pm@olin: Negotiation (Class 4)

An aside: I’d written a new “one page” spec since the previous class, so I spent the first 15–20 minutes walking through it to show the students a real example and reinforce what we covered last time. It’s not topically related, so I didn’t put it into the goals below — but it did work well in terms of the overall class flow.

Goals:

1) Practice negotiating in the type of situation a PM would be negotiating in.
2) Build basic negotiation skills.

Optional Reading:
None

Materials:
1) Two separate “brief” documents for the two negotiating teams.
2) Two spaces — one for each team.
3) Timer (if you type “Timer” into Google it provides one in the browser).

Exercises:

This week’s lesson was the first “workshop.” Rather than having a lecture, exercises, and a back and forth, the entire lesson was filled by a Negotiation Exercise.

I was motivated to do this after Negotiation experience I had during HBS FIELD — the Riva/Charlton Negotiation. Unfortunately, I don’t think the teaching papers from HBS are available. The HBS FIELD negotiation was more formal (everyone wore suits) and more structured than the one I describe below.

Phase One: Prep — 20 minutes

Each team had 20 minutes to read the “brief” I’d prepared and plan their initial negotiation strategy. Since I wanted to make the negotiation applicable to the PM experience, I drew from personal experience. I created a dramatization of a discussion I had with the SkyDrive team while I was working on Office Mobile. I put three major issues on the table for the teams to negotiate.

I’m not putting the documents I gave out online, because while I used some details to make the document realistic, most of the document was fictional. I’d recommend working from your own personal experience so you can add detail/clarify if you need to. If you’re teaching this class to a group of students and need help, I’m happy to chat.

One important facet of the documents was that the two sides got “points” for various outcomes in their negotiation. These did not need to be evenly balanced — it was just to incentivize the teams to strive for different outcomes.

I gave very little direction during this phase.

Phase Two: Initial Negotiations — 20 Minutes

I let the two teams start talking. Initially I thought they were going to solve it in five minutes (and I was disappointed and going to have to find another plan). Thankfully it went back and forth — and at the end of 20 minutes, they were still talking, but had a detailed proposal on the table. I will note that a few times they misinterpreted what I’d meant. I was tempted to correct them, but had to let it go because I might have given away part of the “answer.” It ended up working out fine.

Phase Three: Regroup — 20 minutes

The teams got back together in separate rooms to discuss the proposal on the table and alternate proposals.

Phase Four: Final Negotiations — 20 minutes

The teams came to an agreement that was agreeable to both, and signed a piece of paper.

Phase Five: Discussion — 40 minutes

In the end, both teams felt like they’d successfully negotiated, in part because of the loop holes they found. We talked about how it went — techniques that were effective, things that didn’t work, and how they mis-read the other team. I’m not going to make a list because there are lots of things you can “learn” from a negotiation, and the value was in going through the exercise.

Suggested Notes:

1) Be very careful how you split the teams. I accidentally put all the seniors and the two people who had taken a negotiation class on one team. It worked out.
2) If you leave a loophole in your exercise, they will find it. Both of my teams found loopholes giving them substantially higher “scores” than they’d have had otherwise.
3) Afterwards, a student who had had a formal negotiations class recommended including some of the theory — BATNA, pareto efficiency, and anchoring. I think that would have been wise during the wrap.