What is that Smell in the Room?
There are two unpleasant smells negotiators need to
avoid. One is fear (your own) and the other is excessive
testosterone wafting from the other side of the table. A colleague
has called this "negotiating with an 800 pound gorilla". In
negotiating terms there is an apparent power imbalance and guess
who is the weaker party? Why is it always me I can hear you cry?
Why am I not the one swinging through vines beating my chest and
striking fear into the hearts of others?
Common examples are when you are dealing with a sole source
supplier, a key customer who knows it, a monopoly provider or, in
certain situations, your boss. This is the true test of your
negotiating skill. The first point to make is that there is no
magic tactical trick to overcome an actual power imbalance. You can
play a weak hand skilfully but their power will negate any
substantial gains for you through tactics.
Here are some alternatives for you to consider:
Negotiate don't Capitulate
Be disciplined in your preparation and examine the other
parties' issues, needs and priorities. Having comprehensive
research are great antidotes for fear. Practice your skills
beforehand by pushing back on unreasonable mandates that your boss
may try to give you.
Innovate and Create Value
You can't change the power imbalance but you shouldn't just give
in to unreasonable demands from the other party. Attempt to
demonstrate that there are ways of creating value in a relationship
rather than just allocating value. Focus the discussion around
value not price by including as many variable quality and time
variables into the negotiation. Remember negotiation is a process
where money and experience come together; the people with the
experience get the money, the people with the money get the
experience.
Aggregate
The other party may have all the power at a transaction level by
being the only source of a particular product or service. They may
not have the same power at a whole of business level. If you can
aggregate your total spend across products and services where you
do have alternatives then their power will be dissipated.
Escalate
This may be an appropriate time to use the highest level of
authority in your organisation to conduct the negotiation. Your
boss or their boss may have stronger personal relationships than
you. It may be best to allow them to use their relationship skills
to negotiate a more favourable outcome. These things can often be
sorted out over a game of golf or some other bonding activity.
Motivate
Give them good reasons to be considerate and understand your
situation in the negotiation. A way of doing this is to explain
"welcome to my world" and explain the internal constraints you face
and the processes you are required to comply with. If you are
dealing with a retailers demands for increased promotional spend
then explain that you have to compete internally with other
category managers for these funds based on the business case that
you provide. If they don't provide you with some added value to
support your case for them then it is unlikely to be successful.
They need to help you to help them.
While the above approaches offer no universal solution they can
if used with skill provide an opportunity to redress the obvious
power differences. If all else fails remind them that history is
littered with failed companies, which thought their power was
immutable and became the bloated and lazy as a result. In this
condition they were ill equipped for survival when their power was
vapourised by the creative destruction of innovation.
Keith Stacey
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Copyright Scotwork Negotiating
Skills 2011
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