A recent article in Harvard Business Review on negotiation highlights the diametric thinking that exists in our industry today.
On the one hand, you have the immovable nature of old-time thinking regarding the importance of keeping your cards close to your vest. On the other hand, there is the irresistible force of change reflected in a belief that transparency and open collaboration is the key to achieving a “true” win-win outcome.
By the way, when you access the article, you will be offered a free paper on negotiation—a $47 value, as well as a schedule to an upcoming series of negotiation masterclasses—by lawyers.
Another item worth noting is that the author of the article is a marketing executive.
Lawyers and marketing executives? Why not someone from procurement? Beyond being the gist for the mill of a future article, we thought it would be a good idea to get the procurement community involved in the discussion regarding negotiating to win.
Starting with what a win looks like and whether the best way to achieve it is to assume a poker face at the proverbial table or open the books in a collaborative exercise of mutual gain, we do want to know what you think. Please use the comment section to share your thoughts.
In the meantime—let’s see what we can do to tackle the topic today.
First Things, First
When it comes to negotiations, what is a win, and to whom does it belong.
We are not looking for the superficial everyone’s a winner mantra that has rendered the term win-win negotiation little more than a wishful sentiment to make ourselves feel good about sticking it to the other party. However, we would imagine that the hardliners out there may wonder what you have to feel bad about when you get the better of an opponent. To understand this mentality, all you need to do is check out the following Vlasic Pickles story from a few years back.
The exclamation point regarding this “take no prisoners” negotiating style is the buyer’s comment, “Well, we’ve done to pickles what we did to orange juice. We’ve killed it. We can back off.” By the way, that specific deal resulted in the pickle company declaring bankruptcy.
In the above situation, is there a winner?
Getting to We
The polar opposite of the Vlasic story is one by Kate Vitasek, who has co-written several books on negotiations and the importance of good supplier relationships. One such book—a bestseller in the procurement world—is Getting to We: Negotiating Agreements in Highly Collaborative Relationships.
Speaking at a government conference in Virginia, Vitasek talked about her experiences as a buyer at Microsoft and how the company’s incentives were detrimental to suppliers. Going into more detail, she said that buyer compensation was based on leveraging Microsoft’s clout to get the lowest possible prices. In short, the lower they “negotiated” a price, the greater their compensation.
During her time at Microsoft, she realized that there are longer-term consequences of what can only be called a zero-sum game.
Based on these experiences, Vitasek would write in her book that “current negotiation practices are outdated and do businesses more harm than good.” She then went on to say, “It’s time for a change.”
Of course, that was back in 2013. The real question is if that change has occurred. Given the HBR article referenced in the opening paragraph, we suspect not.