It is human nature for people to have disagreements or disputes. When disagreements exist in a project, there is a chance that the dispute can have an impact on the success of the project. That is why a very important activity in project management is negotiation.
This is a process that aims to resolve disagreements or disputes through consultations between the parties involved. The end-goal of the negotiation is to reach an agreement or a consensus. It is only through the resolution of such disagreements that the project can proceed as planned.
Stages of the Negotiation Process
Project management gurus propose several steps that must be undertaken to ensure successful negotiations. In general, these steps can be categorised into three main stages.
- Preparation
This stage of the negotiation process starts with a decision to negotiate. The negotiator must be able to identify the disputed issue for him to define a problem. Once the problem has been clearly defined, the negotiator must decide whether it is best to negotiate, acquiesce, dominate, or avoid the problem.
If the decision is to negotiate, then the negotiator must prepare for the actual negotiation. He needs to dig deeper into the problem in order to gain a more thorough understanding. The negotiator can then define the goals or objectives of the negotiation. It is also crucial to build relationships and have a very clear understanding of the different roles that both parties play.
The preparation stage also requires the formulation of the best alternative to a negotiated agreement or BATNA. This will help create a win-win solution for the disputing parties.
- Face-to-face Meeting
There are two very important activities during the face-to-face meeting. These are discussing and proposing. Some management gurus may refer to them as the actual negotiation and execution of the agreed-upon solution.
Communication is critical during this stage. It is important that both parties are given enough opportunities to air their side. It encourages them to work together towards a solution that is acceptable to both parties.
This stage relies on the negotiation styles of both parties. Some may employ hard bargaining techniques, while others use a soft bargaining approach. The most effective method is the principled approach.
The principled approach requires the parties to talk about the problem and not the people involved. They also need to focus on the interests and not the positions of the parties involved. This allows them to generate options that can be advantageous for both parties.
An important part of this stage is the generation of alternatives that both parties can agree on. They must evaluate these alternatives and choose the best possible solution.
The agreement should always be formalised in a document. Once the agreement is in place, both parties can work to develop an action plan, including the timeline of the agreement.
It is critical for the negotiator to thank the other party and to never gloat about the agreement.
- Follow-up
This is the working phase of the negotiation process. It includes the monitoring and follow-up of the implementation of the action plan. The negotiator must continue nurturing relationships in order to ensure compliance with the agreed upon solution.
Importance of Preparing for a Negotiation
Successful negotiations are predicated on the quality of preparation of both parties. The prevailing attitude of the parties to a dispute is one of reactivity. One party will often let the other party speak first before they can decide on how best to deal with the other party.
Such an attitude may offer some flexibility. However, a more structured and more systematic way of approaching the negotiation is crucial to addressing the issue. Proper preparation is one of the most important sources of negotiating power. It enhances a negotiator’s ability to persuade or convince the other party to become amenable or agreeable to what the negotiator is asking for.
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Negotiations within a Project
Negotiation is an important skill that all effective project managers have. They negotiate to bring about the best possible outcomes for the project. Here are some of the most common instances when a project manager needs to use his negotiation skills within a project.
- With Contractors and / or Suppliers
The most important item to negotiate with contractors and/or suppliers is getting the right deal. This includes having the right products delivered on time and with the most reasonable price. One must remember that projects work on a budget and within a time frame. Negotiating with contractors and suppliers is crucial to make sure that all resources are available and within the agreed-upon specs to complete the project.
- With Users
Project managers also need to know how to negotiate the different requirements of the project with end-users or customers. This is important in setting the right project expectations. This allows for the faster acceptance of the project deliverables and facilitate its smoother and more efficient handover and closure.
- With Resource Providers
Resource providers act in a similar capacity as suppliers. Where suppliers deliver on tangible project resources, resource providers focus more on the intangible items. These resources often come in the form of services. Project managers should be able to negotiate the best possible services to get the project done, at a cost that is not detrimental to the project and the organisation.
- With Team Members
Members of the project team bring with them their own ideas and aspirations about the project. While they may be united by the project goal, individual differences can get in the way of effective project activity implementation. Negotiations with team members take on an informal approach. It can include calls for prioritisation, internal sync ups, and the determination of mutually-acceptable implementation strategies.
- With the Project Sponsor
The project sponsor holds the key to the accessibility and availability of the project resources. It is the project manager’s responsibility to negotiate the budget that will bring in the desired project deliverables. This is crucial before the project gets underway.
Negotiation is an activity that is ever-present in any human interaction. There will always be disagreements between two persons. Negotiations help resolve these disagreements by coming up with solutions that both parties can agree to and form a strong resolve to implement.