Sourcing Negotiation Tips from the FBI (and Spend Matters!)

Kudos to Procurement Leaders for featuring a truly fun yet fascinating interview with a former FBI leader on the topic of negotiation. In Tips from a master negotiator, Steve Hall interviews Gary Noesner, the former chief of the FBI Crisis Negotiation group. Here are a few highlights that really jump out, as well as our observations on the statements.

“Success comes more from showing empathy, being patient, and showing perseverance than it does from forwarding a brilliant argument. Negotiation skills can be taught, but some negotiators have a natural self-control and likability that allows them to project sincerity, leading to influence.”

Spend Matters observation: Empathy is a crucial and yet often hidden skill set for all successful negotiators and consultants (and one that is completely obfuscated in many tool-based negotiation approaches using reverse auctions, as an example). For strategic negotiations, focus on the human element and use technologies that can support the building of relationships (e.g., soliciting supplier creativity as well as supplier requirements) as much as focusing on a binary outcome (e.g., can you meet this target – or market – price or not).

“In my experience, the most effective negotiation process consists of being a good listener. It’s critical to understand the views and perspectives of the other party in the negotiation and use that knowledge to craft a solution to the problem that is more likely to serve everyone’s needs, not just yours. Being creative and flexible generally helps promote a positive atmosphere in which success can be achieved.”

Spend Matters observation: Know which negotiations where soliciting supplier creativity is essential. Go back to the Peter Kraljic model (e.g., there’s no need for creativity in the “leverage” quadrant). But where creativity is called for, don’t be afraid to have a more open-ended RFI process rather than focusing on an apples-to-apples RFP.

“Anyone in any business situation needs to be an effective communicator in order to achieve maximum success … All of life is a negotiation, but we are not all good negotiators.”

Spend Matters observation: Don’t forget the importance of using different forums for negotiation and supplier communication today. While face-to-face meetings for supplier development can be essential, replace that bi-monthly conference call with a video Skype or Telepresence meeting. You’ll be surprised at how reading body language and truly “connecting” versus simply talking can help improve communication success. Last, don’t focus on being a “good negotiator." Rather, focus on letting negotiations be the sum of a data-driven, analytical exercise in which a natural “bid/ask” type spread between buyer and supplier converges based on reducing risk for both parties through the daylight that transparency and rigor brings.

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