The art of negotiation has been replaced by the science of negotiation.
The quintessential image of a lone, extroverted negotiator has been replaced by teams of negotiators that are empowered by their knowledge, discipline, and preparation. It is no longer viewed as a game, but instead as a process, a process that is learnable and repeatable.
The scholarly research book “Getting to Yes” by Roger Fisher and William Ury does a great job of setting the framework for this new style of negotiation. Based on long-term relationships between the buyer and the seller, the book hones in on true partnerships, not short-term advantages, to reduce cost and improve value and performance.
Fact-based negotiation starts with a process:
Identify stakeholder requirements
If this effort is not accomplished, all future efforts will be compromised. This effort requires an understanding and quantification of the expectations and limitations to the authority of the negotiating team. It is only with this knowledge that the team can determine what must be achieved in order to have a successful negotiation, what concessions the team can make during the actual negotiations, and what should be achieved to ensure complete satisfaction.
With this knowledge, a negotiation team can develop three key approaches:
- Maximum Supportable Solution (MSS) - the optimum result that the team can achieve in a negotiation
- This is the most defensible and realistic aspiration of the team
- Least Acceptable Solution (LAS) - the minimum the team can accept and still consider the negotiations a success
- Failure to achieve the LAS means the team has failed
- Best Alternative to Negotiable Agreement (BATNA) - what you can salvage from a failed negotiation and, possibly, use to restart the negotiations
- To be used in the event of a deadlock or unsuccessful agreement
The truism is that success goes to the team with the most knowledge, and that knowledge is based on consensus. Consensus means you and your stakeholders (plus suppliers and team) are in agreement in each of the various levels of internal and external negotiations:
- Initial with internal users (Stakeholders)
- Initial with internal negotiating team
- Screening and level setting with suppliers
- Actual negotiations with suppliers
- Interim feedback with internal users
- Communicating the outcome with internal users
- Transferring ownership to day-to-day users
The most important of these negotiations are the initial negotiations with the internal stakeholder; the objectives are to determine both the individual and coordinated Critical Success Factors (CSFs), real and imagined, that must be addressed in developing the MSS, the LAS, and the BATNA. Every supply chain and procurement professional will be a key member of a negotiating team at some point in their career. It is critical to understand the dynamics of fact-based negotiations and be prepared to add value.
Looking for more reading? Here are our top recommendations.
Do’s and Taboos Around the World by Roger E. Axtell
The Cultural Dimensions of International Business by Gary P. Ferrarao
Getting to Yes: Negotiating Agreement Without Giving In by Roger Fisher and William Ury
Kiss, Bow, or Shake Hands: How to Do Business in Sixty Countries by Teri Morrison
Cultural Intelligence: People Skills for Global Business by David C. Thomas and Kerr Inkson
Getting Past No by William Ury
Doing Business Internationally by Danielle Walker, Thomas Walker, and Joerg Schmitz