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Be the last to speak
You have been told your whole life to listen, but you should lean to be the last to speak. It sounds easy, but I know from experience that it is not. At least not for me ;o)
It does not have to be always the case that you be last to speak, but in many instances it is better to be silent (first) and speak later. Often people walk into the (meeting) room and say: ‘Here is the problem, this is what I think. But I am interested in your opinion. Let’s go through the room’
It is too late! And it will most likely will have a negative effect on the acceptance and support of your proposal and approach. The skill to hold your opinion to yourself and to wait until everyone has spoken does two things:
1.
1. It
gives everyone the feeling that they have been heard. It gives everybody else the ability to feel
that they have contributed.
2. You get the benefit of what everybody thinks before you render your opinion.
The skill is really to keep your opinion to yourself. If you agree with somebody don’t nod ‘Yes’. If you disagree with somebody don’t nod ‘No’. Simply sit there and take everything in The only thing you have to do is to ask questions, so you can understand what they mean and why they have the opinion they have. You must understand from where they are speaking. Why they have the opinion they have. Not just what they are saying.
And at the end you will get your turn!
Mirror Mirror on the wall ....
Who is the best supplier of them all?
It all begins with a proper way of Sourcing to find the, for YOU, most suitable supplier.
There are many Procurement (Sourcing) models. The most universal and used model is the ‘7 Step Strategic Sourcing’ developed by A.T. Kearney in the 1990’s. This model has been around a long time and a lot has happened since then. Nevertheless and in spite of the name of the model, every self respecting buyer who aims for a successful outcome needs to follow a Procurement process (for goods and services that matters) that at least will consist out of these 7 process steps:
- Data collection & spend analysis
- Market Research
- Sourcing strategy / RFx process
- Negotiating
- Contracting
- Implementation
- Continuous improvement
The category profile in step 1 is not complete or the spend that is not touchable is included. In step 2 the pre-selection is not thoroughly done and wrong selected suppliers participate. Step 3, developing the sourcing strategy and RFx documents is not done or not thoroughly enough with cross-functional involvement. Often caused due to the fact that the buyers or the organization of the buyers do not take the time it needs to set-up the right strategy and/or RFx documents. And last but not least if a contract has been implemented no adequate follow-up (step 7) has been carried out by performing regular Supplier Relationship / Performance Management securing continuous improvement.
The adoption of the model tells the supplier about the type of buyers they are dealing with and the sales approach the supplier will adopt. That is because it typically signifies both the power of the Procurement Department in an organization and the sophistication of the organization's approach to buying.
Unfortunately there is no mirror to determine who is the best suitable supplier. Yes, there might be a good past experience with a supplier or a reference from a colleague or friendly organization. But if at the end it turns out not to be as expected, Procurement is the one who is responsible for it. So to find the best you have to take the time to go thoroughly through this process. It is an exciting and interesting process which will teach you a lot about the market and the selected suppliers. And at least as important is that you can show that you have done everything to achieve a successful selection / outcome.
What would happen for example if a supplier approached each sale with the expectation the prospect was going to follow many, if not all of the 7 steps? Specifically, how would it impact on the sales strategies employed? Well for a start, suppliers would likely ask slightly different questions as they know what is coming and this supplier would have a noticeable lead compared to you.
The supplier who is familiar with the process, is in my opinion, a party leveling easier with then the one who doesn’t. I would fool myself thinking that it is a benefit doing business with a supplier who does not know the process.
By following the process you will also control the communication. Communication is the most important aspect in business. Having your internal stakeholders and colleagues in one team and forming one front towards the supplier. Convince your organization to take time and effort cooperating together to establish the best possible for the business.
Don’t let time being the limiting factor to achieve the best possible and making sure it stays that way!
The art of negotiation
It's a well-known proposition that you know who’s going to win a negotiation; it’s he who pauses the longest. But there is more to it than that. I learned in my
life 2 important lessons that are forming my foundation in negotiations.
1. Positioning of the parties (power balance).
You have to know where you are positioning your negotiation opponent and where your opponent is positioning you! Your strategy and tactics should be conceived from the combination of the position your supplier holds in the Procurement Portfolio Matrix (Leverage, Strategic, Routine or Bottleneck) and how the supplier looks at you as a customer in the Supplier Preference Matrix (Development, Core, Nuisance or Exploitable).
I see in practice that ‘negotiators’ using the same negotiation tactic no matter in which quadrant they and their negotiation partner(s) are or that they treat a supplier like an strategic partner, but the supplier sees him as a nuisance customer. And then wondering why the supplier is giving no attention to the several requests to submit information or to call back. You can imagine that the negotiation result will not be very satisfactory.
2. Frame of Reference.
Perhaps even more important than Positioning is to determine the frame of reference of your opponent in negotiation. Different individuals interpret the same communication differently depending on their experiences, education, exposure and personality.
One’s a colleague of mine said ‘This supplier is really arrogant’ but in this case the reaction of the supplier was not arrogant but it was a sign of non-acceptance of the way he was treated in the negotiation process. The colleague interpreted the behavior of the supplier as arrogant as it was a mirror image of his own behavior.
Try to put yourself in others person position and this will strengthen your negotiation position as you can influence the state of mind of your negotiation partner in your favor.
Negotiation is about knowing what you want, going after it, and respecting the other person in the process.
The Battle of Forms!
Prevention is better than cure, wouldn’t you agree?
So why do buying organizations not take their advantage to be the first to refer to the Terms and Conditions?
Ignorance, underestimation and deliberate negligence not to lose time seems to be the reason of not referring first to the Terms and Conditions. Often I see that general conditions have been declared applicable, but that the handover did not take place and that is a shame as the other party in many cases can void your general conditions. Dutch law stipulates that: in principle, those terms and conditions referred to first are applicable unless the other party declared their (the second set) terms and conditions applicable and explicitly disclaimed the first set of terms and conditions.
How does it work in practice? Basically it is simple: If you make a request for information or quotation always refer to the General Purchasing Terms & Conditions (GPT&C) and submit them to the supplier, unless you have already an agreement with the supplier on your GPT&C. If the supplier does not explicitly disclaim in writing the GPT&C by name and declare their General Sales & Delivery Terms, your GPT&C are applicable.
If however the supplier disclaims your GPT&C and declare their Terms and Conditions you should not sit still and accept that the supplier is starting with the execution of the agreement as you then will be bounded to the Terms and Conditions of the other party.
As the buying party is the initiator they have the advantage on their side, but often a (budget) quotation is asked by employees without referring to the General Purchasing Terms & Conditions not realizing that the advantage is gone as the selling party usually refers on their (budget) quotation to the General Sales and Delivery Terms & Conditions. If this quotation will become an order also the negotiation position of the buying organization is weakened.
Basically the employees of the buying organization are strengthening the negotiation position of the supplier instead of forming together with their Procurement Department one front towards the supplier.