3

Negotiating Skills

Every day involves negotiations: what to buy, how much to pay, where to go, what to do, or how to solve problems, agree on requirements, or get the right resources. Are you fully equipped to get the best outcomes possible? What if you could improve your negotiating abilities by at least 10 percent? Take the time now to learn ten basic “rules” and develop negotiating skills, and you will reap the benefits. Imagine how much better off you will be over the course of your lifetime if you know how to negotiate clear success criteria and how to set yourself up for success instead of failure. Improving your ability to negotiate will change your life.

The objectives that this chapter covers help you:

•  Significantly improve negotiation effectiveness. Be better able to negotiate successful agreements within the project environment, including informal peer agreements and more formal business negotiations.

•  Prepare for a negotiation and recognize the four forces present in every negotiation.

•  Clearly define success and achieve win-win outcomes.

Case studies and examples in this chapter help to reinforce and apply the concepts. It is important to embrace the mindset that everything about a project is negotiable and that a complete project manager needs to be a skilled negotiator. With an intent to negotiate always in mind, review basic negotiation principles, including how to use the four basic forces—power, information, timing, and approach—in every negotiation. Understand and use negotiating techniques as a means to move people from stalemate to solution.

I (Englund) first took a weekend negotiating course over thirty years ago. The course changed my life. The instructor, who was an attorney, said it is only necessary to get a 5 to 10 percent improvement in the outcome of each negotiation for improved negotiating skills to prove their merit. The objective is not to win every negotiation; the objective is to consistently achieve better outcomes for both parties in the negotiation.

I learned the ten rules of negotiating in that course and have applied them ever since. The project world includes all kinds of personalities, who have various styles and approaches to relationships. The rules help me get through all interactions, whether I am inside or outside my comfort zone. One of the most amazing lessons I learned in the course, one that repeatedly demonstrates itself, is how much more I can get simply by asking for it!

I (Bucero) had not been conscious of the power you get by “asking for it.” I remember a software development project I managed where the stress of my team members was very high because we had to achieve a project milestone with a very tight schedule. Our customer was asking us to put in extra hours in order to run more end-user application tests. I asked my team members to do the testing without negotiating with my customer, following the “Yes, sir” approach.

Figure 3-1: Four Forces of Negotiation

After we worked for several weekends, I decided to ask the customer if my team could start working on Monday at 11:00 a.m. instead at 8:00 a.m. to compensate them for their effort over the weekend. The customer accepted my proposal immediately. For several weeks I had a fear of asking the customer for this concession, but when I asked for it, I got it.

Getting Prepared

Before engaging in any negotiation, the most important thing to do—and the foundation for everything else—is to be prepared. Even spur-of-the-moment negotiations—for example, catching a core team member or another stakeholder in the hallway and engaging in a negotiation then and there—will go better if you spend a little time mentally preparing and reviewing the process ahead of time. A solid project plan, communications plan, political plan, and stakeholder management strategy all provide essential background for effective negotiations.

Timing (when), information (what), approach (how), and power (who)—the four forces of negotiation (see Figure 3-1)—are key considerations in every negotiation. Prepare answers to these questions ahead of time.

BENEFITS

Project managers need negotiation skills because they continually interact with and manage a number of forces:

•  Positional authority of project managers (often very low)

•  Team member reporting structures (complicated)

•  Organizational structures (convoluted)

•  Shared resources (challenging)

•  The effects of a dictatorial style (overbearing)

•  Multicultural project teams (hard to understand other team members)

•  Global project teams (far away)

•  Suppliers and manufacturing partners (different)

•  Customers (demanding)

As described in the PMBOK Guide, typical issues to be negotiated during the course of a project include:

•  Project charter, authority boundaries

•  Scope, cost, and schedule objectives

•  Changes to scope, cost, or schedule

•  Release, acceptance, go/no-go criteria

•  Contract terms and conditions

•  Assignments, roles, and responsibilities

•  Resources

Substantive issues that need to be negotiated include:

•  Terms

•  Conditions

•  Prices

•  Dates

•  Numbers

•  Liabilities

PROJECT SUCCESS

“What defines success for this project?” is a question that needs to be asked but often is not. An exercise I (Englund) do in seminars is to ask everyone to take a high-level view and identify what thread runs through all key factors that influence success and failure. The answer I am looking for is that these factors all are about people. People do matter. Projects typically do not fail or succeed because of technical factors or because we cannot get electrons to travel faster than the speed of light; they fail or succeed depending on how well people work together. When managers lose sight of the importance of people issues, they are doomed to struggle. Engaged people find ways to work through all problems. The challenge as leaders is to create environments for people to do their best work. Note also that project success intimately links to the Strategic and Business Management leg of the PMI Talent Triangle. The definition of projects has expanded to such a degree that it now includes business success.

One general path to project success is to meet with key stakeholders, ask for their definitions of success, and negotiate acceptable answers. Pin them down to one key area each. Integrate the replies and negotiate consensual agreements.

Having this dialogue and negotiating clear criteria early in the project life cycle provides the complete project manager with clear marching orders. Project managers become better leaders and managers of people, not just projects, when they are aware that success or failure is dependent upon getting agreements among the people involved.

Project management office manager Zahid Khan observed that “successful projects are almost always linked to customer satisfaction, engaged employees, and strong team relationships. Organizations should create and use key performance indicators (KPIs) centered around these human factors.” He goes on to add criteria to assess team morale, job satisfaction, and customer satisfaction:

ATTITUDES AND TESTIMONIALS ON NEGOTIATION

One of my (Englund) favorite courses to teach is on negotiating for results. I thought it would be interesting to share some comments, attitudes, and approaches that participants posted in online discussions about management and leadership:

•  I have known some good negotiators in my day, and I wouldn’t rank myself up there with the best. I do okay negotiating with someone with whom I have a strong working relationship when there is mutual trust. In situations when I am negotiating over finances, such as with a vendor, I’m not that comfortable. I think the overarching story I tell myself is that I’m not a good negotiator and I don’t like negotiating.

•  Negotiation is part of daily routine, whether it’s work or on the personal front. During negotiations I focus on the issue and my goal is to end up with win-win situations. Recently I had to negotiate terms with a consultant group, and after a lot of back and forth we both agreed upon the terms. What helped me a lot was seeing things from the consultant’s perspective. A number of times I seek advice from experts or experienced people before I launch into negotiations. One of the most common topics of negotiation is schedule. I usually get pushed back to make a more aggressive schedule, but I have to convince the team to look at things with practical eyes. The goal is not to have a schedule to make it look good; the goal is to make a realistic schedule that can be achieved.

•  Some stories that I tell myself: it will all just work out if I really work hard, and if I am just more patient. I strongly believe that you can achieve a lot if you get out there and face the challenges. I gain motivation from remembering great accomplishments and positive events. I know that a discussion/negotiation needs to consider the needs of the other party. If the end result is too unbalanced, or one person/company is burdened by the decision, it may leave a bad feeling and the inability to do repeat business with me and my team.

•  I’m still a very novice negotiator at work. To lead and manage my team members, I really try to communicate frequently with the team and check in and see how they are doing on their tasks and find out if they need more time. I try to see if they need any help with the work they are doing and try not to overburden them. I feel that knowing I want to work for them instead of trying to manage them helps motivate/lead my team members. I really am not their boss but just a coworker, and I try to walk that fine line and not go into boss mode. When I negotiate, I try to have as much evidence as possible to state my case. To do so, I first state what I think should happen and give a good explanation of why we should go with what I think. I always ask what other people think to make sure they get to voice their opinion and not feel I left them out. The story I tell myself when I negotiate is that my opinion may not be the best, but to get enough feedback and input from my coworkers, we can together come up with the best opinion. I really try to not put myself first but try to get others to feel as if they are leading/contributing to the project.

•  Sometimes I find myself wrapped up in details. One thing that I have learned is really stepping back and taking a look at the bigger picture. Otherwise, when I get too caught up in all the details, I forget about the main reason, what are we trying to really accomplish. I ask myself what the big picture is and have also noticed how helpful it is knowing what I want the end result to be. Another thing I do is ask myself [what I would do] in his/her shoes. How would I react, positive or negative? It’s conducting a quick risk analysis before I open my mouth.

•  I think I am a good negotiator. I am pretty confident in the work that I do, and I am not afraid to communicate my ideas and put them out there where my work is concerned. I will also be the first to admit when I am wrong but do take some small pleasure in being right when I am. I also know that I am not perfect and accept all criticism of my work product. I tell myself that all questions are valid and should be asked and that my opinions, regardless of what they may be, are important and should be stated to spark conversation and discussion.

•  Negotiation always had such a bad rap in my mind, as it would bring up ideas of a win-lose situation or a situation where someone gets screwed out of something that should have been theirs but for the skills of a cunning negotiator. I always thought negotiation would be very challenging for me because I’m pretty timid, hate talking about money, and believe in fairness, but I’ve read a few books on negotiating that have changed my opinion on it …. I’ve come to realize that it does not have to be win-lose, and that being a good negotiator does not mean you take things from people who deserve them. I’m the kind of person who likes to have a lot of information before I make a decision and like to feel that I know exactly where I stand and am making a completely informed decision. I have found this information gathering invaluable in negotiating. Knowing your alternatives not only gives you leverage, but more importantly, it keeps you honest.

•  Negotiating is a skill that with experience one becomes better at. I negotiate every day, whether in my personal life or at work. It is important to stay on course when negotiating. It is easy to lose sight of what is being negotiated, especially if one party gets emotional. I always look for a win-win situation. I want the decisions we make to be fair and not cause animosity down the road. I get everyone involved in the decision-making process and use pro/con worksheets to help the negotiating along. Sometimes when things are written down in front of me, it is easier to make my point and stay on track. I think the tools I have used in the past have made me a successful negotiator. When going into a negotiation I make sure that I have all my i’s dotted and t’s crossed. When I feel confident about my point, then it leads to better results.

I (Englund) added this response:

I (Bucero) learned to be an effective negotiator over the years, although I did not initially believe myself to be a very effective negotiator. However, I now recognize—after making many mistakes while negotiating—that I can learn something in every negotiation. My suggestions are to be persistent, analyze the way you negotiate, and take action to improve it.

The Negotiation Process

Negotiation is:

•  Communication back and forth for the purpose of making a joint decision

•  A way of finding a mutually acceptable solution to a shared problem

•  A path to achieving an ideal outcome: a wise decision, efficiently and amicably agreed upon

Negotiation styles include:

•  Hard (controlling). Hard bargaining is adversarial—you assume that your opponent is your enemy and the only way you can win is if he loses. So you bargain in a very aggressive, competitive way.

•  Soft (giving in). Soft bargaining is just the opposite. Your relationship with your opponent is so important that you concede much more easily than you should. You get taken advantage of in your effort to please, and while agreement is reached easily, it is seldom a wise one.

•  People: Separate the people from the problem.

—  Positions: Focus on interests, not positions.

—  Options: Generate options for mutual gain before choosing one.

—  Objectives: Make a decision based
on objective criteria.

•  BATNA (Best Alternative to Negotiated Agreement). Know their alternatives; know and improve yours.

A principled style is much more effective than the preceding ones.

Good negotiations consist of a relentless search for a third alternative. People are presently conditioned to expect relationships to be win-lose. They view most situations from an either/or point of view: either I win or I lose. It must be one or the other. But there is a third alternative in which no one loses, or the loss has been minimized and fairly shared, though it may be harder to find. This is the win-win way, or synergy (Fisher and Ury 2011).

Sources of power in negotiation include:

•  Developing good working relationships among the people negotiating

•  Understanding interests

•  Inventing an elegant option

•  Using external standards and benchmarks

Figure 3-2: The Negotiation Life Cycle

•  Developing a good BATNA

•  Understanding the other party’s BATNA

•  Making a carefully crafted commitment: an offer, something you will do, or something you will not do

The stages in the negotiation life cycle are depicted in Figure 3-2. It is not always a given that negotiations must happen, especially if the status quo is fine or other alternatives exist. But if there is a need for opposing parties to reach a mutual solution, engage dutifully in each step in the life cycle.

Ten Rules of Negotiating

The mind map in Figure 3-3 summarizes the ten rules I (Englund) learned during that first course. It applies for behavior during all negotiations. None are optional. Some may come easier than others; others you may only remember in the milliseconds of thinking time before you speak. The more you adopt the rules into your belief system and the more you practice them, the more readily you internalize them, resulting in actions that come easily and naturally.

One of the principles of effective negotiating is to go for win-win. That should be the only acceptable outcome. (If that is not possible, a wiser approach is to invoke the option not to negotiate, especially if the status quo is acceptable.) Intentional influencing does not have to result in winners and losers, or be characterized as manipulation, conflict, or competition. To achieve win-win outcomes:

Figure 3-3: Ten Rules of Negotiating

•  Consider all stakeholders and how they will be impacted.

•  Ask for their thoughts and listen carefully to their responses; answer their questions.

•  When problems arise, consider how to alleviate them, or what outcomes might make solving the problem worth the extra trouble.

•  Offer something of value to the other party in exchange for what is being asked of them.

Another key principle is being prepared for a negotiation—knowing both sides’ options, as well as starting and desired end points. People are definitely at a disadvantage when they are asked to negotiate without this information. They ask lots of questions and take more time to fully explore both sides’ needs and options before rushing to a judgment, which could have far-reaching, negative consequences.

Note that a detailed “Guide to Prepare a Negotiation” template is available in the online The Complete Project Manager’s Toolkit.

People need to train themselves to remain firm in applying the ten rules of negotiating. Merely knowing these rules and recommendations does not automatically mean that one truly adopts, adapts, and applies them. Kimberly Wiefling explains why people do not put what they know into practice: “Win-lose thinking is the first instinct for many people in any negotiation …. Any joint decision-making or problem-solving is a negotiation, and we all negotiate many times a day with our teammates. Doing better than others occupies our time while making real progress takes a back seat. Fear of losing, coupled with a lack of clear goals, prevents people from even playing the game” (2007, 111).

Colleague Remco Meisner states, “Do not take a stand that you intend to defend as if you are at war. Go with the flow and realize that there are many points of view that can be shifted, bent or taken out without damaging the original ideas behind the project. We call it polderen in the Netherlands: We talk to everyone and try to find a suit to fit all. In the process, we frequently sacrifice one in order to gain the other.”

Here is an example of a negotiated agreement posted by an online university student:

CASE STUDY

I (Englund) was contacted by Brent Geary, director of North America sales and services for Aviat Networks, to provide training on negotiations. The primary focus was a need to establish enhanced negotiating skills among project engineers, project managers, and program managers to produce better outcomes for Aviat regarding reduced quantity and value of cost overruns.

In the more general and larger context, Aviat management desired that its customer-facing post-sale personnel gain a better understanding of negotiation principles and “rules” that apply to Aviat projects. Through this learning, Aviat and its employees enhanced and defended their trusted expertise in microwave networking solutions, which is called upon throughout the entire life cycle of designing, deploying, and maintaining microwave networks.

We established the goal of negotiations workshops to cover the whys, whats, and hows of organization-wide negotiating practices, so that managers regularly achieve desired results through applying principled negotiations among all people who contribute to the portfolio of projects.

Implementation success depends upon developing widespread organizational support for these skills, which means ensuring that sponsors and participants are clear about the need and are involved in applying an improved approach to negotiating with each other and with clients. Develop win-win scenarios for all parties involved.

Statement of Needs In support of Aviat Networks’ question—how can we reduce cost overruns and margin erosion for project-based work?—there was a need for improved negotiating skills related to scope and creep, schedules and delays, and cost management. Means to address these needs included:

•  Identify case studies and typical scenarios that could be handled differently

•  Discover relevant negotiating principles

•  Practice possible alternate approaches, such as through brainstorming, discussions and role playing

•  Agree on action items and follow-on skill development activities

Results Brent served as an ideal project sponsor. He knows his people and the challenges they and the organization are facing. He researched solutions, arranged for workshop training, and worked to address needs and tailor cases for negotiations workshops. Best of all, he was present for all sessions, demonstrating his support. Brent shared why and what everyone needed to accomplish. He shared insights throughout the workshops that added depth, sustainability, and understanding to situations that have been or may be encountered. His perspectives were extremely valuable.

In his words, Brent describes the effectiveness of tailored training to improve negotiating skills:

Negotiating with Your Sponsor

Upper management support is crucial for project success. Their support in sponsoring projects, however, often falls short of what is necessary to ensure project success. Why? Is it ignorance, lack of knowledge about what’s required, distaste for the role, busyness, or unwillingness? It may be any or all of these, but a key ingredient for complete project managers is the ability to manage upward and effectively negotiate with sponsors.

PRODUCTIVE CONVERSATIONS

Negotiations between PMs and sponsors offer PMs opportunities to develop essential skills, such as:

•  Determining when to negotiate

•  Making necessary preparations for negotiations

•  Effectively applying the ten rules of negotiating

•  Courage and fortitude to negotiate through difficult situations

•  Devising effective alternatives for reaching successful agreements

•  Influencing people to move from ineffective positions to more cooperative, mutually beneficial approaches to issue resolution

•  Dealing with project deadlines

•  Developing acceptable concessions

•  Skillfully using power, information, approach, and timing in a negotiation

•  Bringing a negotiation to a successful close.

The purpose of negotiations between a PM and a sponsor is to promote excellence in project sponsorship and performance, starting with the imperative for project managers to take the initiative, first to learn the rules of negotiating and then to apply them through continuous dialogue with sponsors (and all other stakeholders), ultimately leading to improved results from projects. Project results improve because effective negotiations clarify what and how projects will be implemented and ensure that upper managers take appropriate steps to support project work.

WHAT TO NEGOTIATE

The ideal time to negotiate is at the beginning of an endeavor. Before accepting a project assignment, ask many questions, including:

•  Why are we doing this project?

•  What problem is this project solving?

•  How was this project selected (process, criteria)?

•  What strategic goal does this project support?

•  Are we fully prepared to resource this project?

•  What constitutes project success?

When you are being asked to do the impossible, with no resources, and by tomorrow, the project is in trouble. Most projects are not quite this bad … but some come very close. It is not acceptable to be set up for failure. However, it may take a changed mindset—and courage—to engage in negotiations with upper management. The beginning of a project is the time to negotiate all facets relating to that project.

A DIALOGUE

This section highlights steps in the negotiating process with a hypothetical conversation between a sponsor and a project manager. Pretend you are eavesdropping on this conversation with a coach. Pretend we have a special power to observe what they were thinking. Notice the good, the bad, and the ugly in what happens during the negotiation. Think about how the ten rules of negotiating apply to the dynamics between project managers and sponsors. Appreciate how negotiating skills dramatically enhance the ability to obtain effective sponsorship and to sustain sponsor support all the way through to project success.

Observe this dialogue:

What They Said	What They Were Thinking
Sponsor: I asked you here today to get you going on a new project. We have a wonderful opportunity to develop a new product based on the latest technology. You will lead a team to get this product done in time for the next major trade show.	S: I hear this new technology can do great things, but I don’t know a thing about it. Our department has under-performed in the past, so the pressure is on me to get something new and exciting going on.
Project Manager: Great, when do we get started?	PM: This sounds exciting, but what the heck is it all about?
S: Right away.	S: I hope nothing stands in our way.
PM: I’ll just finish wrapping up my current project and then start as soon as possible.	PM: I want to do this new project, but how can I get a long list of tasks done that I’m already working on so they are out of the way?
S: I’m counting on you.	S: I sure hope I’ve picked the right person for the job.

This is a seemingly clear interchange between the two players, and the tone of the dialogue appears optimistic—as long as we focus only on the left-hand column. But we know what each side is actually thinking. Many issues lie below the surface that the parties have not discussed. The interaction is not really off to a good start.

One rule of negotiating is to be positive. In this dialogue, that is no problem. Both sides are positive as well as optimistic. Even in other situations, when more difficult issues arise, a positive attitude is always helpful, first to establish rapport with the other party and then to elicit cooperation to achieve resolution (see Bucero 2010).

Two other rules of negotiating are to be prepared and be patient. For the project manager, it is difficult to be prepared when first presented with a new opportunity. It is possible, however, to anticipate that situations like this may occur. Being prepared means thinking about what questions to ask. It also means recognizing the need to temper the emotional excitement that comes with a new opportunity and also to resist the temptation to accept or commit too early. Personality style may guide typical responses: one person might quickly become emotionally invested, while another will take a cautious and logical approach. Regardless of what your natural style is, make an effort to be patient. Take the time to push back, ask questions, and propose a future time to respond.

Next, gather information and know the alternatives. What is your alternative to accepting this project? Would you be fired or thought badly of if you did not accept? Is there another job you are considering anyway? What alternatives does the sponsor have? Are there other people capable of doing this project? What would the sponsor do if the project did not happen? Can a different project meet the goal, or is a different approach to this project possible?

The sponsor’s anxiety about the project did not surface in the dialogue, but the right-hand column reveals the sponsor’s ignorance about the technology, the pressure he is facing to perform, his concern about obstacles, and his uncertainty about the project manager. Project sponsors may reveal their anxiety indirectly, perhaps through avoidance, unreasonable demands, or seeming obsessions. A sponsor’s unexpressed anxieties can lead to larger issues in the future, such as lukewarm support for the project or poor decisions on alternatives for a new technology. (See Project Sponsorship: Achieving Management Commitment for Project Success [Englund and Bucero 2015] for a discussion of sponsor behavior.)

The sponsor’s anxieties reveal heavy dependence on the project manager to succeed. This situation endows the project manager with a lot of power. Upper managers in general, and sponsors specifically, may lack a thorough understanding about what it takes to do projects. They may be unfamiliar with the process, the means, or the technology. On the other hand, they may be expert in these areas and still want to micromanage the project. Then they get in the way.

Either way, it becomes an imperative for the complete project manager to manage upward and engage in negotiations. Because of the intimate knowledge that project managers usually possess about projects and their requisite ability to systematically get things done in a timely manner, they possess the four basic forces that drive successful negotiations: power, information, timing, and approach. The project manager with an understanding of these forces is in a better position to negotiate with the sponsor.

The negotiating rule to apply in this case is to know your status. When assigning a project, the sponsor is in the role of seller, and the project manager is the buyer. Buyers usually have higher status because sellers are dependent upon buyers to accept the offer. Sponsors’ edge as sellers is that they possess more information about why, what, and how the projects are necessary for the organization. Project managers as buyers are in a position to “nibble” as negotiations near their end. Seek a concession for each commitment the sponsor requests; get something in return for everything you give.

ASK MORE QUESTIONS

The dialogue may now proceed differently:

What They Said	What They Were Thinking
Sponsor: I asked you here today to get you going on a new project. We have a wonderful opportunity to develop a new product based on the latest technology. You will lead a team to get this product done in time for the next major trade show.	S: I hear this new technology can do great things, but I don’t know a thing about it. Our department has under-performed in the past, so the pressure is on me to get something new and exciting going on.
Project Manager: This sounds like a wonderful opportunity. Can you fill me in on more details about how this technology and project were selected?	PM: I’m intrigued, but I need to know more.
S: Our strategic goal is to be the market leader, and this technology has emerged as the next big thing.	S: I’m sure glad we have a business team to pick through all the noise around new technologies, because that’s not one of my strengths.
PM: What other alternatives have been considered?	PM: I hope I’m not coming across as unsupportive.
S: Our labs conducted a thorough investigation of alternatives, and this is the only one that has commercial feasibility and fits with our goals.	S: We shouldn’t have to question the decisions made by management.
PM: Can I think about this project some more and get back to you tomorrow to discuss it further?	PM: I’m worried about jumping in too soon, so I want to check around and think about whether this project is a good fit, both for me and for the organization.
S: Sure.	S: I wonder why the delay.

This dialogue surfaces more information but still leaves some questions unanswered. While the project manager now knows more about the strategic link for the project (good) and has another project added to an already busy agenda (bad), the sponsor’s inner thoughts have not yet been explored (ugly). What each party is really thinking is often left out of the picture or is perceived as forbidden territory. However, the relationship between sponsor and project manager is incomplete without a fuller understanding of what motivates and drives each side. Such missing pieces can lead to conflict and undesirable outcomes down the line.

Also, in this dialogue, the parties take another step in the negotiation: in exchange for the sponsor providing more information about why the project was selected, the project manager asks for more time to consider the proposal.

A very useful negotiating rule is to float trial balloons. These are “what if” questions used to gather information without either party making commitments. It is also important to limit your authority when negotiating so that you can take time to check with other experts or get approval from a higher funding authority. This technique helps keep both parties from jumping into hasty and ill-conceived solutions.

DIGGING DEEPER

With these negotiating points in mind, let us look at how the dialogue goes on to explore more issues:

What They Said	What They Were Thinking
Sponsor: Our strategic goal is to be the market leader, and this technology has emerged as the next big thing.	S: I’m sure glad we have a business team to pick through all the noise around new technologies, because that’s not one of my strengths.
Project Manager: What other alternatives have been considered?	PM: I hope I’m not coming across as unsupportive.
S: Our labs conducted a thorough investigation of alternatives, and this is the only one that has commercial feasibility and fits with our goals.	S: We shouldn’t have to question the decisions made by management.
PM: What specifically are we looking for in this technology?	PM: I wonder what the sponsor believes is the right thing to do.
S: You know, I’m not real clear on the details, so I expect the project team to investigate this question.	S: I have no clue about the technical features; that’s the job of the experts we have in this organization.
PM: In that case, I need to get the right team together. If we start investigating this technology and find that something different may be better, would it be okay to discuss that approach with you?	PM: I’m not the expert either, so I need to limit my authority. We don’t want to get stuck in the difficult position of not being able to deliver. It seems like we have a tremendous responsibility but are on our own. Do we have leeway to explore possibilities? Let me check out the answer to this question.
S: By all means, I’d like to get the best possible solution.	S: This is good … maybe we won’t get stuck in a failed approach.
PM: So, in your mind, what would make this a successful project?	PM: Here’s my opportunity to find out more about how the sponsor thinks.
S: The key thing is that we have something to show at the trade show, so we are perceived by the market as the leading contender.	S: My reputation is on the line to meet this expectation of our marketing executives.
PM: So, this is a time-constrained project. Is there anything else?	PM: So, schedule is our key constraint. That’s risky with a new technology.
S: Yes, I need to be kept in the loop on progress because this is a high-visibility project and extremely important for our organization.	S: I need to make sure this project goes well.
PM: Would you be present at our project startup meeting to share your vision and expectations with the team? Do you want to meet weekly to review progress?	PM: Okay, so this is really important for the sponsor. I need to get commitment to follow through.
S: Yes, that’s a good idea.	S: I’ll have to be much more involved in this project.
PM: Can I think about this project some more and get back to you tomorrow to discuss it further?	PM: I’m worried about jumping in too soon, so I want to check around and think about whether this project is a good fit, both for me and for the organization.
S: Sure.	S: I’m starting to feel much better about this person for the project.

It’s evident that the parties have made more progress, but several other “rules” of negotiation remain to be covered.

BEGINNING AND END POINTS

Know your opening offer is applicable to the starting point of a negotiation. A guideline is to have the other side begin the negotiation, especially if it involves money. The intent is to get the other side to reveal the desired and feasible range of significant parameters.

If a sponsor asks how long a project will take, a preferred response is, “Let me put together a preliminary project plan.” Very often the sponsor pushes for an initial estimate. The danger in providing such an estimate is that the project manager will over-or underestimate the time the project will take. While the project manager believes this “estimate” is nonbinding, the sponsor long remembers the initial time frame as the “plan.”

Next, it’s imperative to know your bottom line. What are your limits? When project sponsors demand the moon and the stars, it is imperative for the project manager to push back, first gently, and then to raise the volume if need be, escalating the issue up the management chain. Be cautious in doing so, though; compile supporting facts, historical data, and arguments, as well as convincing stories. Also, develop a coalition of supporters who can apply persuasive power by providing relevant numbers and credibility and delivering a compelling message. Understand sponsors’ level of risk aversion. Speak the language that sponsors speak; understand and use such terms as business impact, ROI, market share, reputation, and customer satisfaction. Remind sponsors of past failures that could easily occur again. Suggest positive alternative solutions. Avoid technical details. Be transparent; act with authenticity and integrity.

Following these suggestions comes more naturally when you have firmly established the bottom line in your mind. By establishing limits, the project manager knows when to stand firm, negotiate with due diligence, or fall back on other alternatives. These limits determine whether to continue negotiating or walk away.

In between the beginning and end points of a negotiation, never reward intimidation tactics. A project manager who does not push back against unreasonable scope, schedules, or resources is training sponsors to continue their demanding behavior. Instead, set expectations by negotiating the triple constraints at project startup and when changes occur. Make concessions when the other side makes them as well. When a sponsor resorts to intimidation tactics, withdraw previous concessions, threaten to walk away, call a timeout, do not cooperate, and do not make further concessions.

An additional rule that should never be broken is for every concession you make, get something in return. This is the law of reciprocity, the golden rule, the natural order of things. This rule is most applicable when adjusting the triple constraints on every project—scope, schedule, and resources. But violate this rule, and you will most certainly feel bad, not happy—and you will find yourself on a downward spiral toward failure.

We see over and over again that simply asking for something more during a discussion results in a better outcome. The other party can always say no, and no harm is done. Or the other party may say yes or counter-propose, and each side ends up happy with the outcome.

ACHIEVING COMMITMENTS

Applying the rules of negotiating allows you to reach closure. Closure occurs when a resolution of a problem is agreed upon, a new project with clear objectives and constraints is accepted by both sides, or commitments are achieved on courses of action. For example, creating a project office (Englund, Graham, and Dinsmore 2003) is a concerted effort to develop and manage projects, programs, and portfolios across a project-based organization. This effort may be a massive change for the organization, requiring intense negotiations to adopt, adapt, and apply a change management process.

Figure 3-4: Achieving Commitments: Interchange Between Sponsor and PM

Figure 3-4 depicts a typical exchange between a project manager and a sponsor that would lead to commitments from both parties. The sponsor makes an unreasonable demand, the project manager pushes back to say it cannot be done, negotiations ensue, and a set of modified objectives are identified, the project manager confirms that the project is doable, the sponsor approves the project, and the project manager accepts the project.

Sponsors need to accept that this kind of interchange is necessary. Some old-school command-and-control sponsors may not like this approach, believing when they issue orders, others should follow. They may perceive project managers as being insubordinate. New-school lead-and-coach sponsors accept the interchange as natural. Effective project managers develop and apply skills to push back and engage in collaborative negotiations with sponsors. Both sides apply due diligence in fulfilling mutually satisfying roles.

When the rules are not applied, are misapplied, or are forgotten, stalemate happens. Neither side is happy. Or one side “wins” while the other side “loses.” The goal is to achieve win-win (see Fisher and Ury 2011). Identify clear outcomes and make them happen. Do this at the beginning and throughout the project life cycle.

A GOOD OUTCOME

Let us now observe how the dialogue proceeds using the last set of rules for negotiating. The intent is to work through the emotions and pressures surrounding the proposed project and arrive at an agreement that is acceptable to all parties. This wraps up a concerted effort to ensure that discussions with a sponsor are productive, leading to an agreement that both sides are pleased to accept and support willingly.

It is not necessary that the discussion be conflict-free or even comfortable. Skill and perseverance are needed to surface feelings, assumptions, questions, and concerns that may initially be hidden or missing from a critical thought process.

What They Said	What They Were Thinking
Sponsor: When can you get started?	S: I need to be strong and emphasize how important this project is to me.
Project Manager: I have a number of questions first. Can we discuss it further?	PM: I’m worried about jumping in too soon, so I need to get a few more issues settled before making any commitments.
S: Well, I need you to get started right away. We’re wasting time that we don’t have. The trade show will happen whether we are ready or not!	S: This is frustrating. I need to reemphasize how we have to get started now.
PM: I can’t do much if we don’t have a complete set of requirements and all the resources assigned to the project.	PM: I’m feeling the pressure. But I need to be firm on following the PMBOK Guide process steps.
S: We’ll make that happen. Meanwhile, I need your estimate of staff and time, right now.	S: Let me turn up the volume.
PM: Anything I give you now is going to be wrong.	PM: Now I’m feeling intimidated. It’s time to take a firm stand.
S: But I have to get back to the executive committee with an answer.	S: I see there’s no budging with this person. Let me shift to providing more reasons for the urgency.
PM: In that case, knowing that the deadline is fixed when the trade show starts, the only estimate I can provide right now is to deliver a minimally functional prototype with a full-time dedicated team that is in place to start within two weeks.	PM: I need to provide some response. A full-featured project would be extremely risky in this time frame, but we may be able to do a scaled-down version. Let me test if this approach is feasible.
S: Okay, that’s a good start.	S: This is not the answer I wanted, but it’s okay, possibly even better for all parties concerned.
PM: I will get to work immediately on a project plan that describes what we need to do. Can I get back to you next week for your approval on this plan?	PM: I’m starting to get excited about this project. I’m glad I stood firm on not overcommitting.
S: Yes, I look forward to working with you on this project.	S: We’ve got a good working situation going on here.

Popular vocalist Katy Perry has a beautiful video of her song Rise. The lyrics are quite inspiring and applicable to would-be negotiators. Lyrics include not just surviving but thriving; not just conforming but staying true to roots; fighting for victory; transforming herself to rise above it all; think again about victory. We can use her inspiration to remove our own doubts about negotiating.

Summary

Before any negotiation, refer to the mind map in this chapter, and expanded descriptions in The Complete Project Manager’s Toolkit, that depict all ten rules of negotiating highlighted here. It is not necessary to follow them in any particular order. The examples and dialogues in this chapter illustrate that the imperative is to consciously apply the rules as appropriate throughout each negotiation life cycle. Remember that application of these rules represents the manifestation of four key forces that determine the fate of any negotiation: timing, information, approach, and power.

Negotiating can be a fun and productive endeavor. Discover the power of simply asking for something. Get something in exchange for every concession. Complete project managers owe it to themselves and their partners to engage in negotiations. Keep repeating the phrase, “I am a successful negotiator.” Use previous experiences of successful negotiations as proof that you are capable and will keep developing the skills. This is a lifelong skill that is worthy of attention, practice, and continuous improvement. Embrace a mindset to say, “I can and will enjoy negotiating.” Before you know it, you will.

Now is the right time to view everything as negotiable.