Now, I know from some email I received, that some readers got the false impression that I recommend using only emotion-based negotiation and not fact-based negotiation. Not the case. In both articles, I alluded to my belief that fact-based negotiation “should be a tool in the procurement negotiator’s toolbox. Just not the only tool.”
Let me share a great example of why. I have a friend who was, up until recently, a vice president of sourcing for a large health care institution. He was an excellent negotiator in his own right. But when certain types of equipment buys came up, he always delegated negotiating responsibility to this one particular member of his staff.
Because the guy had an incredible knack of getting equipment for free.
This particular staff member either knew the value to a supplier of having a leading name in the industry using their gear, and/or of being able to sell aftermarket parts and services to a large customer in the future, and/or something else, but this guy was able to ethically get millions of dollars of equipment for his employer at no cost. The suppliers were huge companies, so no one had to worry about putting a supplier out of business from negotiating too hard.
The guy was simply a great communicator and negotiator.
Now, if that guy only used fact-based negotiation, he would have calculated a should-cost model that would have had him asking for a 5% discount or something. And he would have been doing his organization a disservice.
You might be saying, “But, Charles, it sounds like that was a huge company. That guy’s tactics wouldn’t work as well for a smaller organization like mine.” And you may be right. But I have seen organizations even larger than this company mandating fact-based negotiation.
And that’s just dumb.
As soon as you start taking tools out of the toolbox, you limit your negotiation potential dramatically. Why would anyone do that?
As a procurement negotiator, you need an open mind and lots of tools. Use them all and keep finding ones that work better!