come back later and take on more should they desire to do so.

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    Boosting Negotiation Skills

    It's important that individuals work on their negotiating skills, especially if they are shy. If you are a team leader, you may consider brushing up first on your own negotiation techniques, and then encouraging others to also work on their negotiation techniques. Role-playing through negotiation situations might be a good idea for a staff that consists of many timid members. Remember that saying "no" may be difficult for some people. Be sure to practice saying "no" and feel good about it. If a deal seems sketchy to you, don't accept it! Ask for better conditions, always.

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    Following Up

    An important part of the negotiation process involves following up on what was promised during the deal period. If you do not deliver and make good on your promises after the negotiation process has been completed, then it's unlikely you'll be able to strike a deal with that person in the future. Make sure to always follow up on your end of the deal, whether it's delivering the agreed-upon product (or service), keeping the cost down, or keeping to a tight schedule.

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    References:

    The Negotiation Experts http://www.negotiations.com/articles/strength-alternatives/

    Image courtesy of sxc.hu/gallery/lockstockb