F. M. "Mike" Babineaux, C.P.M., A.P.P.
F. M. "Mike" Babineaux, C.P.M., A.P.P., Senior Business Specialist, Strategic Sourcing and Supply, FedEx, P.O. Box 727, Memphis, TN 38194, 901/224-4988, www.fedex.com.
Abstract. With the move to selecting fewer suppliers and longer term agreements, the purchasing practitioner is having to learn how to negotiate without one of the traditional purchasing levers: competition. This new negotiating position is very much like negotiating with colleagues and spouses. You have very little, if any, leverage. So, by learning how to strike better deals with their colleagues, the practitioner will also learn how to better deal with their spouses and selected source suppliers.
Objectives. This presentation's overall objective is to provide you with a practical understanding of what brings about a successful conclusion to a negotiation with a colleague. By the end of this reading you'll have a framework which will enable you to:
Four Facts Of Negotiating Life. As with other things, there are some inescapable truths regarding negotiating. Here's four that have proved to be paramount.
Common Mistakes. It's not necessary to belabor these 10 points, but it is well worth considering how easy it is to be guilty of them. In order to heighten your anticipation, the following common mistakes made in negotiation are presented in reverse order from least damaging to most damaging.
10.Failing to end on a positive note:
Example: "Well I'm glad that's over. Now I can . . . " Better to say you are satisfied or pleased with the mutual outcome. That emphasizes cooperation and the action that is often still to follow.
Example: "I really need an answer on this right now" People need time to think over proposals and adjust to compromises. They feel pressured by impatience.
Example: "I see we're not in agreement on this, so let's move on to . . ." Negotiating is about resolving differences or conflicts of interest. If you do not address them, you will not resolve them.
Example: "That's not right. Here's the way . . ." You'll strengthen the other's resolve to maintain their position. Reason and persuasion work much better.
Example: "If this can't be done by . . ., I'll have to talk with your boss." You'll get more cooperation with assertive and positive statements, not with threats.
5.Scoring points for personal satisfaction:
Example: "That's so stupid. Anyone with half a brain could see . . . " Putting the other person down may result in a winning of the battle, but not the war.
Example: "Because I'm a vice-president, that's why." Even relatively minor displays can create resistance.
Example: "That's all well and good, but here's what I want . . ." Successful negotiations requires both parties to keep open minds. Voice tone and body language may suggest a closed mind.
2.Not looking for a win-win result:
Example: "If I can't get . . . there's no deal." Better to use a give-get approach.
Example: "Well I didn't come prepared for that. I guess it'll have to do." Forewarned is forearmed: Prepare, Plan, and Practice.
Negotiating Tactics. Some of the following tactics may be familiar to you, some new. It's important to first understand that sometimes it's not a tactic, but it's a natural response. Even where people recognize it as a tactic, however, it is unlikely that they will have analyzed its use and how best to counter it. Each of the following tactic is given a title, to help you remember it, with an example and comment on the reasoning for its use as well as a counter.
Name - Flinching
Name - Columbo
Name - Appeal to Higher Authority
Name - Trade Off
These are but four of the 1000's of tactics used by colleagues and others in negotiations. Just remember, some times they're not tactics, but are genuine responses to something that's happened during the negotiation.
Good Negotiators. These are the generally accepted "Ten" characteristics of good negotiators.
The ten characteristics listed above are really important contributors to successful negotiators, but it's difficult to identify someone with all these characteristics. Even by observing bad role models you stand to learn something. But before you try to identify someone else's good or bad characteristics, you should first try to understand yourself.
Self Appraisal. A self appraisal can help you to identify your negotiating strengths and weaknesses. Score yourself as honestly as you can (on a scale of 1 - 5, with 5 being the highest) regarding the 10 characteristics of a good negotiator. A score of 10-19 = Poor, 20-29 = Below average, 30-39 = Average. A score of 40 or more indicates you understand negotiating and what you need to bring to it. However, the total score is only one aspect of the exercise. Scores on individual points may show what skills you need to develop. You may also find it valuable to get someone else to do the same appraisal of your skills. They may well highlight different points to work on.
A Six Step Process For Negotiating With Colleagues. The reality of negotiating with colleagues may be that you have very little leverage that you can use. Therefore, you need them to want to help you. You should create an environment that will allow them to justify or rationalize them helping you.
1.Describe Positions - A good way to begin the negotiation process is to describe both parties positions on the issue. It makes little sense to "integrate" positions before you have given enough time to "differentiate" them. The more both parties discuss and agree on the nature of their differences, the more likely they are to negotiate them effectively. For example; A buyer says to an inventory planner, "We have a problem. You and I have been fighting over the size of our orders. It seems to me that I want to order enough products so that we will get lower unit costs, but you want to order less to hold down storage costs. Is that a fair statement?"
2.Offer to Negotiate - Clarify that "negotiate" does not have to mean "compromise." Although a compromise might successfully settle an issue, it may be possible to arrive at solutions that really satisfy both sides. Collaboration could be another way to look at resolution. For example; "Can we collaborate on this matter? I'd like to find a solution that will work for both of us. Are you willing to try to find one?
3.Brainstorming Solutions- Compromises like meeting each other halfway or making a fair exchange should be listed. In addition, creative ideas that integrate the interests of both parties should be attempted. Brainstorming usually works best if the parties take turns expressing ideas. The session should continue until each person sees several solutions on the list with which he or she is willing to work. For example: "Let's take turns coming up with ideas on how we can solve this. Would you like to start, or do you want me to begin?" Another approach is to prepare, in advance, several options, each acceptable to you and then ask the other person for preferences.
4.Evaluate Alternatives - The fourth step is to evaluate the brainstormed solutions. Suggest that each person in turn evaluate the list of solutions. Solutions that are unacceptable for any reason to either person should be eliminated. Jointly develop a criteria. For example: "These questions may help us evaluate potential solutions: Would it really solve the problem? What would be the costs to each party? Can you think of any others?"
5.Pick the Best - The obvious next step is to decide on the best solution. Typically one solution will appear to be much better than the rest, but urge them not to jump in haste to one solution without at least evaluating some of the others.
6.Plan Implementation - The negotiation is not complete until each party takes the time to plan how the solution will be implemented. This last step involves thinking through together the questions of who will do what and when. Urge that a follow-up time be set to evaluate how well the solution is working.
Final Thoughts. Here are some final thoughts, or tips, to lead you to a successful negotiation with your colleagues and others over which you have very little leverage.
As this presentation first stated, with the move to selecting fewer suppliers and longer term agreements, the purchasing practitioner is having to learn how to negotiate without one of the traditional purchasing levers: competition. This new negotiating position is very much like negotiating with colleagues and spouses. You have very little, if any, leverage. So, by learning how to strike better deals with their colleagues, the practitioner will also learn how to better deal with their spouses and selected source suppliers. This presentation's overall objective was to provide you with a practical understanding of what brings about a successful conclusion to a negotiation with a colleague.