2019-2020 Session #3: The Art Of Negotiating

Date: December 6, 2019
Location: 800 Capitol St.
Title: The Art Of Negotiating
Session Sponsors: DLR Group, Skanska
Leaders: Shelby Fischer, Qeturah Williams
Documentation: Kevin Perks, Barak Yaryan
Speakers: Laura Dempsey, David Combs, Tammy Canon

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Introduction

Session 3 focused on the world of contracts and negotiations with an emphasis how to build relationships throughout the process to achieve success for both parties. Prior to the session, scholars were asked to watch a video on Harvard’s “Principles of Negotiation” and review a brief of a character for a role-playing negotiation session. 

Shelby Fischer and Qeturah Williams opened the session with an introduction to common negotiation mistakes featuring Jack Donaghy and how to shape a negotiation based on the goals of the negotiation. The group discussed lessons learned on past negotiations with both successful negotiations and mis-steps.

Sales and Relationship Building

Laura Dempsey of Building Systems Design shared her experience with client negotiations throughout her career. Her central theme was “everybody sells” and that negotiations come up all the time, as seen in scenarios ranging from how much to charge for a service to when the kids will go to bed. Laura gave an overview of the modern history of sales to the scholars with key figures and their well-known books and distilled the essence of each approach. From this, her analysis of sales centered around answering five key questions: 1) who are you? 2) what do you do? 3) why is it important to the client? 4) how much does it cost? 5) how fast is the ROI?

To answer the five key questions, Laura described how understanding the value of relationships is in risk mitigation.  and the importance of understanding the values of the firm, client, team, and yourself. The process for addressing the questions was delivered through the key steps of Discovery, Developing a Relationship Plan, Assembling the team, and Executing the Plan. 

After the presentation Laura led a discussion of real world negotiation challenges and scenarios with the Scholars. The key takeaways were that relationships matter, values are important, boundaries and important, silence is a relationship killer, and finding the Jedi master on your team that can connect with the Jedi Master on your clients’ team is profoundly beneficial for building trust in negotiations.

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Contracts

David Combs of Corgan went into detail with a presentation to the scholars on common Architectural contract negotiation points, and how to mitigate contract risk. David discussed the various owner architect, architect consultant, and owner contractor types of contracts and how these are often modified from the AIA standard contracts in ways that increase the risk for architects. He also described how these contracts interact with each other and the importance of third party obligations which are referenced from the general conditions in the contractor’s agreement.

David described the process of contract negotiation and the difference of Legal versus Business choices in contract negotiation.  Legal items are things that the Architect’s lawyer should review, such as liability, indemnification, insurance, standard of care, dispute resolution, and the specific language of a contract. Business decisions for an architect include fee, hourly rates, scope of services, design schedule, basic service, additional services, and deliverables (the instruments of service).  David discussed the importance of having the architect’s consultants sign the architects contract for legal purposes and that the owner can authorize changes during CA.

David discussed with the scholars how contracts define the initial information from the owner (i.e. the program, site, cost/budget, milestone dates, etc.) and the importance of awareness in when any of these change so that the owner is aware when add services are being asked for. It is important to be clear on add services before proceeding with add services. The scholars engaged in a dialogue with David based on previously encountered contract scenarios and the importance of using contracts. 

The last portion of contract discussion with the scholars discussed what items should be specifically described in contracts for Construction Administrations phase services and in the owner to provide the contractor agreement as well as including the Architect in communications with the General Contractor. Finally, the group discussed the four principals of contract negotiations: 1) separate the person/emotion from the issue 2) negotiate in an interest oriented way 3) develop good criteria that a good solution should fulfill 4) develop several options.

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Negotiation Simulation

In the final component of session three, Tammy Canon led the scholars in a negotiation role playing scenario with scholars playing a city planner and developer in a progressive negotiation based on opposing incentives for each character. Scholars utilized their negotiation skills and techniques learned from the pre-session resources and in session training to reach a “win-win” solution. Tammy moderated the negotiation with increasing complexity for each round of negotiation.

Each scholar participated in the series of negotiations based on their assigned character to reach an agreement meeting their weighted outcome requirements. As each set of negotiators went through the simulated negotiation, the audience of scholars observed the effectiveness of various negotiation techniques. The essential lesson from the exercise was that negotiation requires understanding what is important to the negotiating partner, in addition to understanding what is important to yourself for the negotiation. Through the negotiation simulation, with the help of Tammy Cannon as the moderator, the scholars developed a tangible skill in determining what is important to their negotiating partner, which is a skillset that will make each scholar a better architect, a better businessperson, and a better project partner throughout their careers.

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