Dealing with a Lack of Trust or Poor Relationships in Negotiations

In an ideal world we would be dealing with people we trusted and had achieved collaborative business relationships with.  We would have measured and improved this relationship so that both parties were getting the value they needed – certainly an aspiration that practitioners who are interested in the subject of Supply Chain Relationships can be aiming for.  The real world, we would have to admit, is less perfect.

Most supply chains have participants in them that don’t elicit trust.  These may be monopolies who feel they don’t need to care about relationships, or just powerful companies who have cultures that cause them to have an inflated sense of entitlement versus their less powerful supply chain partners.  As John Gattorna has suggested, there are some people you just shouldn’t collaborate with!

But again, is the last point another perfect world scenario?  In many supply chains there are organisations you just can’t avoid, possibly because they are a monopoly or because of their unique position in that supply chain.  So what to do?  How can you seek to form a relationship and do business with these people in the absence of trust and with apparently opposite views about the sharing of benefits?

It was with this thought in mind that I stumbled across a Harvard Business Review article about negotiating “In Extremis” [1] The article is based on the challenges facing military officers in locations like Afghanistan where there is little trust, doubt about intentions and pressure to resolve issues quickly, very quickly, all this happening in an environment of extreme risk and danger.  While nothing in business can compare with the stress of combat, the current business environment can present considerable pressure on participants in negotiations.

The basic proposition in the article is that it is possible to successfully achieve good outcomes in the absence of trust and with conflicting objectives.  The steps are simple (but not necessarily easy under pressure).

Step 1 – “Get the big picture” – start by soliciting the other person or group’s point of view.  This will help shape the objectives for the negotiation and how they might be achieved.

Step 2 – “Uncover and Collaborate” – learn the other party’s motivations and concerns.  This enables you to propose multiple solutions and ask your counterparts to improve on them.

Step 3 – “Elicit Genuine Buy-In” – use facts and the principle of fairness rather than brute force or stubbornness.  Part of this stage is to use the knowledge gained earlier to help the other party address the critics or stakeholders that they may have to deal with on their own side.

Step 4 – “Build Trust first” – this involves addressing the relationship before trying to reach an agreement on the subject in question.  This step recognises that although the temptation is to negotiate a quick resolution when under pressure, there is a need to ensure the negotiated settlement sticks.  This is such an important step because trust and the existence of a workable relationship are so fundamental to successful outcomes.

Step 5 – “Focus on Process” – when under pressure seek to drain the emotion from the situation and seek to manage the negotiation process as well as the outcome.  Again, this is about not giving in to the pressure of the situation and making immediate concessions, but rather slowing down to ensure undue haste does not leave the negotiator having given too much away.

While the strategies above were developed to train military officers, they can be applied to commercial negotiations just as easily.  The basis of these strategies goes back to some of the texts on negotiation written some 30 years ago, such as “Getting to Yes”[2].  Vantage Partners, an offshoot of the HBR researchers, have also developed some interesting case studies of the application in the commercial world.

There are also others that provide support for the general approach.  Stuart Diamond, in his book “Getting More” [3] makes very similar recommendations.  One of his key questions to ask yourself before entering the negotiations is, “who are they?”  It is this last point that should be of interest to those focused on Supply Chain Relationship management.  A key point to remember is that it is not about B2B (Business to Business) but rather P2P (People to People).  So in the absence of trust, remember you are dealing with people and use the tools suggested above to uncover opportunities to build trust and get the necessary buy in.

 

Do you need help in developing relationships with ‘difficult’ supply chain partners or negotiating with people you don’t trust or have a poor relationship with?  If so, please contact us at andrew.downard@adsupplychain.com.au or call +61(0)419 581 705.

 

 



[1] Jeff Weiss, Aram Donigian, Jonathan Hughes, “Extreme Negotiations”,  Harvard Business Review, 2010.

[2] Roger Fisher, Ury Williams “Getting to Yes – Negotiating Agreement without Giving In”, Penguin, 1991.

[3] Stuart Diamond “Getting More – How You Can Negotiate to Succeed in Work and Life”,  Portfolio Penguin, 2010.

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