The One Negotiation Behaviour that is Often Overlooked by Procurement

In my previous article on Key Negotiation Behaviours, we look at the most important behaviours in Procurement negotiations. According to 12 procurement executives at a Negotiation roundtable at the United Nations Office of Geneva, organized by Negotiation & Influencing consulting firm Conti Advanced Business Learning (www.cabl.ch), the five key behaviours for effective Procurement negotiations were

 

1. understanding the interests and priorities of all parties
2. preparation negotiation in writing
3. listening actively
4. strengthening your alternatives ahead of the negotiations
5. taking time for extensive research ahead of negotiation

 

I presented to the roundtable the findings of a survey I conducted prior to the meeting, where I asked 109 Procurement professionals with over five years of professional experience to rank the 22 Key Negotiation Behaviours they thought were most important in negotiation.

 

While the behaviours considered most important during this survey are very much aligned with the ones indicated by the Procurement executives, there was a healthy debate about the behaviour that was ranked last among the 22 behaviours: “Ensuring the satisfaction of the other party”.

 

Incredibly, ‘ensuring satisfaction of the other party’ is not as important as we would like to think. While we want to walk away from the deal as victors, we overlook the value of ensuring that the other party also feels good with the deal.

 

Stressing the importance of arriving to a win-win result Daniele Di Natale, Director Sourcing EMEA of Herbalife, expressed how compromise is a key element in ensuring both parties walk away satisfied, “when you start a negotiation you must be ready to compromise somewhere, and here it’s very surprising to have it come at the end.”

 

Jon Hatfield, Director Global Supply Management at PPG, echoed this statement “we claim that listening is important and that we want to understand the priorities of the other party but at the end we don’t care about helping them reach their goals.”

 

Whilst the behaviour ranked last, Laurent Gouraud, Head of Purchasing at Bobst, took a different approach, “it’s not because you don’t want the other party to be satisfied, it is just because it is not your priority”.

 

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

 

Giuseppe Conti outlined that the satisfaction of the other party is related to the process not the outcome. It’s how you manage the interaction and the process that makes the party feel satisfied. There is no need to leave money on the table to increase the satisfaction of the other party. Some of the tools you can use to increase their satisfaction include starting higher, managing concessions effectively, giving good explanations and offering options.

 

Thierry Jaccon, Head of Supply Management at Skyguide, highlighted past negotiations where negotiators did not build the foundations for a sustainable relationship and in turn having to recover from situations which were negotiated in a very “automotive” style.

 

The importance of treating each negotiation with the long term in mind cannot be underestimated. Alvin Williams, VP Indirect Procurement at Firmenich, explained that the motivation to prove oneself can get in the way, “You need to protect those suppliers because ultimately at some point, you’re going to need them again. You see that with a lot of junior buyers, where they go in hot and trample over everybody. They get very good short-term gains but then, it gets complicated down the line.”

 

This is the second part of a three-part series that investigates the Key Negotiation Behaviours in procurement. In my next article we analyse how the respondents of the survey ranked their own competencies in these behaviours and thus, how the roundtable participants reflect on these results.

 

 

 

 

 

 

Special thanks to the participants of the roundtable: