Resource - Negotiation (3 Prerequisites + 4 Perspectives)

Negotiation skills will enhance nearly everything your management teams do from winning work through building the project to working with your bank and surety. This is a collection of the best resources we've used to build these capabilities.

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Effective negotiating is probably the biggest differentiator there is as measured by outcomes for those in construction, starting with the PM, Foreman, and Estimator roles. Whether it is negotiating for jobs, vendor pricing, schedule time, staging areas or changes, the skills of negotiation can dramatically change the outcome.

The most effective relationships in construction are those lasting decades, so negotiations must be looked at way beyond the current issue.


 

Negotiation skills can be developed just like any other skill. They are less tangible than a pure technical skill, so training and coaching must be balanced and led by someone experienced. Negotiating is a skill that must be deliberately practiced over time. The strategies and tactics to choose are situational. 

The resources below will provide as quickly as possible a foundational understanding of the basics.

  • The reflection questions will help tie these concepts more deeply to what you are currently doing.
  • Your answers and any additional questions should be discussed with others to deepen your understanding and tailor for specific situations.
  • Real-world practice is critical. Debriefing after a negotiation is very helpful for refining your strategies, tactics, and techniques.

Since real-world practice is key, consider breaking this down into quarterly milestones and working through all resources with a small group of 6-8 people along with the group leader. With a meeting cadence of 1 or 2x monthly for 60-90 minutes, you could work through all resources over a duration of 18-24 months. Please contact us to further discuss how we've seen teams apply these resources in both a "Quick Start" format and for longer-term development. 


 

This is a lot of time to invest. Before you start, calculate the potential benefits:

  • What is the value of improving your ability to win projects, starting with business development through to proposals, interviews, estimating and final negotiation of the contractual terms? This is especially true for alternative delivery projects including CMAR
  • What is the value of improving project performance, even just adding 1% margin on average through better negotiating about schedule, site logistics, and other things that impact production? 
  • What is the value of improving the performance of your change orders by 10% over what you are currently getting? This includes the speed they are processed (cash flow), the amount of changes that even get identified and processed, and improving the margin on them? 

 

Resource Summary

Most of these are available in summary format though there is value in going slowly to let the concepts sink in while providing time to practice.

  1. Trust - including Brené Brown's 18-minute "Anatomy of Trust" video.
  2. How to Win Friends and Influence People (Book)
  3. Never Eat Alone (Book)
  4. Know your Customers' Jobs to be Done (HBR 9-minute video)
  5. Never Split the Difference (Chris Voss - Book)
  6. Ask for More (Alexandra Carter - Book)
  7. Start With No (Jim Camp - Book)
  8. Secrets of Power Negotiating (Roger Dawson - Book)

Six of these are books averaging 8 hours each. While this seems like a lot, keep in mind that it is less than 50 hours of investment in yourself and your team. Think about how much this multiplies over your career. Think about the compound effect if you lead a group of 6 people through this every year. 

Most of these are available from sites like Summary.com, AudioTech, GetAbstract, or Blinkist. We have found value in taking the teams through summaries on the first pass then getting into application and feedback while going through the books slower. 

Some of the authors such as Chris Voss have longer videos available. For example, all of these are great additional resources from Chris Voss:


 

3 PREREQUISITES FOR EFFECTIVE NEGOTIATIONS

  1. Trust: This does not mean agreement, but it does mean benevolence, integrity, and capability. 
  2. Relationships: These are built on trust and trust is built by consistency over time. Life, careers, and contracting can come down to three main buckets
  3. Understanding: Effective relationships and negotiations are built on deep understanding of your own needs, conditions, capabilities, and constraints. Even more important than that is deeply understanding those things about the other party(s) by studying and asking good questions

 

Building Trust

 

Reflection Questions about Building Trust

  1. What resonated with you the most about this video and why?
    1. As trust relates to relationships inside of your company?
    2. As trust relates to relationships with customers and potential customers? (contractor, construction manager, project owner)
    3. As trust relates to other key parties involved? (subs, vendors, engineers, etc.)
    4. As trust relates to your personal relationships?
  2. What is a relationship example with a customer or potential customer where you have seen trust as an issue? Good and bad examples if you have them.
  3. Given that trust is heavily built around doing “the little things” consistently, what are one or two things you will do to more quickly and deeply build trust with customers and potential customers? Please be specific including what, who, and when.

Whether working through this alone or with a group, please take the time to put your thoughts into writing. 

"Nothing so sharpens the thought process as writing down one’s arguments. Weaknesses overlooked in oral discussion become painfully obvious on the written page." - Hyman G. Rickover, “Father” of the Nuclear Navy and longest serving naval officer

 

Discussing these answers as a group is an invaluable start to developing better relationships. 


 

Building Relationships

Both Never Eat Alone and How to Win Friends and Influence People are available as summaries. Contact us if you are having trouble finding them at one of the sources above. Our recommendation is that you start by reading the summaries of each, working through the reflection questions below, then discussing them as a group. If you find you need more work in this area, go through the full books working through a section at a time interwoven with the negotiation resources. 

Reflection Questions about Building Relationships

  1. Please identify a few things from the summary, chapter, or section that really resonated with you.
  2. Please think of the best examples you have from your own experience that related. Both a good and a bad one if you have them.
  3. Please identify a current situation where this applies, if applicable.
  4. What are some specific actions that you will take based on what you've learned, if applicable.

Please think about these questions in the context of your family, your friends, your community, your co-workers, those that work for you, your managers, your suppliers, your potential recruits, your customers, your potential customers, and other stakeholders involved in your life, career, project, and business. 

 

Again, please take the time to put your thoughts in writing as it will help you clarify your thoughts and more effectively share with others. 

 

With your second deeper pass through these books on relationships, integrate very specific questions about companies, job roles, and people that you need to build relationships with for:

Winning on each of these dimensions requires initiating then developing new relationships so it gives you plenty of practice cycles. Be cautious not to overload your team. If you have any questions about how to facilitate this, please contact us and we'll freely share anything we've learned that could help you. 


 

Building Understanding

"Begin with the end in mind." - Stephen Covey (7 Habits of Highly Successful People)

The last major prerequisite in negotiating comes from deeply understanding what is important to the other party including those directly and indirectly involved in the project. Remember that you are just one part of the system that delivers or maintains a project for the project owner, and that facility or infrastructure is just part of how they deliver value to their customers.

The better you can understand the various levels of the value-stream, the better you will be able to negotiate in many situations.

 

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  • Please study the diagram above and sketch out the broader value stream of all the parties that you know about who are involved in building the projects that you are part of. Remember that your whole company represents just one box. 
  • Please study the diagram representing a model of a construction business to understand how you fit into this overall model. 
  • Please watch this short (9-minute) intro video on the concept of Jobs-to-be-Done (JTBD) with these diagrams in mind. 
  • Please read this 8-Step Checklist about asking good questions.
  • Please remember that your understanding of this broader context will continue to grow over time. Contractors are progressively involved further "upstream" as they navigate the stages of growth.

 

Reflection Questions for Building Understanding

  1. Consider 3 different types of projects you have worked on from the perspective of the facility owner. 
    1. What are they, who are the owners and why did you choose them?
    2. What are the most important driving factors for them in terms of the facility they were building or working on as it fits into the context of their business as you understand it?
  2. What role does a General Contractor or Construction Manager play in helping fulfill the needs you identified above/
  3. What role does a Specialty Contractor play in helping fulfill those needs?
  4. As you reflect on the questions above, do you see any opportunities to fulfill the "Job-to-be-Done" by your customer or your customer's customer?
  5. What are the top 3 questions you would like to have answered that will help improve your understanding of the broader project value-stream and the JTBD from each party's perspective?
  6. Who are three people that you think would best be able to answer those questions for you in a way you can use? 

 

 

4 INTEGRATED & SOMETIMES DIFFERING PERSPECTIVES

These are four different but integrated perspectives on negotiating. It is the combination of these that will help you develop a more complete skill set including being able to understand what the other party is doing. 

Chris Voss: FBI hostage negotiator who advises businesses and studied with Jim Camp, which is where you will notice some common elements.   

Alexandra Carter: A focus on negotiation in the context of very long-term ongoing relationships. Her experiences and examples are applicable to many situations.

Jim Camp: Focused 100% on business negotiations including how to address some messy issues like having to renegotiate terms to make a deal sustainable long-term.

Roger Dawson: Lots of experience in the real estate industry. Great job breaking down very specific tactics including when to use them, how and countermeasures.  

 

Recommended learning path is to find summaries of all four books and going through the reflection questions one summary at a time on the first pass. Various sources for summaries are listed above. Search for the ones that are most comprehensive as there is a wide range in quality with book summaries. If you are having trouble locating summaries, please contact us. Links to the books are below:

  1. Never Split the Difference (Chris Voss - Book)
  2. Ask for More (Alexandra Carter - Book)
  3. Start With No (Jim Camp - Book)
  4. Secrets of Power Negotiating (Roger Dawson - Book)

Their websites have many good tools which can be used to facilitate small group discussions. Remember that the best discussions involve tying the concepts to past experiences, current situations, and future actions. This is where an experienced group facilitator is invaluable for developing talent. 

 

Never Split the Difference: Negotiating as If Your Life Depended on It (Chris Voss)

  1. What points resonated with you the most and why?
  2. How do you see “Tactical Empathy” relating to building and maintaining trust?
  3. How do you see “Black Swan” as relating to the JTBD from the perspective of your customer?
    1. Your customer's customer?
    2. Your key suppliers or subcontractors? 
  4. What is a current or upcoming situation where you see some of these tactics being useful, if any? Please describe.  

 

Ask for More: 10 Questions to Negotiate Anything (Alexandra Carter)

"A lot of people are afraid to say what they want. That's why they don't get what they want." - Madonna

  1. What points resonated with you the most and why?
  2. What is an upcoming negotiation, either internal or external, where these 10 questions would be helpful? 
    1. What are your answers to the first five? (The Mirror)
  3. For an external situation, given what you have learned about the broader group of companies and roles involved in developing and then building a project, what are some “Good Questions” you can formulate that will help you understand their needs better, possibly uncovering a “Black Swan”? These are just more specific ways to ask the questions described as “The Window.”

Notice that the last question is a repeat of an earlier question on expanding your view on the total value-stream of a construction project and contracting business. Reviewing similar materials and questions 6-12 months apart will help you see your development.

 

Start With No: The Negotiating Tools that the Pros Don't Want You to Know (Jim Camp)

  1. What points resonated with you the most and why?
  2. What is an example you have seen where you observed “neediness” factor into a negotiation? Either good or bad, personal or professional, if you have one.
  3. The framing of an “adversary” and getting to ‘NO’ can seem counter to long-term relationship building. How do you integrate these ideas?  

 

Secrets of Power Negotiating: You Can Get Anything You Want (Roger Dawson)

  1. What points resonated with you the most and why?
  2. Which of these tactics do you dislike the most and why?
  3. What is the most recent business negotiation where you have seen one or more of these gambits come into play? Please describe, including the outcomes, either good or bad.

 

General Questions: Integrating All Four Perspectives

  1. What were the biggest similarities you saw between all perspectives?
  2. What were the key differences you saw between these four perspectives? If any.
  3. What approaches did you disagree with the most and why? If any.
  4. What questions do you have? If any.
  5. What are the top 3 most valuable additional resources you found on relationship building and negotiations as you have been going through this process?
  6. Who will you share this with and discuss? If anyone.
  7. What are your next steps to continue learning and building your negotiating skills? If any. 

 

FACILITATION IDEAS

There is no single perfect way to work through the learning materials. Remember that everyone needs time to practice as that is what ultimately builds the capability. 

One good approach is to work through a "Quick Start" with 9 weeks of 90-minute meetings alternating through the learning resources using summaries instead of the books. 

  1. Trust
  2. Never Split the Difference
  3. Never Eat Alone
  4. Ask for More
  5. How to Win Friends and Influence People
  6. Understanding Your Customer's "Job-to-be-Done" (JTBD)
  7. Start With No
  8. Secrets of Power Negotiating
  9. General Questions to Integrate

 

After that, you can move to monthly meetings going deeper into some of the materials based on the group and augmenting the discussion questions with exercises specifically designed to stretch all aspects of your team, including:

  • Building relationships internally across functions and project teams.
  • Deepening relationships with your existing customers (estimating, project teams, accounting, etc.)
  • Deepening relationships with your existing vendors and subcontractors (estimating, purchasing, project teams, and accounting).
  • Focusing on specific improvements to negotiating like contractual terms, schedules, site logistics, changes, billings, and payments.
  • Developing target lists of new relationships to build externally. Those relationships will turn into opportunities to negotiate with down the road. 
  • Debriefing on specific negotiations or opportunities to negotiate at each meeting. Sharing successes and challenges is one of the best ways to learn.

 

We exist to help contractors build stronger businesses for the next generation. We will freely share anything we've learned that could help you. Whether you are an individual building your career in construction or an executive leading a contracting business, please don't hesitate to reach out. 

All relationships begin with a simple conversation - let's talk.

 



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