Professional negotiation advice.
Thanks for the great discussion about the first column, focused on the willingness to try. We received a particularly interesting response that lays the foundation for successful supplier/internal negotiations:
“I find it challenging to negotiate internally with key departments and exec board members. Their focus is often purely on their specific areas. Second, they can be divided in relation to what area should have priority and can have power battles. If their focus has that bias towards their specific business area, this may be to the neglect or detriment of procurement, which could get ignored and not properly invested in.” G in the UK.
Each person on the decision committee may have a different priority and system for weighting options. Making internal negotiations successful involves building strong relationships with decision committee members. There is a payoff – if only that you are seen as more than the ‘price police’. Find out what people want to accomplish and do some detective work within your organisation – do their actions and history support their words? Ask what trade-offs they’d agree to. Is delivery schedule or functionality more important – and negotiate what you can, or at least influence them. Embrace the facilitator’s role and gather everyone together to share ideas collectively. Focus on priorities where there is some commonality, but not complete agreement. Often, discussing things in public will sway anyone on the fence. Leave the priorities people can’t agree on. A little time, or new information, might help. Capture agreed-to priorities in documents and include what’s appropriate in the RFP document you’ll be sending to the suppliers, as well as the proposal grading tool you’ll be using internally.
If someone on the decision committee is still reluctant to work with procurement, it may be time to have a direct conversation with them. Find out why there’s conflict from their perspective. Beginning with “help me to understand”, leaves you the option of intensifying if necessary. If you’ve got the team working together nicely, equip yourself for the commercial engagement by understanding the optimal outcomes, related deal points and what the decision committee is willing to give to get. Decide what roles each person is going to play in negotiations with the solution providers. People must understand it’s critical they play their role, nothing more, and continue to communicate often internally.
I can’t stress enough the importance of getting the internal team on the same page early, either through understanding or internal negotiations, to supplier selection and ultimately productive, efficient negotiations.
☛ If you have any topics you would like covered, or specific deals you would like him to review, please email editorial@cpoagenda.com
☛ Mike Inman works as a professional negotiation instructor and advisor with TableForce. Previously, he was a head of global procurement for MGM Resorts International and IAC/InterActiveCorp.
