Negotiation is problem solving. The goal is not to get a deal; the goal is to get a good deal. Four steps to achieving a successful negotiation: assess, prepare, ask, package. Women increase the chance of a success when a proposal is framed in terms of benefits to your counterparts, team, or organization. Three questions to prepare women to enter a negotiation: Why are you asking? How are you asking? For whom are you asking? Margaret Neale's research focuses primarily on negotiation and team performance. Her work applies judgment and decision-making research from cognitive psychology to the field of negotiation. Neale is the Adams Distinguished Professor of Management at Stanford Graduate School of Business. She her BS in pharmacy from Northeast Louisiana University, her MS from the Medical College of Virginia and Virginia Commonwealth University and her PhD in Business Administration from the University of Texas. Read the discussion guide and find other resources at Stanford's Clayman Institute for Gender Research: http://gender.stanford.edu/negotiation Learn more about Margaret Neale: http://www.gsb.stanford.edu/users/man...
AUTHOR Rich Weissman
PUBLISHED July 11, 2019
In some situations, negotiation is a contest with a clear winner and loser. Think about your last automobile, mattress or real estate purchase, where price was everything and the relationship fleeting and insincere.
That model shouldn't apply to the procurement world. Negotiation is not just about price, but about managing and improving overall supplier performance. Negotiation is an underutilized, yet critical business skill that lies dormant within most organizations.
There needs to be a broader approach around supplier performance, including measurable criteria such as accurate and timely deliveries, high quality, strong customer support, reduced supply chain risk, great communication and cost management.
The actual bottom line of a supplier relationship is far deeper than the price on a purchase order.
Successful supply chain management is anchored on excellent commercial relationships with critical suppliers. The benefits of close relationships include a focus on cost rather than price, early supplier involvement on key commercial and technical aspects, improved supplier performance in the areas of quality and on-time delivery and an abundance of communication.
While strong supplier relationships have proven beneficial to the buyer and seller, these relationships are not a replacement for active and ongoing negotiation. If one looks at negotiation with the big picture in mind — ongoing give and take with trustworthy and high performing suppliers — it can be an agreeable experience where both sides meet their objectives.
It is important to keep the relationship in perspective; a relationship with a supplier is not an excuse for lack of due diligence. Buyers need to focus on negotiating and establishing the performance framework early in a supplier relationship to allow for continuous improvement. Approach negotiation with a holistic approach.
This five-step process will help to build the foundation critical negotiations with critical suppliers of all types.
1. Understand your mission and business drivers
It is essential to understand the fundamentals of your own business so you can develop a negotiation strategy that complements the overall strategy. What are the essential business objectives of your company? What markets do you serve, who are your customers, what are their requirements and what are the operational goals of your business? Without a strong understanding of the business issues that makes your organization tick, you will never be able to successfully negotiate at any level.
A company that is quickly trying to build market share may be less focused on cost and more concerned with rapid deliveries. A negotiation based purely on low cost would not offer the proper business alignment. Suppliers will do their best to understand your business and craft a negotiation strategy to exploit your areas of weakness. It is your obligation to know more about your own business than they do to offset their potential advantage.
2. Understand their mission and business drivers
Understanding what business issues drive your suppliers will allow you to develop successful situational negotiation strategies. It is easy to compile intelligence on your suppliers so you can understand their pressures. This process can also be a good way to determine pricing trends, market constraints, regulatory issues or other important issues that the supplier may not quickly share.
3. Be authentic to build credibility and trust
Negotiation can be an emotional exercise, with the pressure of the bottom line creating an environment of conflict and mistrust both inside and outside of the company. Those emotions are not limited to the usual buyer and supplier dust-ups, but internal judgments and misconceptions as well, as the importance of the supply chain gain greater company recognition. Avoid posturing, bluffing, lies or deceit. These are tactics of a bygone era. Be yourself, adhere to your personal and organizational values and proudly represent your company. Trust is an underappreciated business and personal attribute. Gain it and keep it.
4. Work towards a positive outcome for all parties
Win-win negotiations are a bit of a misnomer. It does not mean each party gets exactly what they want, or there is one giant compromise in the "let’s split the difference" model. In a win-win negotiation, both parties can compromise so each side captures some level of value. Win-win negotiations in a relationship-based environment take on a long-term approach with a balance of success for both sides over time. One-off negotiations, perhaps for a piece of capital equipment, may lend itself to less of a relationship-based win-win model, replaced with a more traditional style of negotiation. Experienced buyers can negotiate over range of business situations.
5. Create a plan for evaluation and assessment
Negotiations are not singular events, but continuous efforts that need ground rules and communication frameworks. Leave little to chance and revisit performance often. Identify issues early to avoid conflict later. Establish key performance indicators in the contract that will form a basis for discussion.
Focus on cost, delivery performance, quality levels and a kaleidoscope of customer support initiatives. The indicators provide a great framework for regular contract reviews. But note in a relationship-based environment, the buyer has key performance indicators as well, including adherence to payment to terms, consistent forecasting and a resolution format for operational issues.
Most negotiations occur over and over again. We tend to deal with the same suppliers for a long time. It is important to recognize and give proper weight to the context in which a negotiation is taking place. If it is within an on-going relationship, the significance of that relationship must be considered as you craft your negotiation strategies.
This story was first published in our weekly newsletter, Supply Chain Dive: Procurement.
How two world famous negotiators, Angela Merkel and Vladimir Putin, came to an agreement to meet regarding the Ukraine.
BY KATIE SHONK — ON DECEMBER 16TH, 2019 / INTERNATIONAL NEGOTIATION
How the Relationship of Famous Negotiators like Merkel and Putin Can Impact Diplomatic Negotiations
At a January press conference back in 2015, German chancellor Angela Merkel dangled a carrot in front of Russian president Vladimir Putin: the possibility of a summit in Kazakhstan aimed at easing the Ukraine crisis, to be attended by the two famous negotiators as well as the leaders of France and Ukraine.
Carrot and Stick Diplomacy with Famous Negotiators
That carrot, however, was dangling from a significant string. For the meetings to occur, Merkel said, Russia would first have to make “visible progress” on all 12 points of the Minsk accord, the agreement that brought a shaky cease-fire to eastern Ukraine in September 2015, as reported in the New York Times. While the cease-fire endured, reports by the New York Times indicated that sanctions remained in place as of February 2016 and, indeed, the German Chancellor was pressing her Russian counterpart for further information (and concessions) with regard to the Russian-backed separatists in Eastern Ukraine and talks of a summit were nonexistent. Why would Putin listen to the German Chancellor, aside from wanting to remove the sanctions from Russia’s economy?
Angela Merkel is not only Putin’s closest negotiating partner in Europe but also stipulated the force behind the sanctions on Russia.
In his profile of Merkel in the New Yorker, journalist George Packer outlined the complex relationship that she and Putin have forged. Merkel, who grew up in East Germany and spent her young adulthood there, shares a common geography with Putin, a former KGB major who guarded the KGB bureau in Dresden, Germany, when the Berlin Wall fell in 1989. Merkel and Putin switch between German and Russian during their meetings and regular phone calls.
Merkel, a former scientist who prides herself on her rationality, is known for her ability to methodically analyze situations: “drawing comparisons, running scenarios, weighing risks, anticipating reactions, and then, even after making a decision, letting it sit for a while before acting,” writes Packer.
This ability to think before acting served her well with Putin. During 2007 negotiations between the leaders over energy supplies at Putin’s residence in Sochi, Russia, the Russian president allowed his dog to approach Merkel, who has been frightened of dogs since being bitten by one. As Merkel froze in terror, and reporters watched in horror, Putin stood by, bemused, refusing to call off the animal.
Merkel turned the moment into an opportunity to gain deeper insight into Putin’s character—while also calling him at his own game. “I understand why he has to do this—to prove he’s a man,” she told reporters afterwards. “He’s afraid of his own weakness. Russia has nothing, no successful politics or economy. All they have is this.”
Merkel remains the West’s best hope for convincing Putin to end Russian aggression in Ukraine—and abandon any thoughts he may have of launching adventures elsewhere. “She has a way of talking to [Putin] that nobody has,” one of her senior officials told the New Yorker. Even as she engages in tough talk, she is working to help Putin find a way to make a graceful retreat. After hearing former U.S. president Barack Obama say that Putin was living “in another world,” Merkel is working hard to bring him back down to earth.
What’s your impression of the relationship between these two famous negotiators and how it can impact future negotiations?
Related Article: Dealing with Difficult People Such as Putin? – What tactics should negotiators use when bargaining with a difficult counterpart, whether in business negotiations or in diplomacy? In this article, negotiation tactics and bargaining strategies for grappling with a difficult counterpart at the negotiation table.
Thomas Jefferson made several major accomplishments during his term as President of the United States which included a lot of planning and negotiation.
November 22, 2015
Thomas Jefferson served as the third President of the United States from 1801 to 1809. Among other things, he was the principal author of the Declaration of Independence, facilitated the Louisiana Purchase which nearly doubled the size of America, abolished the slave trade and founded the University of Virginia. Know about the contribution of Thomas Jefferson in the development of the United States through his 10 major accomplishments and achievements.
#1 THOMAS JEFFERSON WROTE THE DECLARATION OF INDEPENDENCE
The Declaration of Independence (1776) was a formal statement announcing that the United States was no longer a part of the British Empire. The Committee of Five established to create it voted to have Jefferson write the document. The Declaration proved to be an inspiration to numerous national declarations throughout the world. The second sentence of the declaration, in which Jefferson first used the famous phrase “All men are created equal”, has become a well-known statement on human rights and has been called “the most potent and consequential words in American history”.
The opening of the original printing of the U.S. Declaration of Independence
#2 HE DRAFTED THE VIRGINIA STATUTE FOR RELIGIOUS FREEDOM
In 1777, Jefferson drafted the Virginia Statute for Religious Freedom which disestablished the Church of England in Virginia and guaranteed freedom of religion to people of all religious faiths. It was enacted into the state’s law in 1786. It was a precursor to the clause in the First Amendment to US Constitution which prohibited any law which would impede free exercise of religion. The Statute is one of only three accomplishments which were put on the epitaph of Jefferson according to his wish.
Thomas Jefferson Tombstone
#3 HE SERVED AS THE THIRD PRESIDENT OF THE UNITED STATES
Jefferson served as wartime Governor of Virginia (1779 – 1781), U.S. Minister to France (1785 – 1789), first U.S. Secretary of State (1790 – 1793) under President George Washington and U.S. Vice President (1797–1801) under President John Adams. In the presidential election of 1800, he tied with Aaron Burr. On February 17, 1801, after thirty-six ballots, the House elected Thomas Jefferson as the third President of the United States. In 1804, he was re-elected by an overwhelmingly majority.
Official Presidential portrait of Thomas Jefferson (by Rembrandt Peale, 1800)
#4 UNITED STATES MILITARY ACADEMY WAS ESTABLISHED DURING HIS PRESIDENCY
In 1801, shortly after his inauguration as president, Jefferson directed that plans be set in motion to establish the United States Military Academy (USMA) at West Point, New York. On July 4, 1802, the USMA formally started as an institution for scientific and military learning. It went on to become one of the leading institutions in America. Its alumni include two U.S. presidents, presidents of Costa Rica, Nicaragua and of the Philippines, numerous famous generals, and seventy-five Medal of Honor recipients.
United States Military Academy Coat Of Arms
#5 JEFFERSON DOUBLED THE SIZE OF THE UNITED STATES DURING HIS PRESIDENCY
In 1802, President Jefferson had made an arrangement for the purchase of New Orleans and adjacent areas from France. Napoleon I offered to sell the entire Louisiana territory for $15 million. The Louisiana Purchase took place in 1803. It doubled the size of the United States at a sum of less than 3 cents per acre and was by far the largest territorial gain in U.S. history. The Louisiana territory proved to be one of the largest fertile tracts of land on the planet. It included land from fifteen present U.S. states and two Canadian provinces.
Map depicting the region added after the Louisiana Purchase
#6 HE MADE SURE US PRESENCE WAS ESTABLISHED IN THE LOUISIANA TERRITORY
After the Louisiana Purchase, Jefferson required the mostly unknown territory to be mapped and explored to establish American presence there before the European powers tried to claim it. This resulted in the Corps of Discovery Expedition which was led by Meriwether Lewis and William Clark. It helped establish the U.S. presence in the newly acquired territory; and diplomatic and trade relations were made with indigenous tribes. The expedition also obtained a wealth of scientific and geographic knowledge. Its success led to Jefferson organizing three other western exploration expeditions
William Clark (left) and Meriweather Lewis (right) – Leaders of the Corps of Discovery Expedition
#7 PRESIDENT JEFFERSON ABOLISHED THE SLAVE TRADE
On December 2, 1806, in his annual message to Congress, President Jefferson called for the criminalization of international slave trade on the first day it was possible. The Act Prohibiting Importation of Slaves was signed into law by Jefferson on March 2, 1807 by which no new slaves were permitted to be imported into the United States. It took effect on January 1, 1808, the earliest date permitted by the Constitution. The abolition of the slave trade was a major achievement of Jefferson’s presidency.
#8 HE MADE AN IMPORTANT CONTRIBUTION TO THE LIBRARY OF CONGRESS
As president, Thomas Jefferson played an important role in establishing the structure of the Library of Congress. Later when most of the collection of the library was destroyed by the British in 1814 during the War of 1812, Jefferson offered his personal library as a replacement. In January 1815, Congress accepted Jefferson’s offer, appropriating $23,950 to purchase his 6,487 books. On June 13, 1980, the name of the main building of the Library of Congress was changed to Thomas Jefferson Building to honor his contribution.
The Thomas Jefferson Building at the Library of Congress
#9 THOMAS JEFFERSON FOUNDED THE UNIVERSITY OF VIRGINIA
Jefferson considered education very important in building a good society. He wanted to establish a new institution free of church influences and where students could specialize in new areas not offered at other universities. In 1819, the 76-year-old Jefferson founded the University of Virginia. He was also the principal designer of the buildings. When the university opened in 1825 it was the first to offer a full slate of elective courses and was notable for being centered about a library rather than a church.
The Rotunda – Building at the University of Virginia designed by Thomas Jefferson
#10 HE WROTE A BOOK TITLED NOTES ON THE STATE OF VIRGINIA
Notes on the State of Virginia is the only full-length book written by Jefferson. It was first published in France in 1785. In the book Jefferson has compiled data about Virginia’s natural resources and economy; and also expressed his views on various subjects including the separation of church and state, constitutional government, checks and balances, individual liberty and slavery. It is often dubbed as the most important American book published before the 1800s.
Cover of the Notes on the State of Virginia by Jefferson
THOMAS JEFFERSON AND SLAVERY
Thomas Jefferson’s stand on slavery remains a heated topic of discussion among historians and scholars. His supporters consider him a consistent opponent of slavery and the slave trade. The fact that Jefferson drafted a Virginia law that prohibited the importation of enslaved Africans in 1778 and his abolishment of the slave trade in U.S. in 1807 are major points in his defense. His critics point that while announcing that all men are created equal in the U.S. Declaration of Independence, Jefferson himself owned around 175 slaves. Also unlike several leading figures of the time, he never liberated his slaves and remained a buyer and seller of human beings. Jefferson’s relationship with slavery has somewhat marred his otherwise rich legacy.
By Andrew Murfett, Editor at LinkedIn
Without great leadership, it's almost impossible for businesses to scale and succeed, according to entrepreneur James Caan. One of the best ways to improve your leadership skills, he says, is to seek advice through a business coach or mentor. Not doing so could hold back your leadership potential and, ultimately, your company's aspirations.
“It may seem obvious, but it’s easy to take for granted: good leadership is one of the most crucial reasons why some businesses succeed and others fail.”
SummaryPart 2 of provides additional advice on how to develop a successful negotiation strategy and create a better proposal while negotiating a solid business agreement.
by Steven Roberts
This is a continuation from Pre-Negotiation Strategy Check List Part 1. These are the remainder of factors that corporate negotiators need to take into account preparing their negotiating strategy.
9. Your Place or Mine?
In much the same way as sports teams enjoy a ‘home advantage‘, negotiators playing away from home need to adjust their game plan and corporate negotiation strategies. There are 3 possibilities to consider when deciding where the talks will occur. We can either hold the talks in their offices, our offices, or at a neutral domain. We might choose the latter so no one has the psychological and resource advantage, of holding the negotiations on their premises. Sometimes, deciding upon where the negotiations take place, can open up a whole new can of worms, especially in the case of international disputes for example.
10. Will we be under the Public Microscope?
Negotiations are often private affairs with little fanfare, until an agreement is signed. There are also agreements that are advertised afterwards, to maximise the mutual benefit both sides obtain. On other occasions, negotiations may be held in strict secrecy.
Then, there are the highly publicised occasions when the press becomes actively involved. It could be that one of the negotiating parties uses the powers of the press, to lever an advantage to sway and manipulate the outcome. We need only scan the daily newspapers, to understand the importance of how public involvement, can influence and add intense pressure to some negotiations. The press can be utilised as a public forum to embarrass our opponents into action, or to deflect their corporate strategy. Press releases and information leaked to the press are often to use as an effective strategy in the negotiation process.
11. Will We Need a Third Party?
Third parties have many different functions and roles to play in developing a corporate negotiation strategy. They may act as agents, intermediaries, translators, consultants, or other specialists who have an expertise, that one or both parties require. There are occasions when a neutral third party will act as a facilitator or chairperson, to manage the negotiations such as in multi-party negotiations, inter organisational negotiations, or even international negotiations.
Then, there are the other occasions when we hit a roadblock, or impasse in our negotiation. During these times we may use a neutral third party to act as a mediator or an arbitrator, to either facilitate an agreement or to impose an agreement, such as in a labour dispute for example.
12. Who is Going to Blink First?
There are situations when we have to decide how a proposal or offer is to be presented, or in deciding who is going to go first. Will we make an informal proposal before we start the negotiations, or wait until we meet face to face? Will we be prepared to make an offer after listening to their proposal, or do we need more information? Will we respond right away, or refer the matter to our constituencies? Will it be to our advantage to be first in making an offer or proposal, to set an anchor around which the talks revolve? Or will it be better to hold our cards tight to our chest and let the other side go first? Of course, this will all relate to the issues, positions, goals and objectives that will determine our approach. These are very serious questions that we need to intelligently address, before we begin our talks.
13. Who Are the Decision Makers?
Before we enter into the negotiations, we must establish who is going to make the decisions. What is our authority and who do we report to in our organisation? Similarly, what are the authority levels of our counterparts? Finally, can we make an agreement in principle, or an unofficial agreement that will likely stand the test of scrutiny?
14. How Far Will We Push It?
Negotiations can be a one shot occurrence where one party comes right out and says ‘This is a one time offer – take it or leave it.’ There are some instances where haggling is not considered acceptable, and will not be tolerated by the other party. Other situations will drag out into the equivalent of a marathon ping-pong match, as each party bounces offers and counter-offers back and forth. We need to know who we are dealing with, before we get too cute and find ourselves cut out of the opportunity altogether. It also depends on the offer and proposal, in relation to the circumstances such as time considerations, need, and many other factors.
15. Are We Strong or Weak?
Negotiation skills aside, two or more parties who are about to engage in a negotiation seldom operate from an equal power base. If one party has something that we desperately need, for our company’s survival and we have no alternatives, then we may find ourselves negotiating at a disadvantage – no matter how how dominant our market position. This all relates to our BATNA and how we stack up against our potential counterpart. Size is not necessarily relevant, as we’ve all heard the old biblical account of ‘David versus Goliath‘, and how that conflict turned out.
Weakness can be countered by strengthening our BATNA, or even by finding allies to support our position and add to our strength. We should consider seeking routes to diminish the power base of our counterparty where possible, before and during our negotiations.
Corporate negotiation strategies need to be developed by considering a whole host of factors, that might have a powerful impact on our success. It is also wise to remember that our strategy has to be flexible and will need to be adjusted as the game plays itself out. We cannot know everything before we go into our first meeting, so we need to prepare to adjust our strategy and tactics, as the situations warps and changes shape. Flexibility is vital, but good preparation is essential.
Matthew Bradshaw, CPSM, CPSD, C.P.M. is the Director of Programs for ISM-Houston, Inc.