Published on November 23, 2009
Negotiating for ResultsHASIT SETH
(c) Hasit Seth, 2009
My Background .edu = B.Sc, LL.M. (Mumbai, Gold Medal), LL.M. (FPLC) Professional: New York and India Lawyer Work: Currently @ MNC in Pune as an Asia Pacific IP counsel Program on Negotiation @ Harvard Contact: hasits at gmail.com (c) Hasit Seth, 2009
Outline A:9.30 – Introductions B:9.45 – Why Learn Negotiation? C:10.00 – Negotiating for a Promotion [Demo] D:10.30 – Principled Negotiation Framework E:11.00 – Option, Interests, Criteria - Exercises F:11.15 – Co-Founding a Business: 1-on-1 G:12.00 – Framework works? DDP™ H:12.15 – Team Negotiation – Pune Metro Railway Plan I:1.00 – Filler/Backup J: 1.15 – Q&A/Wrap-up (c) Hasit Seth, 2009
A: Introductions (c) Hasit Seth, 2009
A:Introductions Your name What do you do? (optional) (1-sentence) How will you use the negotiation skills you learn today? (c) Hasit Seth, 2009
A:My Story As a litigator in court, I saw daily that disputes are not being resolved. Only result – Delays! Forget about your “rights” under law; Forget who is right or wrong. After 20 years delay, it will be worthless to win. (c) Hasit Seth, 2009
A: My Story Is there hope for dispute resolution? My three law degrees, New York and India law licences, few degrees, 10 years of practice don’t provide me a clear answer; nor did my technical background Then, I stumbled into the field of negotiation. Today, I feel, YES, we can get better results. (c) Hasit Seth, 2009
B: Why learn negotiation? SLIDE TALK (c) Hasit Seth, 2009
B:Motivation Tell us your most difficult situation where you used negotiation skills or you think negotiation could have helped. (c) Hasit Seth, 2009
B:Where is Negotiation Used? ContractsLabor Relations / Employment (Salary)City DisputesWater DistributionPersonal Family DisputesInternational Conflicts (e.g. East Timor, Palestine…)UN Organizations – e.g., WTO is totally negotiation based decision making bodyHostage Negotiatons(c) Hasit Seth, 2009
Labor Relations / Employment (Salary)
Personal Family Disputes
International Conflicts (e.g. East Timor, Palestine…)
UN Organizations – e.g., WTO is totally negotiation based decision making body
B:Positional Bargaining Customer: “How Much for the Ring?” Seller: “Rs. 10,000” Customer: “I can pay only Rs. 5,000” Seller: “That is not even my cost price!” Customer: “How about Rs. 7,000” Seller: “I can sell it for Rs. 9,000” Customer: “I can finally pay Rs. 8,500” Seller: “Okay, I will sell it for Rs. 8,500”(c) Hasit Seth, 2009
Customer: “How Much for the Ring?”
Seller: “Rs. 10,000”
Customer: “I can pay only Rs. 5,000”
Seller: “That is not even my cost price!”
Customer: “How about Rs. 7,000”
Seller: “I can sell it for Rs. 9,000”
Customer: “I can finally pay Rs. 8,500”
Seller: “Okay, I will sell it for Rs. 8,500”
B:Positional Bargaining It is Inefficient Endangers an Ongoing Relationship Multi-party Positional Bargaining is Worse Does not lead to “Wise” Agreements- “Getting to Yes”, Fisher and Ury (c) Hasit Seth, 2009
It is Inefficient
Endangers an Ongoing Relationship
Multi-party Positional Bargaining is Worse
Does not lead to “Wise” Agreements
B:Principled Negotiation PEOPLE: Separate the people from the problem INTERESTS: Focus on interests, not positionsOPTIONS: Generate a variety of possibilities before deciding what to doCRITERIA: Insist that the result be based on some objective standard- “Getting to Yes”, Fisher and Ury (c) Hasit Seth, 2009
PEOPLE: Separate the people from the problem
INTERESTS: Focus on interests, not positions
OPTIONS: Generate a variety of possibilities before deciding what to do
CRITERIA: Insist that the result be based on some objective standard
C:Negotiating for a promotion DEMO (c) Hasit Seth, 2009
C:Promotion Negotiation I am a management trainee, working since 1 year with SBIM I want to be promoted to center manager position I think I have skills, demonstrated work experience I think 1 year is too short an experience to give a promotion Money is the motivation? Risks? What alternative can I offer? (c) Hasit Seth, 2009
C: Applying PN Framework Old Style Talking through each other Digging into positions Stonewalling More hardened situations PN Framework Problem minus people = Career Progress vs. Risks/Feasibility Interests: Career, Progress, Risk Management, Feasibility, Timing Options: Defined promotion path, milestones, salary adjustment, risk assessment, other progress opportunities Criteria: Industry norms, company norms, objective evaluation, career path definition (c) Hasit Seth, 2009
D:Applying pn framework Slide Talk (c) Hasit Seth, 2009
A:BATNA Best Alternative to Negotiated Agreement (what will each party do if negotiation fails?) Each party should ascertain its BATNA before negotiating If negotiation is not progressing beyond BATNA, then no point in proceeding further. Key: Valuation of BATNA, be true to yourself and your goals. (c) Hasit Seth, 2009
Best Alternative to Negotiated Agreement (what will each party do if negotiation fails?)
Each party should ascertain its BATNA before negotiating
If negotiation is not progressing beyond BATNA, then no point in proceeding further.
Key: Valuation of BATNA, be true to yourself and your goals.
B:ZOPA Zone of Possible Agreements Negotiation is a not a method to achieve improbable gains A wise negotiation will be placed within the ZOPA E.g., A house on sale for 25 lakhs; expected ZOPA could be +/- 15% ZOPA for Non-Price terms: Payment terms, minor repairs to be done before hand, title clearance, possession dates, electrical diagrams, society formalities…DO THESE TERMS MATTER TO YOU? (c) Hasit Seth, 2009
A:Tactics Tactics (c) Hasit Seth, 2009
A: Negotiating in India 1. Typical tendency is to avoid putting things in writing. When people do put things in writing, they go overboard in writing EVERYTHING possible. 2. Nobody trusts the legal system, so everyone wants iron-clad guarantees for payment. Terms for performance are secondary, but payment terms are the most debated ones. 3. Irrespective of the nature of the contract, the general tendency is that, "All rights are mine, and all duties are yours"! or in other words, I must have my cake and you be damned. (c) Hasit Seth, 2009
A: Negotiating in India 4. In respect of land, nobody trusts anyone. Whether it's rental or a conveyance, the whole transaction is about suspicion. Both parties are trying to psyche each other to understand their real motives and price bottoms. 5. Once money changes hands, there is pretty much nothing you can do. Nobody fears the legal system until they are dragged there. 6. Anywhere police get involved, a civil dispute is easily converted in to a criminal one. Magically. (c) Hasit Seth, 2009
A: Negotiating in India 7. With absolute lack of trust, fairness is the first casualty. Why be fair when other side is never going to be fair? Hence, parties at a negotiation table first throw away the cloaks of being fair. Bare knuckle negotiation is the preferred style. 9. Preemptive blocking is the preparation strategy so that the other party can be made to capitulate when it comes to the negotiation table. Just make it unbearable for the other party to do anything but to agree to your terms. 10. All the above things can thrown away at will, I will do what I like! (c) Hasit Seth, 2009
A: Non-Cooperating Parties F&U: Positional dance of criticism I state a position; you assail it; I defend; you push harder to show how am I wrong; I recoil F&U: Negotiation Jujitsu (c) Hasit Seth, 2009
A: F&U: “Negotiaion Jujitsu” Don’t attack their positions, look behind it Invite criticism and advice for your ideas Recast an attack as an attack on your problem Ask Questions In worst situation, if it helps, suggest a third party negotiator (not arbitrator) (c) Hasit Seth, 2009
E: Option, interests & Criteria exercises Class Exercise (c) Hasit Seth, 2009
E:Locating Interests See Film Clip Brainstorm Interests Assume No-Double Cross With Double Cross (c) Hasit Seth, 2009
E: Finding Options Negotiation with a child to not buy an expensive toy – OPTIONS? Negotiating with the boss to ask for less work – OPTIONS? (c) Hasit Seth, 2009
E:Criteria Selling a House – Price of a house Which movie to see today? (c) Hasit Seth, 2009
F: Exercise – co-founding a business F: 1-1 Exercise (c) Hasit Seth, 2009
F:Background Veeru and Jay/Basanti want to a start a restaurant in Ramgarh Veeru is currently working a MNC. He cannot quit his job as of now but will do later. He will invest Rs. 5,00,000/- Basanti/Jay is unemployed, so can take care of business initially but brings no investment. They want to negotiate terms of partnership (c) Hasit Seth, 2009
F:More Information Jay thinks if he is doing all the hard-work he should have a larger share of profits Veery thinks he is the investor, is giving up his job in few months, so as risk taker, he should have a larger share of profits Veeru and Jay both think that they should have final decision making veto power over day-to-day issues (hiring, menus, advertisement, etc) (c) Hasit Seth, 2009
F:Differences OWNERSHIP: Percentage of ownership, profit sharing, investment? (anything but not 50-50) CONTROL: Veto-power over day-to-day decisions PLAN B: What if this fails? (c) Hasit Seth, 2009
Framework, DDP Class Discussion (c) Hasit Seth, 2009
Framework, DDP PN framework is a static layout It’s a guide to ingredients of a negotiation How to manage changing scenarios? Dynamic Deal Plan (c) Hasit Seth, 2009
Dynamic Deal Plan ™ Layout the expected Positions, Interests, Criteria, Differences Separate non-negotiable core interests and negotiable ones Each deal situations requires a new format of DDP unless repeatable Mix-n-Match Possibilities of solutions Track proposals against expectations Account for variations and fit to ZOPA, test with BATNA Simulate deal and see if it will endure (c) Hasit Seth, 2009
DDP in Extreme Film Clip (c) Hasit Seth, 2009
Pune METRO ROUTING Team Negotiation (c) Hasit Seth, 2009
Pune Metro Five Interest Groups: A: Commuters Association B: Slum Residents C: Rich Bungalow Society Residents D: Metro Planners (c) Hasit Seth, 2009
Problem: Metro Rail is planning a station in Model colony. There are nearby slum residents and on other side of road is a posh bungalow colony. Either slums or bungalow colony will have to be relocated to create the station Model colony station cannot be eliminated to keep metro profitable. Nobody is ready to move – slums/bungalows (c) Hasit Seth, 2009
A: Commuters Association They want metro to happen at any cost They want a station at Model Colony as a MUST. They are not very concerned with either slum or bungalows are demolished, but some of their members stay in either slums or bungalows, so they are not so sure if either should happen (c) Hasit Seth, 2009
B:Slum Residents They don’t much care for metro They are okay if it happens but not if they have to move They want a flat from Metro or Bungalow Society if they have to relocate but it should be within model colony Fear: This is a trick of bungalow guys to get rid of them (c) Hasit Seth, 2009
C: Bungalow Society They are unwilling to move in any scenario They will not allow whole metro to happen through political pressure, courts and other tactics They are okay if slums are relocated, or rather want that it happens It is Metro’s headache to relocate slums or deal with slum owners (c) Hasit Seth, 2009
D:Pune Metro Metro management wants a station to keep the metro financially viable There is no alternative land available in Model Colony for station They have limited funds to relocate only half of the slum owners (c) Hasit Seth, 2009
THANK YOU (c) Hasit Seth, 2009
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