Procurement and supply chain professionals must be aware of and strive to improve their emotional intelligence. It has a key impact in negotiations. Soft skills are becoming more important - even in the digital age.
In addition to this week’s webinar recommendations, ProcureCon MRO is taking place in Atlanta, GA on the 28th and 29th.
If you are looking for a longer term webinar recommendation, check out “Mission Critical for 2020: Touchless Supplier Management” from Spend Matters and APEX Analytix and featuring a case study on JetBlue, November 12th at 11am ET.
BTW: If you haven’t already, sign up for our mailing list to be sure you get my weekly recommendations in your Inbox each Monday.
“When considering any contribution that risk management can make to the organization, it is important to decide whether the contribution will relate to strategy, projects and/or operations. The decision will enable the risk management activities within the organization to be aligned with the other business operations activities and imperatives.” P. 292
Fundamentals of Risk Management: Understanding, Evaluating and Implementing Effective Risk Management (5th Ed.) by Paul Hopkin (Kogan Page, July 2018) provides a thorough and instructive foundation for anyone looking to increase their enterprise’s rigor around risk. By acknowledging and discussing critical contextual issues such as global finance, international regulations, corporate culture, and natural human responses to risk, this book sets the reader up for success - and empowers them to proactively and positively navigate the inevitable uncertainty we all work in the midst of.
Picture this: your organization needs to create a multi-year contract covering critical components for its manufacturing process. Because of the technical nature of those components, management requests that the team creating the contract be led by procurement but also include engineering, R&D, and finance. Each of the people involved will have different priorities, even though all agree on what they want the end result to be. How do you present a united front at the negotiation table?
What would you do?
“We can spot an Expensive Sentence by its impact. Expensive Sentences limit information. They end conversations. They create urgency and isolation. They reduce options. They steal choice.” (p. xviii)
Expensive Sentences: Debunking the Common Myths that Derail Decisions and Sabotage Success by Jack Quarles (Ideapress, 2017) accomplishes two amazing things in one highly readable book:
Expensive Sentences is about the power of spoken language. You may not be aware of it, but some of the most common sentences aired in your company on a daily basis are costing you money.
Have you ever wondered why your savings projections supersede the realized savings? Have you ever been challenged by your finance department to validate the projected cost savings one year into an agreement? Has your C-suite ever complained that procurement’s estimates and projections go unrealized? If you have faced any of these or similar situations, you are not alone. Savings projections often fall short of reality, but why? For many procurement organizations, their sourcing efforts aren’t felt due to noncompliance.
It had been a particularly hard week for the whole team. Factory audits had been going on with the accuracy of a Swiss watch (plane, factory, hotel, plane, factory, hotel...). That Friday night we were isolated by a storm that had canceled our flight home and left us stuck in an airport hotel, not knowing what day it was or when we would get back. Our ‘batteries’ were very low.
Only Avi, our expert sales agent, strengthened by a thousand negotiations, seemed to be fresh as a lettuce.
Around the crackling of the chimney, while the storm whipped outside, we all tried to shelter ourselves in hot cups of coffee, seeking the strength to recover our spirits.
“I cannot guarantee whether you will be successful after a well-prepared negotiation, but I can 100 percent guarantee failure or finding yourself outsmarted and in a concessionary position if you choose not to do a thorough prep prior to a negotiation.” (p. 38)
Mastering High Stakes Negotiations: Both Sides of the Table by Mark M. Bilgin, Ph. D. (BookLocker.com, 2017) is true to its title in that it lays out all of the considerations associated with the most critical, highest dollar value negotiations conducted. In an odd way, however, even meeting that high bar is still selling the book short.
If you are a people watcher, or a student of human behavior, you will absolutely love this book. I was immediately drawn in by the author’s use of case studies, both his own and the ‘outside’ experiences of others to illustrate in colorful but honest fashion the incentives and pitfalls associated with negotiation prep. Negotiation is, at its simplest level, the use of leverage, exchange, and (somewhat) predictable human behavior to bring parties together for their perceived benefit. As a result, you can not be a master negotiator without being aware of and interested in what people say and do. That may come as a great relief to anyone that still thinks negotiation is about aggressively dominating ‘them’ to get what is best for yourself at any cost.
Editor’s note: Scott Jancy is a multi-faceted professional, with experience as a historian, an architect, a Naval Officer, a planner, and a consultant. He blogs often on innovation, leadership, and design thinking. In his first guest post for Buyers Meeting Point, Scott takes on the topic of leadership through times of change. For procurement teams this might mean greater contact with procurement, a new organizational mandate, or the role out of different technology. Regardless of the source of the change, procurement must have a vision for the desired outcome and the messaging to build support and spread understanding.
Change of state is the physical process where matter moves from one state to another. Examples of such changes are melting, freezing, evaporation/boiling, condensation, sublimation, and deposition. Shifting temperatures and increased pressure are the usual causes of this kind of phase change in matter.
People and organizations can also change their state when subjected to stress. Typical causes include, but are not limited to, poor leadership, low employee morale, an ineffective or excessive office management, and possible job uncertainty. A team of people can either break apart or fuse together depending on how they react to the stress.
The principle of a North/South divide has been around for as long as mankind has organized itself into societies. It is a term often used within politics to define the ‘North of the country from the South’. It doesn’t matter if you are referening to the USA, UK, or India, the statement is still applicable. It works on the principle things may be considered different between two groups, thereby creating a barrier to collaboration.
The key to the model is achieving the right perspective. For example, we may embrace a North/South divide within our countries yet still passionate about being part of the same country. Overcoming the divide requires a common agenda, one that everyone can get behind regardless of which side of the divide they are from.
If you were to review your own procurement team’s achievements and capabilities from the perspective of a customer, would you buy from you?
The principle of using an internal business function which is currently a cost centre, and turning it into an revenue generating business proposition, is not new. Examples can be found in most areas ranging from IT through to Finance. The principle is based on creating such a leading business function others will pay to use.
Dr. Tom DePaoli recently released Avoiding a Supply Chain Apocalypse. It is a collection of the best advice he has to give on topics ranging from relationships to negotiation to Kaizens and storytelling. Since I’ve read all of Dr. Tom’s books, I consider it something of a personal challenge to uncover the material he has added – either because the focus of the book is different or because professional priorities continue to change over time.
Like Dr. Tom’s other books, this is for professionals that don’t have the time (or desire) to lose themselves in a 300-400 page book of polished academic theory. His sections are short and to the point and draw in material from third party sites as well as his other writing. You can read one or two sections as time allows and not have any trouble picking up in a different place the next time you sit down.
Anyone who has ever completed a Request for Proposal (RFP) has had the unfortunate experience of informing all but one or two suppliers they have not been awarded the business. It may be difficult and at times uncomfortable, but when the unchosen supplier is the incumbent, there is more to manage than just this conversation. How this transition process is handled can either help or hinder the success of moving to a new supplier relationship. There are a few steps you can take to smooth the transition and ensure all parties are as satisfied as possible.
Last month I had the opportunity to speak with Dave Bowen, Xchanging’s US Country Manager and CEO of MM4. Xchanging has now released two parts of the research they conducted into procurement and supply chain. You can read my coverage of the first two parts here and here.
This week's guest audio comes from a panel discussion moderated by Code for America. They create open source solutions and facilitate a collaborative community around their use. Code for America also hosts an annual summit that brings together public sector innovators and the organizations that collaborate with them – and that is where this particular recording was made: at a 2014 summit panel on public sector procurement.
In this exchange, the panel responds to an audience question about the politics of procurement and facilitating cross-functional communication for the sake of gaining buy in.