The dynamics of negotiation can shift dramatically in the face of a crisis. Whether it's a global pandemic like COVID-19, supply chain disruptions, or natural disasters, these situations demand unique approaches to secure successful outcomes.
Navigating through these turbulent times requires a blend of foundational negotiation principles and adaptability to the evolving landscape.
Before exploring crisis negotiation strategies, it's crucial to understand the importance of proactive planning and building relationships with clients and suppliers. As RED BEAR’s Mike Slomke puts it, "Strong supplier relationships return the most value. A good supplier relationship is built not on what happens when things are going well but on what happens when things go wrong. Namely, can you work through issues productively?"
Investing time and effort into building strong relationships with clients, suppliers, and partners before a crisis occurs can pay dividends when challenges arise. Established trust and open communication channels can facilitate more productive negotiations and collaborative problem-solving.
While crises may require adapting your approach, the fundamental principles of successful negotiation remain relevant. RED BEAR emphasizes the following key principles:
Emphasize the unique benefits and relevance of your product or service in the current crisis situation. Highlight how it can address the heightened needs and challenges faced by your customers or suppliers.
Maintain ambitious yet realistic goals to drive favorable negotiation outcomes. High targets can motivate both parties to explore creative solutions and reach mutually beneficial agreements that exceed initial expectations.
Share and withhold information strategically to strengthen your negotiation position. Leverage insights about market trends, competitor landscapes, and customer needs to influence perceptions and build trust.
Recognize your leverage points in the negotiation, like the strength of your position, the negotiation skills you bring to the table, and the other party's priorities and constraints. Leverage your strengths while mitigating weaknesses to achieve optimal outcomes.
Focus on identifying and meeting the essential needs heightened by the crisis rather than just catering to wants. By prioritizing value creation and problem-solving, you can align your offerings with what matters most to the customer, fostering trust and laying the foundation for long-term partnerships.
Make concessions thoughtfully and strategically—based on trade-offs, priorities, and long-term objectives. Avoid impulsive concessions that may undermine your position or erode value unnecessarily.
In times of crisis, the ability to adapt in real-time is vital. While planning is essential, so is the flexibility to pivot based on new information or changes in the crisis landscape.
Being adaptable means being prepared to change your approach as circumstances evolve.
Strategies for real-time adaptation include:
RED BEAR’s negotiation behaviors offer a structured strategy that can be adapted during crises:
Trust is critical in successful negotiations, and even more so during crises. Strategies for building trust in these situations include:
Procurement negotiations during crises present unique challenges.
Acknowledging the difficulties suppliers face during crises is the first step toward building stronger partnerships. Showing support and flexibility can lead to better cooperation and mutual benefits.
"Good supplier relationships can get you more than your fair share of attention, prioritization, and service during difficult supply chain conditions. If you have a good relationship with the person who makes that decision, you can both help each other during tough times. Good supplier relationships can set you up for a better response when the unexpected happens."
Effective procurement negotiation strategies during crises often involve collaboration from both sides (more on this below). Collaborative approaches can include:
Leaning too heavily on traditional competitive negotiation tactics often fails, both in “normal times” and in times of crisis. At RED BEAR, we emphasize the importance of balancing these dimensions—this approach ensures you grow your company profitably while preserving and enhancing relationships, even in the face of excessive or unrealistic demands. Embracing collaboration and creativity along with the competitive dimension is essential for achieving better outcomes and building trust with suppliers and clients.
Establishing credibility and reliability is a cornerstone of successful negotiation. Practical steps to foster trust and cooperation include:
Effective negotiation strategies during crises involve a blend of fundamental principles and adaptability. By planning ahead, building strong relationships, and applying strategic negotiation behaviors, you can successfully navigate challenging times. RED BEAR’s training programs equip your team with the skills needed to excel in negotiations under any circumstance.
Invest in RED BEAR’s negotiation training to unlock greater potential and drive your business to success. Reach out today to learn more about how our programs can enhance your negotiation capabilities.