In the latest episode of The Confident Negotiator Podcast, host Rob Cox speaks with RED BEAR Senior Instructor, Shawn Malone. Shawn, who has a rich background in procurement leadership, discusses his upcoming session at ISM World 2024 titled, 'Six Negotiation Strategies to Mitigate Procurement Challenges and Risks.'
This episode not only offers a preview of Shawn’s upcoming presentation at ISM World 2024 but also provides invaluable insights into the subjective nature of value in negotiations and how it can be skillfully shaped to improve outcomes.
Transcription of the Video:
Rob Cox: Hello everyone and welcome to The Confident Negotiator Podcast. I'm Rob Cox, and with me today is RED BEAR Senior Instructor, Shawn Malone. Shawn, thank you for joining me today.
Shawn Malone: Yeah, hey, thanks Rob for having me.
Rob Cox: Shawn, you're incredibly busy. Not only have you been delivering negotiation training workshops for some very large RED BEAR clients, you've been recently featured in the cover story of the March/April issue of Inside Supply Management and you're a featured speaker at ISM World 2024. This year in Las Vegas, you're presenting a session titled Six Negotiation Strategies to Mitigate Procurement Challenges and Risks at noon on May 1st out there in Las Vegas. We wanted to give our listeners a sneak peek at what they can expect to hear when they see you at ISM World and give them a chance to get to know you before your session. With that said, I say we dive in. Does that sound good to you?
Shawn Malone: Yeah, let's do it.
Rob Cox: Excellent. Now, Shawn, tell us a little bit about your background and how you help RED BEAR customers become world-class negotiators.
Shawn Malone: Yeah, sure. So I started my career as an active duty Army officer, and so after taking on kind of several operational leadership roles, I actually ended my career in the military teaching at the U.S. Military Academy at West Point. And so it was there that I kind of learned how much I enjoyed sharing my knowledge and experience with future leaders. So after 11 years, I left the Army and I joined GE Appliances and I kind of worked my way through several supply chain roles and I eventually was promoted to the lead sourcing to lead the sourcing organization. So, we had used RED BEAR Negotiation at GE Appliances the last few years I was there and the principles and behaviors they taught to improve our negotiations were just invaluable. So, when I left GE, I knew I wanted to be part of the RED BEAR program and continue to educate procurement professionals to basically be the best it could be.
Rob Cox: Now, Shawn, switching over to your featured presentation at ISM World 2024. Let's start by talking about value. Part of your presentation is the idea that value is subjective. What does that mean and why is it important?
Shawn Malone: So, this is the fundamental basis behind why RED BEAR's proven principles and behaviors work. So early on in our workshops, we conduct a simple one-on-one negotiation between participants, and then we post results. And what we see is the negotiated values have a 10 to 20 times range. And so when we get down to it, it clearly demonstrates that value is subjective. And for negotiators, that's good news because it means that value can be shaped in the mind of the other party. So now the question is how do you shape value? Well, we have shown that skilled negotiators actually apply six negotiation principles to help shape this value, and that's how we start this off.
Rob Cox: Excellent. In your presentation, you'll cover Six Negotiation Strategies to Mitigate Procurement Challenges and Risks. We don't want to give the whole presentation away, they've got to go to hear everything. But what are some of the strategies procurement professionals will learn during your presentation at ISM World?
Shawn Malone: So most of the strategies that I will discuss, we'll focus on communicating value and understanding what's important to the other side. So take for instance, setting high aspirations as one of the strategies. To do this properly, you have to have a strong value-based positioning theme that supports your ask. And so this theme also needs to be repeated with conviction. So a position theme must include an item that is compelling to the other side for it to be effective. Well, how do you know if it's compelling? Well, that brings up the other strategy of uncovering the needs of the other side. Now, to do this effectively, you got to ask questions, but not just any questions but the right type of questions. And so our workshop helps companies develop and practice delivering positioning themes and learning how to ask the right questions,
Rob Cox: Excellent. Positioning, negotiating with the other side, and uncovering information. Sounds like ISM World attendees will learn a lot of different methods for how to negotiate better in their procurement challenges. Very exciting. Now, embracing tension isn't just one of the strategies that you'll discuss at ISM World. It's also one of the principles that you shared in the March/April Inside Supply Management cover story where you're heavily featured. Why is healthy tension so important in procurement negotiations?
Shawn Malone: Yeah, so that's a great question. So embracing tension is probably one of the toughest skills to learn for new negotiators, and we spend a lot of time in our workshops actually. So I like to say it's getting people more comfortable with being uncomfortable. So the reason tension occurs in a negotiation is because actually both sides are usually in conflict between what they want. So often negotiators look to avoid or reduce the level of tension very quickly. So they give to the other side and they basically become too collaborative and they don't get their needs met. Now, on the other side of the spectrum, some negotiators are so fixated on what they want that they're not willing to entertain new ways to look at the situation or they become too competitive. So this creates an impasse. So healthy tension is the balance between the self-interest of the parties, that's the competitive side and the desire of both to maintain the relationship. That's the collaborative side. So when you keep this healthy tension, this balance, when this occurs, then both parties really start to get creative to make a mutually beneficial agreement, which is what we're all about.
Rob Cox: Excellent. Well thank you for that, Shawn. Let's talk about wrong turns. What are some of the common mistakes that you see procurement negotiators make?
Shawn Malone: Yeah, so first we need to understand why negotiators are making mistakes. So other than lack of training, it's mainly the challenges driven by market forces or internal limitations at their companies that are basically beyond their control. So us as negotiators, when we're faced with these kinds of challenges, they put a lot of pressure on us as we perform our jobs. And of course, as these pressures increase, it's more likely that we'll make negotiation mistakes or the wrong turns that we talk about. So some of the wrong turns that we see at companies, we see them not planning before negotiation. Some are focusing only on price, and that's because they don't understand what is of value to the other side. We find that they don't ask enough questions, they avoid the tough conversation. In fact, a lot of 'em feel so powerless that they act powerlessly. Some are too collaborative. And then in many cases when they start conceding, they don't get something in return when they make a concession. So these are just a few actually of the wrong terms. I see at companies, especially during our workshops, we ask all our companies some of the challenges and wrong terms that they're seeing and that we can work on, but the good news is, is that the proper execution of the RED BEAR principles and behaviors, it actually helps negotiators avoid these wrong terms.
Rob Cox: Excellent. Those are some great mistakes that you highlighted there, Shawn, not just externally but internally as well. So moving on from mistakes, what do you think are some of the biggest challenges for procurement negotiators this year?
Shawn Malone: Yeah, so like I said, in our workshops, we actually ask companies what their biggest challenges are. And like you said, I've done already numerous workshops this year, and some of the biggest challenges I see them telling me for 2024 are they're still seeing persistent inflationary challenges. Suppliers are holding on to price. They still have these single or sole source suppliers, so they feel like they have no leverage, they have limited time to plan and limited time to negotiate. So that is a big challenge for them. Even internally, there's a lot of resistance to change suppliers, so that holds their hands from other options. And then there's this strange, one of the challenges they tell me, well, we don't want to upset the supplier, which I think is frankly is fascinating to me because that just almost tells you that you're not considering your own self-interest anymore. You're only considering the supplier. So those are some of the challenges that they're experiencing.
Rob Cox: Excellent. Well, I know in your ISM presentation, Shawn, you're going to go through a lot of the wrong turns, a lot of the challenges. You’ll even present some RED BEAR primary research data; I believe while we're out there talking about some of the trends that we're seeing in negotiations. So thank you for highlighting some of those. To hear the rest, you'll have to hear Shawn speak at ISM world, of course. Shawn, thank you for your time. Is there anything else you'd like to say before we wrap up?
Shawn Malone: Yeah, sure. Listen, I tell people all the time that kind of preparing for negotiations or training to negotiate, it is like training for any, like a fitness challenge, right? One, you just can't read about it. You actually have to get out there. You have to practice by actually doing it and you got to be doing it right. So this is kind of where the RED BEAR training excels because it gives participants not only the correct training environment to learn and practice the skills, but to practice them correctly. So, that's where I'd like to send the final message.
Rob Cox: Excellent. Well, Shawn, thank you again for your time. Be sure to catch Shawn's session, Six Negotiation Strategies to Mitigate Procurement Challenges and Risks at noon on May 1st at ISM World 2024 Las Vegas. This has been The Confident Negotiator Podcast. Thank you for listening. We'll see you next time.
