Negotiating in changeable circumstances

Most of us will recognize that we are living in unprecedented times, dealing with significant challenges on a global scale that even the most experienced of negotiators may not have come across before, all of which is adding considerable strain to commercial relationships.?

In my work with clients running sustained behavioural change programmes and individual coaching sessions, I am consistently asked the same questions in relation to the challenges being faced, with rising inflation and global cost increases. What’s interesting is that I’m being asked the same questions from both sides of the table, from the buyers AND the sellers!?

“How can I support my team to build trust with our retailers, after so much trust has been eroded due to endless CPI’s that we’ve put forward?”?

“How can I ensure our suppliers feel supported yet achieve the best outcome for my business?”?

“How can I encourage my suppliers to negotiate more collaboratively, when we are constantly between 2 - 4 o’clock on the Clockface, with all the CPIs I have on the table?”?

Both buyers and sellers are aware that when discussing CPI’s, the tendency is to slip back around the Clockface to 2 - 4 o’clock, where the appropriate behaviour is to become firmer, harder, colder and more dismissive. This is due to the simple fact that when discussing a CPI, the likely scenario is that the focus is on price. When price is the main variable, people by nature tend to become more competitive, and therefore lose sight of the opportunity to create additional value. If one party behaves competitively, then the other is likely to reciprocate that behaviour.?

Now more than ever, the following statement is ringing true during my interactions:??

“People often credit the other party with more bargaining power than they really have, but you are much more equal than you think you are!”?

People should be asking themselves:??

“How can I get inside the head of my counterparts and understand more about their position, their challenges, and their priorities?”??

“Have I shared with my counterpart what’s important to me?”?

A recent article in The Guardian said,??

“There is no escaping inflation: whether it’s energy, food, transport or entertainment you are paying for, prices are going up – and at pace.”?

Inflation had reached a 40-year high of 9%, with warnings of worse to come. We know that current inflation is impacted by Covid and the war in Ukraine, which is resulting in shortages and supply chain problems.??

Both buyers and sellers know that CPIs are going to happen, but that doesn’t mean that they should be non-negotiable, or approached any differently to any other type of negotiation that would take place in more settled times.?

The first step in any negotiation is to prepare thoroughly, to enable you to get inside the head of the other party and understand more about what’s driving them. What pressures are they facing, and how does that impact their approach? Through effective questioning techniques, you can gain more insight and probe more deeply on key aspects of the information being shared. Approaching it in an interrogative manner, however, will not help you maintain and build trust. In fact, it may have the opposite effect.?

Managing your own behaviour is crucial. You can be firm on the issues and still build a rapport and trust through a warmer, more collaborative approach. Some of your counterparts may feel reluctant to initially share information, so think carefully about the information you can share with them as part of your planning process. If you share, they are more likely to share back. If you are not willing to share, they are unlikely to either! By changing your own behaviour and approach, you may find that your counterpart will start to work more collaboratively with you.?

The act of sharing information builds trust, and if you understand that you are both looking at the same problem, just from different perspectives, you can begin to open your mind to exploring more opportunities to create value.?When both parties start to work and behave more collaboratively, the chance to unlock additional value or find alternative solutions can start to build momentum, and the real opportunity to negotiate begins.???