Negotiation skills impact our everyday lives. We negotiate with our partners for more time together, with our children about what they can eat for dinner and with our friends about where to go to watch the game. Much of our life is engaged in a series of negotiations with the desired outcome being a solution that benefits both parties. The same applies to project management.
As a project manager, it’s important to understand that every part of a project is a negotiation. What to buy, who to buy from, how much to pay for materials, how to agree on terms, and how to settle disagreements are all parts of the job of a project manager.
They also all rely on negotiation.
I’ve written this article to walk you through the steps required to become a master negotiator in your projects—it’s common to be fearful of negotiation, but with the right skills, you don’t have to be.
What Is Negotiation?
Negotiation is a discussion aimed at reaching an agreement. Think of all the things you try and agree upon with the people in your personal life.
Where to eat, what to eat, who does the dishes, who does the laundry, all of these are small negotiations which we engage in every day of our lives.
Quiz Yourself: Are You a Good Negotiator?
You’ve probably never asked yourself this before. Sure, you can problem-solve? Get contracts signed and materials purchased. But are you getting the best deal, finding the best solution, and reaching the best agreement? Here are a few questions you can ask yourself.
A) Can You Understand the Other Sides Point of View?
Roger Fisher, author of Getting to Yes says that “the ability to see the situation as the other side sees it, as difficult as it may be, is one of the most important skills a negotiator can possess.”
B) Can You Disagree Without Being Disagreeable?
In the heat of debate, it’s easy to let emotions get the better of you. A key skill in negotiation is the ability to stay calm and agreeable. Chriss Voss, the author of Never Split The Difference, writes that “he who has learned to disagree without being disagreeable has discovered the most valuable secret of negotiation.”
C) Can You Identify Value-Creating Moves?
These are small agreements within a negotiation that cost you little, benefit the other side, and create value for you. Say you’re negotiating the bulk purchase of materials and to secure a lower cost per item you guarantee fast payment.
The other side wins because they aren’t waiting weeks or months for the invoice to come through and you win because you’re getting better cost per unit.
D) Are You an Active Listener?
Most people don’t listen. Instead, what they do is wait for the other person to stop talking so they can start talking. The result is that at the end of the conversation they’ve failed to understand the other person’s point of view or learned from them at all.
Active listening, on the other hand, requires the listener to understand what the other person is saying. It requires your total attention.
One technique for active listening is to repeat back, in your own words, what the other person just said in a way that they agree with.
By doing so, you communicate to them that you have a) been listening and b) can understand and empathize with their point of view. This is a great way to build rapport.
Why Negotiation Is an Important Project Management Skill
1) Project Negotiations Are Always Ongoing
In project management, there are unique and routine forms of negotiation. Some things, such as resource allocation, come upon a near-daily basis.
Others, such as negotiation the bulk purchase of materials, may come up only once or twice each project. Of course, you’ll always have salary negotiations throughout your career as well.
2) Not All Negotiations Have Equal Outcomes
Negotiations break down into two sub-categories:
Distributive negotiations are also known as “zero-sum” negotiations. The only possible outcome is that one side wins and the other loses. These are often adversarial as each side fights to maximize the amount they win by.
One common mistake people make when entering negotiations are assuming that zero-sum is the only possible outcome. This is not true. Distributive negotiations are where both sides leave the negotiation in a better place than where they entered. Most of the negotiations you engage in as a project manager have the potential to be distributive.
3) Project Managers Fill Three Negotiation Roles
First, project managers are negotiators. They are responsible for the purchase of materials and the allocation of resources, both of which require negotiation.
However, within the project, they often have to mediate conflicts between team members. When that happens, they have to fill the role of mediator.
In this situation, they’ll look to facilitate the meeting between the parties. Communication is a vital part of the negotiation and the mediator should ask questions that generate dialogue.
In other situations, project managers will be the arbitrators of a negotiation. They’ll make the final decision. As a result, it is in their best interest that the negotiations go well. They’ll set the ground rules for negotiation, allow both parties to make the best argument possible and then choose how to proceed.
What Are Negotiation Skills?
Negotiation skills are personal characteristics and techniques that can be applied to negotiation to achieve the best possible outcome.
Some important negotiation skills are:
- Setting goals and limits.
- Control Over Your Emotions
- Active Listening
- Knowing When To End Negotiations
Issues Where Project Managers Will Need to Negotiate
So far I’ve talked about the reasons why project managers need to be good negotiators. Until now, I’ve been talking about negotiation in general terms.
Now, I’m going to explain some specific parts of project management where you’ll need to negotiate on behalf of your team.
A) Scope, Cost, and Schedule Objectives
I’m sure you’ve been in a situation where you’re fighting tooth and nail against scope creep. It happens all the time. The stakeholders want to add a feature here or there that wasn’t initially planned for.
Even if the modifications are possible, it will affect the cost and schedule of the project. Here you need to negotiate what you’ll be willing to add, how much more it will cost, and how it will affect your schedule. Strong negotiation here will increase team morale, too, as your team members will know you’re in their corner.
B) Release, Acceptance, Go/No-Go Criteria
Sometimes there will be a disagreement between what qualifies as acceptable quality for the project to go live. Many projects have failed at the final hurdle because the requirements for the project to be considered done were not negotiated at the start.
C) Contract Terms and Conditions
Contracts are negotiations. If you’re a sports fan, you’ve probably heard numerous times that your favourite team has entered into contract negotiations to sign a player.
As a project manager, you’re familiar with the complexity of contracts. How much, how long, the structure of the payments. There are a lot of details to sort out and potential points of conflict and negotiation.
D) Assignments, Roles, and Responsibilities
Sometimes you’re going to have to assign team members roles and responsibilities that they’re…well…less than thrilled to be given. Many people who’re unfamiliar with the different types of negotiation will view these conversations as zero-sum.
Instead, if these situations are handled correctly, they can be integrative. Yes, perhaps the team member has to do a role they don’t love, but in exchange, they get a slightly better contract or additional time off.
Good negotiators can take these potential points of tension and turn them into satisfying resolutions.
No project comes with an infinite budget. We wish. And believe me, if we knew how to get you one, we would tell you.
The reality is that even if you negotiated a great contract that has ample budget for resources, you’ll still have to allocate them properly (usually with the help of a project management tool).
It’s human nature for people to want more resources than they think they need. We like the surplus because it means security. However, since you don’t have an infinite budget or resources, you’ll have to negotiate who gets what, and how much of it they get.
Again, since you don’t have an infinite budget, you need to make sure you get the best prices possible for your resources. Look for value-creating moves.
What can you do that will take little time or cost on your part but provide value to them?
Some options are guaranteed fast payment and bulk or recurring purchases.
A good piece of advice is to look for things that provide stability for the other side.
Resources to Improve Your Negotiation Skills
Though negotiation is not often mentioned when it comes to project management (though it should be!), other professions have been incredibly concerned about improving how they negotiate. As a result, there are many books and online resources that project managers looking to get that extra edge can turn to.
Here’s a list of the best books on negotiation, as well as some online resources:
The Best Negotiation Books
Getting More by Stuart Diamond
What Sets It Apart:
The book starts with the theory that a person’s emotions are what guides them through negotiations rather than logic.
“Never make yourself the issue. Just because the other side is a jerk doesn’t mean you should be a jerk.”
Crucial Conversations by Kerry Patterson, Joseph Grenny, et al.
What Sets It Apart:
The book emphasizes the importance of effective communication. The ideal read for people new to learning about negotiations.
“At the core of every successful conversation lies the free flow of relevant information.”
Getting to Yes by Roger Fisher, William Ury, and Bruce Patton
What Sets It Apart:
The most influential book ever written about negotiation. Developed the idea of the “win-win” situation between opposite sides.
“The more extreme the opening positions and the smaller the concessions, the more time and effort it will take to discover whether or not the agreement is possible.”
Getting Past No by William Ury
What Sets It Apart:
In Ury’s follow-up to Getting to Yes, he presents a five-step strategy for negotiating the hardest of deals.
“You need to suspend your reaction when you feel like striking back, to listen when you feel like talking back, to ask questions when you feel like telling your opponent the answers, to bridge your differences when you feel like pushing for your way, and to educate when you feel like escalating.”
Never Split the Difference by Chiss Voss and Tahl Raz
What Sets It Apart:
A book is written in response (and expressing disagreement with) Getting To Yes.
“If you approach a negotiation thinking the other guy thinks like you, you are wrong. That’s not empathy, that’s a projection.”
Other Online Resources to Learn Negotiation Skills
- Harvard’s Program of Negotiation
- Project Management Institute: Negotiating Project Outcomes
- Negotiation Express
What Do You Think?
Now that you’ve learned a bit more about the importance of negotiation in project management, what techniques will you try?
Let me know in the comments.