Five Common Mistakes in Procurement Negotiations

Undisciplined behavior and emotional outbursts can undermine even the best thought-out strategy.  There’s a wealth of published information available about how to manage the commercial and technical content of supplier negotiations but little focus is given to how to handle the behavior of the participants, on both sides of the table. 

#1   Lack of preparation

Many experienced negotiators prepare their team beforehand.  This entails setting objectives, defining roles, deciding on tactics and planning the meeting. But, how many teams research the supplier participants in detail?  Knowing who will be there, their exact influence in the negotiation process and their preferred outcome is standard practice.  There is, however, great benefit in understanding the personalities, knowing what their personal interests, preferences and biases are. This information can help in establishing rapport and breaking the ice. 

#2   Getting off on the wrong foot

There can be many reasons for this.  Many of them are because of poor timing of the meeting for the suppliers, an inconvenient venue, lack of facilities, even hygiene factors like refreshment issues.  Immediate efforts at recovery are required so that the negotiations can proceed without further disruption.  Make sure that you have all the right people present and that they have no distractions or competing commitments.   

·         Some of the early problems may occur because of issues on your own team:

·         For each person, know their priorities, preferences and loyalties

·         Manage conflicts of interest on your own team and mediate them early in the process

·         Make sure everyone knows their role and has access to the same data

#3   Not managing your emotions

Many well-planned negotiations fail due to personality conflicts rather than big differences in commercial position or desired outcome. Don’t react negatively to common tactics (there are more than 50 that have been documented) or gambits, some are designed to irritate and rile you.  Everyone has “hot buttons”, it is important that you know what yours are and what sets them off.  Discussions may get extremely heated, you have to stay in control even if you are being insulted or yelled at.  Being able to diffuse such situations is a talent that is worth developing, allowing arguments to escalate will lead to failure of negotiations.  Sometimes just a smile can do it.            

#4   Not listening

Listening is a learned skill. Hear their ideas, acknowledge them and think about them positively before launching into your solution.  It is easy to become impatient with those people whose ideas are radically opposed to yours. Develop the ability to shut up at the right time and let others talk. One way to cool off is to ask for “time out”, taking a ten-minute break can permit the discussion to get back on track.  Consider a person’s own background and beliefs and assess how this may influence their views.  Remember you are acting a part in the negotiation process on behalf of your employer, your own personal biases must take a back seat.     

#5   Not reading body language    

People who fidget during a negotiation can be showing signs of being nervous or anxious.  Anyone tapping their feet, or touching their face or clasping their hands is a big giveaway. Not maintaining eye contact gives off a perception of a lack of confidence and conviction and shows that the person is uneasy.

Take a refresher or read up on body language beforehand, especially if the participants are from a different ethnic group or from another country with differing customs.  What physical behavior is the norm in your organization may have a completely different meaning in China or among French-speaking people, for example.  A nod from one person may signify “yes”, but not from others.