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VIGNETTES
Our example project consists of a technology transfer from another company of a capsule process requiring equipment retrofits at one site and new process modules at a second site. The perspective we consider is that of the manufacturer. Our Capital Governance Committee (CGC) assigns me as the team leader.
1. Conflict between the technology transferor and recipient.
Which of several processes will be transferred? The transferor has, with the growth in demand over the course of time, built several different manufacturing modules with increasing levels of automation, sophistication, and capacity. They tell us it’s our responsibility to choose whatever process we want to adopt. We say no, it’s their responsibility to select the process they are transferring. As the commercial contract is non specific, conflict ensues. How do I approach the issues raised?
I want to spell out the issues, interests and needs that my company has as a means of opening negotiations. I may say:
“My issue with choosing a process is we lack manufacturing experience with your product. We don’t have the background information you possess. My interest is in ensuring we manufacture this product reproducibly to meet your specifications. In order to do that I need for you to settle on a process you want us to use which you feel confident can be demonstrated and you will continue to support over the life of the agreement.”
We’re focused on issues, interests, and needs. We do not attack their position, we stay in the present, focus on the future, and make known our specific need including benefits they will derive from making the selection.
2. Conflict between project team and operations. Manufacturing needs to continue using the formulation area during our project to dispense USP water. When dispensing USP water we can’t be in the area burning-in process pipe or conducting any other particle producing activity. Our construction schedule is being impacted by operations use of the space.
I know production requirements will take precedence. The biggest issue is to assess what the impact on my project will be and I realize I have to get the right people into the same room with the “authority” to get to a decision.
In my first meeting with operations I made a mistake. I did not invite production planning. I do not repeat my mistake. PP pointed out manufacturing operations y could schedule production runs involving Purified Water in campaigns. It would take a bit of shuffling of other product schedules but campaigns were a planning option which provided predictability about space availability. We reached agreement to proceed. From then on we scheduled welding activities around operations campaigns.
3. In an e-mail a site manager criticizes me for failing to personally notify her that I planned to, and obtained approval from CGC, for pellets for the capsules to be made at only one site and shipped to her site for processing. From our teams perspective we were avoiding a significant capital investment.
I made an error in judgment in not speaking personally with the site manager!
I respond with an apology. I notify my boss in a cry for help. I collect the information I need to understand how this happened. I review the process which used to make this decision, how it was communicated, and determine how the site manager was left out of the loop.
I do not respond impulsively. I prepare. I investigate. I review with my peers. I talk the issue over with my boss who tells me he will talk to his boss for a peer to peer discussion. I inquire whether a meeting with the site manager is appropriate and when agreed upon I repeat my apology. I’m told, the apology is accepted. I acknowledge my accountability for the failure. Life goes on.
There are many discussions about the power of apologies in negotiations. If I had not cried for help and tried to handle the issue directly with the site manager, who knows, unfavorable comments on my performance in my next evaluation could ensue.
4. The site demands compensation for a failed piece of equipment they feel the project team damaged. The project denies responsibility. Investigations, including site safety, cannot come up with a conclusion about responsibility.
Even though I feel I have a strong position and a strong urge to negotiate from a positional standpoint, insisting my team did not damage the equipment, I decide to conduct interest based negotiations. We do not assume we win while site maintenance loses. The goal of interest based negotiation is to find a solution that is mutually satisfactory because our interests intersect. What kind of interest is there? Certainly there is a substantive interest involved here, the cost of repair. However, I do not limit myself to just the money. I consider procedural interests. I want each of us to speak our minds about cause, allocation of responsibility, and resolution with an orderly approach, with negotiations conducted within a reasonable amount of time, and where we avoid personal or derogatory attacks. Finally, I take into account psychological interests like respect, not forgetting the maintenance area must approve my turnover package before my project is closed. Oops, that last statement might not be an interest you would include in your considerations. In an issue like this one I want to include the appropriate levels of management to close the issue.
5. One of my team members is so upset about an e-mail I wrote he confronts me in a team meeting. I become defensive and he calls me a liar.
Wow, was it embarrassing! Even though his accusation contains some truth it still does not excuse the behavior. I want to understand what I could have done differently during the confrontation.
When confronted in this way and there is truth to what is being asserted try this[iv]:
Admit to the mistake
State briefly what I’ve learned from this experience
State what I’ll do differently in the future.
If however, the accusation is not true it may pay just to say “thank you for expressing your views”. Just show appreciation. Move on.
6. Mid project, my boss gives me an evaluation I do not agree with. The evaluation is already signed by his boss.
When confronted with an adverse result are you the type who fights or flies? What would you do? Here is what to avoid.
Avoid using the following statements unless they are absolutely true. “We had no control in our department”. “Upper management made those decisions”. “Vendors forced us into those decisions”. “Those policies are set by Financial”. “If it were my decision, I would have handled things differently”. I wasn’t given a say in the matter”. “The team decided, not just me”. Why? You’ll suffer a credibility gap as a “shirker”. [v]
It is natural to be angry. I must not fear rocking the boat even in this important relationship. I know I can’t force a change in my evaluation. However, I can state my position, recognize my choices, and make responsible decisions. I prepare for a meeting with my boss to be articulate and absolutely clear why I don’t believe I deserve the negative evaluation. I listen carefully to his response. I want to know what problems caused the evaluation to suffer. I also want to ascertain whether my points about why the evaluation is unfair are considered or not. Overall, does it add up to the evaluation provided? If not, I will ask precise questions and make clear statements to expose our differences. If I still disagree I will restate my position.
The knowledge I gain gives me strength to more objectively look at my options beyond a written statement of disagreement and my signature. These options may range from meeting with my bosses boss to looking for a new job. Equally important, but of a different interest, I want to know what it is I have to accomplish in order to get a higher evaluation. I want my boss to know I am striving to get there.
7. At a supplier, several of my modules are running late, pointing to potential project delay, which triggers a need to advise CGC. The vendor’s project manager asserts the problem lies with the number of people from my project team involved in issuing change orders, instructions, asking questions. My team members tell me the vendor’s project manager is not following-through on their requests.
In looking to problem solve are we going to look for the one right recommendation to present to CGC? Before I make such a decision I asked a CGC member how they feel when a team asks for a decision providing only the solution without a hint what else was considered? He replies, CGC wants to know options and alternatives considered?
In negotiations we often need time to study options, develop alternatives and decide on a recommendation which adds the most value to our project. Time has been lost, costs incurred, we are where we are.
An example of an option (requiring study) might be to gain an understanding of the reason behind vendors delay. Procurement conducts an audit. They discover vendors parts order system is incapable of handling the load to keep on schedule. With this problem identified I know steps have to be taken to address this issue as it will come up again with later modules.
After the study, we develop alternatives (option ready for the making of a decision)
- Ask the vendor to hire additional support.
- Engage our procurement department to aid the vendor in identifying additional parts suppliers to more quickly supply parts needed
- Assign a team member to the vendors site during the critical period
- Streamline communications with the vendor by establishing a point person through whom all change requests are handled during the critical period
Having identified a set of alternatives we selected alternatives 2 and 4 as our priority recommendations which were presented to and accepted by CGC. We present all four and CGC asks us to implement all four alternatives. They also send a senior executive to talk to the supplier’s management.
8. One of the validation report reviewers keeps rejecting qualification documentation to the point my team members are in open revolt.
The level of documentation was already high. The delays and retesting are starting to materially impact the project. I need to re-establish a collaborative environment between the preparer’s and the reviewers. I, or a third party, have to intercede in what has become a dispute. What is, and what types of intercession are there? Why do it?
An intercession introduces a third person into a dispute where people directly involved are not capable of resolving the issue. In a corporate setting, an interceder could, for example, be CGC, or senior functional area managers or the project leader, a mediator, or facilitator.
I already discussed the situation with senior functional managers. They sympathize, but they are reluctant to get involved and defer the issue to me for resolution. When I call the involved personnel are they going to view me as objective? What is my role going to be, decision maker, mediator, facilitator? What are some of the differences? When do we choose a particular role?
Decision Maker. As we are in the execution stage there is a strong tendency to act as decision maker. After hearing a presentation of the issues and the facts a decision maker renders a decision where one side wins and the other loses. During execution decision making is a critical skill a project manager must have. But in this case there is a question of authority to be directive.
Mediator. A mediator, commonly referred to as a neutral, has a role to assist preparers and reviewers in the conduct of negotiations. There is a level of proactive involvement in decision making but only as it helps in identifying common ground for mutual understanding and agreement by the people in dispute. Acceptance of oObjectivity and “neutrality” by the opponents with skills in this area make mediation appropriate.
Facilitator. A facilitator is also a “neutral” who has to be accepted by both the preparers and reviewers as such. However the facilitator is purely process oriented in helping the preparers and reviewers work together more effectively.
I assess issues. For example, do I have the authority to make a decision for both preparers and reviewers? Probably not. Can I be accepted as a neutral or do I have to bring in someone else? Do I need to bring in others, to balance out the concerns of the reviewers and approvers? Depends on the seriousness of the issues. Perhaps there is a need to create a focused environment by which to resolve issues, set an agenda, and work through it, drawing in the disputants to problem solve? Facilitate. Facilitation is not simple. Check whether the company has trained facilitators.
9. Two of my engineers are openly hostile to each other to the point they will not interact. The two engineers are deadlocked in intractable positions. Their dispute could be about a single issue or differences might have been developing over a long period of time. What approach can be useful to deal with intractable interpersonal disputes?
I decide I want them to move from the intractable, no way, to a “maybe” or “yes”. My first task is, defuse the dispute. Get both talking to me so I can determine how each party sees the situation without my intercession appearing as a prelude to “surrender”. I seek to create a safe environment in which we can identify common interests and where possible, to turn accusatory or attack statements into neutral statements of feelings allowing the focus to shift to problems that need to be solved. Assume in this case, both have a regulatory background, but now, one holds on to views overtaken by policies and time. I might try and defuse the dispute in the following manner:
“Realizing both of you have a regulatory background you share an understanding of the importance of compliance. You differ in your views. The problem we need to resolve is how to reconcile the differences which come up in this project in a way which is consistent with today’s policies, your respective responsibilities, and in the best interests of the project. “
In this statement I have acknowledged a common interest, regulatory compliance. I have stated the problem to be resolved, difference in views. I have provided determinable criteria to be utilized for resolution, current policies. I’m sure you can differentiate this approach from the more directive “you must stop this unacceptable behavior or else”.
10. I disagree with my process module provider about charges they list as “change requests” wherein my teams view is “changes” requested are correction of “misses” by the vendor. It’s about the money. Hard ball negotiations, What does that amount to?
In negotiations over money, or in some quarters, experts advise, over anything, never accept the first offer or demand. The idea is to get conflicting amounts into a common bargaining range for negotiations to be serious. Decision analysis, which includes assessments of outcomes based on probabilities, is well suited to this type of situation. A few facts help. Don’t forget intangibles such as the nature of the relationship, future business, and the difference in business orientations between corporation and vendors. The corporation is trying to minimize costs while the vendor is trying to maximize profit.
The more negotiations are about dollars the quicker I should get the dollar demands on the table. In mediating cases involving money I don’t know how much time I’ve spent talking about issues, interests, and needs other than money. The disputing parties often talk as if they are near agreement until they finally reveal and compare the dollars being asked for or offered and the negotiation falls apart! If it’s about the money, deal with it.
11. It’s time for start-up. The site disagrees and continues to demand more. I need to cut-off capital funding or over spend the budget. I believe CGC will refuse any further requests for capital. Besides, how much is enough?
I have to say No. William Ury, calls it the “most powerful and needed word in the language”. [vi] However, he also cautions that if used incorrectly it is the “most destructive”. NO deserves a few words and an example. In context to our project it follows:
I know what I need to do. It is, close the project. My interests in saying No distilled to the project scope of work has been completed. I do not disagree the requests are work needed by the site, I no longer have the resources on the team to fulfill these requests. Finally, I have a “contract’ with CGC on schedule and dollars. In order to fulfill the sites requests I need to declare a contract break and ask for additional dollars and time. If this is what I need to do then the site areas asking for the additional items are going to have to provide the justification. I conclude I can fully support my assertion. In my NO I give the other side opportunities to say Yes.
The work requests being made are not punch list requests which the remaining team members and contractors can support. The site needs to complete the transition from project capital to site capital or expense for the remaining items.
Here’s my interpretation of the way I structure my NO using Ury’s approach.
“I agree the requests you have, need to get done. I respect that. In my judgment they should not be done by this team as the scope of work called for in the project, including punch list items have been completed. I can however, commit, to assisting you in putting together a dollar estimate for the work called for in these requests. If you feel strongly that the requests are within the scope of work we’ll have to take this to CGC as a contract break because we’ll need additional time and dollars. I do not feel they will support such a request. However, I realize and respect the sites ability to require us to do so.”
I have structured my NO to give the site the opportunity for reaching several Yes. They can agree with my judgments. Alternatively they can say Yes to my offer for help in estimating and if they feel strongly that additional time and dollars are warranted I will prepare to, and, go to CGC. Going to CGC is what Ury calls a Plan B. Always have a Plan B.
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