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Posts Tagged ‘negotiation skills’

Do nice guys finish last?

Yes according to the University of Notre Dame, reported by NBC News.  Apparently, being one of those people who gets along with your coworkers gets you a smaller paycheck at the end than those people who are not as agreeable in the workplace.  “Being bad is good for your bottomline.”  The study reveals that disagreeable men earn US$10,000 a year more than nice guys.

Hmmm….

Well I’m not a fan of stepping on others in order to get ahead, but I have seen countless number of times where others attempt to do so behind my back.  No matter how self-righteous I try hard to be,  I can’t help to make sure I am constantly watching out for my back.  However, it’s about what “bad” means here.  If it’s about being insistent and fierce in the workplace, it can be a pretty neutral or even influential behavior.  If we are talking about “jerks” in general, why they get a bigger paycheck certainly strikes up a lot of controversies.

One thing I can experience for sure is that being nice can easily end up being taken for granted, or even taken advantage of.  Not everyone appreciate goodness and competencies in the spirit it’s intended.  Just because you are conscientious, well-mannered, understanding and a people person, you can sometimes be perceived as a push-over.  In circumstances like this, and if you truly have talent and value to showcase for, my advice is to take a harder stand.  No, not on your coworkers, but on those who are trying to rip you off.

I can’t stress more about the prerequisite here.  It’s whether you have distinctive value in the first place.  Otherwise, bragging about something non-existent is not only unrealistic but borderline annoying.  If you have what it takes and you know how much it is valued in the market place, fight for your worth.  Use reasoning, facts and logic.  I may not get what I wanted, but I wish that I have tried my very best to make my case, and most importantly, feeling respected at the end.

My experience tells me that there are always those who are trying to test my boundaries purely as a negotiation habit of themselves.  There is no way around it.  I can only step up to the game.  The process can be ugly, petty, frustrating or sometimes even disgusting, but it has to be played out.  If I can learn to put emotions aside, I believe I have the power to somehow turn this undesirable process into a much more professional exchange.

Nice guys finish last?  It depends on where the finishing line is, baby.

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Dealing with suppliers that are not in any way smaller than your employers is one of the trickiest negotiation scenarios to master.  I cannot believe I still come across senior procurement executives who continue to believe that they are given almighty powers just because they are in the seats of making multi million deals.   More often than not, they are the ones who constantly get themselves hit with never-ending surprises.  I pay no sympathy for them, not even a tiny bit.

I wrote about reciprocal trading last year and that existence is plentiful with large multinational suppliers.  What I encountered recently is the classic example of negotiation leverages – the battle between the lawyers.

A big technology supplier is insisting to use a brand new contract template on a renewal deal, while we believe that it is just going to be a tremendous time drain to review all the terms and conditions again from scratch.  Lawyers of mutual parties refuse to give in, and as in every negotiation, essentially it’s the deal itself that is going to matter.  As long as I gather the bottom line position of my stakeholders (i.e. users), it is now up to me to lay it out on the table by keeping it simple.  Do we need this deal or not?

The answer is always yes, or we won’t get ourselves into this situation in the first place.  If this is a deal not worth remembering, no one would have been bothered by it this much.  As long as the intention is mutual, there is ought to be some common ground that we can all work with.  I usually don’t dwell on matters that are already handled by the lawyers to avoid redundancy.  I focus on the logic portion and point out the inconsistencies I see of the other party’s arguments.  Why is a new template needed?  What’s changed?  What does it have to do with our other similar agreements in other markets?  Why wasn’t this mentioned during bid phase?  Why are we discovering this only now?

In short, don’t take us for a ride.  Our company’s time is worth much more.  I reserve no time for last-minute rip-offs.  Even if we really rely on you, we deserve some professionalism instead of some third grade sleeky salesmanship.

Obviously, I sugar-coat such messages.    Though every seasoned salesperson, or in many cases the Managing Directors, would have gotten my messages.  When I make it a point as to question someone’s professional credibility or even integrity, coupled with logical reasoning and facts, there is no way the other party won’t budge.

Does it work on people on the same side as I do?  You bet.  Did they inspect all the fine prints when they received the quote?  Did they sound way too eager when they approached the supplier?  Did they not make it clear as to what’s important to the company aside from the service only?

I have to say again and again that none of this is rocket science, and those of you reading this must also agree that this is just common sense.  However, you may be surprised just how much time and effort continues to be wasted on such power play.

Perhaps, that equates to job security to many.

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In every job search opportunity the topic of remuneration and package always comes out one point or another.  Regardless whether you think you have any negotiation power on what’s on offer or not, you should know what you are worth.  If I were the employer, even if I don’t agree with the number you are proposing, you would still have gained my respect if you present a relevant logic of how you tabulate the number.

Salary surveys, benchmark reports, and insider information are all undoubtedly helpful in assessing how much your fair pay is going to be, but don’t apply yourself in everything you are hearing.  Each person has distinct characteristics and experience to offer and the higher the career ladder you are at, the bigger the variability.  So next time when the so-called headhunters coerce you in accepting an “unbeatable” offer, do your own research and make your own assessment.

What makes you stand out from the other candidates being considered for the same position?  Do you know who are out there and what level of experience they have?  The number one step is to know your competition.  Once you have been in a profession for some years, that should not be as hard to do as it seems.  You should have compared yourself with your colleagues in your own company, those in competitors’ organizations, at business seminars, trainings and cocktail parties.  In my line of work, I particularly pay attention to the personalities of my industry peers other than just their professional qualifications, because sometimes that is what it takes to tell a couple of similarly qualified candidates apart.

The hard qualifiers are easy.  Years of experience, number of subordinates, revenue numbers, savings figures etc. are all quantifiable.  Compare your accomplishments with the market to assess your net worth.  Why is your employer going to be “profitable” to bring you on board?  To drive revenue up?  To land more savings?  To re-energize the team?  Always make sure you will be delivering a much bigger number than what you want on your paycheck.  It’s simple math, and both sides have to win.

Yet it’s the soft qualities that few manage to notice.  Soft qualities like personalities, influencing skills, communication skills, staying power and leadership skills all have unlimited potential that no past accomplishments can truly showcase.  We have seen countless cases where a very competent high performer fails miserably in his new role because he does not have the leadership skills at the next level.  I wrote about that in my earlier post recommending Marshall Goldsmith’s book.   On the other hand, if you are confident that your soft skills are going to add great value to the post at hand, make sure you let your employers and headhunters know about it with examples, and then attach a dollar figure to it.  Yes how one sees this figure as relevant is a subjective issue, but as long as you can put together your logic behind it, there isn’t much to lose.

When negotiation is at stake particularly for a fairly big portion of your career life,  don’t be shy about it.   The key is to be as fact-based as possible, build a convincing proposition and articulate it skillfully.  If you are a good salesman at your job, why wouldn’t you do it for yourself?

 

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The Price Of Egotism

In this day and age you would think that business negotiations are conducted behind weeks of research, preparation and interests alignment.  Definitely true.  However the more I probe into business deals within even the biggest multinational corporations, the more I am surprised by how reckless some business decisions are made, or deals negotiated.  There are a few mistakes that shouldn’t even be accepted by 12-year olds.

  • Unclear and unaligned objectives.  When multiple beneficiaries are involved, negotiations have to be planned carefully with a clear chain of command.  I have seen negotiations that went on for months because certain stakeholders complained about being ignored or neglected.
  • Too short-sighted.  If the stakeholders are only keen on getting what they want now, unless we are talking about a product buying contract, there are bound to be issues with upgrading, maintenance, integration, servicing and performance management sooner or later.  Getting a cheap upfront offer but paying a huge price in the years ahead is no doubt a horrible deal.  Many of my clients used to bitch about the careless contracts that they inherited from their predecessors.
  • Caught by timeline.  This is a result of poor planning, or sometimes being totally conceited.  They believe the other parties will all cave in  regardless of how tight the deadline is, but little do they know everything comes with a price, and their companies sure aren’t prepared to pay more for their ego.
  • Not reading the fine prints.  I hate to believe that some people are just too stupid to not read the fine prints of the contract.  Then they must be so confident that their personal charisma is going to successfully seduce the other party into not executing the protection clauses. 
  • Fooled by the oldest tricks.  How many times have you heard the other parties saying “My god, you are such a tough negotiator!” or “I really like working with you – you are very reasonable.”?    The correct reflex action is run, splash cold water on your face, and review the terms once again.  Chances are, you are already in a shitty deal.

There you have it.  As I mentioned before, these silly mistakes (and many more) are still being repeated everyday no matter how advanced the company it is.  That’s why lawyers and procurement professionals still have jobs! 

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Ambushed!

Today is the first time I have heard of ambush marketing.  Guilty.  Chinese gymnasts at the Asian Games are accused of making hand gestures during competition and medals ceremonies promoting their main sportswear sponsor Li Ning brand.   Apparently this is not uncommon and event organizers have been trying hard to stop all this ambush marketing to protect their official sponsors.   Because of the new terminology learned, I have now also discovered Predatory Ambushing, Coattail Ambushing, Property Infringement, Self Ambushing, Associative Ambushing, Distractive Ambushing, Values Ambushing, Insurgent Ambushing, Parallel Property Ambushing, Unintentional Ambushing, and Saturation Ambushing.  I have to give it to the marketers nowadays for all of their innovative means of getting their messages across.

As a sports event spectator, I really wasn’t expecting to be “ambushed” by product placements through athletes’ hand gestures. What’s next?  Athletes peeling off their uniform on stage to show us their sponsored ointment patch?

Well this reminds me of a project last year when my boss and I were invited to sit in to a series of meetings between our sales team and an Indian film academy, who was looking for sponsorship by our company for hosting their annual award ceremony, which would be televised around the globe to over 450 million viewers via Star TV.   Our company was attracted by the media value of the event, and it hits our key demographics.  However, sponsorship covers everything from local transportation to lodging to meals to production to security and so much more, and we were invited to join the negotiation team to ensure the company’s rights and interests were protected.

There wasn’t really too much to negotiate monetary wise since the sponsorship definition has been set from day one.  We knew what we were getting into, but we needed to have a good idea as to where the limit would be.  Normal lodging and meals are fine.  What if the stars and celebrities decide to throw a big private party and order 2 tons of spirit?  Will that be included?  Who calls the shots?  Who provide bodyguards?  What can they do and not do?  When do we turn over the responsibility to the local law enforcement? 

You get the idea.

The biggest concern, however, was marketing and sponsorship rights.  The counterpart clearly has a lot of experience producing the event around the world, and they fund it entirely through sponsorship deals.  Ours was the biggest piece that more or less dictates which country/location the event would eventually land.  We were looking for opportunities to get ourselves some funding but we could not get the event brand anywhere close to our campaigns.  Fine.  What we were most concerned of, however, was whether we would be “ambushed” (now I finally have the word for it) by their other sponsors.  That would seriously undermine our return-on-investment if we did not have exclusivity. 

It was a very interesting project for me and it had nothing to do with cost savings or even purchases.  The cultural differences at play is also remarkably classroom material.  When there is a chance later on, I will write something about cultural aspects at the negotiation table.

Hmm….in the meantime let me think of ways to make “ambush purchasing” up…

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Negotiation skills in my opinion are nothing too technical.  Sales people today are already well prepared for intensive bargaining by the buyers and sometimes even the users themselves.  I refuse to believe that we achieve fantastic results because of our expert negotiation skills, unless we are talking about business partnership deals where there are lots of variables to trade mutually.  The latter takes strategic planning, homework and role-playing.

More often than not,  the users or stakeholders do not even know what they want in the first place.  They are confused over why they need what they are buying.  In turn they end up buying things expensively, and sometimes even buying things they don’t need.  It sounds silly, but also ironic that it appears the more “educated” people make more of these mistakes – just because they think these trivial matters are just not worth their valuable time.  Well, that’s why I am paid to help them.  I often spend a considerable amount of time interviewing my users and find out what is the current stage and where they want to go from there.  They will usually have some strong ideas about what they want to buy or may have received proposals already from suppliers.  I help them pin down to what are the necessities and what are the bonuses.  I try to put a limit to customized  requirements in hope to broaden the supply base from a few niche players to a more commoditized market.  This may not be practical at times and I may actually approach it the other way round and look for players that provide me with solutions rather than cookie cutter off-the-shelf products.  This takes experience and I of course need the help and expertise from the users as well.

If you keep asking questions like a 5th grader, you are already half way toward success.

 Pinning down what we want and identifying our true needs is quite a significant milestone.  Sales people love ambiguity because they can pad hidden costs and allowances into their product offering.  I want transparency, accountability and fairness.  With these simple principles, it does not take a genius to drive pricing down.

Some of my colleagues use good old traditional “threat” as their negotiation tactics.  I respect everyone’s individual negotiation styles, but it’s just not my cup of tea.   Today’s suppliers can be larger and more powerful than my employers.  We may actually need to depend on them though we are paying the bill.  When I pick people in my field of strategic procurement, I always go for talents who have expert communication and problem solving skills.  Critical thinking is a must.  The low hanging fruits are long gone, and we are presented with new unprecedented and complex problems.  I need  people who are fast learners, innovative and eloquent.  I used to be told that people who possess these qualities will put procurement jobs as their last resort.  True.  Good people are in demand everywhere.  However, just because such qualities are so rare, they can become truly niche players in the field, and the opportunities are endless.  To raise the bar and professionalism of strategic procurement is partly the objective of me starting this blog.

Cheers!

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