The 7 Habits of Highly ORDINARY Negotiators – HABIT #3

by Omid Ghamami

world-class-negotiations

 Purchasing & Negotiation Training

The 7 Habits of Highly ORDINARY Negotiators – HABIT #3

If you believe the glossy negotiation seminar advertisements in airline magazines, then world class negotiators are the ones who know how to “get an unfair advantage” and “get the upper hand” in negotiations.

Flush that philosophy down the toilet if you ask me.  What kind of supply chain has all the links trying to extort the upper hand over one another? Ask the Japanese if their supply chains, the most advanced in the world, have this kind of self-serving 1950’s focus.   Or you can save time and just ask me:  they don’t.

So what is one of the biggest “X Factors” that separates the good from world class PSCM (PSCM = Purchasing and Supply Chain Management) professionals?  You will not hear this from anyone else, anywhere.  Ready?

But first I want to tell you a story.  I once hired a landscaper to do my front and back yard.  We agreed as follows:  he would come every Sunday at 9AM and mow the lawn in my front and backyard, edge both lawns, trim the bushes, cleanup, and go.  Sounds clear enough, right?

Well, how could it be that he was doing EXACTLY what he and I agreed on week after week, yet I was still unhappy and had to ultimately release him?  What I learned was that I did not actually want to buy those activities that he and I agreed on.  I had forgotten my own teachings.

What I actually wanted to buy was an END RESULT, not the process.  But I focused on the process instead of the results when I defined the purchase, just like your end users do to you.

What I actually wanted was that every time I went outside or came home, my landscape would look pretty.  That’s what I wanted, but guess what, it’s not what I asked for.  And it was my fault!

The worst possible situation in PSCM in my opinion is that the supplier is doing EXACTLY what you asked them to do, yet you are still unsatisfied.  There’s nothing you can but look in the mirror and get angry.  I call this situation “purchasing hell”, and many of you live in it regularly.

So this leads me to the third habit of highly ORDINARY negotiators:

The most ORDINARY negotiators negotiate for Goods & Services Instead Of Performance Results.

That’s the third habit of highly ORDINARY negotiators – they buy goods and services. They buy “stuff” that their end users ask for, with no negotiated contractual guarantee of deeply researched performance outcomes.

What’s the implication of this, you might ask?

In three decades of working with PSCM professionals in 21 countries, I’ve come to an unmistakable conclusion.  Our profession is focusing on all the wrong things, aginst their will.

What percentage of each day do you think is, on average, spent on unplanned activities?  You won’t believe the answer.   It’s about 70 – 90%.  And it hasn’t gotten better in all this time.

Just stew on that for a minute.  We have a profession filled with unbelievable talent, capable of mastering complex strategies to negotiate multi-million dollar contracts and streamline supply chains, and we are instead getting our entire days agenda getting instead sucked up in unplanned activities.

So first let’s define an “unplanned activity”.  An unplanned activity is something you get sucked into against your will – against your master plan for the day.  Unplanned activities are time vampires. They suck the life out of you.  They don’t garner you awards, recognitions, raises or promotions.  They just give you stress and make your career growth slow down to a snail’s pace.

Unplanned activities turn you from a strategist into a fire fighter.  What kind of fires are you putting out?  Late deliveries, lack of payment, customer service issues, product performance issues, supplier safety issues, inventory problems, production problems, after the fact purchase orders, and on and on.

On top of that, there are plenty of planned activities that are unplanned activities in disguise –regularly scheduled meetings that are in place because all parties involved know that there are so many fires involved in a particular area that ad hoc meetings are not enough – you have to keep meeting regularly to discuss the status of the various fires in the pipeline.

Is this how you wanted to spend your life?  Your career?  Putting out fires with 70 – 90% of every day?  What could you do with that time if you could waive a wand and make it go to 20%?

This topic takes me two days to teach in a public seminar, so I certainly cannot do justice in a blog, but I hope to drive change with my loyal readers.

The PSCM profession, despite being filled with highly capable and educated professionals, is getting better and better at the wrong things, which provides the illusion of progress.  I want you to throw your procurement process out the window and start over.

Chief Purchasing Officers, I’m talking to you:  Your organizations need to be soliciting, negotiating, and contracting for PERFORMANCE RESULTS.  Suppliers need to have skin in the game, with rigorous metrics and pay for performance models.  And your people eventually have to develop success metrics when they do supplier report cards, so why not have them do this up front, before the supplier has your company’s money?   EVERYTHING changes after suppliers have your money.

Now is the time to make a difference.  Go off and do something wonderful!

Be your best!

Omid G

“THE Godfather of Negotiation Planning” ~ Intel Corp

P.S.  My CPSCM (Certified Purchasing and Supply Chain Manager) Certification Program is going through the roof!  Some companies have gotten their entire department signed up.  It’s 30 hours of fast paced (equivalent to 90 hours classroom time) online, on-demand training, where you see the materials and hear my voice throughout.  The exams are all online and you get certified on your terms.  Never buy books and drive to testing centers for certification again.  And I have a game changing announcement coming soon about the CPSCM Certification Program – it’s going to rock this profession.

Remember, if you keep doing what you’ve always been doing, you will keep getting what you’ve always been getting.

Check out the most advanced PSCM Certification Program in the world for yourself!   www.CenterforPSCMExcellence.org

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