Episode 17 — Negotiation Tips From Ellen Smith

Episode #17
Original Air Date: 09.06.2016

42 Minutes

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Our Guest This Episode: Ellen Smith

Ellen Smith shares how to become a master negotiator. Ellen Smith is an attorney with Holt Ney in Atlanta. She deals with commercial real estate, wireless telecommunications, and land use; and her clients range from single individual member limited liability companies to nonprofit hospitals to Fortune 500 companies.

Tune in now to hear Ellen answer these questions and more: Is a win/win even possible? How do I manage my emotions? What are some strategies of persuasion?

Favorite Quotes from Our Talk:

"One of them is know your BATNA, B-A-T-N-A. It stands for Best Alternative To a Negotiated Agreement. So what does this mean? It means know your leverage; right? Know where you’re starting from. Understand your leverage points and the consequences."

- Ellen Smith

"Some things are better face to face; right? And so some negotiations are going to be way better face to face than over the phone. On email, without question, you don’t want to negotiate, I think, on email. But I think you have to be able to walk into that negotiation having that range of outcomes, that ZOPA, so that your client is prepared. And if you’re a project manager, so your team is prepared. Right? These are the various things that we can hope to get out. From a project management standpoint, this is what we need."

- Ellen Smith

"There can be a win-win. It’s a matter of knowing what those leverage points are and starting by saying, hey, we agree on these things. These are the couple of things we disagree on. Let’s, you know, let’s see what we can do to resolve it."

- Ellen Smith

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ANDY CROWE ● BILL YATES ● NICK WALKER ● ELLEN SMITH

NICK WALKER:  Welcome to Manage This, the podcast by project managers for project managers.  This is our every other week chance to meet and talk about the things that matter most to you as a professional project manager.  What does it take to get started in the field?  To get certified?  And how do you survive?

I’m your host, Nick Walker.  And with me are our resident experts, Andy Crowe and Bill Yates.  They’ve experienced the challenges, they’ve tasted the victories of project management, and they want to share their experience with you.

And, guys, we are fortunate once again to have a special guest in the studio today.  Ellen Smith is an attorney with Holt Ney in Atlanta.  She deals with commercial real estate, wireless telecommunications, and land use; and her clients range from single individual member limited liability companies to nonprofit hospitals to Fortune 500 companies.  Varied in her talents, for sure.  Ellen, thanks so much for being with us on Manage This.

ELLEN SMITH:  Thanks for having me.

NICK WALKER:  We are so looking forward to talking with you about our topic today, and that is negotiation.  But before we get there, Andy and Bill, let’s talk a little bit about the need for negotiation when it comes to project management.  Andy?

ANDY CROWE:  And Nick, I want to back up.  You said we’ve “tasted the victories of project management”?

NICK WALKER:  That’s my impression.

ANDY CROWE:  Bill, is that your experience of your work in project management?

BILL YATES:  What I conjure up is more of a bitterness, you know, like the most bitter coffee.

ANDY CROWE:  Thinking the bitter dregs?

BILL YATES:  Yeah, yeah, yeah.  That coffee that’s been sitting there all day.

NICK WALKER:  So it’s more the agony of defeat than the thrill of victory.

BILL YATES:  Maybe.

ANDY CROWE:  You know, it’s one of those – you remember the old saying that you have to have a strong stomach to see how the sausage is made?

NICK WALKER:  Yes, yes.

ANDY CROWE:  And when you go back and sometimes see how a project gets done, and see what it takes to get there, you’d better have a strong stomach and a strong sense of yourself.  But no, I’m excited about this topic because it’s this whole idea of negotiation.  And the project manager is in such a difficult position.  And this is what nobody really stops to think about.  So you’ve got the organization.  You’ve got this whole group of stakeholders.  You’ve got senior management.  You’ve got sponsors, users, customers, all of these people.

And the way I think about it is sort of picture them in an inverted pyramid.  So that’s on the top side of the pyramid, this triangle pointing down, with the tip pointing down.  And then below you, you’ve got the team.  And that can include a lot of different people.  It can include virtual relationships.  It can include dedicated straight-line reporting relationships.  And the PM is stuck in the middle between those two points.  So there’s a…

BILL YATES:  Two very sharp points.

ANDY CROWE:  They can get very sharp.

BILL YATES:  Yes, very pointy.

ANDY CROWE:  And so there’s this idea that the project manager is constantly negotiating everything, all day every day.  That’s really a lot of the job, at the heart of the job.  You could call the person a “project negotiator” as opposed to a project manager.  I mean, there are people who just tick off boxes and say yes, complete, check, check.  And we think about those as maybe a coordinator.

BILL YATES:  Right.

ANDY CROWE:  But in this case a project manager has to go back in the kitchen and make the sausage.  And it is tricky, and sometimes it’s very ugly, and it’s a lot of work.

BILL YATES:  Yeah.  There are third parties that they’re having to rely on to provide valuable deliverables for this project.  So they’ve got contracts, perhaps, with third parties.  They’re having to negotiate internally to get the resources they need to get it done.  They’re having to negotiate with the team, to get those resources on the team.  And people have their own expectations; right?  I’ve got, “This is where I want to go in my career,” or “I don’t want to do this on this project.”

ANDY CROWE:  Yeah.  Not just expectations, but their own agenda.

BILL YATES:  Yeah, absolutely.

NICK WALKER:  So, Ellen, that’s why we’re so glad you’re here.  Because we’re going to draw on your expertise.  Give us just a little overview of some of the situations that you have encountered that require the skill of negotiation.

ELLEN SMITH:  Sure.  So commercial real estate; right?  You think it’s just dirt, but it’s not.  I mean, I’m working on a project now where the project team – there’s a project manager.  They’re managing the client, which is a Fortune 500 company which has its own expectations.  They had to negotiate their own contract with that client.  But then they have to put together the project to get something built on a piece of property.  They had to negotiate to get the dirt bought.  They had to get all the equipment.  They have to go through right now the permitting process, so negotiating with government officials, which is miserable in and of itself.

But they also have a team of experts; right?  They have their engineers.  They have their architects.  And they have to deal with lawyers on the outside.  They don’t just have to deal with the client’s lawyer.  They have to deal with the city’s lawyer.  They have to deal with the architect’s lawyer and the engineer’s lawyer and everyone else.

BILL YATES:  Those dang lawyers.

ELLEN SMITH:  And they really are stuck in the middle because at the end of the day they have to get that deliverable to their client.  But they have to keep everybody on the same page and make them happy.  And whether you call it a negotiation, whether you think about the start of your day as a negotiation, that really is what they’re doing from start to finish all day.

NICK WALKER:  So obviously a project manager needs negotiating skills.  But that’s not necessarily something, perhaps, that most project managers are going to be trained in.

BILL YATES:  Yeah, Nick, that’s a great point.  We, Andy and I, just – we’re constantly surprising ourselves as we look at those that we train and those that use our materials, and just how closely we can relate to them in that this is a skill that we had to learn on the job.  We didn’t really have training on negotiation in school.  You know, we may have learned some tools along the way.  But this is really an on-the-job kind of thing.

So we are – we can definitely connect with our tribe in this area.  We may have a lot of technical expertise.  We may be great at coding, at testing.  We may be a strong engineer.  But suddenly I’ve moved into this position where I’ve got to manage and negotiate with those people on the team.  Plus, to Andy’s point, that pyramid above me that’s very sharp and pointy and right on the top of my head, I’ve got to negotiate the expectations of sponsors, of customers, of my senior management.  And I don’t have training in it.

ANDY CROWE:  And Bill, I want to suggest for a minute that we almost need to think about it a little bit differently as project managers because traditionally we’re trained to think about negotiation as the art of getting the best deal for your organization or for your side.  And it’s the idea of engineering the best deal you can for your group that you’re representing.  And some people do approach it that way.  Project managers are going to get in trouble when they approach it that way.

BILL YATES:  Right, that’s right.  If you burn bridges along the way, you’re going to be in big trouble.

ANDY CROWE:  Right.  You don’t squeeze people down necessarily.

BILL YATES:  No.

ANDY CROWE:  I worked with a guy early in my career who was from Philadelphia.  And he was just a Philly guy who’s classic in every sense of the word.  And we love you listeners in Philadelphia.  But his idea was “I’m not winning if you’re not losing.”  And he really seemed to believe that.  That was his overarching goal for negotiating was to squeeze people to make sure everybody knew who won, and it was him, you know; and who lost, and that was you.

BILL YATES:  Yeah.  Yeah, Ellen, one of the things that’s unique for us with negotiations is we have to live in the mess that we create.

ELLEN SMITH:  For sure.

BILL YATES:  So we, you know, as project managers, the things that we negotiate, whether we’re a part of scoping out a project on the front end or we’re in the middle of it, I mean, we don’t want to tick off our client.  We don’t want to tick off those that are on the team.

ANDY CROWE:  Or the vendor.

BILL YATES:  Yeah.

ANDY CROWE:  Not just the client.  You don’t want to tick off anybody.

BILL YATES:  Right.  You’ve got to…

ANDY CROWE:  You want everybody to be able to live with the outcome.

BILL YATES:  Right.  That’s right.

NICK WALKER:  And it occurs to me this is probably not necessarily intuitive, either.  So, Ellen, returning to you, how do we…

ELLEN SMITH:  Sure.

NICK WALKER:  …become master negotiators?

ELLEN SMITH:  Well, and I’ll say this, too.  I think that that top end of the pyramid is probably the ones that have gone to Harvard Business School or some other business school.  They have their MBA.  And they did take classes on negotiation.  So as a project manager, some of the ones underneath, you’ve gone to school, you’ve had the technical expertise, whether you’re an engineer or what have you.  You can put together the things that client, customer, sponsor needs from a technical side.  They are using their negotiating skills against you, always.  It’s not because they can help themselves, it’s because that’s what they went to school for nine times out of 10.  Right?

So there are sort of three principles that I think – and I’ll mention Harvard Business School.  And Dr. Guhan Subramanian is a professor at Harvard Business School.  And he’s just written a book called “Dealmaking:  The New Strategy of Negotiations.”  And as an aside, part of his background study was to go to used car dealer negotiating school; right?  So you can really learn a lot from a used car dealer.

BILL YATES:  Yes, you can.  We’ve all been taught lessons.

ELLEN SMITH:  They are trained in negotiation.  And you mentioned it’s not intuitive.  I mean, I think some of it is, and we’ll talk about some of the practical.  But this professor has given sort of three names or acronyms, they’re a little crazy, to various strategies for negotiation; right?  So one of them is know your BATNA, B-A-T-N-A.  It stands for Best Alternative To a Negotiated Agreement.  So what does this mean?  It means know your leverage; right?  Know where you’re starting from.  Understand your leverage points and the consequences.  That sounds intuitive.  But unless you step back before you walk into that negotiation, and you sit back and say, what do I need to get out of it, know your BATNA.  Know all the alternatives that you can live with, that your team can live with, whether you’re trying to get a team member to come along.

Bill, to your point earlier, they have a different idea of what they might get out of this project.  You know, they want to be working on this project as opposed to another project.  And you’re trying to get them to work on the other project.  I think part of that is knowing your team, knowing all of those alternatives.  So that’s one of his points, not to get us too deep into the theory there.

ANDY CROWE:  So Ellen, BATNA is looking at your own focus on this, what you can live with, what your possibilities are.  You’re not trying to figure out what your – the person on the other side of the table.

ELLEN SMITH:  That’s right.  So that would be the next step; right?  So the BATNA is – it’s understanding all of the things that you need, all of your leverage points, where you are in the deal, so to speak, where you are in the project.  But also knowing consequences.  If X doesn’t happen, then what’s the consequence of that?  And understanding that fully so that you’re prepared on your end to go into the negotiation.

ANDY CROWE:  And do you do this just mentally?  Do you do a flow chart?  How do you do it?

ELLEN SMITH:  So I just went to this class a couple weeks ago.  You know, I do it – it depends on the situation.  If I’m walking into a face-to-face meeting, I usually have had a conference call with my team, conference call or meeting with my team beforehand.  I do have a written checklist.  Lawyers, everybody says, like paper.  We do.  Although some of us are trying to streamline it a little bit.

I do usually have a few notes because I’m trying to think about what can I get out of this meeting?  What do I need to get out of the meeting?  What does my client want?  What happens if it doesn’t go my way?  What are the top three, say, alternatives, if this happens?  It’s like a chess game; right?  What are my next 10 moves going to be?  Do I always have a list?  No, because sometimes I get a call out of the blue, and I’m thinking on my feet.  But I think these are sort of best practices, I think.

ANDY CROWE:  Good.

ELLEN SMITH:  So the second one is your ZOPA, Z-O-P-A, Zone of Possible Agreements.

BILL YATES:  Not Zika, ZOPA.

ELLEN SMITH:  Not Zika.  That’s right, we’re not talking about Brazil or the Olympics.  But your ZOPA; right?  This is all of the ranges of outcomes that you’ve already done when you did your BATNA.  But it also includes what you think the other side, the other party, the other parties if there’s more than one, have to offer what their leverage points are, what you think is the full range of outcomes for the meeting.  So if they say X, I’m going to say Y, to get to Z.  Even more alphabet.

ANDY CROWE:  So it’s interesting.  Sort of like Venn diagrams, and these are circles, and you’re looking for the intersection, the common area.

ELLEN SMITH:  That’s right.  Absolutely.

NICK WALKER:  So do you already have in your mind this is going to succeed?  Or is this somewhere along the way you sort of identify, okay, these are the hills to die on?

ELLEN SMITH:  So for me, you know, part of my BATNA, and I don’t call it BATNA, but part of my strategy is I want to manage my client’s expectation.  So if I’m giving them legal advice, look, 90 percent of legal advice is practical advice.  Right?  In law school they don’t teach you really anything except one principle.  There’s no such thing as black and white.  It’s only shades of gray.  That’s what you learn sort of as a liberal arts education law school degree.  UGA would maybe say differently.  But I’m a proud alum.  It was a fine experience.

But you don’t come out with this negotiating formal business school acronymed layout.  What you do come out with is you should manage your client’s expectation to say here’s the range of possibilities.  Here’s one we hope for.  If this happens, you’re going to jail.  Or not really, that’s not my realm.  But, you know, there are worst-case consequences.  So, yeah, before you walk into negotiation, I think we can talk a little bit later about practical.

Some things are better face to face; right?  And so some negotiations are going to be way better face to face than over the phone.  On email, without question, you don’t want to negotiate, I think, on email.  But I think you have to be able to walk into that negotiation having that range of outcomes, that ZOPA, so that your client is prepared.  And if you’re a project manager, so your team is prepared.  Right?  These are the various things that we can hope to get out.  From a project management standpoint, this is what we need.

BILL YATES:  I like it.  And what I like about this, Ellen, is this helps me as a project manager think about what steps can I take before the negotiation so that I can take my fear and put it to the side and start to think about what are the things that I want?  What are my outcomes that I’m comfortable with?  Those are excellent.  So I like that.  I think for a project manager, anything that helps me reduce risk and reduce fear is good.

ANDY CROWE:  And you know, Ellen, as project managers, we default to face-to-face communication wherever possible.  There are so many things that you pick up in those things, expressions that get lost in email.  Everybody’s read an email before and gotten really heated.

BILL YATES:  Yeah.

ANDY CROWE:  And maybe you’ve gone through that escalation over email.  And then what happens?  They either pick up the phone or they sit down face to face and work it out.  So face to face is generally very favored in the project management community.

NICK WALKER:  But what strikes me, Ellen, is that there really is a lot of preparation beforehand.  You don’t just jump right into this.  You’re really doing a lot of prep work here.

ELLEN SMITH:  You are.  I mean, I think, look, you’ve already got the expertise, right, on the professional level for the project manager.  You’ve already gotten all of the education, all of that.  So have all of your team members, right, assuming you’ve hired the right team members for the project.  They have the technical expertise.  That part of their homework is done.

It is stepping back to do just what you said, think about how you’re going to put forth the project.  Look, how you’re going to win the project, how you’re going to make the client happy, but also how you’re going to keep your team onboard.  To your point earlier, it’s also how are you going to make sure you’re not burning bridges.  It’s a win-win for everybody.  And you can move forward and have those relationships for the next project moving forward.

NICK WALKER:  So we’ve got our preparation done.  We’re ready to step into the negotiation.  Can you give us some practical steps on actually how we go about doing that?

ELLEN SMITH:  Sure.  So, you know, I think one of the points, too, is a negotiation’s all about persuasion; right?  As a lawyer, I’m an advocate.  I’m an advocate for my client.  I’m an advocate for justice, whatever that is, in the commercial real estate world.  There are some things that are right and wrong.

So part of it is physical; right?  How do you manage the environment?  Where’s the negotiation going to be held?  Is it at your office?  Is it at the client’s office?  Is it at some third location?  Is it onsite?  Where is that?  And that plays a role.  Is it outside in 100-degree weather?  Maybe, if you want to talk about HVAC, right, and ensure that your client has the best one.

But seriously, you know, it really does matter, the physical environment.  It matters who’s in the room.  It matters who you’re talking to.  So as the project manager, are you talking to the president of the company?  Probably not.  Maybe not.  Should you be?  Are you talking to the right person?  Are you bringing the right team members with you to the meeting?

BILL YATES:  One thing to just – I’m looking at you, Ellen, as you’re sharing this.  I’m thinking, here’s a partner with a law firm.  She would completely play games with me if she was negotiating with me.  I could see moving in, coming into her turf, her room.  She’s got it set up, and her chair is the highest one.  I’m down in some little low squeaky chair.  But, yeah, I get that.  I mean, the setup of the room, bringing the right people into the room.  It may be even something where you really need to have eyes on the item that’s being – that’s contentious, right, that we’re discussing.

ELLEN SMITH:  Absolutely.

BILL YATES:  Then do it onsite.

ELLEN SMITH:  Absolutely.

BILL YATES:  Those are good tips.

ELLEN SMITH:  I think it’s anything from the meeting space, the location, who decides it.  All of those things set up the negotiation and point to leverage in the deal.  So, and some of those things you might give up; right?  Frankly, I almost always would prefer in a negotiation to be at the other side’s place of business.

BILL YATES:  Ah, interesting.

ELLEN SMITH:  Makes them more comfortable.  Love for people to be comfortable when I start a negotiation.  They don’t see it coming, quite frankly.  And I think that can be a very good strategy, depending on what it is.  So as the project manager I’ll come to your office; you know?  It’s one thing to want to share your space with someone.  That can be inviting, as well.  But I think it, you know, can set the tone for the meeting, who’s going to have the most power.  Are you letting them think they have the most power by having it in their space?

NICK WALKER:  Ellen, you mentioned what’s important sometimes is the people in the room.

ELLEN SMITH:  Right.

NICK WALKER:  You know, I look on negotiation sometimes as one on one.  But third parties, I guess, can make a difference.

ELLEN SMITH:  Absolutely.  So I think there are two ways to look at it; right?  At some point in the negotiation, if it gets to a critical point, and the team of people, whether it’s a client team, or whether it’s the project management team, are at loggerheads, I think it makes sense to get two individuals together.  They can resolve it.  The question is at what point to do that?  You’re probably better off waiting until some critical point in the negotiation to say we’ve got to call in the bigwigs; right?  We’ve got to call in the heavy-hitters.  Make sure that they’re fully prepared, that they know all of your BATNA and your ZOPA and all of the outcomes, because they haven’t been down in the weeds on the project; right?

But at some point your negotiation’s not going to go further.  Call in those two people.  At that point, by the way, separate issue as to where they meet.  Do they meet at Starbucks, you know, neutral location?  Do they meet somewhere else, one office or the other, onsite or not?  But I think the individual, that’s sort of an escalation, most likely.

Now, I’ll also tell you that, for lawyers, usually the client says, “We’re just going to have our lawyers talk.”  They’re playing the good guy.  They want the lawyer to play the bad guy.  The lawyers get on the phone, we’re not the bad guys.  We each have been told by our client to be the bad guy.  Usually we can come to some agreement, by the way.  So kind of an interesting little twist or nuance there.  But certainly I think to get to that point where you call in the bigwigs, that’s a different strategy, and one that most times works.

NICK WALKER:  But in the beginning, do we have to assume that there is going to be some sort of agreement?  Do we actually come to it saying, okay, we are going to agree on something here?

ELLEN SMITH:  Right.  So I think you’re in that meeting; right?  Everyone’s called a meeting, and there’s an issue to be resolved or negotiated.  Where do you start?  I think a starting point is always, hey, we agree on this.  Let’s get these things off the table.  We agree on these 10 items.  And everybody then is in a frame of mind of, oh, yeah, we do agree on some things.  We’ve set the stage.  This is not contentious.  We’ve gotten to a point where we agree on more stuff than we disagree on.  That’s an important thing, and something to be highlighted.  Even if it’s to start at a point where you agreed on something a month ago, to just reiterate that I think can set the stage for the negotiation.

NICK WALKER:  And you’ve used this term before, “win-win.”  Is that possible?

ELLEN SMITH:  Good question.  I think it is; right?  I think, look, one of the very basic things in negotiation, I think, is that you’ve got to feel comfortable with the people you’re negotiating with.  Right?  There’s a very base level that people are coming to the deal, to the table.  They are trying to make something happen.  The project manager wants to get paid for the project, but he also wants the client to be happy, wants repeat business; right?  Wants his team to be happy, wants to be able to use those various vendors or team members on other projects.  They want to get the deal done.

So I think the answer is yes.  There can be a win-win.  It’s a matter of knowing what those leverage points are and starting by saying, hey, we agree on these things.  These are the couple of things we disagree on.  Let’s, you know, let’s see what we can do to resolve it.

ANDY CROWE:  You know, as you’re talking, Ellen, I’m thinking about this, and I’m reminded of the book “Getting to Yes.”  He makes a point early on in the book, and he says “Conflict is a growth industry.”  And so we know, getting into this, that we’re going to have to be doing this job.  But the idea is to look for that win-win.  I’ve got somebody – I’m going to be intentionally vague about this, but I’ve got somebody with whom I’m very close who owns an auto dealership.  And this particular auto dealership used to be the largest in the world for that type of auto.

And so, as he’s doing this, it was really interesting that I got an up-close look at some of his tactics.  And their take was basically this.  They want every customer walking out feeling like they got a steal.  Okay?  So people would walk out, and I would regularly encounter people who bought a car from this person, and they would say, “Oh, my gosh, I got a deal you wouldn’t believe.”  They said, “Nobody’s ever gotten a deal like this before.”  And I would nod and say, wow, you’re a great negotiator.  But it was impressive to me that they walked away believing that.

Their philosophy was, and it’s interesting watching the approach that you’re taking here with the BATNA and the ZOPA, that their approach was we’re going to get you, either on the price of the car, the trade-in, or the financing.  And it’s such a complicated game that you can’t possibly keep up with all of it.  The interesting thing here is, though, nobody sends, well, I won’t say nobody, but most people don’t send a surrogate out or an attorney out to negotiate a deal for something like this.  They do it themselves.  And so it is interesting when to do it face to face; when to do it yourself; when to send somebody else out.

ELLEN SMITH:  Absolutely.  Look, I’m married to a guy who’s a certified mechanic.  I’m never buying a car myself for the rest of my life.  I’m not.  I have no desire to walk into a dealer.  I negotiate every second of every day, whether I think about it as a negotiation or not.  I have no desire to negotiate for my vehicle.  My husband, on the other hand, is like the car whisperer.  And – seriously.  And he really does know more about a car than probably most of the salesmen on the staff.  But he also is walking in with that knowledge that he doesn’t care.  We don’t have to have a car.  Right?  So that’s one of the things about that negotiation.  You have to know when you’re walking in, do you have to walk out with a car that day or not?

BILL YATES:  And that brings me to another point that I’m interested to bat around the table here, which is motivation.  And for me, what I’ve found many times is the thing that I find out, either in the negotiation or after, is, okay, the person that I’m negotiating with actually had a point of fear.  There was something that, forget all the acronyms, it was just something that they said, “This cannot happen.  If this is the result of the negotiation, then I’m toast.”  And for me, it’s a challenge for me to try to find out, okay, first, to know thyself.  What is my fear?  What’s the worst-case scenario for me?  But then how do I get that level of trust with the person I’m negotiating with so I can find out, what’s really going to stink for you?

ELLEN SMITH:  Sure.  Well, and so to your point, Andy, it’s how does that person feel when they left the dealership; right?

ANDY CROWE:  Right.

ELLEN SMITH:  They think they’ve made the best deal, and no one else has gotten that deal.

ANDY CROWE:  And will ever get that deal again.

ELLEN SMITH:  And will ever get that deal again.  I think that falls along the same line; right?  Part of it is an emotion.  But part of it is really understanding that what you think the other person wants might not be what they want.  That there are third-party factors.  There are any number of other factors that can come into play, whether it’s a project experience that that client had on the East Coast versus the West Coast, that they had a horrible experience 20 years ago on some very nuanced portion of a project that you have no idea about.  Right?  Google, all of those things help you know your customer and other side much better now.  The question is, when do you say that?

BILL YATES:  Right.

ELLEN SMITH:  Do you come out and say, look, the worst-case scenario for me is X, and tell me what your worst-case scenario is?

ANDY CROWE:  Yeah.  And we have a saying that we probably repeat every other podcast, which is nobody is at their best when they’re relating out of fear.

ELLEN SMITH:  Right.

ANDY CROWE:  And nobody’s at their best when they’re negotiating from a position of fear and terror.  So it’s interesting as you talk because here’s what’s going through my mind.  I don’t typically like to send lawyers in to negotiate.  Now, what we do, we have to use attorneys just like everybody else from time to time to go over agreements.  And what we’ll do is we’ll get it down to the point of, okay, you put the word “reasonable” in here, and we need to sharpen that a little bit and talk about what’s reasonable.  And we need to talk about, you know, some paragraph here that we don’t like.  We’ll get the attorneys to hammer that stuff out.  But with great deference and respect to your profession, attorneys, sometimes you’re at cross-purposes.

ELLEN SMITH:  Sure.

ANDY CROWE:  Because we regularly have to call our attorney, whom we love, and say, hey, we want this deal to go through.

ELLEN SMITH:  Right.

ANDY CROWE:  Because attorneys are compensated when there’s conflict.

ELLEN SMITH:  Yes and no.  So I have been practicing for 16 years.  I started as a litigation associate.  Look, I went to law school because I argue, and I argue well.  And, you know, and I enjoy it.  I’m good at it.  At the same time, what I discovered is that, look, I’d rather make people happy.  In litigation, true litigators love what they do.  They love the fight.  They love the thought process.  They really do.  I have some partners…

ANDY CROWE:  They’re predators.

ELLEN SMITH:  They are.  And, yes, they get compensated for the fight.  I say I’ve gone from the dark side to the light side.  I still litigate for clients that I like or issues that I think are interesting, or to really win because, let’s face it, I like to win when I’m right.  And that’s one thing.  But really my job is to get a deal done.  My job is to make sure that my client has gotten the deal that they want with the least risk possible.  And that risk can be a business risk.  That risk can be a legal risk.  You know, I’m a counselor more so than a litigator.  And that is where the negotiation comes in.

BILL YATES:  Ellen, you and I are friends, and I know you’ve got emotions just like a normal human, even though you are an attorney.  So give us advice…

ELLEN SMITH:  It might be heightened because of that.

BILL YATES:  That’s right.  Give us advice as project managers.  There are times that we’re involved in negotiations, and things get heated.  We have differences of opinion.  And we get really ticked off at the other party.

ELLEN SMITH:  Absolutely.

BILL YATES:  So how – what advice do you have for us to – how do we get that under control?  What are some tips, techniques that we can use to get over it?

ELLEN SMITH:  To manage that?  You know, I think, look, you have to know when to walk out of the room; right?  So if you’re in that face-to-face meeting, you have to know when to say, “Guys, respect where you’re coming from.  We obviously disagree, and we need to leave.”  I was just in a meeting three or four weeks ago, government sort of side of things, that was going to stop my client’s business entirely in this particular jurisdiction.  Not just stop it, make them take down things they had built.

And we got there to the meeting.  One side is sitting on one side of the eight-person table.  One side is sitting on the other side.  By the way, if you talk about physical space, is that the right way to set up the room?  No.  And we would have been much better off had the city agreed to meet us onsite to really see the physical impact of what my client had built with a building permit that the city had issued.  But we were there to try to resolve the matter.  That was what we went into the room with.  The city was not so much there to try and resolve the matter, but to stop my client.

And about three minutes in we said – it was clear that the city attorney had this feeling.  And I said, “Look, we’re not looking to waste everybody’s time.  If your answer is there’s no solution, and there’s no creative approach that we can all come to, we don’t want to waste your time.  We’ll get up and leave.”  I have said that maybe three times in 16 years.  But knowing when to leave and managing that emotion I think is a key thing.  Sometimes you get to the point, right, where the emotion is going to take over the negotiation.  You’re much better off just leaving, taking a step back.

Sometimes that emotion, though, I think can be good, I think can impress upon the other side that you’re serious; that where you’re coming from is a place where you really feel strongly about whatever the issue is; and that they should listen to you.  So I think emotion can be used both ways.  I think it’s got to be strategic, though.  And you have to recognize, look, principles are expensive, and emotion can cost.  So know when to use it and not to.  That’s a hard, hard line.

ANDY CROWE:  That’s a great quote:  Principles are expensive, and emotion can cost.  I like that.

ELLEN SMITH:  It is.  I mean, I have clients who call me all the time, you know, can they do this?  Can someone do this?  Anybody with a hundred bucks can sue you.  For me, by the way, it’s free.  I can sue anybody I want to.  That’s what I went to law school for.  So that said, that is not the goal, at the end of the day, for most people; right?

ANDY CROWE:  It’s a blunt instrument.

ELLEN SMITH:  Right.

ANDY CROWE:  Litigation’s a blunt instrument.

ELLEN SMITH:  It is.  But, look, I think it all goes back to know where you’re coming from, know what you want, know the cards that you can play, and know when to play them, whether it’s out of emotion or not.

NICK WALKER:  And hopefully there will be areas where both parties are flexible.  And it’s obviously important to know what those are.

ELLEN SMITH:  It is.  And it sort of goes back, Bill, to your question about fear.  How do you understand the fear that you have and that the other side has?

BILL YATES:  Right, right.

ELLEN SMITH:  And how do you deal with it?  I think you’ve got to be flexible enough at some point to say, “What are you worried about?” to the other side.  “I’m not understanding.  Here’s what I hear you telling me.”  Right?  You can mirror some of their comments back.  You can mirror their body language.  If they’re angry and sitting at the table with both fists out, get both fists out and do the same thing.  But I think it’s fair at some point in the discussion to take an active listening role and to say, “What are you worried about?  Tell me your worst consequence.”  Now, they may or may not.  If you’re dealing in good faith, they should.  But I think that’s an important thing.

ANDY CROWE:  I’ve dealt with people before, and I’ve worked with people before, who have a style of negotiation that I refer to as “loss unacceptable.”  And they simply can’t come out on any losing side on any point.  They have to win comprehensively, kind of an Alexander the Great type conquest of land.  And that can get you in a lot of trouble.  It goes back to your point that principles are expensive.

ELLEN SMITH:  Right.

BILL YATES:  There’s another thing I’m thinking about, too, with this, Ellen, which is many times the negotiation, when we’re all sitting around that table, whether it’s round or square, there are several parties involved.  And I may have a key – maybe there’s someone, a counterpart on the other side of this that I feel like I’ve got the best connection with.  And I’ll try to have a meeting with that person, face to face, off-site, where it’s not – he or she’s not worried about people seeing, oh, he’s over there fraternizing with the enemy kind of thing.  We’re able to have a conversation, off the record, before we’re on the record.  And then I can ask those questions and try to get to what is your point of fear?  What’s going to make you look good?  What’s going to make you look bad?  Before we’re all around the table.

ELLEN SMITH:  Absolutely.  I think that kind of face-to-face one-on-one can happen both before and after.

BILL YATES:  Right.

ELLEN SMITH:  Right?  So we’re talking about preparation.  That can happen before.  I think that, after you’ve left the table, you didn’t resolve everything.  You might have resolved five of the points, but there are still two big ones that you’ve left on the table.  I think that it’s a follow-up with that same person.

BILL YATES:  Right.

ELLEN SMITH:  Or someone else in the room you’ve noticed has struck a relationship.  This engineer has got a relationship with this engineer.  And they agree that there’s a technical solution to whatever the issue is.  Let them with that expertise go for it.  Let them figure out that solution and work it into the project that way.  I think you have to support your team.  It’s a hard thing to do.

BILL YATES:  Right.

ELLEN SMITH:  But I also think you have to make the client happy, to the point about the pyramids.  It’s a pointy, pointy predicament to be in, for sure.

NICK WALKER:  And at some point you have to really take a close look at your cards.  You have to determine, okay, am I still in the position that I thought I was in?  Am I in a position of weakness, or am I in a position of strength now?  How do you determine that?

ELLEN SMITH:  Right.  I think, so after you have that meeting, I think it’s that you go back, right, you look back at your checklist, whatever it was that you started the game with, and  you say, I’ve gotten five of the 10 things.  Is that enough?  Did I win?  Did I make them feel like they won?  Do you think they got more of their items completed?  Maybe so.  At the end of the day I think it’s about credibility.  It’s about trust, establishing those things, and treating people with respect.  You never know when they’re going to run your way again.

BILL YATES:  Yeah.  To that end, Ellen, what are some tips with that?  Or maybe you’ve had an experience where, man, we just went through a really rough negotiation.  Now, I know I’m going to be doing business with this person in the next six months again.  We’re going to be around the table again.  So how do I recover that?  Or how do I walk away so that we can be partners in the future?

ELLEN SMITH:  It’s tough.  And I’ll tell you, I just had this.  I had a team conference call a few months ago.  I had let one of the team members have it unmercifully.  And it was truly terrible.  I had not met this person in person.  This was on a conference call.  And about two weeks later, where we still haven’t resolved things, and I have just yelled myself to death, I’m at a dinner party.  There are 20 people in the room.

BILL YATES:  Oh, I know what’s coming.

ELLEN SMITH:  And we’re sitting around the tables, three tables.  And I’m at one table, and we have to go around and introduce ourselves.  And the person who goes right before me is sitting at another table.  And he stands up and introduces himself, and it’s the guy that I have just unmercifully just let him have it.

NICK WALKER:  Oh, my.

ELLEN SMITH:  To a team, with the client on the call, I mean, it was the full project management team.  And, you know, there’s no graceful way to say, oh, yes, I’m that person.  Hi, nice to meet you.  But I did.  I just called it out as, “Okay, so I’m Ellen Smith.  I’m an attorney at Holt Ney.  And, hi, John Doe.  It’s so nice to meet you in person.  We are working on this project together that is a huge project.  We’re super excited about it.  And this is so great that we’re able to be at this dinner together.  Thank you so much.”

BILL YATES:  Nice spin.

ELLEN SMITH:  As I turned to my colleagues at the table and said, sort of mouthed, “He hates me.”  But, you know, look.  I am going to work on other projects with this person.  After that we chatted and, I think, mended things a little bit.  But still, you should know who’s in the room, always, for sure.

ANDY CROWE:  There’s a scene in a rather artsy movie called “Dumb and Dumber.”

ELLEN SMITH:  Yes.

ANDY CROWE:  Where Jim Carrey…

ELLEN SMITH:  I know it well.

ANDY CROWE:  …manages to – he’s fighting another gentleman in a restaurant, and he rips the guy’s heart out, puts it in a doggie bag, folds it up, and then kindly hands it back to the guy.

ELLEN SMITH:  Yes.

ANDY CROWE:  So there is this idea here that, yeah, you need to make amends once it’s all over.

ELLEN SMITH:  You do.  And I’m still working on that.  It’s the art of being graceful, I think.  And, you know, look.  There are two things.  I think you have to know, in a negotiation, when it’s done.

BILL YATES:  Right.

ELLEN SMITH:  Also, you want to win.  You want to get all of those things.  You will not win all of them.  So at some point it’s knowing when to say, “I’m done, thank you,” gracefully.  “Look forward to the next project, but we can’t go further.”  And that’s a hard thing.  But separate topic for another day, probably.

ANDY CROWE:  It is to me.  I tend to stick with things longer than I should, and tend to keep trying and keep trying and keep trying to make something work.

ELLEN SMITH:  I think it’s human nature; right?  But at some point you’re doing more damage than good by continuing.

NICK WALKER:  So bottom line, you really need to treat people with respect through the negotiation process and even at the bitter end.

ELLEN SMITH:  I think so, without question.

NICK WALKER:  So are there any other tips you would give us, if the negotiation fails, or if it’s not going where you want it to go?  Last resort?

ELLEN SMITH:  Call your lawyer.

NICK WALKER:  Ellen, thank you so much for joining us.  Thanks for being with us and giving us and our listeners the benefit of your experience.  As a token of our appreciation, we have a special gift for all our guests.  That Manage This mug sitting there in front of you is yours to keep.

ELLEN SMITH:  Fantastic.

NICK WALKER:  And we just appreciate that.  You know, we get the benefit of your experience.  You get a mug.  Talk about win-win.

ELLEN SMITH:  Absolutely.  I think a successful negotiation all around.

NICK WALKER:  Ellen, thank you again.  Andy Crowe, Bill Yates, as always, thank you for sharing your expertise.  It’s probably a good time to remind our listeners that, if you are certified as a project manager, you can earn PDUs just by listening to this episode or any episode of the Manage This podcast.  Hey, how cool is that?  Earn PDUs during your commute, cutting the grass, working out at the gym, .5 PDUs for each podcast.

That’s it for us here on Manage This.  We hope you’ll tune back in on September 20th for our next podcast.  In the meantime, you can visit us at Velociteach.com/managethis to subscribe to this podcast, to see a transcript of the show, or to contact us.  And tweet us at @manage_this if you have a quick comment for us or a question for our experts about project management certifications.  We’d love to hear from you.  That’s it for this episode.  Talk to you again soon.  In the meantime, keep calm and Manage This.

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