Words

Negotiating Value in a Price-Only World Part 2

Federal Government Negotiates and Gets Value Today, Rocky Flats is a National Wildlife Refuge. It was established in 2007, and is managed by the U.S. Fish and Wildlife Service. The 5,237-acre refuge was once a nuclear weapon depot, a legacy of the cold war. Prior to 2007, it was a radioactive waste site just 15 […]

Drafting a Gainshare Framework: Use this Checklist

A client and I are drafting a gainshare arrangement for a complex service delivery contract. Neither my client (procurement) nor the service supplier have used a gainshare arrangement in their 26-year relationship. Yet, my client’s current economic outlook demands that the supplier lower its costs by eliminating redundant and unnecessary processes. It is noteworthy that […]

Negotiating Value in a Price-Only World Part 1

Every customer wants value, and every supplier says that they provide value. But, when it comes time to negotiate the contract it’s all PRICE, PRICE and more about PRICE. So, how do you break out of the price only conversation and really negotiate value? Negotiators need a common framework for talking about value. But, most […]

Rethinking Supplier Pricing: Target Price or Test Balloon?

My client was preparing to make a counteroffer to a vendor asking them to reduce their price, when an announcement to close a division of my client’s organization was made public.  The closure impacts the vendor’s relationship with the organization, but doesn’t eliminate the relationship. My client’s line-of-business stakeholders are demanding price reductions, but at […]

Buyers Do Not Really Want Innovation: They Want Significant Improvements.

Asking your suppliers for innovation—or transformation—is a tall order and few suppliers accept the challenge. I think I know why. Innovation transforms something, whether a process or a machine. It is more than an incremental improvement—saving “fingers and toes” worth of time, effort or money. Innovation is, I believe, disruptive, as opposed to continuous improvements […]

Managing the Rogue Stakeholder

A stakeholder said in front of the supplier during negotiations, “What the hell does ‘G.S.’ (V.P. of Sourcing) have to do with my deal!?” My coaching client and I had to regain control of the conversation immediately. In this article I’ll explain what we did and ask you to consider what you would have done […]

Getting to We: The Guiding Principles

There are six relationship principles that drive the Getting to We mindset in both negotiating the relationship and in the subsequent operation of the partnership. These guiding principles tell the parties how to act within the relationship. In earlier posts I’ve talked about the importance of trust and the necessary steps needed to build and […]

Shared Vision and Guiding Principles

Getting to We is a process. After partners assess the levels of trust and compatibility between two partners, and agree that there is enough trust and compatibility, they are ready to move on to the next step in the process: developing a shared vision for the relationship. It is vital that the parties view each […]

Assessing Trust and Compatibility

Accurately assessing trust and compatibility is not easy. It is often one-sided: a buying company will evaluate a supplier’s trustworthiness without understanding the supplier’s perceptions of the buying company’s trustworthiness. That’s why professors Gerald Ledlow and Karl Manrodt developed the Compatibility and Trust Assessment TM (CaT) to measure the strength of a business relationship across […]

TCO vs. TSS: They Serve Different Functions

Recently, a newer employee working in supply chain at a public utility asked me the following: “What is the difference between a Total Cost of Ownership and Total Supplier Spend? We need to cut costs next year and there is a line in the supplier’s scorecard for TCO but I don’t know what it means.” […]