Using Collaboration In Negotiation: 3 Steps
PurchTips - Edition # 219 December 14, 2010
By Charles Dominick, SPSM, SPSM2
How Can You Collaborate When You Negotiate?
Win-win negotiation uses collaboration as opposed to confrontation as the basis for persuasion. In some negotiations where you and your supplier have opposite positions on an issue, you may think that there is no opportunity for collaboration. But there usually is if you use these three simple steps:
- Have both parties share what their interests are. In our online class "Powerful Negotiation For Successful Buying," we teach that an interest is a need that you desire to have satisfied and a position is one scenario that could satisfy an interest. For example, a supplier may have an interest in making a 20% profit margin on its sales to your organization and its position will be that it wants to charge $5.00 per unit. Your interest may be that you achieve a 10% cost savings and your position is that the supplier should reduce the price to $4.50. If you've reached an impasse, it can be more effective to discuss interests rather than argue over positions.
- Brainstorm to identify several possible solutions. After interests have been discussed, ask the supplier to work with you to come up with multiple scenarios that would enable both parties to achieve their interests. The goal is not to come up with the perfect solution just yet, but to gather several different ideas that can be later pared down. Don't feel the pressure to do all the talking. Sometimes, a supplier can come up with a good idea and they will be more likely to buy into it - or at least reluctantly honor it - if they come up with it as opposed to you imposing it on them. For example, the supplier may say "I could get the price down to $4.50 if you opted for a single material packaging instead of a two-material packaging. I'd still make 20% because my costs would be lower and you'd achieve your savings."
- Jointly select the best solution. After brainstorming, you may have to whittle down some of the suggestions that just won't work. But, hopefully, you've come up with several potential solutions that accommodate both parties' interests. Together, you and the supplier should select one that makes the deal feel like a "win" for both parties.
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