Negotiation for Procurement Professionals Negotiation for Procurement Professionals i ii THIS PAGE IS INTENTIONALLY LEFT BLANK Negotiation for Procurement Professionals Second Edition Jonathan O’Brien.
i Negotiation for Procurement Professionals ii THIS PAGE IS INTENTIONALLY LEFT BLANK iii Second Edition Negotiation for Procurement Professionals Jonathan O’Brien iv Publisher’s note Every possible effort has been made to ensure that the information contained in this book is accurate at the time of going to press, and the publishers and author cannot accept responsibility for any errors or omissions, however caused No responsibility for loss or damage occasioned to any person acting, or refraining from action, as a result of the material in this publication can be accepted by the editor, the publishers or the author First published in Great Britain and the United States in 2013 by Kogan Page Limited as Negotiation for Purchasing Professionals Second edition 2016 Apart from any fair dealing for the purposes of research or private study, or criticism or review, as permitted under the Copyright, Designs and Patents Act 1988, this publication may only be reproduced, stored or transmitted, in any form or by any means, with the prior permission in writing of the publishers, or in the case of reprographic reproduction in accordance with the terms and licences issued by the CLA Enquiries concerning reproduction outside these terms should be sent to the publishers at the undermentioned addresses: 2nd Floor, 45 Gee Street London EC1V 3RS United Kingdom www.koganpage.com 1518 Walnut Street, Suite 1100 Philadelphia PA 19102 USA 4737/23 Ansari Road Daryaganj New Delhi 110002 India © Jonathan O’Brien 2013 and 2016 The right of Jonathan O’Brien to be identified as the author of this work has been asserted by him in accordance with the Copyright, Designs and Patents Act 1988 ISBN 978 7494 7730 E-ISBN 978 7494 7731 British Library Cataloguing-in-Publication Data A CIP record for this book is available from the British Library Library of Congress Control Number 2016949865 Typeset by Graphicraft Limited, Hong Kong Print production managed by Jellyfish Printed and bound in Great Britain by CPI Group (UK) Ltd, Croydon, CR0 4YY v For Elaine, Emily and Hugh vi THIS PAGE IS INTENTIONALLY LEFT BLANK vii Co n t e n t s List of figures ix List of tables xiii Preface xv Acknowledgements xvii About the author xix Introduction 1 01 Introducing negotiation 3 02 Countering the seller’s advantage 21 03 Red Sheet – a winning process for negotiation 35 04 Planning the negotiation 47 05 Negotiating across cultures 73 06 Personality and negotiation 105 07 Power 143 08 Game theory in negotiation 179 09 Building the concession strategy 203 10 The negotiation event 231 11 Winning event tactics and techniques 251 12 Body language 309 viii Contents 13 Managing what you say and how you say it 337 14 Making it a success 357 Appendix – The Red Sheet Negotiation Tool 385 Glossary 401 References and further reading 403 Index 411 ix L i s t o f Fig u r e s figure 1.1 An interpretation of Maslow’s hierarchy of needs 4 figure 1.2 The value pie – claiming or creating value 7 figure 1.3 Different forms of agreement in a negotiation 8 figure 1.4 The ZoMA (Zone of Mutual Agreement) 10 figure 1.5 Negotiation pre-requisites and success factors 12 figure 2.1 The sales funnel (adapted from Rich, Spiro and Stanton, 2007) 25 figure 3.1 Negotiation planning using the Red Sheet 36 figure 3.2 The overarching STEP framework 38 figure 3.3 The Situation STEP within Red Sheet 39 figure 3.4 The Target STEP within Red Sheet 40 figure 3.5 The Event Plan STEP within Red Sheet 41 figure 3.6 The Post-event STEP within Red Sheet 41 figure 3.7 The full 15-step Red Sheet process 43 figure 3.8 The abbreviated Red Sheet process (simple negotiations) 44 figure 4.1 Red Sheet step – Background (worked example) 48 figure 4.2 Supplier’s value objectives 56 figure 4.3 Supplier preferencing tool 62 figure 4.4 Day One analysis to support negotiation planning 64 figure 4.5 Red Sheet step – Stakeholders (worked example) 69 figure 4.6 The RACI model 70 figure 5.1 Steps for cultural adaptation 97 figure 5.2 Red Sheet steps and 11 – Culture and culture plan (worked example) 104 figure 6.1 The steps to negotionality 107 figure 6.2 The COW SOAP model 109 figure 6.3 The ACE model 110 figure 6.4 Conflict styles for negotiation (based on Thomas–Kilmann Conflict Style Instrument) 114 406 References and Further Reading Kaufmann-Scarborough, C and Jay, DL (1999) The Polychronic Attitude Index: Refinement and preliminary consumer marketplace behavior applications, Marketing Theory and Applications, American Marketing Association Winter Educators, 10, pp 151–57 Kennedy, G (1998) The New Negotiating Edge, Nicholas Brealey Publishing, London Knight, S (2009) NLP at Work, Nicholas Brealey Publishing, Boston, MA Knutson, B (1996) Facial expressions of emotion influence interpersonal trait inferences, Journal of Nonverbal Behavior, 20, pp 165–82 Kolb, DA and Fry, R (1975) Toward an applied theory of experiential learning, in: Theory of Group Processes, ed C Cooper, John Wiley and Sons, New York Kolb, DM and Williams, J (2001) Breakthrough bargaining, Harvard Business Review, OnPoint enhanced edn, Harvard Business School Publishing, Boston Kraljic, P (1983) Purchasing must become supply management, Harvard Business Review, 61(5) pp 109–117 Kramer, RM and Tyler, TR (1996) Trust in Organizations, Sage, Beverly Hills, CA Lewicki, RJ, Minton, J and Saunders, D (1999) Zone of Potential Agreement in Negotiation, 3rd edn, Irwin/McGraw-Hill, Burr Ridge, IL Lewis, EStE (1903) Catch-Line and Argument, The Book-Keeper, 15, February, p 124 Littauer, F (1992) Personality Plus, Flemming H Revell/Baker Publishing Group, Michigan Littauer, F and Sweet, R (2011) Personality Plus at Work (e-book edn), Revell, Grand Rapids, MI Luecke, R (2003) Negotiation, Harvard Business School, Boston, MA McBane, D (1995) Empathy and the salesperson: A multidimensional perspective, Psychological Marketing, 12(4), pp 349–70 McCrae, RR and Costa, PT (1997) Personality trait structure as a human universal, American Psychologist, 52, pp 509–516 McCain, RA (2004) Game Theory – A non-technical introduction to the analysis of strategy, Thomson South-Western, Mason, OH McKnight, DH, Cummings, LL and Chervany, NL (1995) Trust Formation in New Organizational Relationships, University of Minnesota McKnight, DH, Cummings, LL and Chervany, NL (1998) Initial trust formation in new organizational relationships, Academy of Management Review, University of Minnesota, Minneapolis, MN, 23(3), pp 473–90 Malim, T and Birch, A (1998) Introductory Psychology, Macmillan, London Mannix, EA (1993) The influence of power, distribution norms and task meeting structure on resource allocation in small group negotiation, International Journal of Conflict Management, 4, pp 5–23 Marfleet, B and Gregory, J (2000) The operational cost of John F Kennedy during the Cuban Missile Crisis: A comparison of public and private rhetoric, Political Psychology, 21(3), pp 545–58 References and Further Reading Maslow, AH (1943) A theory of human motivation, Psychological Review, 50(4), pp 370–96 Mayer, J and Salovey, P (1997) What is emotional intelligence?, in: Emotional Development and Emotional Intelligence, eds P Salovey and DJ Sluyter, Basic Books, New York Mead, GH (1934) Mind, Self and Society, University of Chicago Press, Chicago Moulden, D (2007) NLP Business Masterclass, Prentice Hall, London Mick, DG, DeMoss, M and Faber, RJ (1992) A projective study of motivation and meanings of self-gifts: implications for retail management, Journal of Retailing, 68(2), pp 122–44 Miller, RB and Williams, GA (2004) Paths to Persuasion: The art of selling your message, Kogan Page, London Miller, SM, Brody, DS and Summerton, J (1988) Styles of coping with threat: implications for health, Journal of Personality and Social Psychology, 54(1), pp 142–48 Navarro, J with Karlins, M (2008) What Every Body Is Saying, HarperCollins, New York O’Brien, J (2012) Category Management in Purchasing, 2nd edn, Kogan Page, London O’Hara, MW, Schlechte, JA, Lewis, DA and Varner, MW (1991) Controlled prospective study of postpartum mood disorders: psychological, environmental, and hormonal variables, Journal of Abnormal Psychology, 100, pp 63–73 Oechsli, M (1993) Making success a habit, Sales and Marketing Management, 145(4), pp 24–26 Pease, A and Pease, B (2004) The Definitive Book Of Body Language, Orion Books, London Pease, A and Garner, A (1992) Talk Language, Simon and Schuster, London Potter, JP (2008) The Expert Negotiator, John Potter Potter, JP et al (1997) Negotiating Tactics, Wyvern Crest Publications, Cambridge, UK Randall, G (1993) Principles of Marketing, Routledge, London Red Sheet Negotiation Tool (2013), Positive Purchasing Ltd, Portsmouth, UK Saarni, C (1999) The Development of Emotional Competence, The Guilford Press, New York Saxe, R and Weitz, BA (1982) A measure of the customer orientation of salespeople, Journal of Marketing Research, 19(3), August, pp 343–351 Schwartz, SH (1994) Beyond individualism/collectivism – new cultural dimensions of values, in: Individualism and Collectivism: Theory, method and applications, eds U Kim, HC Triandis, C Kagitcibasi, SC Choi and G Yoon, Thousand Oaks, CA Schwartz, SH, Siegel, JI and Licht, AN (2012) Egalitarianism, cultural distance and FDI: a new approach, Organization Science, http://ssrn.com/abstract=957306 or http://dx.doi.org/10.2139/ssrn.957306 407 408 References and Further Reading Skyrms (2004) The Stag Hunt and the Evolution of Social Structure, Cambridge University Press, Cambridge, UK Slocombe, TE and Bluedorn, AC (1997) Organizational behavior implications of the congruence between preferred polychronicity and experienced work-unit polychronicity, Journal of Organizational Behavior, 18 Spiro, R, Rich, G, and Stanton, W (2007) Management of a Sales Force, 12th edn, Irwin/McGraw-Hill, New York Spiro, RL and Weitz, BA (1990) Adaptive selling: conceptualization, measurement, and nomological validity, Journal of Marketing Research, 27 (February), pp 61–69 Stiff, JB, Dillard, JP, Somera, L, Kim, H and Sleight, C (1988) Empathy communication and prosocial behavior, Communication Mongraphs, 55, pp 198–213 Sullivan, HS (1953) The Interpersonal Theory of Psychiatry, Norton, New York Sun, Tzu (1981) The Art of War, Hodder and Stoughton, London Sweet, C (2010) Change your life with CBT, Pearson, Harlow, UK Szalay, LB (1981) Intercultural communication: a process model, International Journal of Intercultural Relations, 5, pp 133–46 Thompson, JB (1990) Critical Social Theory in the Era of Mass Communication, Stanford University Press, CA Treitel, GH (2007) The Law of Contract, 10th edn, p 8, Sweet & Maxwell, London Tyler, T and Degoey, P (1996) Collective restraint in social dilemmas: procedural justice and social identification effects on support for authorities, Journal of Personality and Social Psychology, 69, pp 482–97 Ury, W (1991) Getting Past No, Business Books, London Vaknin, S (2010) The Big Book of NLP Expanded, Inner Patch Publishing, USA Van den Bos, K, Wilke, HAM and Lind, EA (1998) When we need procedural fairness? The role of trust in authority, Journal of Personality and Social Psychology, 75, pp 1449–58 Vermeiren, J and Verdonck, B (2011) How to REALLY Use LinkedIn, 2nd edn, www.how-to-really-use-linkedin.com Von Bergen, CW and Shealy, RE (1982) How’s your empathy?, Training and Development Journal, 36, pp 22–28 Von Neumann, J and Morgenstern, O (1944) Theory of Games and Economic Behaviour, Princeton University Press, Princeton, NJ Ward, Alex (2012) What we say and what we really mean, Mail Online, 17 July, article 2174269 Webster Universal Dictionary (1968) Harver Publishing Ltd, New York Weitz, BA, Sujan, H and Sujan, M (1986) Knowledge motivation and adaptive behavior: a framework for improving selling effectiveness, Journal of Marketing, 45 (Winter), pp 85–103 Wells, LE and Sweeney, PD (1986) A test of three models of bias in self-assessment, Social Psychology Quarterly, 49(1), pp 1–10 References and Further Reading Wolfe, R and McGinn, KL (2005) Perceived, relative power and its influence on negotiations, Group Decision and Negotiation, 14(1) January, pp 3–20 Wolff, SB (2005) Emotional Competence Inventory (ECI), Hay Group, McClelland Center for Research and Innovation World Values Survey (current), www.worldvaluessurvey.org Zartman, IW and Berman, MR (1982) Practical Negotiator, Yale University Press, New Haven, CT Recommended further reading Of all the books I could recommend here, a handful stick out as particularly relevant, well written and practical for those learning to negotiate On negotiation There are many in this space, few are any good Getting to Yes by Fisher and Ury is a must have Harvard Business School publishes many good books and leading-edge articles in this field Negotiation compiled by Michael Watkins for Harvard is worth a read and Chester Karrass who is one of the founders of theory in this space has many publications worth reading including In Business As In Life – You Don’t Get What You Deserve, You Get What You Negotiate On personality Personality Plus by Florence Littauer is a powerful book based around the four temperaments that helps to understand both self and others For body language The various books by Allan Pease are recommended The Definitive Book of Body Language by Allan and Barbara Pease is highly recommended So too is to What Every Body is Saying by ex-FBI agent Joe Navarro On NLP NLP at work by Sue Knight provides practical guidance for effective interaction and seems to give the most useful summary of how this complex topic can help in everyday situations Also consider The Big Book of NLP Expanded by Shlomo Vaknin On culture The Handbook of Negotiation and Culture by Gelfand and Brette Any of the works by Geert Hofstede including Cultures and Organizations 409 410 References and Further Reading On strategic procurement Category Management in Purchasing and Supplier Relationship Management, my other books, provides practical guidance on using a range of strategic procurement tools that can help prepare for a negotiation Websites General http://en.wikipedia.org http://www.britannica.com http://www.inhouselawyer.co.uk http://www.charlesrussell.co.uk http://www.defense.gov/transcripts/transcript.aspx?transcriptid=2636 (Donald Rumsfeld, 2002) http://judgmental.org.uk/judgments/EWHC-Ch/2009/[2009]_EWHC_2538_ (Ch).html – Jirehouse Capital and Ors v Beller and Anor (2009) Culture http://www.kwintessential.co.uk – online guides for cultural etiquette http://www.clearlycultural.com – cultural guides http://www.geerthofstede.nl – the site of Geert Hofstede http://business.uni.edu/buscomm – University of Iowa http://chineseculture.about.com – Chinese culture Psychology http://www.psychologytoday.com http://eqi.org – a site containing a wealth of emotional intelligence-related articles and information www.myskillsprofile.com – online emotional intelligence assessment www.kilmanndiagnostics.com – website of Thomas–Kilmann Conflict Style Instrument 411 I N DEX Page numbers in italic indicate figures or tables Adler, A 105, 132 Allport, G W 106 Anderson, C 173, 373 appendix see Red Sheet The Art of War 22 Astley, W G 16 Bacon, F 148 Bates, K 132 BATNAs 122, 156–58, 181, 203, 204, 213–17, 218, 222, 228, 294, 298, 318, 383, 384 Bazerman, M H 173 Berkowitz, L 176 and frustrative-aggression principle 176 Berman, M R Blair, S C 82 Blake, R 113 body language (and) 94, 309–33, 342 culture 327 faces 324–25, 325 gestures 102 hands and arms 322, 324, 323 as health warning 310 lying 314–20 and the eyes 316–20, 317, 318, 319, 320 management techniques 333, 334, 335 need to understand 309–10 as non-verbal communication 309 reading (and) 310–13, 311 clusters of gestures, actions, etc 312 comfort/discomfort 313, 328, 329 spotting changes 313 visible cues 311–12 written notes 313 sitting 326, 326 tips for managing 333 turning away 321, 322 used to advantage (and) 329–35 bodily position 330, 331 flinching 332 mirroring 331–32 positive emotion 332 rapport building 333, 334, 335 things to avoid 330, 331 vital signs 327–28, 329 of discomfort 328 and the ‘green light’ 328 Bolton, D 31 Bolton, R 31 Borg, J 337 Brett, J 75 Brockner, J 174 Brown, L 212 building the concession strategy see concession strategy Carnevale, P D J 173 category management 61, 64, 149, 158, 205, 369 Category Management in Procurement 156 Category Management in Purchasing 118, 369 Chen, Y 174 Chervany, N L 16 Chomsky, N 340, 344 Cialdini, R B 348 Clark, J D R 133, 136 see also models cognitive behavioural therapy (CBT) 107 Cohen, R 75 and negotiation style 252 communication: gestures and action 92–94, 93 body language 94 and gaining commitment 94 gestures with their own meaning 94 to reinforce what is spoken 92–94 communication: language (and) 90–92 context 91–92 cultural protocols 90 culture and cultural traits 90–91 directness 91 embellishment 92 lying 92 preserving face 91 communication management (and) 337–56 care in what you say (and) 350–56 bluffing 353 oral contracts and English Law 350–52 sparing use of ‘no’ 352–53 412 Index communication management (and) continued top 10 things to avoid 353–54 winning verbal techniques 355, 355–56 connecting with others 337 learning to listen 339–40 listening 338–39 paralanguage and metalanguage (and) 340–43 cultural differences: reading between the lines 341–42 embellishments 343 emphasizing words 342–43 mirror paralanguage 341 questions and answers 343–47 avoiding answering 346 building on what they say 345 clarifying 344–45 leading and manipulative questions 347 open and closed questions 346–47 thinking – visual, auditory and feeling 337–38 winning approaches 347–50 the glass half-full 349–50 influence and persuasion 347–49 and six principles of influence 347 using ‘and’ 350 using person’s name 349 concession strategy (and) 203–29, 230 see also Red Sheet (concession strategy) 10 winning techniques for concession trading 224, 227, 225–26, creating and deploying a winning 203– 04 defining our requirements 204–10, 210 see also Red Sheet for business 205–06, 207 see also models (RAQSCI) for negotiation 206–09, 208 and ‘no pain, no gain’ 209–10 determining MDO, LDO, BATNA and ensuring ZOMA 210–12, 211 four phases of negotiation 217–18, 217 guessing their BATNAs 228 guessing what they want 227–28 other parties’ knowledge (and) 213–17 determining the LDO 213–14, 215 determining our BATNAs 214–17 trading concessions process 218–24 building a winning concession strategy 222–24, 223 and the negotiation checkerboard 221–22, 222 step by step 219–21 Confucius 82 Conroy, D E 13–14 Costa, P T 106, 107 see also models countering the seller’s advantage (and) 21–33 the disadvantaged buyer 32–33 seizing the advantage 33 procurement professionals as negotiators 21–22 process behind the salesperson (and) 22–27 AIDA model 25 see also models sales methodology 23–26, 25 sales team capability 27 systems used/CRM systems 26–27 the sales personality (and) 27–31 building relationships 28 the empathic salesperson 29–31 see also empathy the highly motivated sales team 28–29 sales team knowledge 29 salesperson’s repertoire 31–32 Covey, S R 339 Covic, B 338–39 COW SOAP ACE 107–08, 109, 116, 118, 115, 117, 123, 125–26, 125, 128 Cummings, L L 16 Customer Relationship Management (CRM) systems 26–27 definition(s) of assertiveness (Dorland’s Medical Dictionary) 108 culture 73–75 selling (Webster) 22 Degoey, P 174 DeLozier, J A 107, 131 dependency 16–17, 55, 61, 63, 62, 66, 146, 147, 148, 152, 158–59, 160, 275 Deutsch, F 29 Dichter, E 28 Dilts, R B 107, 131 emotional competence (EC), components of 115–16 emotional intelligence (EI/EQ) 115 see also Goleman, D empathy (and) 29–31 adopting buyer’s viewpoint 29–30 concern for buyer’s feelings and welfare 30 emotional contagion 30 European Union see also legislation (EU) Official Journal of the European Union (OJEU) 370 Eysenck, H J 132, 133 Index failure, five consequences of (Metzler) 13–14 Fisher, R 113, 156, 173, 215, 296 see also BATNA Frank, R H 173 French, J R P 144, 144–45, 146, 147 see also power and Raven, B Freud, S 105 Fridlund, A J 173 Fromm, E 132 Galen 132 game theory (and) 179–200, 201 see also game theory negotiation games and Red Sheet (game theory) choosing the right game 191–92, 194, 192, 193 see also portfolio analysis origins of 179–80 reasons for using 180 spotting the game 194–96, 195 switching the game 197, 198 test answers 199 test: examples of games 196–97 game theory games Chicken 180–83, 181–82, 192, 194, 197, 213, 223 and Cuban Missile Crisis 182–83 Prisoner’s Dilemma 186–89, 187, 188, 194, 352 and catch of the day 188–89 Stag Hunt 189–91, 190, 191, 194, 197 neighbours playing 191 Trust 183–85, 184, 185, 227, 352 Gantt charts 363, 364 Garner, A 340, 343, 349 Goleman, D 115 Graham, J L 102 Gray, R 328 Greenberg, J 174 Greene, R 231 Hagenmayer, S J 186 Hall, E T 86, 88, 89 Hansen, J Hazeldine, S 353 hierarchy of needs (Maslow) 4, Hippocrates 131–32 Hofstede, G 74, 76, 77, 80, 88 Horney, K 105 House, R J 76 Isen, A M 173 Jung, C 105, 106, 132 see also Myers Brigg Type Indicator (MBTI) Karrass, C L Knight, S 317, 337, 345 and ‘precision questions’ 344 knowledge/knowledge gathering 148–49, 151–52, 150–51, 152 knowledge sharing 366, 382 Knutson, B 173 Kolb, D M 11 Kraljic, P (and) 119–21 portfolio analysis 119 see also subject entry profit impact approach 121 Kramer, R M 174 Krayhill Conflict Style Inventory 113 Lam, N M 102 Least Desirable Outcome (LDO) 204, 210–14, 211, 215, 217, 217, 219–23, 222, 223, 225, 227–29, 241, 253, 257, 257–60 263, 265, 265 266–68, 271, 278, 281, 287, 293, 296, 310, 313, 327, 318, 332, 335, 342, 346, 352, 366, 376,378, 383, 384 legislation (EU) and four pillars of EU Law 370 Procurement Legislation 370–71 legislation (UK): Social Value Act (2012) 370 Lewicki, R J 10 Lewis, E St E 25 Littauer, F 132, 133 Luecke, R McBane, D 29, 31 McCain, R A 179 McCrae, R R 106, 107 see also models McGinn, K L 158 McKnight, D H 16 Madle, R 29 making it a success see post-negotiation activities managing what you say and how you say it see communication management Mannix, E A 174 market power (and) 159, 161–64, 165 determining alternative markets 163–64 determining the marketplace 159, 161 understanding what is happening in the market 161–63 Maslow, A H 4, Mead, G H 30, 116 413 414 Index Metzler, J N 13–14 Miller, S M 30 Minton, J 10 models AIDA (Attention, Interest, Desire, Action) 25 four-colour (Clark) 136 OCEAN/the Big Five personality dimensions 106, 107 RACI (Responsible, Accountable, Consult, Inform) 70, 70 RAQSCI (Regulatory, Assurance, Quality, Service, Cost/Commercial, Innovation) 205, 206 Monkhouse, B 251 Most Desirable Outcome (MDO) 204, 210, 211, 211, 212–13, 216, 218–23, 227–28, 241, 383 Morgenstern, O 179 Moulton, J 113 Myers Brigg Type Indicator (MBTI) 106, 132 see also Jung, C Navarro, J 313, 314, 315, 318, 321, 327 and the flashbulb effect 318 Neale, M A 173 negotiating across cultures (and) 73–103, 104 see also Red Sheet (culture) adapting for culture: taking the negotiation approach (by) 96–97, 97, 98–100 determining culture 97, 97 planning (by) building rapport 101 meetings 101 tailoring communication style 101 tailoring gestures and body language 102 understanding differences 97, 101 attitudes towards authority 80–81, 81 cultural differences 89–94, 93 cultural protocols 90 gestures and actions 92–94, 93 see also communication: gestures and actions lost in translation 90–92 see also communication: language culture, bribery and corruption 95–96 defining culture 73–75 determining culture 75–77, 80, 78–79 monochronic vs polychronic 85–86, 88–89, 87 short- vs long-term 82–83, 84 ‘time’ and the Hopi Indians 83, 85 negotiation (and) 3–19 see also planning the negotiation and postnegotiation claiming/creating value 6–7, defining 5–6 developing capability (for) 17–19 knowing ‘how’ to it 19 knowing ‘what’ to do 18 and personality, process and repertoire 19 the ‘enemy within’ 12–17 bias in self-belief 14–15 fear of failure 13–14 need to trust 16–17 need to win 13 and power of relationships 15–16 e-sourcing 376–77, 377–79 first step in 9–12 approaches for 11–12, 12 having a Zone of Mutual Agreement (ZoMA) 9–10, 10 four colours of 131–36 132, 133, 135 observation 136 research 134–35 testing 136, 137 as life skill 3–5, in the organization 367, 369 perfecting the art of (by) 380–84 building organizational capability 380–82 building personal capability 380 negotiation for life 382–84 planning ‘this specific’ (by) 139–41, 142 see also Red Sheet (negotiation) identifying known issues/risks 140 setting targets 140–41 in the public sector see negotiation in the public sector Red Sheet as winning process for see Red Sheet remote 372–73, 374–76 strategic sourcing 367, 369 win-win illusion 7–9, negotiation in the public sector 369–71 see also legislation (EU) and legislation (UK) negotiation and strategic sourcing 367, 369 pre-contract summaries – the problem 360–61 and Jirehouse Capital & Ors v Beller & Anor (2009) 361 post-event implementation 362–63, 365, 364 see also Red Sheet (post event actions) remote negotiation 372–73, 374–76 categories of 372 Index the negotiation event (and) 231–49 see also Red Sheet (culture, event preparation and event timeline) power of 231–36 control 235–36 location 231–32 meeting and greeting 235 room layout 232–35, 233, 234 preparation (through) 236, 238–42, 237, 238 communications planning 238–39 getting everyone aligned/elevator speeches 239–40 supplier conditioning 240–42 timeline 242–46, 243, 248 closing the negotiation 246 opening the negotiation 244–45 start and end times 244 using an agenda 245–46, 247 negotionality (and) 118–28, 129–30 COW SOAP ACE traits 118, 123, 125–26, 125 portfolio analysis 118–23, 119, 120, 122, 123, 124 see also subject entry reinforce, avoid or sustain – adapting style 125–26, 125 neuro-linguistic programming (NLP) 27, 107, 220 Orwell, G 80 Pease, A 94, 314, 315, 317, 326, 327, 340, 343, 349 Pease, B 94, 314, 315, 317, 326, 327 personality (and) 105–17, 136–39 assessing COW SOAP ACE traits 116, 116, 117 conflict 113–14, 114 COW SOAP model 107–08, 109 emotional competence 115–16 playing the ace 108, 110 pressing their buttons 136, 138, 138–39 assertiveness 108–10, 112, 111–12, five dimensions to 106 see also models relevance of 105–07, 107 personality and negotiation 105–41, 142 see negotiation; negotionality and personality Personality Plus 132 planning the negotiation (and) 47, 49–71 Day One analysis 64–66, 64 and generic, tailored, custom and proprietary approaches 65–66 involving stakeholders (and) 68, 70–71, 69 see also Red Sheet doing it: stakeholders (Red Sheet step 2) 71 the RACI model 70, 70 negotiation timeline 66–67 developing a plan for: Red Sheet 66–68 Red Sheet step (background) 47, 49–50, 48, 67–68, 69 see also Red Sheet and negotiation: what, with whom and why? 49–50 the right relationship (and) 57–64 dependency 61, 63, 62 see also subject entry first vs repeat engagement 58–59 opportunities 58 relationship objectives 60–61 supplier’s perspective 61–64, 62 understanding the journey 57–58, 59 the value objective (and) 50– choosing the right approach 50–51, 54, 51–54 screwing the other party and Win/ Win 56–57 why sellers want to create value 54–56, 56 portfolio analysis 118–23, 119, 120, 124, 126, 128 see also Kraljic, P degree of market difficulty 120 degree of profit impact 121–23, 122, 123 and game theory 192, 192, 194, 213 post-negotiation activities (and) 357–84 see also negotiation the legal contract 358–60 and negotiation failure (example) 359 lessons learnt review 365–66, 368 see also Red Sheet (outcomes and learnings) Letters of Intent (LOI)/Heads of Agreement (HOA) 361–62 negotiation in the public sector 369–71 see also legislation (EU) and legislation (UK) negotiation and e-sourcing 376–77, 377–79 negotiation and strategic sourcing 367, 369 perfecting the art of negotiation see negotiation post-event implementation 362–63, 365, 364 see also Red Sheet (post event actions) 415 416 Index post-negotiation activities (and) continued pre-contract summaries – the problem 360–61 and Jirehouse Capital & Ors v Beller & Anor 2009) 361 remote negotiation 372–73, 374–76 power (and) 143–77, 178 see also Red Sheet (power) 5x5 sources of 146, 147 intangible 172–75 display of positive emotion 173 and social comparisons 174–75 trust 173–74 knowing the ‘final price’ (and) 152–72 degree of dependency 158–59, 160 future opportunity 170–71, 172 market power 159, 161–64, 165 see also subject entry power of alternatives with a good BATNA 156–58 see also BATNAs Purchasing Price Cost Analysis (PPCA) 154–56, 155 relationships and relationship history 164, 166–67, 168–69 time 167, 169, 170 knowledge as 148–49, 151–52, 150–51, 152 shifting balance of 175–76 and frustrative–aggression principle 176 tangible 148 types of 143–44, 146, 144–45, 147 see also French, J R P and Raven, B Purpose, Process and Pay-off (3P) agenda 246 RACI (Responsible, Accountable, Consult, Inform) model 70, 70 Raven, B 144–45, 146, 147 see also power Red Sheet (and) 35–46, 36, 101, 213 background (step 1) 47, 49–50, 48, 67–68, 69 a collaborative approach 45 concession straegy (step 9) 228 culture (steps and 11) 103, 104, 213, 249 event preparation (step 12) 249 event timeline (step 13) 249 game theory (step 7) 200, 201, 213 getting started 45–46 negotiation (step 5) 141, 142 negotiation STEP by STEP 37–38, 38, 39 see also STEP Negotiation Tool (appendix) 385, 386–99 negotionality (step 4) 129–30 our requirements (step 8) 210, 215, 228 outcomes and learnings (step 15) 367, 368 portfolio analysis (step 4) 213 post-event actions (step 14) 364, 365 power (step 6) 177, 178, 213 as process-based approach 35–36 stakeholders (step 2) 71 their requirements (step 10) 228 using 42, 43, 44 report on two burglars (Albert Tucker, Philadelphia Inquirer, 1995) 186 Rich, G 23, 25 Rumsfeld, D 148–49 Saarni, C 115 Saunders, D 10 Saxe, R 28, 29 Schwartz, S H 76, 80 Shealy, R E 29 social media 135 Spiro, R 23, 25 Stanton, W 23, 25 STEP: situation, target, event plan, postevent 37–39, 38 Situation 38–39, 39 Target 39–40, 40 Event Plan 40, 41 Post-Event 41–42, 41 Stiff, J B 30 Stockholm syndrome 373 Sujan, H 28–29 Sujan, M 28–29 Sullivan, H S 30 Sun Tzu 22 supplier preferencing tool 61, 63–64, 62 Supplier Relationship Management 60, 369 supplier relationship management (SRM) 60–61, 64, 149, 369 Sweeney, P D 15 and bias in self-assessment 15 Szalay, L B 90, 91 tactics and techniques (for) 251–307, 253, 308 bargaining 257, 265, 265, 266–75 choosing the right tactic/technique 252 deal-closing 276, 277–86 dirty 276, 287, 288–91 exploring positions 253 facts, data and experts 294–95 checking for mistakes 294–95 round numbers 295 opening 253, 257, 254–56, 257, 258–64 Index tactics and techniques (for) continued repertoire building 251–52 to think about 287, 292 using a secret code 292 when it goes wrong 295–306 and all else fails 298 countermeasure tactics 298, 299–306 deadlock and conflict 296–97 resolving conflict 297–98 and winning techniques for great outcomes 292, 293, 306–07, 307–08 Thomas–Kilmann Conflict Mode Instrument (TKI) 113–14, 114 Thompson, J B 173 Thompson, L L 173, 373 Treitel, G H 352 trust 16–17 in Eastern and Middle Eastern cultures 17 elements of 16 as power 173–74 Tucker, A 186 story of two burglars 186 see also game theory games: Prisoner’s Dilemma Tyler, T 174 Ury, W 113, 156, 173, 215, 296, 297 see also BATNAs Van den Bos, K 174 Vermeiren, J 25 Von Bergen, C W 29 von Neumann, J 179 Ward, A 341 Weitz, B A 28–29 Wells, L E 15 and bias in self-assessment 15 Williams, J 11 Willow, J P 13–14 winning event tactics and techniques see tactics and techniques WIN/win outcome 219 Wolfe, R 158 World Trade Organization 370 Zajac, E J 16 Zartman, I W Zone of Mutual Agreement (ZoMA) 10, 10, 204, 211, 211, 219, 221, 227 417 418 THIS PAGE IS INTENTIONALLY LEFT BLANK 419 THIS PAGE IS INTENTIONALLY LEFT BLANK 420 THIS PAGE IS INTENTIONALLY LEFT BLANK ... and that means that anyone can become good at negotiation To the uninitiated the art of negotiation may appear a specialist skill, and despite the plethora of material and training out there, the. .. likelihood and ability for the sale to succeed which will require them to gather information along the way There is a final dynamic here that provides advantage to the seller and that is internal business... wasn’t a potential buyer but knowing that creating an ally in the friend could help the sale There must be some means of interacting and conducting the negotiation such as a face-to-face meeting,