Earlier this week, I received news that my second procurement boss ever, Mr. Jack Pawlik, had passed away at the young age of 65.
Jack had a profoundly positive influence on my procurement career. I even shared a story about one of our interactions in my book, The Procurement Game Plan: Strategies and Techniques for Supply Management Professionals. I’ll adapt that story and share it with you here.
In 1996, I was working as a buyer for a small manufacturer here in Pittsburgh. I was aggressively recruited by USAir (who later became US Airways and then American Airlines) for a position on the leadership track of their procurement team.
My first assignment for USAir was in Facilities Purchasing, where I reported to Jack. Soon after my hire, USAir decided to change its name to US Airways. This brought about the need for every USAir sign in the world to be replaced by a corresponding US Airways sign.
And guess who Jack picked to be responsible for procuring every single one of those signs?
Yep – me!
And it was through that project and through Jack that I learned who the procurement professional’s worst enemy is.
If I was to ask you who your worst enemy is in the context of a negotiation, I bet there’s a high likelihood that you would respond that it’s your supplier counterpart. That is, the sales person on the supplier’s team who’s trying to get the highest price for the product or service that he or she is trying to sell to you.
And in some cases you’d be right. In other cases I’d say that you’re close, but not quite right.
Why is that?
Well, in my opinion the procurement negotiator’s worst enemy is the set of assumptions that the procurement professional makes in context of the negotiation. And let me explain more through this story.
In one of my first signage buys, I was buying signage with a baseline price of $100,000. I negotiated with the top rated supplier and was able to persuade that supplier to reduce his price by 20 percent.
I felt pretty good about this so I went into Jack’s office and said, “Jack, I think we’re ready to sign the contract with this supplier. I was just able to negotiate a 20 percent price decrease.”
I expected Jack to be pretty happy about that, but Jack looked up from his ever-present stack of reports and bag of pretzels and said, “Is that as low as they will go?” And I said, “Well, yeah.”
Jack said, “How do you know?” And I sheepishly replied, “Well, that’s the price we ended up at when we concluded the negotiation.”
And then Jack said, “Well, how do you know that they wouldn’t be willing to go even lower if you continued with the negotiation?”
I probably looked like a deer trapped in headlights because I didn’t have a good answer for Jack. And at that point I realized that the assumption that I was making about the supplier’s pricing was limiting my ability to maximize my success in the negotiation.
Unfortunately, over the years, I’ve seen this type of assumption get in the way of a lot of potential procurement success. But, since then, I’ve never allowed that type of assumption prevent me from pushing just a little bit more in my negotiations.
So, the lesson that Jack left for me that I will pass on to you in celebration of Jack’s legacy, is for you to evaluate your assumptions – your worst enemy – before going into a negotiation. Try to catch yourself making the type of assumptions that Jack caught me making. And when you do, ask yourself “Is that assumption correct?” Challenge that assumption and see what happens. I guarantee you that over the course of your career you will be more successful in some negotiations because of it.
But don’t thank me. Thank Jack – someone whose impact on my procurement career will always be felt, never forgotten.
Rest easy, my friend and mentor.