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Negotiation is one of the key skills needed by Project Managers (as indeed is the skill of carrying a laptop computer around all day to perch on a convenient ledge – see picture).

An article in Psychological Science offers the latest research and some good advice that we can use in our negotiations.

Psychologist Adam Galinsky from the Kellogg School of Management at Northwestern University of Illinois and his colleagues examined two related approaches to understanding one’s opponent in negotiations: perspective-taking and empathy. Perspective-taking is described as the cognitive power to consider issues from somebody else’s viewpoint (also known as ‘re-framing’), whereas empathy is the power to connect emotionally with people.

They conducted a series of experiments to test whether perspective-taking or empathy was the more useful technique, by enlisting the help of MBA students. The researchers first performed personality tests to assess the whether the students were more likely to be capable of perspective-taking, or having the ability to act with empathy.

Next they asked the students to play the part of buyer and seller to reach a deal in the buying and selling of a petrol station (or ‘gas station’). The twist is that the buyer’s maximum price was set below the seller’s reserve price, so the only way to get a deal would be to understand and investigate other options. The creative deal involved understanding that the seller needed the money to finance a sailing trip but would need a job on his return, whilst the buyer needed staff to run the petrol station.

Students who were ranked as ‘perspective-taking’ were more likely to successfully reach a deal. In contrast, higher scores on empathy tended to result in being less successful at reaching a creative deal.

Negotiators give themselves an advantage by thinking about what is motivating the other party, by getting inside their head” Galinsky said. “Perspective-taking gives you insights into how to structure a deal that can benefit both parties. But unfortunately in negotiations, empathising makes you more concerned about making the other party happy, which can sometimes come at your own expense.

Luckily, we do have some tips on re-framing from the field of Neuro Linguistic Programming (NLP).

Reframing describes changing the context or representation of a problem. For example if you are lying in bed and hear the bedroom door open, your reaction depends upon the frame of reference; are you expecting the kids to wander in, or could it be a burglar? Is that gunman a ‘terrorist’ or ‘freedom fighter’? Once you understand that everyone might have a different understanding of the same event, then you can take steps to increase your awareness and ability to take a perspective.

So if you want to succeed with project negotiations, we suggest you don’t get emotionally involved with your opponent as this leads to a worse outcome.

I’ve noticed that people – myself included – can behave in ways that sometimes appear to be ‘irrational’ or unpredictable. It seems that our personal biases and expectations can influence our decisions, with self-justification getting in the way of clear thinking.

To help all Project Managers, here are some of the strange behaviours you might see during the course of any project endeavour. Knowing about these effects will help us to understand and manage the expectations of our project stakeholders:

* The Endowment Effect

People attach a higher value to things they own. This leads to trouble in project contract negotiations, when the negotiator will try to hold on to things that are already agreed, even though there may be better options available.

* Confirmation Bias

People will search for or interpret information in a way that confirms their preconceptions. Don’t expect to be able to change someone’s mind easily, as they will ignore your carefully presented evidence if it falls outside their own biases.

* The Bandwagon Effect

Doing things because others do them. Ever been waiting to cross the road at a ‘red’ pedestrian crossing and then seen 5 other people stride into the road? Seeing other people taking action seems to give us permission to join them, so we irresistibly cross the road with them instead of waiting for the ‘green’ light.

* Framing Problems

Presenting the same data in different ways leads people to make different conclusions. We also assume other people see things the same way as ourselves.

Having some knowledge of human behaviour can help us to use the most appropriate communication strategy, tools and techniques.

We seem to hear a lot about ‘success’ and ‘failure’ of projects and Project Management. I find this to be a very interesting subject, as it relates to the effectiveness of project management training.

I recently received a summary of the Standish Group’s report, “CHAOS Summary 2009″. Here’s what they say:

This year’s results show a marked decrease in project success rates, with 32% of all projects succeeding, 44% were challenged (late, over budget, and/or with less than the required features and functions) and 24% failed (canceled prior to completion or delivery and never used)

Standish defines ‘success’ like this:

Projects success means delivering on time, on budget, with required features and functions

But is this really a full definition of ‘success’? An interesting study by Dr. J. Rodney Turner and Ralf Muller in their book “Choosing Appropriate Project Managers” has a much more detailed definition of success:

• Meeting the project’s overall performance (functionality, budget, and timing)
• Meeting user requirements
• Meeting the project’s purpose
• Client satisfaction with the project results
• Re-occurring business with the client
• End-user satisfaction with the project’s product or service
• Supplier’s satisfaction
• Project team’s satisfaction
• Other stakeholder’s satisfaction
• Meeting the respondent’s self-defined success factor

If we use this broader definition of ‘success’, then there are many implications for us as project managers. For example, are you measuring end-user satisfaction? Or supplier satisfaction? Did you even bother to ask other stakeholders about their definition of success?

Experienced Project managers use Project Stakeholder Management to better understand the success criteria of all project stakeholders, and this enables them to take action to make their projects successful, beyond the simple time/cost/scope definitions that we normally use.