To truly negotiate effectively, a three-part approach is imperative.
In sales and procurement, it’s not uncommon for negotiation to be limited to external stakeholders (like suppliers). While effective negotiation strategies are necessary to the success of any procurement professional, focusing solely on external parties is not ideal for maximizing savings potential.
To truly negotiate effectively, a three-part approach is imperative. The tripartite approach to negotiation includes negotiation with self, negotiation with internal teams and negotiation with external partners. David Feavearyear, Chief Procurement Officer at Pearson, joined Negotiate Anything to discuss the tripartite approach to negotiation and top strategies for achieving success within each layer.
Why Three Parts?
Most fail to realize that strong internal negotiations are the true foundation for powerful external negotiations - especially in procurement. Self-negotiation and emotion management will be critical to ensuring insecurities don’t block success - or lead people to avoid negotiating altogether. Internal negotiations (with internal departments and colleagues) are foundational to understanding what a “good” deal looks like for a company. This understanding then informs a strong external negotiation strategy.
Negotiating with Self: Key Strategies
It can be difficult for people to embrace conversations when they assume there will be a negative reaction. While this anxiety motivates some, it deters others.
“Negotiation can bring out some of our own insecurities,” Feavearyear shared. “[Resistance] could also be about the relationship that you have with somebody - from a supplier perspective this is particularly important.”
People tend to view negotiation as a barrier to positive relationships. This causes many to avoid difficult conversations altogether.
“If you can extract the task you need to get done from the relationship (especially if it’s one worth having) you will forge a way to smooth over the conversation,” Feavearyear explained, “as opposed to avoiding it or assuming that you can’t have it without tarnishing the relationship.”
It all comes down to the courage to identify and present a request that you deem reasonable. That said, without self-confidence, all other negotiations (internal, external) become obsolete.
Negotiating with Internal Teams: Key Strategies
For many procurement professionals, internal negotiations can prove to be the most challenging. This is because oftentimes those making the purchase request are experts of their own domain - making it frustrating when a procurement specialist questions them about a product or service.
To navigate these tough conversations, Feavearyear recommends two things: practicing humility and remaining open-minded.
Practicing humility can be as simple as acknowledging your counterpart’s expertise. Oftentimes, a simple recognition can drastically shift the tone of a conversation. This can be taken a step further by asking your counterpart for their feedback and input on your decision.
Remaining creative with solutions is equally important. For example, if a department head comes to a procurement specialist with a generic purchasing request (notepads for example), one strategy could be to note their specific needs but ask for flexibility in selecting the product that meets those needs.
For those with highly specific requests (a name-brand notepad with specific dimensions and rulings) internal negotiations become more complicated, but an open-mind still rules the day when it comes to influencing suppliers and saving more.
External Negotiations: Key Strategies
Circling back to the previous example, if internal negotiations (around a product or supplier) are rigid, consider different ways to save money. Options include using time strategically to put pressure on the seller or offering something in return for additional savings.
According to Feavearyear, competitive tension is the best for negotiations. Multiple suppliers competing for a contract will mean more leverage for your company.
That said, in situations where only two parties are negotiating (one customer and one supplier) it becomes even more important to understand what a “good deal” looks like - a conclusion that should have been reached during internal negotiations.
“The perfect deal doesn’t exist,” Feavearyear explained. “If you don’t start the discussion internally to understand what good looks like, then you could be the most brilliant negotiator on the planet but you will never land the deal to the same potential.”
That said, Feavearyear encourages listeners to practice fairness and reason, as there are consequences to breaking a counterpart’s trust.
“You are much better off just negotiating a position that is fair and reasonable than trying to be overly clever and box somebody into a corner,” he shared.
The Role of Compassionate Curiosity
Feavearyear also encourages professionals to remain curious and open-minded, as opposed to entering a conversation committed to preconceived notions.
“If you have a preconception as to what somebody will or will not accept, you probably will leave things on the table,” he explained. “Before you become too entrenched in a position or too dogmatic, make sure that there is no other way of getting to a creative solution.”
Connect with David Feavearyear on LinkedIn today. To listen to the full episode, click here.
