In a major negotiation, procurement needs to deal not only with the supplier representative on the other side of the table but with the internal stakeholder sitting next to you. If that person deviates from the script – as they do so often – then don’t be afraid to kick them in the shins. It’s your job!
This article was originally published on Procurious, based on a roundtable organized by Conti Advanced Business Learning (www.cabl.ch), a Swiss training company that specializes in Negotiation & Influencing training.
Giuseppe Conti introduced the subject by pointing out that in many negotiations, it isn’t enough to negotiate with the suppliers. Usually, there’s a minefield of internal negotiation to get through first.
Don’t enter the maze without a map
Håkan Rubin refers to his company (IKEA) as a “matrix organization”, and therefore sees stakeholder mapping and management as crucial before any sourcing activity. In his role as Supply Chain Operations Leader (Group Sustainability Innovations), Rubin points out that it isn’t always identifying who the key players are internally isn’t always that obvious. “We try to get everyone on board, to make sure that resources are available and that everyone feels they are involved.”
What happens between the meetings is often more important
Paul André, Emerging Products & Commercial Supply Director at JTI, built upon Rubin’s point: “I find that even though you’ve carried out your stakeholder mapping and have a joint meeting with key people involved, a lot of discussions happens outside of that meeting. What happens between the meetings is often more important, where people agree on things in one-to-one discussions.”
Kemira’s Senior VP of Global Sourcing, Thierry Blomet, examined some of the typical resistance that procurement faces from internal stakeholders. “They have restrictive time constraints, heavy specifications, and often want to select suppliers based on past history and how comfortable they are with using them. It’s often challenging for procurement to convince stakeholders that there’s a better option against so much resistance, especially in a conservative industry not willing to take on the adventure of new technology or new suppliers.”
I converted the issue into facts and put both of us in the same boat
Xinjian Carlier (Strategic Sourcing Commodity Manager –Honeywell) shared an example of how she overcame resistance to a request for extra resources to deal with a major issue with significant financial impacts. “The reaction was ‘we don’t have time – I can’t give you the resource.’ I explained that the reason I came to them was that the company including both procurement and engineering would suffer an impact of hundreds of millions in sales. Basically, I converted the issue into facts and put both of us in the same boat. This helped the senior leader in engineering understand, and reprioritize his resources.”
Resolving conflicting objectives
Laurence Pérot, Head of Global Supply Chain & Procurement at Logitech, comments that particularly in larger organizations, it’s procurement’s responsibility (and challenge) to juggle differing objectives and agendas from varied teams. “When you’re dealing with different functions, it sometimes isn’t clear what the company actually wants out of the negotiation. It means we [procurement] are unsure what we’re going to ask for. I had an experience where we had to make the decision on our own about the objectives on behalf of the rest of the community because we couldn’t get alignment between the functions.”
Procter and Gamble’s Global Capability Purchasing Leader, Tamara Taubert, adds that procurement owns the discipline to be able to turn around a complex, multiparty negotiation effectively. “To do that, our stakeholders need to get educated on what a negotiation is, the do’s and don’ts, and their role in the negotiation itself. The procurement representative might be the only person sitting at the table across from the supplier, but there are others involved in the negotiation, whether they like it or not. Procurement can lead by connecting all parties together and help them come to a value agreement.”
Interested in Negotiation?
You may want to join one of Giuseppe’s forthcoming workshops:
- Advanced Negotiation: Overcoming Tough Procurement Challenges, 23-24 January 2019, Geneva, CH: featuring senior guest speakers Alessandro De Luca– CIO – Merck Healthcare, Regina Roos– VP & Sales Segment Leader Mineral and Mining – Schneider Electric, Paul André– Director Reduced Risk Commercial Supply– JTI, and Thierry Blomet Senior VP, Global Sourcing and Procurement – Kemira.
- Webinar: Managing Internal & External Negotiations, 1 February, 2019.
- Masterclass: Influence and Persuasion with Oxford Academic Director Owen Darbishire, 26-27 June, 2019, Geneva, CH
- Masterclass: Strategic Negotiations with Harvard Prof. Francesca Gino, 19-20 November, 2019, Geneva, CH
- For other information on Conti Advanced Business Learning intensive workshops, visit http://bit.ly/CABLevents
Staying in control
Thierry Blomet, Senior VP of Global Sourcing and Procurement at Kemira, has found that engineers are generally happy to be guided by procurement as they’re often less experienced in negotiations and sourcing events. But when senior business stakeholders step in, it’s often more challenging for procurement to keep control of the process. “Business stakeholders are more likely to say that they know how the negotiation should be handled. Procurement may be tempted to back off at this point, but my advice is ‘don’t back off’. It’s even more important to help set the scene, do the roleplay, and keep them under control both during the preparation phase and during the meeting itself. And yes, this means it might be necessary to kick someone under the table if they deviate from the script.”
I called a time-out, we took a break, left the room, and the supplier stayed behind.
Alessandra Silvano, Global Category Director Capex and MRO at Carlsberg Group, says this has happened to her. “I had to ask someone who was not keeping to the script to leave the room. This person was becoming emotional and I could see we would be left in a bad position. I called a time-out, we took a break, left the room, and the supplier stayed behind. Eventually, we went back into the meeting and said we’d like to continue in a smaller group – leaving out the person who was not playing according to the script.”
Francesco Lucchetta, Director of Strategic Supply at Pentair, noted that although emotion can cause people to leave the script, it’s part of the negotiator’s toolset. “There’s a difference between playing with emotions and keeping negotiations under control. In a supplier negotiation, you’re the customer, so you can be much more emotional than they are. In an internal negotiation, you’re more likely to change a stakeholder’s mind by pointing out the emotional/risk side of the issue, rather than presenting facts around savings.”
What’s your personal experience with managing internal and external negotiations? What challenges did you face? Please leave a comment below.
If you want to find out more, you can get in touch with Giuseppe Conti at Conti Advanced Business Learning.
Giuseppe Conti, “The Creator of Master Negotiators”, is the founder of CABL (www.cabl.ch), a firm that offers a range of customized workshops and services in the field of negotiation and influencing. Since 2006, he is an award-winning lecturer at leading business schools throughout Europe (Cambridge, ESADE, HEC Lausanne, HEC Paris, IESE, IMD, Imperial College, INSEAD, London Business School, Oxford, RSM, SDA Bocconi, University of Geneva and University of St Gallen), recognized for his lively and interactive training workshops. He runs negotiation workshops for corporate customers in four continents. Leaders from multinational corporations and individuals from over 90 different countries have attended his workshops. Giuseppe is an accomplished negotiator and integrates into his training over 20 years of executive-level experience at Blue Chip corporations (Procter & Gamble, Novartis, Firmenich, Merck). Please visit his website at www.cabl.ch for more information.