The Fine Art of Negotiations
Presented by:
Patrick Callahan
Callahan Municipal Consultants - LLC
563-599-3708
Callahan.cmc@gmail.com
The Final Art of Negotiations
General Overview of Session
1.
2.
3.
4.
City Government – Examples of
Negotiations
Introductions – Speaker & Participants
The Elements of Negotiation
Styles of Negotiations
The Final Art of Negotiations
General Overview of Session
5.
6.
7.
8.
The Path to Preparation
Preserving the Relationship
Sealing the Agreement
Tips for Negotiating
Definition of Negotiate

Negotiate – to settle by bargaining; to
arrange; to transfer (a bill, etc..); to
surmount; v.i. to discuss with a view of
finding terms of agreement; to bargin

Webster’s Dictionary 1987 Edition
Professional Experiences Negotiations
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Maquoketa – Union Negotiations
Anamosa – Contractor Disputes
Consultant – Cable & Gas Franchise
Renewals
Consultant – Employment Agreements
on Searches for City Administrators
Negotiations in Your Daily Lives

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Major agreements – union contracts
and franchise renewals
Routine agreements – payment plans
and employee issues
Personal business – car purchases,
service fees, etc
Personal lives – spouses, children and
grandchildren
City Government –
Examples of Negotiations
1.
2.
3.
4.
Collective Bargaining Agreements – Labor
Unions
City Employees – Salary adjustments,
Fringe benefits, and Hiring
Department Heads – Employment
Agreements
City Budget Discussions – Meetings to
balance the budget
City Government –
Examples of Negotiations
5.
6.
7.
8.
Lawsuit Settlements
Contractors – Change orders on
projects
Engineers – RFQ, RFP, & Fees
Utility Company Franchise Agreements
City Government –
Examples of Negotiations
28E Agreements – Multiple Agencies
and Government Units
10. Citizens – Utility Payment Plans
11. Employee Termination Agreements
12. Regulatory Agencies – DNR, EPA, IRS,
DOT
9.
City Government –
Examples of Negotiations
Vendors – Purchase of City Supplies
14. Economic Development Incentives
13.
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TIF Rebate Agreements
TIF Grants
Tax Abatement Agreements
Negotiations in Your Personal Lives
1.
2.
3.
4.
5.
Spouse/Significant Other
Children
Grandchildren
Service Providers – Cable Company
Vendors – Car Dealers
Class Participants - Introductions
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Your Name
Your City and Population
Your Position
Negotiation Experiences
What is your City known for?
The Executive Summary
The Elements of Negotiation
What is
Negotiation?


Negotiations:
Agreement:


A process we all use
instinctively
When used consciously, it
can help fulfill our needs
An exchange between two or
more parties for the purpose
of reaching an agreement
Occurs when both parties
accept the terms of the
arrangement – They do not
have to like it.
The Executive Summary
The Elements of Negotiation
The Essence of
Negotiations:

Cooperation
The Vehicle of
Negotiations:

Communication
The Criteria of
Negotiations:
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Self Knowledge
Flexibility
Empathy
Timing
What signals success?

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You met or exceeded your goals
Your success is good in the short run
and in the long run
You strengthened the relationship
You had an efficient bargaining process
What signals success?

No damage to relationship
“Bringing them to their senses, not to their
knees.”

Long term – Took care of the other
person
Barriers to Negotiations
1.
2.
3.
4.
Anger
Fear of Rejection
Manipulation
Criticism
Barriers to Negotiations
5.
6.
7.
Assumptions
Failing to Listen
Bottom Line – Sole Focus
Special Considerations
for Public Officials
1.
2.
3.
4.
Client
City Council or Board Approval
Confidentiality
Fiscal Limitations
Special Considerations
for Public Officials
5.
6.
7.
8.
“Deep Pockets”
Fairness and Equality
Precedent
Municipal Bond Rating
Special Considerations
for Public Officials
9.
10.
11.
12.
Code of Iowa Requirements
Costs of Litigation
Public Accountability
Integrity
Understand yourself as a negotiator
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Competitor – Win/Lose Person
Accommodator – “Door Mat”
Collaborator – “Win/Win” Style
Avoider – No interest
In any given situation we all have some
of these styles.
Which style is best?
Substantive outcome
important?
YES
Relational
outcome
important?
NO
YES
Collaboration
Accommodation
NO
Competition
Avoidance
What is your predominate
style of Negotiations?
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Work Life?
Personal Life?
Group Discussion
Keys to managing style
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Develop flexibility
Know your strengths and weaknesses
Compensate for your weakness –
outside assistance
Know your “hot buttons” – take a break
Know your power sources & strengths
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Information or other resources
Personal traits
Skills – Especially communications
Expertise
Experience (your or someone else’s)
Know your power sources & strengths
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Problem solving
Trade Information – “Buy Points”
Do not make too many assumptions –
Check it out!
Take history into account
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Your general negotiating experience
Your negotiating experience with this
person or company
Look for how your experience creates
an advantage or bias
Know your beliefs & attitudes

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What are your beliefs and attitudes
about negotiations?
Do they apply here?
How will they affect this deal?
Know your attitude on money
Your attitude towards the boss –
i.e. city council
Authority & constituencies
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How much authority or power do you have to
affect the outcome of this negotiation?
Do city or state laws or policies restrict or
protect you?
Are there rules by which you must abide?
Are you negotiating on behalf of someone
higher up who has the final say? City
council?
Why are negotiators unprepared?
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People assume “just talking” is low risk
Preparation takes too much time
People don’t know how to prepare
Why are negotiators unprepared?
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Many deals are lost or missed due to
poor preparation
Not ready? Postpone it
Know how to prepare
Path to preparation
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Stakeholders
Challenge
Position
Interests
Options

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Alternatives
Legitimacy
Communication
Relationship
Commitments
Group Discussion
The Path to Preparation
Two Examples

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1.
2.
TIF Rebate Agreement
Construction Project – Contractor change
order
What are some actions that could be taken
to prepare for negotiations?
How do you maintain a good working
relationship after negotiations?
Preparation: Identify stakeholders

Who has a stake in the outcome?
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Anyone at the table
Anyone who stands to gain or lose
anything they value
Any “invisible” players or constituencies
Anyone on either side who is affected by
the outcome
Preparation: Interests

Look for the interests behind positions

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Ask “why?” and “for what purpose?”
Ask yourself, “What will happen if I get
this?”
Preparation: Interests

Consider the other side’s interests

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Probe for their underlying interests
Record this information and use it
Verify it
Preparation: Four kinds of interests

Content (substantive)
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Be specific and measurable
Break complex goals into strategic stages
Relationship
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Present
Future
Preparation: Four kinds of interests
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Identity

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Your sense of “who I am” and the other side’s
Process

How to communicate
Preparation: What can be traded

Define the bargaining “mix”

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What are the pieces?
Are any pieces linked?
Preparation: What can be traded

Prioritize your interests

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Content, relationship, identity and process
Identify limits (upper and lower constraits)
for substantive issues
Preparation: What can be traded

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Hold off on commitment until your
know their needs and desires
Not sure on their priorities – Ask them
Goal – Give away low value stuff
Preparation: What do people want?
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Consider short and long term interests
Check to make sure your interests
include the needs of your constituents
in your organization
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Political mistakes cost you later
Look beyond this first deal
What is the order of priority
Preparation: What’s most important?
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Order tells relative importance
Order tells relative value in terms of
dollars
Order helps avoid making concessions
on the wrong things
Order helps you decide on packages
later on in the deal
Preparation:
Developing supporting arguments

What facts support your view?
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What validates those facts?
Who can help you elaborate or clarify
facts?
What data do you need?

Get help, if necessary
Preparation: Exploring their interests
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Why are these objectives important to them?
How did they come to this position?
What if they can’t reach your goals?
Preparation: Exploring their interests
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How have their needs changed since you last
talked?
Last, outline what you don’t know. Inquire
about those things as you go along.
Researching the other party
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Things to learn
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Their objectives
Their interests
Their alternatives
Researching the other party
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Things to learn
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Their
Their
Their
Their
resources
reputation, style, and behavior
authority to make an agreement
likely strategy and tactics
Researching the other party
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Need a network of contacts to call
Check on-line for information
Keep track of the information
Remember their style and credibility
Try to get to know them
Consider options
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An option is a possible agreement or
parts of an agreement
Key element

Ability to design the “bargaining mix”
Consider options
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Common mistakes
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Taking a narrow, one-sided focus
Having only one option, with no fall-backs
Thinking that the only approach is to close
the gap between differences
Building options & packages

Step 1
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Examine interests
Figure the “give-aways” from their list that
are easily fulfilled and record those
Identify your “throw-aways” (confidential)
Expanding the pie

Step 2
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Don’t divide the pie, EXPAND the pie
Remember – the deal is not just about the
money.
Finalizing options
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Evaluate the risk and benefits of options, use
sub-groups for complex options
Narrow the range to a few of the best
Be willing to justify personal preferences
Finalizing options
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Be alert to the influence of intangibles
Cool off and come back
Keep decisions tentative till the end –
conditional language
Relationship

When done – get it in writing

When done – Shut up
Consider alternatives
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Best Alternative to Negotiated
Agreement (BATNA)
What will you do if you can’t agree?
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BATNA
What are your options if the deal fails
How good is your Plan B, really?
Legitimacy

What criteria can you use to persuade
each other that you are not being
ripped off?
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Legitimacy is a tool to persuade others
Legitimacy is a shield to protect yourself
Examples
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Collective bargaining – salary survey
Change orders – Unit prices
Relationships
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Common mistakes
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Confusing relationship and substance
Assuming that’s how the relationship is, it
is a given and it is “their fault”
Relationships
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Prepare to address relationship and
substance independently
Prepare to take unconditionally
constructive steps to improve the
relationship
Do not give up on a bad relationship
Commitments

Common mistakes

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Not knowing what “done” looks like
Failing to determine actions needed to
reach agreement
Nailing down the agreement
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Selective paraphrase
Ask for paraphrase of what you’ve said
Reinforce ideas you like in their
proposal
Nailing down the agreement
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Resist movement away from agreement
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Remember your BATNA
Get them to make a public announcement
and A
Acknowledge the agreement to their team
Sealing agreements
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Reciprocity (back scratch)
Use their commitment to seal the deal –
make sure they articulate it a few times
Name those will agree
Name similar deals in the past
Note scarcity of time or other resources
More steps to agreement

Plan the steps to agreement
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Decision makers – who will sign?
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Who should we be consulting for buy-in?
Steps necessary to get a binding agreement
More steps to agreement

Implementation – What happens next to
make this?
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What to do – offer to write the agreement
Possible obstacles to implementation
Ways to deal with obstacles
Group Discussion
A. Past Negotiations
1.
2.
What have you done that helped “seal the
deal”?
What did you learn about yourself as a
negotiator?
Group Discussion
B. Future Negotiations
1.
2.
What did you learn today that could help you
with future negotiations?
What will you do differently during your next
negotiation session?
Special Considerations for
Negotiations
1.
2.
3.
4.
Location of Negotiations
Setting of Negotiations
The Art of Body Language
Interpersonal Relations
Special Considerations for
Negotiations
5.
6.
7.
Good Guy/Bad Guy Roles
Exploring Creative Solutions
Always bring a Calculator to the Negotiation
Table.
The Negotiation Model
1.
2.
3.
4.
Prepare
Establish the Objectives
Define the Issues
Clarify the Interests
The Negotiation Model
5.
6.
7.
Identify Objective Criteria
Explore the Alternatives
Select the Best Form of Agreeement
When you have no time

Consider the situation – then…
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Prep the most goal-critical areas
Prep the most problematic areas
The Art of Negotiations
“How to Improvise Agreement in a
Chaotic World”
By
Michael Wheeler
Simon & Schuster 2013
Embracing Chaos
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We cannot script the process
The Other Party
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Smart
Determined
Fallible
Embracing Chaos
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Learn
Adapt
Influence
Prepare your strategy
1.
2.
3.
Should I negotiate?
Is now the time?
Do I hedge or go all in?
“Manage uncertainty should be the
cornerstone of your negotiation strategy.”
- Michael Wheeler
“The time to stop negotiating is when the
risk of pressuring further outweighs
possible gains.”
- Michael Wheeler
9 Key Principals of Negotiations
1.
2.
3.
Set a provisional goal
Have a Plan B
Envision the End Game
9 Key Principals of Negotiations
4.
5.
6.
Make Learning a priority
Adapt when you have to
Think like a competitor
9 Key Principals of Negotiations
7.
8.
9.
Be multilingual
Guard your exit option
Always be closing
12 Tips for Negotiating and
Compromising with Difficult People
- Ryan Lynch at Dale Carnegie Training
1.
2.
3.
4.
Have a positive attitude
Meet on mutual ground
Clearly define and agree on the issue
Do your homework
12 Tips for Negotiating and
Compromising with Difficult People
- Ryan Lynch at Dale Carnegie Training
5.
6.
7.
8.
Take an honest inventory of yourself
Look for shared interests
Deal with facts, not emotions
Be honest
12 Tips for Negotiating and
Compromising with Difficult People
- Ryan Lynch at Dale Carnegie Training
Present alternatives and provide
evidence
10. Be an expert communicator
11. End on a good note
12. Enjoy the process
9.
Negotiation Handouts
1.
2.
3.
4.
12 Tips for Negotiating and compromising
with difficult people by Ryan Lynch – Dale
Carnegie Training
Union/Labor Negotiations – Municipal Policy
Leaders Handbook – Institute of Public
Affairs
28E Agreement Checklist – Institute of
Public Affairs
Suggested Reading – Complied by Lynn M.
Walding
Choose 3 small steps to improve your
negotiation skills and outcomes
YOUR PLAN OF ACTION
Getting to Yes: How to Negotiate
Agreement Without Giving In by Roger
Fisher and William Ury
Any Questions?
Patrick Callahan
Callahan Municipal Consultants LLC
563-599-3708
callahan.cmc@gmail.com
www.callahanmunicipalconsultants.com