Blog by Jon Stevens, Group Head of Commercial, Servest
In deal-making, procurement professionals can display a number of traits. Recognise yourself in any of the following procurement personalities?
A procurement officer’s brief is to get the best deal. More often than not, the focus is on cost, as opposed to the ins and outs of the offering in question.
Perhaps that’s because there’s usually been a rigorous selection process based on the benefits of such a partnership before both sides take their seat across the boardroom table to negotiate further. The procurement function exists to get down to the “nitty-gritty” – the most important aspects or practical details – before anyone commits their name to paper. Part of that process involves getting one’s own way, of course! But it’s also important to strike a balance so both customer and supplier are happy in the long-run, or else the relationship will burn out before it gets going. We should aim for the win-win, then, not just the win.
We don’t all think the same way – nor are we programmed to automatically conform to every wish or demand presented by another person. That’s where the art of negotiation comes into it. It’s important to start with a level playing field and to establish relationships from the outset so you get a feeling for the person that you’re striking a deal with. Procurement officers need to somehow blend art with science if they’re to create a foundation on which constructive negotiations can be built. This isn’t just a numbers game – or mind games – it’s about being open, honest, credible and sincere.
There’s no wrong and right way to negotiate but there is a lot to be said for taking some time to think about how you’re coming across. In this industry, there are numerous personalities at play, each with their own style and way of doing things. Perhaps you fall into one of the four categories below. If so, here are some dos and don’ts:
Your preference is to bully people into submission by adopting a black and white, brutally cutthroat approach to the buyer / supplier relationship. You win. They lose. The problem is that being too cost-focused can mean you’ll have problems down the line when the supplier realises it’s not a sustainable agreement – and then the process has to start all over again.
The poker player
You guys don’t give anything away. You know your stuff and you’re dangerously good at getting your own way. You usually do so by confusing suppliers with data and jargon – to the point they give up trying to understand and just agree. Like with the dominator, this can sour the relationship.
The best buddy
You prefer a warm approach and a bit of honesty and are the friend suppliers tend to trust. If people are on your side, it can make reaching an agreement easier. Just be careful you don’t forsake professionalism trying to be a pal, otherwise they may take advantage of your kindness. In other words, they’ll win and you’ll lose.
The smooth operator
Tough. Knowledgeable. Professional. If you know exactly what you want, and if you know exactly how to get it without devaluing a supplier’s offering, then you’ll probably have a win/win situation.
Procurement is not all about ‘hard-nosed’, price-based battles; it’s about reading people, negotiating, and reaching the best deal for both parties to ensure a long-term, fruitful relationship. There are many personas in procurement, but people can usually sense who you really are, so the best one for a face-off is the one that will allow you to cultivate and maintain a good rapport with everyone at the table. That’s the only way every player can win.
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