In his book Relationships First! The New Paradigm in Contract Management Andy Akrouche had made reference to a Commitment Matters blog post by IACCM CEO Tim Cummins titled “The Power of Negotiation.” In his post Cummins shared the revelation of what he called a ‘conspiracy’ that leads executives on both sides of the negotiating table to ‘lie’ to their trading partners, in which they create a combined version of ‘the truth’ that leads to mutual delusion over what they can achieve, by when and for how much.
Based on the above Cummins would go on to write; In the end, it is the overall quality of contracting and contract management that creates effective ‘due diligence’. Negotiation is just one phase in this activity and any organization that relies solely on the effectiveness of its negotiators is indeed foolish – and will reap the consequences by performing poorly over time.
I could not agree more with Cummins’ assessment which leads to me to ask the question . . . why is there such a great emphasis placed on learning negotiating techniques. As Cummins points out the consequences of placing too great an emphasis on negotiating are poor results.
In this context, it make more sense to focus on Akrouche’s Relationships First model, in which the greater emphasis is placed on building better relationships with stakeholders as opposed to learning how to “beat them” through better negotiating techniques?
Now you might think that this is a radical or at minimum, notable departure from the way in which we are used to doing business. After all haven’t we applauded the exploits of the Donald Trumps who have so willingly shared their “art of the deal” approach to winning in the business world?
This might have been true a few years ago. However, and has a recent interview with one of the world’s top negotiating experts Keld Jensen revealed, there is not only a paradigm shift in thinking in terms of how we negotiate, but the role that negotiations play in the overall success of any business dealings. In fact, and in answering one of my questions, Jensen actually agreed with Akrouche’s Relationships First model from the standpoint of having the need to bring the right partners to the table through an effective and meaningful industry analysis. You can listen to that interview through the following link; Executive Deceit and Optimizing Negotiation Outcomes.
When everything is said and done, I believe that the first question you have to ask yourself before taking a seat at the negotiating table is simply this . . . am I negotiating a deal or a relationship, and what difference will my answer make in terms of a successful outcome?
Remember to also check out the advanced publisher’s eBook and hard copy versions of Andy Akrouche’s new book Relationships First! The New Paradigm in Contract Management (see below).
Click to purchase Relationships First!
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Procurement Insights 
Neha Vaidya
December 4, 2013
I am currently in a procurement class that has a final lecture on “negotiation.” To emphasize the importance of negotiation we participated in a reverse auction scenario in which we pretended to be suppliers giving quotes to a retailer for a portfolio of parts. Since we were working off a spreadsheet, it was easy to see how students jumped at the opportunity of making risky and pricey deals at times just to win over a client. Though it was a simulation, I would speculate there was more of a relationship component in the negotiation than stated in your blog, or else there would be no reason for a supplier to cut profits in the present without betting on profits in the future. As far as the gray area of pricing between supplier and buyers, I do agree that real prices can get lost in negotiations especially due to processes like auctions that continuously allow the outlier prices to become the normal price being sought on the market.
Overall very interesting argument and definitely a very complex faction of procurement.