Daily Archives: March 9, 2011

Is Your Supply Management Organization Ready for Convergence?

According to this recent web exclusive over on CPO Agenda on how technology creates ever-changing leadership challenges, 70% of top executives from multinational companies agree that there is a danger in being overwhelmed by the complexity of change as whole industries are transformed by a trend called ‘convergence’.

So what is this convergence? According to wikipedia, it could be technological convergence which is defined as the tendency for different technological systems to evolve towards performing similar tasks. Today’s smart phone is one example. We had a phone, we had a PDA, we had a gaming system, and we had a wifi laptop for browsing the web. Now we have one device that does it all (and, in the case of Apple, an iPhone that puts the one ring to shame).

And it’s happening across the board. Automotive has to build hybrid cars with integrated GPS and satellite internet connectivity. Fashion and Medicine both have to deal with personalization and custom-fit (in the former, the shoe has to be printed exactly to your foot and in the latter, the drug has to be optimized to your DNA). And technology has to adapt to the other systems you have in place. Gone is the time where you could be a master of one thing. Now you have to be a jack-of-all-trades and a master of one. It’s a daunting task, and one you’re probably not ready for as it’s a requirement most of your people probably are not ready for.

But one thing is for certain, the next few decades will prove whether or not we are the most adaptive species on the planet, because if we’re not, the impending global economic collapse could end all of civilization as we know it. Either way, we will live in interesting times and China, which once upon a time was the most powerful civilization in the world, will have its revenge.

Common Negotiation Ploys – Are You Falling for Them?

While your goal as a procurement and contract professional is to get the best deal you can, the sales people at each and every vendor that you deal with have the same goal. But whereas you have to split your time between determining internal customer requirements, writing RFXs, negotiating contracts, managing contracts, and educating and managing your internal customers, your sales counterparts get 100% of their time dedicated to sales — and they’re spending all of that time trying to figure out ways to get more money from you.

And if they can’t get it from an honest day’s hook, they’ll get it by a con man’s crook. Not only does your average sales professional get weeks of training before they’re even let out into the field, filled with “tactics that work”, but they spend every day figuring out how to improve these “tactics that work” and add more to the arsenal. Meanwhile, if you get a 2-hour crash course in “negotiations”, you’re lucky.

So what can you do? Since you can’t become a negotiations expert overnight, and will never have the time to invest in negotiations training that your counterparts will, the best thing you can do is lean to spot the ploys the sales people will try to use on you and your organization. This deprives them of a significant amount of their arsenal and makes it much harder for them to justify unfair markups in negotiations.

The following are 16 common ploys that sales people will use to try and take you for a ride:

  1. Pop-Tart
  2. Surprise!
  3. Getting to Know You
  4. Misdirection
  5. Making an Impression
  6. Mirroring
  7. Wait!
  8. Hurry Up!
  9. Resources, Not Results
  10. That Would Set a Precedent
  11. Bracketing
  12. The Only Game in Town
  13. That Would Violate GSA
  14. That Would Violate SOX
  15. Evil Eval
  16. Divide & Conquer

And while some of them, like:

  • Surprise!,
  • That Would Set a Precedent,
  • That Would Violate GSA, and
  • That Would Violate SOX

are easy to spot, because it’s hard to miss a sales person showing up unannounced or making some outright, often ridiculous claim, that something can’t be done for some specific, probably irrelevant, reason, others, like:

  • Getting to Know You,
  • Misdirection,
  • Mirroring, and
  • Divide & Conquer

can be almost impossible to spot. A really good con artist err sales person won’t make it obvious when he or she is trying hard to get to know you, will make misdirection so subtle that it will seem like the conversation is going where you want it to go, will not change his or her outward mannerisms quickly, and will be very careful not to do anything that would alert you to the fact that he is simultaneously charming your internal customer.

So how can you spot these ploys and what can you do to make sure they don’t happen to you? First of all, you buy a copy of Stephen Guth’s Contract Negotiation Handbook and you read the chapter on ploys very carefully. Then you observe your supplier’s sales people very carefully and, over time, one by one, you’ll see them using these ploys on you.

The book is also filled with negotiation tactics; tips, tricks, and traps of contracts; and subtleties of terms and conditions negotiations; but the description of the ploys is key. Because if you don’t spot them, nothing else really matters as it’s impossible to negotiate the best deal once you, or your internal customer, has fallen for a ploy. There are lots of books out there on negotiations, but this is the first book I’ve found that does a superb job of not only identifying all of the common ploys, but providing you with great advice on how to spot the ploys and counter them (in addition to telling you why they so often work).

And once you’ve mastered the ploys and are ready to take your negotiations to the next level, you can attend a seminar. There’s an upcoming NAPM seminar on the 26th in the D.C. area. For more details, see this post.