Project Management: Partnering and the Principle Negotiation Approach

Why do proponents and owners of partnering claim that it is a proactive approach to managing projects?

Traditional (non-partnered) relationships between a company and a contractor has entailed practices that are ineffective and self-defeating. Among these are:

- Suspicion/mistrust between the individual parties
- Parties have their own specific goals (what’s best for each of them – not the project)
- Project teams are independent, even if particular teams on both sides are working on very similar (or the same) types of activities
- Guarded communications between the two parties; even if they have information that (when combined) would be for the good of the project
- Single project contracting (no long term commitments)
- Limited objectivity; lack of continuous improvement opportunities
- Access is limited with structured procedures; each party is looking out to preserve itself even if this mean the project will be sub-optimal
- Only project-level employees will be “allowed in” – others are precluded
- Duplication and translation factors; the two parties do not share equipment
- It is always the other party’s fault

Partnering (when it is successfully implemented) is considered proactive as it employs practices to keep problems from taking root. Specifically, each of the problematic practices noted above is countered:

- Mutual trust: builds strong, lasting relationships
- Goals are shared as are objectives to establish a common direction
- Joint project team built with members from all parties; lots of interaction is encouraged
- Very open lines of communication; this improves working relationships and eliminates misdirection; partners will learn to speak a common language which will reduce misunderstanding
- “Objective critique” will give an honest review of the performance of project teams
- All parties will have access to each other’s resources; this will lead to improved performance as, over a period of time, partners will know the other’s standards
- Company involvement/commitment across the board…from the CEO to all team members
- Administrative systems equipment integration; costs of bidding and selecting contractors are eliminated
- Risk is shared by all parties; this encourages innovation and improvement

Example: My company, a ConAgra manufacturing plant, partners with local electrical and mechanical contractors. Together, the partnership has produced many successful projects. The partnering contractors even have an allocated parking lot at the plant where their “trailer offices” are parked – although the offices are on wheels, they have not moved in over 20 years! And, despite the fact that these contractors’ firms service other manufacturing and contracting needs in the area, they supply a number of full-time, dedicated employees to our plant. The relationship with the partnering employees is so powerful that, when the head electrician accepted an offer from another contractor, the company also switched this contractor.

Why is the principle negotiation approach recommended for negotiating agreements on projects?

As our textbook states, “the [principle negotiation] approach emphasizes developing win/win solutions while protecting yourself against those who would take advantage of your forthrightness.”

The key points to principle negotiation are:

1. Separate the profile from the person:

Fisher and Ury say, “be hard on the problem, soft on the people.” Too often, people get so caught up with their emotions, they forget the problem itself. It is often easier to blame someone than address the issue. We have to learn to avoid personalizing the negotiation. We also have to develop the mentality that a partnership is not a contest. A good way to avoid interpersonal conflicts during negotiations is to develop a friendly rapport with the partnering members before negotiations take place. Building social networks early helps to ensure that negotiations will be friendly and productive.

2. Focus on interests, not position:

Scenario:
Party1 Manager: “I need the applet ready before the weekend”
Party2 Manager’s response: “No way! I don’t have the people.”

A situation like this can escalate up to a point where one or both parties will not cross a certain line. This situation creates a win/lose scenario. If someone crosses the line, he/she “looses.” There are egos to contend with as well as issues dealing with not understanding the original request. The text states, “seek first to understand, then to be understood.” We must do so with “empathetic feeling”: putting ourselves in the other party’s shoes. We must ask ourselves, “did I understand the issue correctly?” or “am I sure there is no second or third option?” This type of thinking will, initially, require a lot of discipline. But it is the most compassionate option. In the example above, Pary1’s Manager may not have stated his request correctly. Perhaps he may not need a tested version of the applet software – just a demo piece. A finished but untested version may already exist.

3. Invent options for mutual gain

This can be one of the hardest and most stressful aspects of negotiating. A way around it is to hold a brainstorming session where all affected parties will participate. The key is “separating the inventing from deciding.” Dovetailing interests help to invent options for mutual gains. That is, someone can point out options that are of low cost to them but of high interest to the other party. Example: a partnering vendor that supplies a company with parts cannot deliver his parts on time because he is cash-strapped. If the company were to pay him in advance for the entire order, he would have the money to develop/deliver the parts on time.

4. When possible, use objective criteria

Use established values for codes, prices, procedures. This can resolve any ambiguity in negotiation of prices. At my company, the partnering electrical/mechanical contractors employ union members that are part of a local “collective bargaining unit.” Therefore, the wages for these employees is prescribed by State law. In any project negotiation, this aspect is never a debate because of the established, objective criteria.

Other issues: When dealing with unreasonable people, it is important to remember not to push back if someone starts to attack. It’s often best just to step aside. If someone is very adamant about his/her opinion, its best not to make a judgment call – just treat it as an option. And, do not defend your own ideas – rather, ask for criticism and advice. Another good defense against unreasonable people is silence. Ury and Fisher suggest that the best defense against unreasonable negotiators is the BATNA (best alternative to a negotiated agreement). BATNA implies, “no deal unless we work out a win/win scenario.”