Tag Archives: strategic sourcing skills

Five Key Mistakes that Hurt Negotiations

After a career working with sourcing managers, I’ve had a chance to observe great practices and others that should be avoided. These 5 tips keep coming up when I work with teams in procurement.

  1. Too Much information – Suppliers are constantly collecting information about you, your organization and your interests, all for the sake of building strategies to motivate decisions in their favor. Beware of Facebook, Instagram and other personal social media outlets that provide details about your hobbies, family and interests. I often see posts by sourcing managers, sales reps and marketing reps on Facebook and Instagram that discuss travel and negotiation activity – I do suggest that you search Facebook for your company name and representatives’ names to see what they’re thinking; just don’t post that type of information yourself! In my case, I use LinkedIn for business, avoid friending business contacts on my personal Facebook account and am mindful of what I post.
  2. Failure to truly understand supplier motivation – Most sourcing managers understand the profit motivation of suppliers, but they fail to account for cash flow, capacity, business information, global footprint, your company’s reputation, being associated with an industry leader, capacity utilization, impact on fixed cost, ease of doing business and many more reasons that your business is desirable. These factors are the keys to unlocking the supplier’s true interests in doing business with your firm. In my case referrals are a motivating factor since 80% of my business is the result of a referral.
  3. Emphasis on supplier’s gain in negotiation – We’ve all done this in our lives–trying to negotiate with a supplier on why it is to his/her advantage to meet our targets. We seek win-win and list myriad positive what-you-have-to-gain reasons for coming to agreement. My wife says “If I were only one-tenth as motivated by the benefits of healthy habits as I am by the consequences of not saving my work on the PC every 5 minutes, I’d weigh 120 pounds and run marathons.” We tend to approach suppliers with what we all gain rather than what we have to lose by not meeting the targets. We certainly want mutual benefit, but sometimes we fail to talk about what we could lose. Are you more motivated to do things meet your “win” goals than you are to do things to avoid a loss?
  4. Using power, threat and coercion when you are unprepared to take action – If you are going to use this method of persuasion, you need to follow through with your threat. If you say that the supplier is likely to lose business by failure to comply with your request, be prepared to take action. Never make a threat you can’t back up. If suppliers are truly strategic to your business, they will call you out and you could lose all credibility with the supplier. Of course, power, threat and coercion are tactics you should only use in very specific applications under very specific circumstances, right?
  5. Managing suppliers via text messaging –Text messaging works great if you need quick answers or have a simple question. If overused or abused, you become a nuisance. Nothing can replace a quick call to gain alignment on a complex issue. Unfortunately in today’s fast-pace environment we look for quick solutions. It’s easy to decline a request on an email or text message; it is a lot more difficult if you are making the request in person or on the telephone. Remember that negotiation begins long before you sit across the table.

Think about all communication and actions when working with suppliers and avoid the pitfalls and mistakes that can cost your organization dearly.

Have you ever screwed up a negotiation?

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Three Hours of Power

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The Secret to Achieving Strategic Procurement and Supply Chain Goals

As I watched the Olympics last night, I saw the thrill of swimmers and gymnasts achieving their strategic goals and became even more excited about this blog. This week I’m honored to have guest blogger Chris Brogan. Those of you who know me understand that I’m all about implementable solutions and Chris’s tools and suggestions work. He’s had a huge positive impact on Linda, me and our business and he’ll help you win, too.

Three Hours of Power
By Chris Brogan

I’m writing to you within the three hours I’ve allotted each day to reaching my goals for myself and my business. It’s part of something I sell called the 20 Minute Plan JUMPSTART but it’s something that I work from daily. Remember the old ad? “I’m not just the president. I’m also a client.” True of me.

Three Hours of Power

The basic concept of the 20 Minute Plan is that you take 10 minutes in the morning and 10 minutes in the evening to set up your days for success. The mantra behind this is simple: your day is your week is your month is your year.

Your day is your week is your month is your year.

What you do today influences your weekly goals, and impacts your monthly progress and ultimately shows up in what you get for the year.

The three hours part is what I call the 9box. It’s for a simple reason. Take three hours and split them into 20 minute blocks. That’s 9 blocks of 20 minutes each. On my little sheet I work from, it looks like one side of a stretched out Rubik’s Cube.

In those three hours go ONLY that which moves me closer to my goals for me and my business. No client work. No honey do list stuff. Only priority work. Grade A top shelf stuff that will move the needle.

The To Do List is the Enemy

You’re so busy that you’re not doing anything. Let THAT sink in a moment. Are you one of those people who answers “How are you doing?” with a deep sigh and says, “Oh, busy!” And then you open your mouth to draw in air and your eyes are a bit wide, like, whew the exhilaration.

Guess what? 1.) No one cares that you’re busy. 2.) How successful is that busy making you?

People love their to-do lists. They feel excited when all the boxes are checked off. I call to-do lists noble masturbation. It feels good, but it’s not the real thing.

Sure, you have work to do. Whatever. We all do. But if you don’t dedicate some time to the actual priorities and efforts that will move your business forward, you’re just eating up hours on tasks.

The to do list is the enemy. Make it a third class citizen in your life.

Work Inside Three Hours

You’re awake roughly 16 hours each day, if you get 8 hours of sleep. I get 8 or more. You’re probably too busy to sleep as much as me.

Of those 16 hours, people speak for a lot of your hours: family, friends, work, clients, whatever. Find three. You can find 3 out of 16. And make those about your priorities. This isn’t piano lessons. This is “this will make me more successful because I’m investing time and focus in it” type stuff.

You can find it. And your success will start giving you proof that it’s working. And then you’ll defend it. I promise. It’s how I’ve written ten books and counting, while still traveling to consult, speak, and spend as much time as I can with my kids and my fiancé. Join me in taking some of this power for yourself.

Chris Brogan is a business advisor and New York Times Bestselling author. Learn more about him at http://chrisbrogan.com