Negotiation Skills- Pankaj Sinha

1. Negotiation Skills
By Pankaj K Sinha
Head- Commercial
Essar Offshore Subsea Ltd.

2. Vision Statement of EOSSL
To be the most preferred solution
provider in Shallow and Deep water
Construction

3. Mission Statement of EOSSL
Essar Offshore Subsea Ltd is committed to:
• Make customers, employees and other
stakeholders happy by delivering
value consistently
• Ensure that services and solutions
provided by EOSSL are safe, cost
effective and environment friendly
• Fast track growth in the Shallow &
Deep water Construction space, across
the globe

4. What is Negotiation
Negotiation involves the art and science of drawing
up deals that create lasting value.
David A. Lax and James K. Sebenius
Negotiation is the process by which people deal with
their differences.
Harvard Business School.
The virtue of efficient Negotiation is that you don’t leave money on the table… how you split
the money is up to you and your counterpart.

5. Essar Essentials- From being to becoming
1. Entrepreneurial Orientation
2. Project Management
3. Operational Excellence
4. Negotiation
– The ability to leverage interpersonal relationships in the best interest of
work/organization. This individual always looks for greater efficiencies
in any business transactions.
– An individual demonstrating this capability builds rapport with internal
and external customers; has exhaustive understanding of business
environment and knows how to leverage this; believes in win-win
scenarios and relentlessly tries to achieve the same; appreciates working
relationships and contributes to effective team work across extended
team.
– The ability to build strong relationships with both internal and external
customers and look at every day tasks from service
5. Customer Focus
6. Nurturing
- Quoted from Section 5.2- Essar’s Corporate Induction Manual

6. Negotiation
Let us never negotiate out of fear
But let us never fear to negotiate
John F Kennedy

7. Evolution of Negotiation
1970 to 1985 Power
1985 to 2000 Side by Side
Problem Solving
2000 to _____ A Learning
Conversation
What Tools do you Carry in Your
Negotiation Toolbox?

8. Evolution of Negotiation
Give and Take Dr. Chester Karrass
Getting to Yes Fisher and Ury
3D Negotiation Lax and Sebenius

9. Types of Negotiation
1. Distributive Negotiation
2. Integrative Negotiation.
3. Most negotiations combine elements of both types,
but for the purposes of understanding, it’s
important to examine each type in its pure form.

10. Distributive Negotiation
1. Parties compete over the distribution of a
fixed sum of value. The key question in a
distributed negotiation is, “‘Who will claim
the most value?" A gain by one side is
made at the expanse of other.
2. The Seller’s goal is to negotiate as high a
price as possible; the Buyer’s goal is to
negotiate as low a price as possible.
3. Thus, the deal is confined: there are not
much opportunities for creativity or for
enlarging the scope of the negotiation.

11. Integrative Negotiation
1. In Integrative Negotiation, parties cooperate to
achieve maximize benefits by integrating their
interests into an agreement. This is also known
as a win-win negotiation.
2. Integrative negotiations tend to occur in
following situations:
– Structuring of complex long-term Strategic
Relationships, JV or other collaborations
– When the deal involves many financial and
non-financial terms
3. In an integrative negotiation,, there are
many items and issues to be negotiated,
and the goal of each side is to “create”
as much value as possible for itself and
the other side.

12. Distributive versus Integrative Negotiations
Characteristic Distributive Integrative
Outcome Win-lose Win-win
Motivation Individual gain Joint and individual gain
Interests Opposed Different but not always
Opposite
Relationship Short-term Longer or Short-term
Issues involved Single Multiple
Ability to make trade-offs Not Flexible Flexible
Solution Not creative Creative

13. Negotiation Concepts
1. BATNA (Best Alternative to a Negotiated Agreement): your
options if you fail to reach agreement during a negotiation.
2. Reservation Price: the least favorable point at which you’ll
accept a negotiated deal; the “walk-away” price.
3. ZOPA (Zone of Possible Agreement): the range in which a
potential deal can take place; defined by the overlap between
the parties’ reservation prices.
4. Value Creation Through Trades: the trading of goods or
services that have only modest value to their holders but
exceptional value to the other party.

14. Type of Negotiation Styles
High COLLABORATE
ACCOMODATE Problem solved creatively, aiming for
win-win
Build friendly relationship Characteristics:
Characteristics: Search for common interests
Promote harmony Problem-solving behaviours
Avoid substantive differences Recognising both parties’ needs
Give into pressure to save COMPROMISE
Synergistic solutions
relationship
CONCERN FOR RELATIONSHIP
Win-win becomes the main purpose
Place relationship above fairness of Split the difference
of the negotiator
the outcomes
Characteristics:
Meeting half way
AVOID DEFEAT
Look for trade offs
Take whatever you can get/Inaction
Be a winner at any cost/Competitive
Accept half-way measures
Characteristics:
Characteristics:
Aims to reduce conflict rather than problem
Feeling of powerlessness
solve synergistically Win-Lose competition
Indifference to the result
Pressure/Intimidation
Resignation, surrender
Adversarial relationships
Take what the other party is willing
Defeating the other becomes a goal
to concede
for the negotiator
Withdraw & remove = behaviour of
negotiator
Low CONCERN FOR SUBSTANCE High

15. Negotiation Strategy- Time Factor
Percentage Time
Pre-Negotiation 80%
Negotiation 5-10%
Post-Negotiation 10-15%

16. Negotiation Strategy
1. Best Alternative To a Negotiated Agreement (BATNA).
• Absolutely essential to know whether to accept alternative
arrived at through negotiation versus ending negotiation.
• Must consider other side’s BATNA as well as your own.
2. Develop your BATNA:
• Invent a list of actions possible if no agreement.
• Improve some of ideas from list, create practical alternatives.
• Select the alternatives that seem best.

17. Negotiation Strategy ……
3. Strengthen your BATNA
• make BATNA easier, more probable, or better at satisfying
interest.
• If you only accept a deal that is better than BATNA, improving
BATNA leads to better result, either through better agreement
or going to the BATNA.
4. Consider their BATNA:
• Understanding BATNA helps you understand how to make
agreement easier.
• Understanding their BATNA allows you to estimate whether
agreement is possible.
5. Reservation Price: Translation of the BATNA into a value at the
table—the amount at which you are indifferent between reaching a
deal and walking away to your BATNA. .

18. Negotiation Strategy ……
6. Zone of Possible Agreement (ZOPA):
The bargaining range created by the two
Reservation Values. The ZOPA defines a
“surplus” that must be divided between
the parties
• Assess the ZOPA
• Change the ZOPA
• Take the ZOPA
ZOPA
Min Willingness to Accept Max Willingness to Pay
Seller’s Res. Price Buyer’s Res. Price

19. Strategy-templates

20. Strategy-templates

21. Body Language
Body language plays a critical role in
communication Accurate interpretation of body
language is required for successful
negotiations. Body language is expressed by:
Eye and facial expressions
Arm and hand positions
Leg and foot positions
Posture and body position
As important as it is to accurately interpret
body language, it’s also important to
recognize that there are exceptions to every
rule - body language can help to support, or
contradict a message, or mean nothing at all.
For example, the term ‘poker face’ describes
an individual that has mastered the ability to
show no emotion regardless of the situation.

22. Negotiation Process
Closing Preparation
Bargaining Opening

23. Preparation
1. Define your goals, the other party’s goals, and the conflict.
2. Identify the goals you share with the other party.
3. Define the things you are willing to trade and their value to the
other party. Do the same for the other side: what they might offer
you and how much it is worth to you.
4. Anticipate Alternatives to determine how important it is for you to
reach a settlement.
5. Realize that you are no weaker or stronger than the other party. The
two sides share goals and both sides are willing to trade to attain
their objectives.

24. Opening
Most important opportunity to
influence the other side
Active Listening Skills
– Body Language
– Intelligent Listening
Non-negotiable items
Flexibility

25. Bargaining
1. Explore Key Commitments
2. Summarize Arguments and Seek
Acceptance
3. Look for Signals of Possible Movement
4. Identify and Highlight Common Ground

26. Bargaining
1. Remember: You Win ≠ They Lose
2. Negotiate Interests, not Positions
3. Focus on what you don’t know… exchange
information
4. Explore all the ways in which they can create value
for you
5. Find out all the ways in which you can create value
for them
6. Add issues
7. Negotiate multiple issues simultaneously
8. Exchange information regarding priorities
9. Trade based on differences of all kinds to create
value
10. Search for Post-Settlement Settlements

27. Closing
Be Prepared to Concede
Begin with those of Low Priority and
seek High Priority Items
Never Concede on More than possible
by your Brief
Use your Concessions Wisely
Don’t just give these away expect and
receive something in return
Look for Contingent Agreement, if
required
Never burn the bridge

28. Thank You
Q&A