Negotiation is a fact of life. We all negotiate every day in our private, business and public lives. Most if not all Procurement personnel will negotiate at some point of their professional lives.
The purpose of this article is to provide a practical “negotiation 101” tips guideline as how to quickly and efficiently develop a “win win” working relationship thru effective negotiation, whereby both parties feel that they have reached a fair and lucrative agreement.
- OUTCOMES- Pre-identify your desired outcomes from the negotiation process and use this as a roadmap during negotiations
- TEAM CONSENSUS-Ensure that any other team members are in agreement with these desired outcomes
- EXPERIENCE– In a negotiation process where other team members are involved, always allow the most experienced negotiator in the team take seniority in the negotiation process. Remember this does not mean the most senior management member in the team!!! However, this approach often proves non- feasible due to deference to seniority, individual personalities and ego’s etc.
- RESEARCH- ALWAYS research the other party that you are intent on negotiating with, and all other pertinent contributing factors. Remember the old military maxim of “good intel is the key to winning the battle!”
- PERSONALITY- ALWAYS analyze the various personalities of the key players to the negotiation process (and yes this would include your own team members!!), and use the outcomes of this analysis to the best effect.
- ROLES- Understand the function and role of each member of your own team, and those of the other party. Remember: the “quite insignificant chap” not involved directly in the negotiation process is most probably an advisor to the primary negotiators. Therefore, it is strategically vital to understand ‘’who’s who in the zoo’’ and to get your points over to them.
- PERIPHERAL– Take into account all peripheral influencing factors such as technical, financial, legal and the weight of individual personalities.
- AUTHORITY- Only involve or engage with those members (both sides of the table) that have the necessary decision-making authority and or value/influence adding ability. This selection is something you need to establish quickly and capitalize on, wherever possible.
- EXPECTATIONS– Try to identify early on what the other party’s (and if in doubt, your own) expectations are in the short, medium and long term, with regards the resultant business relationship. Never feel embarrassed or hesitant about asking questions in this regard! Always take cognizance of all perspectives, objectives and aims.
- SIGNIFICANCE– Ensure that you always understand the significance of what the other party says and means during the negotiation process. Always remember that individuals express their intent differently from one another-it’s called being human!! Also bear in mind cross cultural ambiguity and “lost in translation” issues.
- AFFABILITY- Never come across as “over friendly”. Remember that the other party is most likely also performing a character/personality assessment of you.
- OUTCOMES- Always do your pre-negotiation preparation on what are your desired outcomes. Create an objectives roadmap of what your primary and secondary (negotiable or wish list) objectives are. Never deviate from this objectives roadmap.
- COMPROMISE-Always be fair but without serious compromise to your agenda. Remember that serious compromise and or losing face to the other party can have serious long- term complications to the business relationship. However, as compromise is a general factor of negotiation, be skillful on what constitutes elements that can be compromised, and what is not (as predetermined in your objectives roadmap).
- POSITIVES-Always highlight the positives of doing business with yourself and your company. However, be careful to avoid being condescending or brash.
- NEGATIVES- ALWAYS minimize any negatives that may be associated with doing business with yourself or your firm. There exist many employable strategies, from tactical omissions to “minimized switch backing” as may befit the individual scenario.
- SPECIALISATION- If specialist expertise and input is required, call for it.
- HONOUR-Always remain true to commitments, offers, conditions or promises made.
- TIMEKEEPING-Always remain true to time schedules for meeting made (including telephonic and Skype meetings).
- STALLPOINTS-Always try to keep the negotiation process fluid and mobile, never get “hung up” on a single point that results in a stalling of the process.
- ALTERNATIVES- Always, where possible, offer alternatives, counter offers etc. Try to establish a gutfeel what the other party’s limits are. You do not want to reach stall point!
- BULLYING-Never take a “bulling” or “superior attitude”. This often is the downfall of many negotiators, especially those employed by large corporates or owner negotiators of successful SMME firms-the “we are successful and large, it’s an honor to do business with us” Unfortunately, it comes across as a hallmark of a poor negotiator, unprofessional and as an arrogant character flaw.
- PREPERATION- Always ensure that diligent preparation, research and analysis has been done. It is amazing how many people including senior executives don’t pay serious heed to preparation.
- AMIABILITY- Never put an extremely amiable or affable person in charge of the negotiation process as the other party may well rightly believe that they have the tactical advantage, and exploit it. Always be pleasant within reason, and if you are an amiable personality develop an adequate “negotiator persona”!
- PROFESSIONALISM- Always keep it professional and to the topic of negotiation, and not deviate excessively by discussing irrelevancies such as sport, kids, hobbies or whatever.
- DISRESPECT-Never allow for the possibility of perceived disrespect to arise either at a corporate or personal level. Its fact-we are all human, and have very human interpersonal likes and dislikes. If you feel compromised by inter personal feelings, take appropriate action to remedy. Always be wary of making witty comments as they can be misinterpreted.
- PRESSURE-Never be over keen to rush the negotiations or to be pressured.
- TRUTHFULNESS- Never lie or twist the truth on issues that can be easily verified.
- HIJACKING-Never involve a team member in negotiations who is going to “hijack” the negotiating process from the appointed lead negotiator for whatever reason (usually personality and ego).
- TEMPER- NEVER become” ruffled” or lose your temper.
- CLARITY– Never commit to something that you do not fully understand. This principally includes technical and legal/contractual issues. Seek advice!!
- HOLISTICS– Never concentrate solely on best price vs. profit ratios. Always look at the bigger and deeper picture.
When viewed objectively the above is absolute common sense but many negotiators break all or some of the cardinal rules of professional negotiation all the time.
Should you have any enquiries regarding Procurement Negotiation or any other requirements in Strategic Procurement or Tactical Purchasing, review www.furrutterandassociates.co.za, or contact Karl Furrutter via e-mail at karl@furrutterandassociates.co.za or telephonically on 27 82 393-3685 ,regarding your Procurement needs.