Are Your Engineers Giving Your Suppliers an Unfair Negotiation Advantage?

One strategy that contributed to my success in sales negotiations was engaging with engineers. Engineers often hold a treasure trove of insights about competitors, internal processes, and decision-making dynamics within their company. Engineers can become your strongest internal champions when treated with respect and provided with high service levels.

?However, this same access to information makes engineering teams crucial in safeguarding your company against hidden threats, such as backdoor selling. With the proper training, they can transform into your frontline defense, protecting your procurement process from suppliers who attempt to gain an unfair advantage.

Engineering teams are the technical backbone of any organization. They hold critical information, from specifications to project details, that suppliers can exploit through backdoor selling. This makes them indispensable in preventing such tactics and maintaining the integrity of your procurement process.

The Dangers of Backdoor Selling

Backdoor selling involves suppliers covertly gathering confidential information about a buyer’s needs, preferences, or budget. This practice often succeeds when sensitive data is shared unintentionally. This happens most often in parts of the organization that aren’t typically involved in the negotiation of commercial deals, such as engineering, operations, software, and quality.

Why Engineering Teams Are Essential in Protecting Sensitive Information

1. Guardians of Technical Knowledge: Engineering teams hold technical knowledge that can be used to manipulate negotiations. It is crucial to train them to protect this information.

Example: If an engineer shares detailed product specifications with a supplier during a casual conversation, that supplier could use this information to tailor their proposal to give them an unfair advantage over competitors.

1. Impact on Projects: The effects of backdoor selling can lead to cost overruns, project delays, and substandard results.

Example: A supplier who learns of specific project timelines and budget constraints from engineering might manipulate their proposal to fit within those limits but at the expense of quality or future costs.

1. Protecting Innovation: Engineers are key to innovation. Preventing backdoor selling helps safeguard intellectual property and ideas.

Example: Suppose an engineer casually mentions a new, innovative process they are working on. A supplier could take this idea, integrate it into their offerings, and present it as part of their proposal, effectively stealing the innovation.

1. Cost Control: Engineering teams help control costs and ensure projects stay within budget by preventing suppliers from gaining an unfair advantage.

Example: If a supplier learns that the engineering team is struggling with a particular component or material, they might increase the price, knowing the company has few alternatives. Engineering teams help maintain leverage in negotiations and control costs by keeping such challenges confidential.

1. Procurement Alignment: Engineering teams should be involved in procurement at the right time to ensure supplier strategies align with organizational goals.

Example: Engineers may focus solely on technical requirements and overlook the bigger picture, such as long-term supplier relationships or strategic goals. For instance, if they engage a supplier too early without consulting procurement, they might lock the company into a less favorable deal. Training engineers to be involved in procurement at the right time ensures that supplier strategies align with broader organizational goals.

?The Importance of Training

?Training engineering teams to recognize and prevent backdoor selling is essential:

?- Risk Reduction: Training reduces the risk of unintentionally sharing sensitive information, minimizing the chances of backdoor selling.

?- Increased Awareness: It heightens engineers’ vigilance, equipping them to identify and report suspicious interactions. How can you hold your engineering team’s accountable if they aren’t aware?

?- Value Protection: By safeguarding sensitive data, training helps maintain the value your organization seeks to create during negotiations.

- Cross-Functional Cooperation: Training fosters collaboration between engineering and procurement teams, ensuring a united approach to resisting backdoor selling.

- Sustained Vigilance: Continuous training ensures engineering teams remain alert and proactive over the long term, delivering significant benefits.

Training engineering teams is a strategic necessity. It strengthens your organization’s defenses against backdoor selling and protects the integrity of your projects, innovations, and reputation. Well-prepared engineering teams are essential to safeguarding your organization’s future.

If you need help with this topic, I've created a 20-minute online training product to stop your team members (engineering, project management, operations, quality, software, product management, HR, etc) from sharing sensitive information with your suppliers. Check it out here.?