Developed by Cathrine Fay Aasenden
Negotiation is a complex interaction between two or more individuals. Having a good set of negotiation skills is most central to a project manager both in day-to-day activities amongst the team members of the project and when interacting with project stakeholders. The negotiation skills of the project manager can be said to go beyond achieving the wanted output as the project manager often need to maintain a positive relationship with the stakeholders and co-workers. Their subjective perception of the project process and results will determine the success.  That is why accomplishing mutually acceptable solutions is important and the ability to negotiate is a vital prerequisite when striving towards success. This article will provide recommendations to project managers wanting to improve his or hers negotiation skills.
The successful negotiator has a high degree of self-awareness and is always well prepared. Confrontation is common occurrence in negotiation but often best avoided as the project will come to an end and as a project manager you may need to maintain good business relationships for later projects.  Having a good set of arguments is not sufficient to accomplish what you want from a negotiation. It is important to have an understanding of the opponents priorities, and intellectually manage any emotions surfacing as the negotiation plays out. The best way to uncover any hidden agendas the counterpart may have is by building a trusting relationship during the negotiation. This is done through active listening to what your opponents interests are and by noticing nonverbal communication. Should the negotiation head towards an impasse you may have to reject the offer and apply the Best Alternative to Negotiated Agreement, BATNA. 
Types of negotiation
Both negotiators want to get as much of the pool of resources as possible, but a successful project manager is aware of the fact that there is a broader spectrum of things that matter such as the stability and durability of the agreement. Keeping a good relationship with the project stakeholders helps to ensure that another deal can be made at a later point in time. Thus, project managers should have a real interest in reaching an agreement which will benefit and satisfy both parties.  Negotiation theory differentiates between two main types of negotiation: distributive, also known as a win-lose negotiation, and integrative, often referred to as a win-win negotiation. 
Distributive negotiation is competitive and the final outcome is usually favorable to one party as the resources appear fixed to the negotiators and both parties fight to maximize their share. In building solid business relationships you have to make people trust you. If you employ unpleasant types of negotiation strategies your stakeholders will evidently choose to do business with someone else. In a scenario where the project manager can assume not to engage with the other party again, distributive bargaining tactics can be employed. Such strategies can provide great short-term benefits but may destroy your reputation as a project manager.
Maintaining your reputation is critical as a manager. A successful negotiation is when the desired output is obtained and the relationship with the opponent is maintained.  That is the outcome of a win-win negotiation. Nevertheless, initiating an integrative negotiation does not imply that conflict is to be avoided at all cost. Rather, it is a form of negotiation where you work on achieving a solution that is great for you whilst making sure the opponent gets a deal that is good for them. By being flexible and capitalize on differences between you and your co-negotiator you can extend the pool of resources beyond what you would get by splitting the pool at 50-50. A common mistake, which can lead to a distributive behavior, is to assume that the pool of resources is fixed because it rarely is. 
During the negotiation you may choose a soft, hard or principled communication strategy. Soft bargainers are gentle, passive, and often appear weak. When confronted by a hard bargainer the hard bargainer almost always wins. However, the hard bargainers, who applies a distributive negotiation technique, misses out on unexplored possibilities and destroys business relations. Principled bargaining is the best strategy as a manager. It aims at negotiating interests and demonstrates self-confidence and fairness. It is the route to go to achieve a win-win situation. 
In order to achieve the best possible output, you should never walk into a negotiation unprepared. A solid communication plan will lay the foundation for success and help you accomplish an effective negotiation. The amount of preparation needed is proportional to the significance of the deal and the stakeholder being addressed. Many negotiators develop a negotiation pattern so if you know you are dealing with an experienced negotiator you may find it helpful to talk to business associates for clues on how to deal with the person in question.
The first thing you should do is to clarify your goal. Negotiators with a clear goal consistently outperform those without one.  Furthermore, successful negotiation relies on good ground work. Being well informed on the project subject matter will create a strong foundation of confidence as well as it keeps the opponent on their toes. It will also keep stress levels in check, should you feel anxious about the negotiation. Don't appear weak by not knowing the details of the topic being discussed as your opponent may sense that and start bluffing. Many negotiators will exploit lack of knowledge to make you feel uncertain about your case and persuade you to accept less.
As a part of preparing for the negotiation you should calculate your reservation value, which is the lowest valued price your willing to accept.
Negotiating with difficult people
Negotiating with parties who apply a distributive negation strategy can be difficult. In desperation emotions will grow strong and thus your negotiation skill become less effective. At such times it is often beneficial to use more time before reaching an agreement.  Allow for breaks from the discussion to release tension. Time pressure often leads to quick judgement, which can cause both parties to walk away with a less optimal deal.
When dealing with a counterpart who seems to prefer competition over collaboration, it is common to categorize the opponent as irrational but few people in professional environments are. Before walking away from the negotiation, try to identify why the opponent is acting the way they are. Understand what external constrains they might have and what stakeholders they are answering to. Calling out the irrational behavior can cause the opponent to lose self-esteem, which can trigger anger or embarrassment leading to an increasingly competitive behavior. Try to identify hidden constrains such as a tight budget, fear of walking away from the negotiation with too little or commitments to other on going projects.
Remind the other party that you have shared benefits and emphasize losses that will occur if a deal cant be made. Clarify your level of commitment to the deal, point out your common interests in the negotiation and how your interests compliment each other. If a potential vendor is not willing to reduce their price point you should consider other sorts of perks that the vendor may be able to offer such as additional services.
Closing the deal
Effective negotiators are able to both capture and create value in a negotiation. Most negotiations involve multiple issues, which forces the negotiators to be creative and make trade-offs. Both parties can strike a better deal by trading across the issues and seeking creative solutions. This is known as logrolling and it requires you to have a clear vision of your own as well as the opponents preferences. These trading elements should be kept in the forefront of your mind throughout the discussion, but are most efficiently used towards the end, when you want to close the deal.
Achieving the desired output relies on the negotiators ability to recognize that all obtainable goals have been reached and time has come to finalize the process. If no agreement can be reached, recognize the impasse and bring the meeting to a close. Wether the negotiation reached an agreement or not it is important to briefly summarize essential parts of the discussion such that both parties have the same idea of the trailing actions. Any future promises the opponent makes should be documented and a contract stating the consequences if the promises fall through should be made.
You should always be aware of a viable second option should the negotiation fall short. The Best Alternative To A Negotiated Agreement, BATNA, is the fallback solution you apply if your reservation offer is not met. Having thought this through in advance will protect you from making the wrong choice and walking away with a suboptimal solution. Having a strong BATNA will raise your level of confidence throughout the discussion. If the opponent asks for more than your reservation value, you implement the BATNA. 
To create your BATNA, begin by listening outside alternatives. Brainstorm the viable options which can meet your intent and at the same time please the relevant stakeholders. Evaluate each option, calculate the value of pursuing it and then chose the most attractive solution as your BATNA. Implement the BATNA if the negotiation is headed towards impasse. A strong BATNA will increase your negotiation power so it is important to take active steps to better your BATNA if you feel it is too weak. 
Sophisticated negotiators do not only think through their own BATNA, they will also have thought about what the opponent might do without the proposed deal. Although harder to asses, it will give you an understanding of their trigger points, negotiation power and what they can obtain without your proposal. 
Every interaction entails negotiation to a certain degree.  An open communication amongst the project team members will result in higher team efficiency and as project manager it is important to have an understanding of communication style to assure positive relationships. It is easier to interact with individuals who have demonstrated respect for others and gained peoples trust. Know what you would like to communicate to the other party in a negotiation and remember that too much information can be as ineffective as saying too little. The information you provide should be formulated in a logical and well organized way such that it is easily understood. Stress the unique benefits of your solution, be patient and pay attention to what the opponent signals through their body language.
Active listening is both informative and affective. It is arguably the most essential tool in a successful negotiation.  Through attentive focus on the speaker you increase your understanding of what the other party's interests are. Active listening displays professionalism but if you're not sufficiently empathic and your listening style is interruptive it will shine through. Many negotiators do not listen well enough and thus fails to capture valuable information. To capture the attitude of the opponent, and the messages behind the words, be alert on what is said through nonverbal cues. Many people are under the influence that if you want to be persuading you need to be talking, but thats often not the case.
Negotiation is about influencing someone’s mind, but you cant shape their thoughts if you don't know where their mind is. By listening to what the opponent has to say you build trust and you also make it more likely to that they will listen to you. A common mistake when negotiating is projecting own interests and desires on to the counterpart and assuming they share your interests and believes. As opposed to being assertive, actively ask questions and restate what they are saying to validate your understanding.
The nonverbal communication covers everything we say we say without the use of words through gestures, tone of voice, body language and so on. Strong negotiators master both verbal and nonverbal communication. Typically, we are much less conscious of nonverbal messages than what we are actually saying and yet the nonverbal communication represents two thirds of the message that is communicated. Consequently, project managers would benefit from having conscious knowledge of the things being said through visual cues.
A win-win negotiation is based on the subjective perception of what a win is. You can affect the opponents satisfaction with the negotiation by influencing their expectations to what they will get through the use of nonverbal communication. If your reaction to a proposal is cooperative and you smile and nod along to their information, you will raise your counterparts expectations. If you're not prepared to meet the demands they conveyed the negotiation will end with excessive disappointment. Conversely, if you meet an offer with a surprised look and squint eyes, even laughter, you can lower their expectations and the opponent will satisfied with less. 
Visual cues to be aware of
To successfully negotiate you should be aware of the nonverbal messages you emit. It can be a powerful tool for those who learn to master it. You can use your body language to convey confidence or honesty, thus forming the type of relationship you wish to have with the person you are discussing with. As the negotiation becomes heated your body may response by becoming tense. Pay attention to what made you tense, and take a brake. The opposing negotiator will be aware of your body language either way and if you are not careful they may leverage their position from what they interpret, causing you to walk away with less than initially planned.
Arm movement. Pay attention to your hands and try to keep them in a neutral position. Restless arm movement will make you appear less confident. 
Eye contact. Avoiding eye contact can signal an unease or that you are hiding something. Look the other person in the eye when talking to show confidence and enthusiasm but keep in mind that too much eye contact will make you appear aggressive and intimidating. It it is natural to look away occasionally, like when processing new information.
Personal space. Face the other party in the discussion to convey interest but respect their personal space. Too little personal space will appear intimidating.
Premature celebration. Win-Win negotiation doesn't imply that resources are split in half, fair and equally but it aims at keeping the opponent pleased with the agreement. Don't appear too satisfied with the outcome of the negotiation, as this may signal to the opponent that they could have struck a better deal.
Posture.Straighten your back and signal attentive listening by leaning slightly forward if sitting down. Signal an open reception by uncrossing arms or legs.
A smart negotiator is at all times aware of the present emotions and addresses them in an intelligent way. Managing emotions and relationships the most important parts of being a successful negotiator over an extended period of time. The higher the perceived stakes the more likely it gets that emotions will influence the final outcome of the discussion. Both positive and negative emotions occurring during the negotiation can influence decisions so it is essential to monitor you own and the co-negotiators emotions.  It is important to show empathy to the counterpart, understand what their interests are and what is important to them at a fundamental level.
Dealing with your own emotions
If you are able to identify what your emotional triggers may be in advance they are less likely to let it affect your negotiation decisions. 
Anger. Anger is one of the most destructive emotions in a negotiation. If the anger is directed at the subject of discussion, and not towards the person on the other side of the table, it can come across as conviction and passion, which can sway the opponent to accept your terms. More often, anger is directed at the other party. Try to separate the person from the argument. Should the rage distract you from the task at hand, the best solution is to propose a brake to release tension.
Anxiety. When dealing with important stakeholders you may feel a bit anxious. To have some anxiety has been proven to be constructive as it can help you concentrate, however, too much will make you more recipient to poor advice. In order to deal with anxiety, make sure to prepare well in advance, know your value and alleviate stress through relaxation techniques.
A common mistake in negotiation is to over-attribute intentionality. When experiencing discomfort in an argument due to comments from the opponent, which hurts or upsets, a common mistake is to assume that the person who caused the discomfort meant it. This causes us to retaliate, creating a downwards spiral of conflict. Trying to hold back from assuming your opponent deliberately tries to upset you will be beneficial. Furthermore, to maintain lasting relationships you should not blame the other party if you didn't achieve the output you wanted.
Dealing with the opponents emotions
Trust. Prior to a negotiation your counterpart will have some expectation as to what sort of deal they will get. By creating a trusting bond with the stakeholder during the negotiation, he or she will feel as though your decisions are less risky and thus more acceptable. The opponents willingness to create trade-offs relies on an expectation that their own trade-offs will be met so try to build a high degree of trust. 
Positive attitude. Entering the negotiation with a positive attitude will increase the likelihood of a positive outcome.  When appropriate, decrease the formality of the negotiation and make the opponent feel relaxed through small talk and the use of humor. Generally, people are more cooperative and less likely to apply an aggressive bargain technique, when in a good mood. If you suspect your opponent is otherwise, try to identify the source of the negative feelings. Start off by making light conversation and ask open ended questions about their day.
Mirroring. The opponent will signal their mood through visual cues and by mirroring their signals you can build trust and create a connection.
Symbolic gestures. The emotions of the opponent may have nothing to do with you but if they are the most effective and low cost way off restoring the relationship is by offering an apology. .
Some people are self-conscious about the way they are being perceived in the workplace and may be conducting a hard bargain technique to save face. He or she may have an idea of who they want to be as a business negotiator and want to maintain a reputation by taking a firm holding out on your proposals. In such a scenario the best solution may be to start looking for other strategic options out there or engage different stakeholders.
- ↑ 1.0 1.1 1.2 Project Management Institute, "A guide to the project management body of knowledge: PMBOK Guide", Project Management Institute, (2000):.
- ↑ 2.00 2.01 2.02 2.03 2.04 2.05 2.06 2.07 2.08 2.09 2.10 2.11 "Getting to Yes: Negotiating Agreement Without Giving in", William Ury, Roger Fisher and Bruce Patton, (1992):.
- ↑ 3.00 3.01 3.02 3.03 3.04 3.05 3.06 3.07 3.08 3.09 3.10 3.11 3.12 3.13 3.14 3.15 3.16 3.17 Harvard law school, "Program on negotiation daily blog", 
- ↑ 4.0 4.1 4.2 4.3 Dorothy M. Stewart, "Gower Handbook of Management Skills", 1998, third edition
- ↑ Template:Cite book