Friday, February 4, 2011
One of the skills a good negotiator must have is basic program management skills. For any complex negotiation the negotiator needs to be a program manager to keep track of and manage all the issues that arise in a timely manner. To make sure that you don’t forget something with all the various issues you need to discuss, I believe that at the beginning of every negotiation you need to start an action item list where you capture the specific issue, what is required, who will provide it and when it will be provided. You may also have a similar internal action item list to help manage your team in ensuring that all Buyer documents and specifications and all referenced documents are being provided to the Supplier in a timely manner and all internal actions required are being delivered as promised.
You can maintain a separate action item list, or you could annotate a copy of the agreement to document and track status. My preference is to maintain a separate list that you review at both the beginning and end of each negotiation session. The review in the beginning is to track progress status on previous open issues and get information disclosed. The review at the end of the session is to agree upon any new action items that were added as a result of that session and any open issues that were closed in that session.
My action item lists contains seven simple columns.
If an issue expands requiring multiple actions being required, you can assign new numbers and close out the prior issue. Each Buyer action and each Supplier action should have a separate number to track status against.
I also find that color coding both the information and status is helpful in management review meetings with Buyer and Supplier management that may occur during the negotiation. For example the text of all Buyer Actions may be typed in one color, all Supplier actions are typed in a different color so its visually easy to see whose action it is and who has the most open action items. For the status column I use a simple open or closed for the written status but also color code the status column boxes as follows:
No color = open, but with no schedule impact.
Yellow = open, starting to become critical.
Red = open, late and/or impacting schedule
Green = Closed
There are clearly advantages and disadvantages to maintaining an action item list from a negotiation perspective. The biggest disadvantage to the Buyer is you can’t avoid or not respond to a Supplier generated issue as the action item list tracks them. A big advantage to the Buyer is it keeps things from falling through the cracks, puts a discipline in process where the Supplier can’t avoid responding to their actions things. Another reason for using it is to move the negotiation along for a prompt
closure, whether it be coming to agreement or the decision to walk away. That's important because delays in closing the negotiation can create a significant loss in leverage if you start to lose other options or have too much invested to walk away.