When it comes to negotiation one of my favourite quotes and one I always try to remember is “you can shear a sheep many times, but you can skin it only one”.
This is especially true when you are looking to create a long term relationships, or at strategic partnership.
Here we need to look for Win/Win solutions, if we skin our strategic partners, then our relationship with them, will not be one of trust and partnership.
It will be one where they are constantly looking to regain any losses during the initial negotiation. We all need to have some degree of success.
The same with our staff, here we are also looking to create long term relationships and need to establish Win/Win, if we don’t do that then they will not be our employees for long. Nothing kills employee/employer relationships than us looking to win each and every negotiation.
Clearly, there are people who want to win every negotiation, and as a competitive person I can understand that, but I am not sure it’s always the wisest option.
If you negotiate a deal where the price is so low that the supplier loses money, then you will never get the quality you are looking for, irrespective of the contract negotiated.
I worked at one client where they had negotiated a fantastic fixed price, giving them everything that they wanted.
However, the project was 2 years late and quality was not as good as hoped for. The challenge was that as a company we had other clients who were prepared to pay for our best resources, which would allow us to make a profit, so why would we use them on a project with a client where we were losing money.
Many companies operate in the same way, and the result is that the poorer resources end up working on the poorer contracts, leading to costly overruns and poor results.
This client, whilst having negotiated and excellent deal, ended up paying more than intended and experiencing a 2 year delay. Whereas if they had been more flexible in the negotiating stage, leaving a little bit more money on the table, then we could have got the right people involved and delivered the right result at the right time, but only for the right price.
Quite often the people negotiating the deal are only involved in the negotiation stage, and don’t have to live with the consequences of what they have agreed.
I don’t like, I don’t think its the best approach, as the negotiators can declare victory after their part, even though the overall result is failure.
I believe that the negotiators should be involved throughout and can only declare success at the end, this is the best way to ensure Win/Win.