What does it take to succeed when negotiating with procurement professionals?
It’s not enough to leverage the same individuals on your team with the innate talent for negotiation every time, and it’s rarely the case that canned strategies and manipulative tactics play out in your favor.
The core of successful procurement negotiation lies in understanding the principles, behaviors, and skills that drive effective negotiation — and that goes for everyone on your team.
Here at RED BEAR, our mission is to empower individuals with those same fundamental ideas to transform their approach to negotiation, offering them the skills, tools, and behaviors needed to craft profitable, value-based agreements with suppliers and other procurement professionals.
Today, we’ll touch on an essential element of RED BEAR’s methodology and the bedrock of reaching optimized deals and nurturing long-term relationships in negotiations.
That concept is found in the three dimensions of negotiation; let’s explore.
The 3 Dimensions of Every Procurement Negotiation
There are three dimensions to any negotiation. They are:
- Competitive Dimension
- Collaborative Dimension
- Creative Dimension
For most novice negotiators, the goal of negotiation is simply getting what your side wants. That’s solely the Competitive Dimension in action — this dimension revolves around self-interest.
The Competitive Dimension is important.
It's essential to understand when it's best used and when to leverage the other negotiation dimensions. For instance, setting high targets, a critical element of successful negotiations, finds a home in the Competitive Dimension.
“But, the Competitive Dimension is important. It's essential to understand when it's best used and when to leverage the other negotiation dimensions.“
In procurement, these self-interested concepts revolve around things like cost, delivery times, contract specifics, etc.
While you want to get what’s best for your business, a simple approach to procurement negotiation that focuses only on self-interest may not play out successfully in the long run.
The next dimension on our list is the Collaborative Dimension.
Here, finding common ground and reaching win-win outcomes are emphasized. Building and nurturing relationships is the core concept that drives this dimension. While it sounds like where you should spend all of your time, it’s the balance between these two dimensions that unlocks the third and final dimension: the Creative Dimension.
Balancing the Collaborative and the Competitive Dimensions of Negotiation
Before we delve into the final dimension of procurement negotiation, let’s explore a real-life scenario to illustrate the importance of balancing the first two dimensions.
Inflation. It’s an issue still troubling supply chains and procurement professionals worldwide. In the U.S. alone, we saw 17% inflation overall from 2020 to 2023. While these pressures may be settling, the lessons that procurement professionals need to leverage during this time will always stay relevant.
How can companies effectively negotiate in this environment? Building solid relationships with suppliers is one strong strategy.
RED BEAR team member Mike Slomke offers this insight: “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?”
On one hand, the drive to survive (self-interest) pushes negotiators to advocate for their own needs. On the other hand, a drive to find common ground (collaboration) may lead them to uncover alternate negotiables outside of price that provide additional value. This could be discovering lower-cost alternatives for materials, guarantees on inventory, efficient shopping strategies, and much more.
But, these creative solutions aren’t a result of one dimension or the other but the balance between the two. When both the Collaborative and Competitive dimensions are in synergy, negotiators can unlock the third dimension, the Creative Dimension, and leverage the power of healthy tension to reach win-win outcomes.
“When both the Collaborative and Competitive dimensions are in synergy, negotiators can unlock the third dimension, the Creative Dimension, and leverage the power of healthy tension to reach win-win outcomes.”
When battling rampant inflation and other procurement issues, this approach is critical.
Why Tension is Essential for Creative Problem-Solving
So, what is healthy tension, anyway? Skilled negotiators understand that tension is the key to successful negotiations. It’s the fuel that powers the fires of creative problem-solving for both parties.
Procurement professionals should never shy away from tension — quite the opposite. They need to guide tension effectively toward a positive and healthy place. But, this only comes from a position of good faith. That is to say, a place where both sides understand that the goal is to find a solution that benefits everyone. And this only comes from trust, transparency, and a strong relationship.
Depending on which dimension the negotiation is at the time, a skilled negotiator will utilize specific Negotiation Behaviors, like the ones we use at RED BEAR, to make trades, ask open questions, and more.
This approach to negotiation is what makes RED BEAR stand out in the industry and why over 45% of the Fortune 500 leverages our training.
Effective Negotiators are Situational
So, if the key to finding win-win outcomes is balancing the Competitive and Collaborative Dimensions to unlock the Creative Dimension and healthy tension, what steps can negotiators take to move toward this goal?
First off, it’s important to note that canned strategies and manipulative tactics always fall short of expectations.
While a strong negotiation process is the key to staying on track and maintaining standards throughout an organization, this is far from a play-by-play strategy. Instead, it’s a framework that can guide the discussion toward success.
Effective negotiators are situational.
This means they approach each situation individually, using adaptive strategies to find the right time to leverage each specific Negotiation Dimension and Behavior. That’s why effective negotiation training starts with the right foundation — the skills, knowledge, and tools that prepare your team to enter into any negotiation environment with confidence.
Think of effective negotiation like carpentry. While anyone can follow simple step-by-step instructions and get the same result, it’s only the real master carpenters who understand their materials, leverage the right tools, and use their expertise to craft custom solutions that meet the diverse needs of an expansive clientele.
An amateur with a sloppy birdhouse simply won’t cut it.
That’s why RED BEAR’s training provides the skills, tools, and behaviors needed to reach the most optimized outcome for both parties and that specific negotiation environment. Our training is designed to empower procurement professionals and deliver results repeatedly.
Get the Training Your Team Needs to Succeed
When negotiating with procurement professionals, the right skills matter. Especially in times of pressure, it’s the skilled negotiators who leverage the three dimensions of negotiation and the right negotiation behaviors who can craft profitable deals that satisfy both party’s needs.
If your team is looking for an edge in procurement negotiations, RED BEAR is here to help. Our Procurement Negotiation program, Negotiating With Suppliers, is built to give your team exactly what they need to walk into any situation with the desire not only to reach the best possible deal but also to nurture relationships for long-term returns.
Our training gets results. For every dollar invested in our programs, our clients receive an average return of $54. That’s the value of effective negotiation training; that’s the power of RED BEAR.
Contact the team today to explore your procurement negotiation training options.
