One of the concepts in negotiation that seems to present a particular difficulty is the idea of the ‘whole negotiation’. By this, we mean the entirety of the elements in a negotiation with a supplier and how those various elements come together and interact.
Procurement often talk about the ‘commercial aspects’ of the negotiation as being the area of responsibility which is recognised. However, there is also the regular line of discussion about the many ways in which stakeholders restrict the success of the commercial element by having separate negotiations about technical or specification areas.
From this, it is a short step to say that a challenge to negotiation success is how the various parts are negotiated separately, and how an overview of the whole is often hard to develop. Given that the supplier will tend to have a single point of contact (SPOC) managing their side, then the lack of SPOC on our side is a real challenge.
Key to successful negotiations
A key to success is to make sure that we start to address this issue. Firstly, we need to be clear about needing to be the lead negotiator and that we will be setting ourselves up to do that. After that, we are into a change program to help our stakeholders start to accept a lead negotiator role.
This needs to be tackled like any organisational change: using small starts and successes, building out from there and being excellent at communication.
It is very valuable to build a stakeholder map for your negotiation to test who might have a problem with the concept of the lead negotiator.
From there, it is easier to target messages and approaches to get the stakeholder on board.
This does imply that we are capable of acting as a lead negotiator, co-ordinating all the different aspects to bring them together. It is helpful to have a toolkit available, as that will help explain to our stakeholders how the different elements of the negotiation will work together.
Once confidence has been established, we can progress further and lead more complex negotiations with the help of our stakeholders.
All this has an interesting implication for the use of e-auctions, in that they are often set up with a focus on the price specific elements. It does suggest that we need to make sure that the e-auction is fitted into the overall negotiation approach and doesn’t become uncoupled.
Whatever we are negotiating, we should be stepping back and thinking about it in the round to get the optimum outcome.
About Mark Hubbard
30+ years experience in procurement and supplier management, in line and consulting roles
Previous employment: Positive Purchasing Ltd, SITA,
QP Group, BMW, SWWS, Rover
Education: BSc in Engineering Metallurgy, MBA University of Plymouth
CIPS: Current Member