Negotiations and Preparations

One of the most important tasks of procurement, and basically key to the function of procurement is the art of negotiating. Anything in life can be a negotiation, and certainly anything in business life. Think of items such as the duration of a meeting, the place and time of a meeting and of course the agenda.

Most importantly however is the preparation to any negotiation. Fail to prepare is the preparation to fail. So make sure that you everything organized:

  • Define the goals
  • Establish an approach
  • Assume your position relative to the other party
  • Take the Lead to a solution
  • And secure the implementation

You could call this the “DEALS” framework. However, I would take the LEADS framework: Leverage (which leverage do you have), Establish approach (negotiations tactics and strategies), Assume position, Define the goals and secure the implementation.

Leverage: Define which points can be used as leverage. Carrots, sticks, alternatives, the relationship.

Establish an approach: how do you want to lead the negotiation? Where do you meet, with whom? What is acceptable, which tactics will be used?

Assume position: do role-plays, take a look at your position through the eyes of your supplier. What counter-arguments can you think of for your arguments, and how can you guard yourself against this?

Define the goals: How far can you go? What is your absolute must, or your “walk-away-target”. What is the Like and what is the intention.

Secure the implementation: formulate the agreements, put in contracts, ask for confirmation and make sure it is signed by the appropriate people.

Much more will follow on this subject.