© 2011 AACE International Inc. “AACE” and the AACE logo are registered marks of AACE International (06-10)

Essential Negotiating

Skills for Cost Engineers

* And a little bit about AACE International

Agenda

• Why Negotiating is an important skill

• Types of Negotiations• The 7 Steps• Cultural Considerations• Update on AACE International

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My Background• Global association management professional for 15+ years

including tenure with ASME• MBA, Certified Internal Auditor, Certified Government

Auditing Professional and Certified in Control Self-Assessment

• Recognized as a Distinguished Faculty member by the Institute of Internal Auditors for conference presentations, facilitations and seminar instruction

• Topics include: communication skills, hostile negotiations, conflict resolution, audit skills, generational differences, creative problem solving and risk management

• AACE International Executive Director for 109 days

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Meaning • The word “negotiation” stems from the

Roman word negotiari meaning “to carry on business” and is derived from the Latin root word neg (not) and otium (ease or leisure). That’s the central point: It’s not easy!

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Negotiating: A Critical Skill• It is a part of everyday life• It makes you valuable to your company,

supervisor and department• It gives you confidence and builds your skill

set• It makes the team stronger• It can save your company time, money and

resources• Bottom line it can earn you more money, a

promotion and more clout6

Types of Negotiations• Informal – the kind you do every day• Formal:

– Budget Issues– Trade offs between scope, time, costs, quality– Change management– Contract Overruns– Workspace and Equipment– Vendor Selection– Risk Management Strategies– Pay scales & Bonuses

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The 7 Steps to Successful Negotiations

Why we exist!

The 7 Steps to Successful Negotiations

1. Prepare2. Set the Tone3. Listen and get the issues on the table4. Look for Common Ground5. Shoot for Collaboration6. Spell out Decisions7. Close with a final Summary

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Preparation is Key

• Do a DUMP Sheet• What Outcomes do you want out of the

meeting?• What is your BATNA?• What is your bottom line?

Set the Tone

• Clarify Purpose• Physical environment• Collaborative mindset• Ready and willing to listen• Keep a sense of humor

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Actively Listen• Focus on what is

being said; maintain good eye contact, lean in; head nodding

• Ask Questions• Paraphrase• Don’t tune out!

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Common Ground• A summarizing tactic• Transitioning tool

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Areas of Agreement Areas of Concern

Agreements/Disagreements Worksheet – Why it Works

• Listening in Stressful Situations• Bearer of Bad News• More Analytical/Objective Perspective

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“By fighting you never get enough, but by yielding you get more than you expected” – Dale Carnegie, How to Win Friends and Influence People

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Strive for Collaboration

1. Willingness to listen with objectivity to all sides of the story

2. Listening to peoples’ different perspectives to the situation

3. Willingness to brainstorm solutions that will be of mutual benefit

4. Stay focused on the problem and not the people

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Spell Out Decisions

• Put detailed decisions on paper

• Express expectations

• Close meeting with final summary, expectations, next actions to take, and deadlines

• Always reconfirm deadlines

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Closing

A Word on Salary Negotiation

–Research–Strike first–Make them

sweat–The complete

package

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The Golden Rule of Resolving Conflict

Myth Busting• Most literature on negotiation and conflict

management espouse the collaborative Win-Win approach as the only style to use.

• That is not exactly true

• Collaboration yields the best success. In truth it depends on the person and the situation. You must think strategically in terms of your approach

Don’ts of Negotiation• Don’t negotiate via email. It leads to the escalation

of issues. Pick up the phone or even better meet in person. You can always get the documentation later.

• Don’t Allow emotion to escalate

• Don’t negotiate with the unempowered

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“Let us never negotiate out of fear. But let us never fear to negotiate” – John F. Kennedy Inaugural address January 20, 1961

Cultural Considerations• Most people in most cultures hate conflict• Common issues:

– Language barriers– Reference issues– All filter through their individual values, beliefs, cultural bias – this

leads us to interpret through our own lense– People rely on stereotypes

• According to the Harvard Business School “Deal making across cultures tends to lead to worse outcomes compared to negotiations within the same culture”

•  Take time to study the person on the other side of the bargaining table, including the country in which he/she is from, his/her company, etc. 

Richard D. Lewis Model

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© 2011 AACE International Inc. “AACE” and the AACE logo are registered marks of AACE International (06-10)

AACE

AACE Membership Trends Since 2002

Net Certification Trends:

BadgeCert Program

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Noteworthy Information• Section dues payments will occur at the

beginning of the FY based on the 12/31/14 membership

• S&K 6 is in edit and will be released in 2015

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Federal Agency Roundtable• District Architecture Center (Washington Chapter AIA)

421 7th St. NWWashington, DC - October 17, 2014from 8:30 am to 12:30 pm

• The focus of the roundtable discussion, which will be facilitated by officers of the Association, will be “The Benefit of Professional Certifications within Government Contracting:”

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The Second ITCM Conference will be held in

Bangkok Thailand

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© 2011 AACE International Inc. “AACE” and the AACE logo are registered marks of AACE International (06-10)

Questions?

Contact InformationCharity Golden, MBA,

CIA, CCSA, CGAPcgolden@aacei.org