Michael Erdle, Managing Director, Deeth Williams Wall LLP, discusses practical skills for successful negotiation, conflict management and dispute resolution including different negotiation styles and strategies.
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Negotiation and Conflict Resolution - Entrepreneurship 101 (2012/2013)
1. Negotiation and
Conflict Resolution
MaRS Discovery District
Entrepreneurship 101
Presentation by
Michael Erdle, Co-Founder
Practical Resolutions Inc.
4. What is Negotiation?
v Negotiation is:
v a process.
v a structured conversation.
v a means to an end (agreement about something).
v We do it all the time, without really thinking about it.
7. Power
Power Strategies: Characteristics of Power:
• Take action unilaterally. • Adversarial
• Win at all costs • “Win/Lose” at best
• Attack/Defend • Usually “Lose/Lose”
• Threaten • Extremely expensive
• Coerce • Negative impact on future
• Withdraw (Take the Ball and Go relationships
Home)
• Physical (or verbal) violence
8. Rights
Rights Strategies: Characteristics of Rights:
• Contracts (guarantee the • Adversarial
minimum) • “Win/Lose” at best
• Policies, procedures, rules • Often “Lose/Lose”
• Precedent • Extremely expensive
• Past practice • Time-consuming
• Legal action • Impact on future relationships?
• Third-party decisions
(e.g. arbitration)
9. Interests
Interests Strategies: Characteristics of Interests:
• Identify what’s really important • “Win/win” process
• Dialogue about needs and wants • Collaborative
• Honest sharing of information • Interdependent
• Maximize results for all parties • Builds trust
• Help everyone explore and • Positive impact on future
understand their own interests, relationship
and interests of other parties
• Needs an ongoing relationship
10. Power, Rights, Interests
All out “War”
Unilateral Action
Power
Threats, Coercion
Litigation
Arbitration Rights
Costs Investigation/Fact Finding
Go
Up Conciliation
Interests
Mediation
Negotiation
Problem Solving
Prevention
Control Goes Up
13. Duty to Negotiate
in Good Faith
v Obligation to respect the legitimate interests of other
party and to deal promptly, honestly, fairly and
reasonably with them.
v Shelanu Inc. v. Print Three Franchising Corp. (Ontario Court of
Appeal)
v Implied in negotiation where there is an imbalance.
v Wallace v. Grain Growers (Supreme Court of Canada)
14. Duty to Negotiate
in Good Faith
Spectrum of contractual duties
Selfish Selfless
Honesty
! Good Faith Fiduciary Duty
15. Duty to Negotiate
in Good Faith
v Fiduciary:
v Trustee
v Corporate Director
v Lawyer
v Good Faith:
v Professional Code of Ethics
v Contract
v Employee/Employer
16. Negotiation Steps
v Distributing Value vs. Creating Value
v Opportunistic
v Problem-solving
v Identify Issues
v What does each side want and need?
v Consider Interests
v Common
v Complementary
v Conflicting
17. Effective Negotiation
v Interests vs. Positions
v “Needs” vs. “wants”
v “Separate the People from the Problem.”
v Soft on the person
v Hard on the problem
v Consider other Options
18. Effective Negotiation
v Seek Objective Alternatives
v Determine BATNA and WATNA
v Best Alternative to Negotiated Agreement
v Worst Alternative to Negotiated Agreement
v Look for a “win-win” solution.
19. Effective Negotiation
v Successful relationships are built on communication
and trust.
v Lack of trust leads to “win-lose” or “lose-lose”.
v Negotiation is one way of creating trust – or deciding
whether trust is justified.
20. Multiple Negotiations
v Selfish strategy works in a “winner take all” game.
v Life is rarely like that.
v Most negotiations involve a continuing relationship.
v What happens if there’s a series of negotiations?
22. Multiple Negotiations
1. The player always cooperates, unless provoked.
2. The player always retaliates, if provoked.
3. The player is quick to forgive –co-operate next time.
4. The game must continue long enough for
the ‘retaliation and forgiveness’ pattern
to affect opponent’s behaviour.
30. Power Ploys
v Classic “Hard Bargaining” Ploys
v Extreme claims, small concessions
v “Take or leave it.”
v Unreciprocated offers
v Threats and warnings
v Attacking the alternatives
v Good cop, bad cop
31. Ways to Respond
v Extreme claims, small concessions
v Tit for Tat – make equally small concessions.
v “Take or leave it.”
v Make a counter offer.
v Offer an alternative.
v Don’t be afraid to walk away.
32. Ways to Respond
v Unreciprocated offers
v Don’t negotiate against yourself.
v Wait for a serious counter offer.
v Threats and warnings
v Don’t make a counter-threat.
v Challenge the underlying assumptions .
33. Ways to Respond
v Attacking the alternatives
v Ask for an explanation.
v “Why do you have a problem with…?”
v Good cop, bad cop
v Negotiate with the boss.
v Use the “good cop” to your advantage.
34. Understanding Interests
Common Interests
v Parties want the same things.
v E.g. company and workers both want to avoid strikes
and workplace grievances (costs them both money).
37. Negotiation Skills
v Communication is the key to effective negotiation.
v Assertiveness vs. Empathy
v Effective negotiator is assertive and empathetic
v What you say is often less important than how you say
it.
v Tone
v Body language
38. Negotiation Skills
v Understanding and recognition do not mean
compromise and concession.
v “I understand” vs. “I agree”.
v Your own emotions and subconscious brain can hinder
your ability to negotiate effectively.
39. Negotiation Skills
v Listening
v Develop “active listening”.
v Understanding
v Acknowledge the other person’s perspective.
v Flexibility
v Be open to other options.
v Pragmatism
v Accept the best available option.
40. Conflict Resolution:
Match Process to Business Goals
v Litigation v Mediation
v Public v Private
v Little control over v Cheaper and quicker
time & expense v Control outcome
v Arbitration v Facilitation
v Private v Informal
v Quicker and v Inexpensive
cheaper?
41. Power, Rights, Interests
All out “War”
Unilateral Action
Power
Threats, Coercion
Litigation
Arbitration Rights
Costs Investigation/Fact Finding
Go
Up Conciliation
Interests
Mediation
Facilitation
Problem Solving
Negotiation
Control Goes Up
42. Facilitation
v Informal process
v Parties control process and outcome
v Facilitator ensures that all issues are addressed and all
parties have an opportunity to be heard
v Examples: partnering workshops; joint problem-solving;
facilitated negotiations (re-negotiations)
43. Mediation
v A more formal process of facilitated negotiation.
v The Mediator guides the process and helps the
parties negotiate more effectively.
v The Mediator does not decide who is right or
wrong.
44. Mediation
v Interest-based Mediation
v Mediator is a facilitator.
v Focus on interests, not legal rights or obligations.
v Options for creative solutions.
v Evaluative Mediation
v Neutral evaluation.
v Based on legal rights & obligations.
45. Mediation
v Qualities of an effective mediator:
v Subject area knowledge
v Negotiation & mediation process skills
v Lets parties make key decisions
v Creative approach to the problem
v Patience
46. Arbitration
v Adversarial process
v Less formal than litigation, but need to follow
procedural rules for fairness and efficiency
v Not necessarily quicker or cheaper than litigation
v Parties can select arbitrator with particular legal,
financial or licensing expertise
v Private – don’t “air dirty laundry”
47. Arbitration
v Qualities of an effective arbitrator:
v Subject matter expertise
v Active control over process
v Fairness and good judgment
48. Other Dispute Processes
v Executive Committee
v Formal escalation process
v Risk that positions become harder as they escalate
v Executives must remain engaged throughout the agreement
v Project Umpire
v Can facilitate or mediate resolution of project disputes
v Can also provide neutral evaluation or non-binding arbitration
v Umpire is engaged throughout the project
v Available to deal with issues on short notice
49. Resources
v Fischer, Ury and Patton: Getting to Yes, Penguin, 1991
v Ury: Getting Past No, Bantam, 1993
v Cohen: You Can Negotiate Anything, Bantam, 1980
v Mnookin, Peppet and Tulumello: Beyond Winning, Harvard
University Press, 2000
v ADR Institute of Ontario (ADRIO)
http://www.adrontario.ca/