The Heart of Negotiation: A Conversation with Molly Fletcher
- Supplier Management
Procurement experts know that making deals is a key part of the job. From agreeing on bulk pricing with a supplier to working out budget numbers with internal stakeholders, procurement teams are locked in a constant give and take. But negotiation doesn’t have to be a battle and learning the steps to success is simpler than you may think.
JAGGAER was lucky enough to hear from entrepreneur, speaker, and ace negotiator Molly Fletcher at the REV2019 Global Procurement Forum.
Fletcher drew on her background as a pioneering female sports agent to captivate the audience of procurement professionals with advice, anecdotes, and life lessons about how to approach and close negotiations.
JAGGAER sat down with Molly after her keynote address to speak further about what makes a truly successful negotiator and how anyone can develop top-tier negotiation skills.
Embracing the Human Element of Negotiation
With over 20 years of experience and several books under her belt, Fletcher had many insights to share, beginning with the biggest error negotiators make when approaching a deal.
“I think the mistake people make is they spend a lot of time worrying about what they want and what they need instead of spending time getting in the head and the heart of the person that you’re actually negotiating with.”
By approaching a conversation with the other party’s real desires in mind, she suggests, you will often find that a compromise is easier to reach than expected, simply because you have different, compatible priorities.
When sourcing a new supplier for finished goods, you may naturally assume that your supplier is most interested in the financials: price and profit. But in many cases, there are alternate priorities.
Maybe they’re looking to establish a presence in a new industry or geographic area, and a partnership with your organization would help them beyond just the purchasing price. Or maybe the supplier is hoping to find a partner that will be active in providing feedback, rather than simply placing orders. By examining the human element behind the deal, Fletcher offers, procurement experts can find more areas to create value, and procurement experts agree.
Stephen Dunn, Hobart Harris, and Peter Blatman of Deloitte support this idea, stating that focusing on several areas of negotiation, not just price, is key. According to Fletcher, seeing things through the eyes of the person you’re negotiating with gives you a better opportunity to steer the conversation in your favor.
“We can lead with the kind of information that the person we’re negotiating with is most interested in, and then weave in, of course, the things that matter to us.”
Lasting Purchasing Partnerships
Establishing partnerships with your counterparts often leads to simpler, smoother deals in the future. As partners get to know each other, they begin to understand not only what’s important to each other, but also their strengths, weaknesses and manner of working.
“You’re negotiating with somebody on the other end that has a heart, and a soul, and needs and wants, and the more that we can build that connection, the better off we all are,” says Fletcher.
True partnerships leverage those needs and wants to establish a relationship built on trust and mutual respect, rather than just economic value.
Partnerships also offer longevity rather than one-off transactions. Contracts eventually expire, situations change, and future negotiations are inevitable, so you might as well have them with partners rather than strangers. It’s certainly easier to renew a contract than negotiate an entirely new one, driving down legal costs.
The International Trade Forum found that retaining current suppliers is significantly less expensive and time-consuming than seeking new partners. These costs and savings should be weighted in each contract renewal negotiation and the value of the partnership shouldn’t go overlooked.
Fletcher points out that partnerships and negotiations are not linear, and that reaching a new agreement may take time. But by forming meaningful connections, we can shorten the timeline of negotiations and get better deals done faster.
Embrace Technology Cautiously
Finally, the expert dealmaker suggests that, while technology is vitally important in industries like procurement, it’s crucial not to let the excitement about digital advancements overshadow the fundamentals of running a business. The human element is key and will be for a long time.
“I believe there’s absolutely a role in technology that can create incredible efficiencies for all of us,” she suggests, but letting it get in the way can be devastating to negotiation, a practice that she feels still must be done in person.
Among her signature phrases is, “If you want to blow a deal up, send an email.” Electronic communications can’t replace the tone, feeling, and emphasis of human conversations, and are too easy to misinterpret.
On the other hand, technology has made face-to-face negotiating easier than ever thanks to video conferencing. While not a true replacement for in-person discussions, video calls have enabled global meetings like never before. “There’s no question there’s a place for it; it’s just picking and choosing the spots in which you use it.”
Make Your Negotiation Breakthrough
#ThursdayThought – Earlier this month we shared @MollyFletcher‘s advice on approaching negotiation from a different, and often neglected, angle. How should you handle an unsuccessful negotiation? #procurement #negotiation pic.twitter.com/ALuuG776X9
— JAGGAER (@JaggaerPro) January 16, 2020
If you don’t already feel comfortable sitting down for a negotiation, just remember that everyone starts somewhere. You won’t always look back on an agreement and see it as successful, Fletcher says, but that’s perfectly normal.
The key is to recognize it, take responsibility, and move forward from there.
“You’ve got to look at those times when you lose, when you mess up, when it doesn’t work, and learn from it and have the courage to ask yourself; what did I do wrong? What was my role in that?”
As to how you can improve your negotiation chops, Molly has some simple advice; practice.
“I’ve found that the more that I practiced negotiating even in small moments, little moments, life moments, personal moments… the better I got in the big moments.”