Thursday, April 7, 2011

Communication - Manage Your Team’s Communications

Since so much of negotiation is communication if you will have other members of your team meeting with the Supplier you need to spend time coaching them on communication. Many times a negotiation can be severely damaged by one of your own team’s actions or comments before it ever starts and all the tactics in the world may not help after that.

They should understand that:
Ø  Negotiations are a process and not a single point in time activity.
o   You need to effectively manage communications with the Supplier throughout the process.
Ø  What is said to a Supplier from the prospecting stage onward may be used against you during the actual negotiation.
Ø  What you can learn about the Supplier from those early discussions and from your detailed pre-qualification may be extremely useful in your negotiating with the Supplier.
Ø  Suppliers will frequently give away substantial amounts of information about them and their products to attract your interest. Learn all you can.
Ø  Once the actual negotiations commence they will manage their communications tighter and your ability to discover information that will help you is reduced.
Ø  In discussions you need to avoid language, topics and behavior that provides them with any type of negative reaction. If they get a negative reaction that may turn them off to the discussion and thereby limit the amount of information you can discover or their willingness to deal with you.
Ø  The goal should be to get as much information as possible about them and their products.
Ø  Start out with broad questions, and then focus on specific issues.
Ø  Probe with open-ended questions just like they may have tried to probe to try to find out about your needs.
Ø  Ask them for their advice or recommendations. Many times the Supplier will know far more about a specific subject and their advice may cause you to change directions or strategies.
Ø  Get them to talk about themselves, the company, the work, and their customers by seeming interested or needing to be educated.
Ø  Probe to understand potential alternatives.
Ø  Probe to understand the organizational values so you will understand whether you have a conflict and, if you don’t, so you can speak to them later in the negotiation, showing that you have viewed the issue from their perspective.
Ø  Probe to understand their motivations and what they may consider as important, as threats, as benefits etc.
Ø  The key in your communications with them is the need to either set or continue to manage their expectations that it will be competitive in nature
Ø  Provide them with enough to peak their interest and be willing to share information, but not enough so that it will affect you later.

For any team members that will actually participate in the negotiation I’ve frequently called a team meeting in advance to establish a set of rules I expect them to follow. Having learned the hard way, I found that I could avoid “being shot in the foot” by my own team member if I set ground rules in advance. Some of these may seem like common sense, but I learned each of them the hard way:
1.     Negotiations and meetings with a Supplier are not forums for discussing internal disagreements. Negotiations are not the place to challenge what another team member has said. If something is said that you disagree with, make a note of it and discuss or resolve it off line. If the item is critical to the discussion at hand, pass a note to the lead negotiator asking that you break to caucus.
2.     References to the way you do business should be mentioned when necessary and in a positive manner. If you have nothing positive to say, don't comment on it.
3.     References to the way the Supplier does business should be positive so as to not turn them off, but not so positive for them to believe that they have any edge over the competition. If others do something better, let them know it.
4.     Never disclose an area where you can't measure the Supplier's performance. If you can't measure their performance you may be able to do so in the future or, you may wish to make a concession. If they know you can't measure them they will also know that it is really no concession.
5.     Never agree to anything immediately. At first look a proposal may seem very enticing. All ramifications need to be considered and it may not be a deal or you may be able to do better.
6.     Don't accept the Supplier’s "standards or policies" as final. Companies publish standards and quote policies for customers who are not wise enough to negotiate them.
7.     Never re-enforce a Supplier’s objection. If you are part of the discussions with the Supplier and you agree with them, keep it to yourself. Re-enforcing a Supplier’s objection takes power from the negotiator.
8.     Don't agree to make any concessions until you know all the demands. A normal negotiating tactic is nibbling, a little here, a little there, each of which seems harmless, but the total effect will surprise you.
9.     Keep track of all the concessions which they are asking for and weigh them from both your and the Supplier's perspective. What may appear to be nothing for you to give away may be a substantial gain for the Supplier and as such you should use it to get a concession of equal or greater value.
10.  If you are unsure of what you heard the Supplier say, seek to clarify it by re-phrasing it. A number of times your impression will not equal their impression and it's best to clarify it before you may be locked in.
11.  When the team breaks into sub-groups and in subsequent meetings or phone calls remember that the rules still apply. Suppliers will probe at individual team members to get information that will assist them in their negotiations. Volunteer only information that is necessary. Use that time to do probing about the Supplier’s operation.
12.  Take good notes of your meetings. Use them when the Supplier says something contradictory in the negotiation.

Easy ways to lose in a negotiation is to allow the Supplier to divide and conquer your team and ask someone who would be sympathetic to their position what their opinion is. If there is a high risk of that, control who attends.

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