As PMs, we’re negotiating constantly—even when we don’t realize it. We’re using different types of negotiation every day. We negotiate resources, timelines, budget, and scope every time we start a new project.

The thing about business negotiation is that most people don’t know how well they’ve actually done. They may leave feeling happy with the outcome, naïve to the fact that they could have negotiated less scope to hit a tight deadline or even gotten themselves a salary increase.

Negotiation theory

There is a psychology to negotiation, as Professor of Organizational Behavior Dr. Owen Darbishire recently explained at Oxford’s monthly meetup of Digital PMs.

Confidence, control, and the art of business negotiation

If you don’t negotiate, you’ll lack a sense of ownership over the project and end up feeling trapped and disempowered. When you reach this point, you may find yourself agreeing to unrealistic timescales and rapidly burning up money with no “escape” clause. In other words, the project is controlling you. This is not a position the project manager wants to be in. It is therefore time for a change in the project manager’s negotiation techniques.

Maintaining good negotiation skills is a tricky balance. If you push too hard and fight every battle you’ll get burnt out very quickly, so be careful which ones you pursue.

Dr. Darbishire underscores the importance of understanding your goals and establishing priorities and trade-offs before going into a negotiation.

Hierarchy of Priorities

Essential Important Desirable Throwaway

Scoring systems are highly effective at sorting out key issues, whether you choose to use rankings, points, or some other technique.

Let’s take a look at some examples of good negotiation skills and some examples of less effective approaches to negotiation.

Successful negotiation examples

Do your research, every time

Brian Epstein, manager of that small band, The Beatles

Brian was approached by a film producer for copyright to the “A Hard Day’s Night” film. Brian based the percentage he would accept in terms of rights on his experience working in the music industry. When it came to the deal he requested 7%.

The film company accepted his offer. Unbeknownst to Brian, they were actually willing to accept up to 25% for the rights. Brian based his figure on what he knew and lost out because he didn’t do his research!

Be creative when presenting options

Franklin Roosevelt, political leader who served as the 32nd President of the United States

When Roosevelt’s election party printed collateral for the upcoming campaign, they managed to overlook the fact that the image of Franklin had “copyright” written on the photograph. They quickly found out that they would be subject by law to pay $1 per image printed in copyright (they had 3 million copies printed!). This was obviously a fee they could never afford. So what did they do?

They published an open letter to this effect:

“We’re due to publish 3 million copies of a publication ahead of the election. This is a great opportunity for anyone who owns the copyright for an image of Franklin Roosevelt. Please make an offer in the next week if you’re interested in your image being included.”

In a short time they received this from the company who owned the copyright of said image:

“We would love to accept this opportunity but we only have $250”

When you’re confronted with a situation, try turning the problem on its head—think about what you can offer the other party as well as what you’ll gain.

Know your end goals and stay true to them

Albert Einstein, theoretical physicist

When Princeton University approached Albert Einstein to come and work for them, Einstein responded to their offer by saying he was interested but would not accept less than $3,000 a year to cover his food and living expenses. This was twice the amount an average full time working man was being paid at the time.

Princeton might have chosen to negotiate with Einstein—they might have offered him the amount he was asking for—but instead they offered him $15,000.

Why did they offer him five times the amount he requested and probably would have accepted?

Because their goal was not merely that Einstein would accept the offer, but that he would want to stay with Princeton for the length of his career. They wanted Einstein to feel valued and in return become a loyal advocate of Princeton for years to come.

During any negotiation, don’t lose sight of your end goal. What have you really gained if you agree to a good deal in the short term, but lose out on your ultimate objective?

Apply these negotiation skills to your projects

The project management triangle is a good reminder of the nature of negotiations you’re likely to encounter as a PM.

Each side of the triangle represents a type of constraint; the client can pick two as untouchable, meaning the third is the one that is open for negotiation.

For example, if the client is happy to be flexible with the scope of work, they can decide that cost and time are non-negotiable. Similarly, they might be willing to spend an infinite amount of money to meet non-negotiable scope and time requirements.

When there is a conflict, such as if the client doesn’t have enough money to deliver the remaining scope, you’ll need to present a plan that clearly outlines the issues and available options.

In this instance, you could:

Find more budget. Detail exactly how much and what impact this would have on the timeline.

Detail exactly how much and what impact this would have on the timeline. Remove scope. Detail exactly how many days they’ll need to remove from the schedule in order to deliver within the budget.

While presenting your proposal, stay calm and remember that negotiations aren’t personal—be factual and avoid using emotional or forceful language.

It’s important to make the negotiation process collaborative, so talk about how you can help support the other party. You might say something like, “Would you be available to come in later this week to review the backlog with the team and see if there are any stories we can split or any features where we can remove complexity to get the budget to an acceptable tolerance?”

Adapt negotiation strategies so everyone can win

Think about how each negotiation could benefit both parties. Don’t think about them as being binary—there should be no win/lose mentality. There are normally things you can do to make the deal better for everyone.

Keep the door of conversation open

Ask for feedback and listen attentively to what the other party is saying; you might hear something you can do to make the negotiation even better.

In his autobiography, entrepreneur James Caan writes that before the final handshake he asks, “Are you happy with this deal? Is there anything that would make this deal better for you?”.

He often finds he can make the arrangement better for the other party at little or no additional expense to himself.

For example, the other person may share that the deal would be better if the payment terms were 40 days rather than 30. By choosing to extend the payment terms, Mr. Caan said he can make the other person happier before they complete the deal.

Keep it clear

Have your facts, know what you want and don’t compromise until you have to.

The best negotiators perfect their skills

Business negotiation is a skillset we can study and develop. There many excellent books, websites, presentations, and activities to help you improve as a negotiator, and you can even sign up for negotiation simulation courses.

Books

Roger Fisher, William Ury, and Bruce Patton— Getting to Yes

William Ury — Getting Past No

David A. Lax and James K. Sebenius — The Manager as Negotiator

Leigh Thompson — The Mind and Heart of the Negotiator

Howard Raiffa — Negotiation Analysis: The Science and Art of Collaborative Decision Making

Online resources

Negotiation skills course on Coursera

Negotiation and Conflict Management course materials from MIT

Negotiation Fundamentals tutorial on Lynda.com

Your personal approach to negotiation

Dr. Darbishire’s talk was a bit of a revelation for me. Before his workshop, my brain tended to link negotiation with confrontation—something I tend to avoid at all costs. What he did, however, was move past the binary win/lose trajectory and instead look at how the process of negotiation can fulfill the interests of both parties and sometimes even enhance them.

The creative and collaborative elements of negotiation are definitely worth exploring. For instance, if you’re a “satisficer” like me (yes, that’s a real word), then you’ll learn negotiation is for you, too.

Are you a “satisficer” or “maximiser”? Here’s a great quiz to determine how you approach decisions.

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