Our agendas are filled until mid-next year. We are re-evaluating budgets, in meetings all day, visiting plants, factories, headquarters and on top of that, during our lunch break, we need to make some last-minute reservations for the end of year break with our families.
We are so preoccupied with internal commitments; we do not have the time to prepare properly before meeting with external partners with whom we have a long-term relationship.
In a roundtable discussion featuring 13 senior Sales and Procurement experts, we explored the must-dos for negotiators to successfully negotiate externally with partners and created a mini checklist for you to follow.
Strategic fit is key
According to Giuseppe Conti, Creator of Master Negotiators at CABL, a solid starting point is to understand where this negotiation fits in the category strategy. Are we about to negotiate with a strategic partner or it is a more transactional type of business? Douma et al. (2000) paper on Strategic Alliances emphasizes the importance of making this distinction because “during the day-to-day running of the partnership, management must primarily focus on achieving and maintaining a good ‘fit’ between the parties.” Otherwise, the relationship between the two parties will not succeed, whether it is long or short term.
Keep the communication lines active all the time
If you and your team are not in regular contact with your supplier or customer much before a key meeting, you will find yourself in a difficult position when the impending negotiation approaches. Francesco Lucchetta, Procurement Director EMEAI at Pentair, emphasises “if a product is under a long-term contract with an impending end date and you were not connecting on a regular basis six months before the end of the contract, you know there is a low chance for renewal.” Set up your internal account management processes and relationship management in a way that when a contract is up for negotiation, you can be dynamic enough to be the master of your destiny.
Are you finding internal alignment on interests and strategy?
Key alignment within the internal party on your company’s interests is an obvious requirement and obligation before any external negotiation. The communication to the other party must be crystal clear, as Jose Maldonado, Global Sourcing Head at CSL Behring, emphasises “clear roles and responsibilities to achieve stakeholder alignment and good planning is especially important.”. Laurence Pérot, Head of Global Supply Chain Procurement at Logitech, underscores the importance of defining and aligning the company’s long-term strategy and identity, one of the key questions to ask yourself and your team is “does our strategic roadmap truly match with the other party’s roadmap?” When your team finds synergy on this level, the negotiation flows much more smoothly and according to plan.
“Try letting your boss be the supplier and act out opposing roles, you will give birth to more arguments than you had before”
3,2,1 ACTION! It’s time for role plays!
There is also a theatrical dimension to negotiations, after all, it’s a mix between art and science. It is a good idea to role-play the negotiation with your team. Brainstorm the sentiment or atmosphere that you want to have to set the tone for the negotiation. Role-plays are the business version of science laboratories, they are a medium for you to idealise new strategies, ask probing questions, spot non-verbal cues that blemish your message, knot out bad behaviours… The list goes on and on. Regina Roos, a Senior Sales Executive, is a big advocate for these practical skills exercises. For example, if you are in Procurement “try letting your boss be the supplier and act out opposing roles, you will give birth to more arguments than you had before.”
Talk to your ‘frenemies’ and get them involved
Who are your frenemies (Friend + Enemies)? If you work in Procurement, your best friends to land a new deal with an external party is your internal Sales team. Marco Martelli, Vice President Procurement at Tetra Pak, commented that his team “brings the Sales force to discussions with the supplier, as they have the market perspective that the Procurement team lacks.” By involving the Sales team in discussions and preparation meetings, you find common ground and similarities throughout discussions. After all, if the Sales department tell the other party what their goals may or may not be, it adds credibility and portrays your investment finding an agreement. Furthermore, it encourages transparency that otherwise would not have been present in discussions with a Procurement team.