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When I started negotiating years ago, I used to think I didn’t fit the mold because I wasn’t the most aggressive person in the room. But that’s a misperception. The best negotiators aren’t pounding their fists and making demands.
So, forget the pre-conceived notions about effective negotiating, and remember it’s not a one size fits all ability. People may not want to work with the hothead in the room, but that doesn’t mean they can’t be effective. But the cool, close to the vest, quiet negotiator can be equally impactful. Take Martina Navratilova and Chris Evert, two completely different styles – one aggressive, hard hitting and physical, the other more subtle and technical – yet both were world class victors who successfully competed against one another.
While there isn’t a single negotiation style that guarantees success, it is generally true that the best negotiators are informed, eloquent and strategic. They leave their egos at the door, remain collected during a disagreement and treat the other party as a business partner rather than as an adversary. Ultimately, successful negotiation combines art and science. The latter is teachable, and comes mostly in the form of rigorous and diligent preparation. The former is more instinctual, the ability to read your audience, and to switch gears – and tone – when necessary. The skill is finding the right balance.
That’s what I have learned about the negotiating trade. And since I began as part of the Global Supply Chain Leadership Team at Levi Strauss and Co. in 2013, my team and I have negotiated and landed deals with more than 100 suppliers globally. Here are a few other tricks I’ve picked up to maintain the advantage.
- Prepare, rigorously and diligently. The most important parts of any negotiation happen well before the actual event. That’s when you need to know your position going into the meeting. You need to understand who needs the deal more and who has the leverage. Use your strengths – like size, scale, etc. – to your advantage and understand the market dynamics. You may not have the same strengths for every negotiation.
- Clearly define your objectives and know your bottom line. Before entering a negotiation, you should know exactly what your target is and what you want. And most importantly you must come in with a firm bottom line, a concrete “walk away” threshold. If you don’t have a number in mind that you’re not willing to compromise, you might get locked into a deal that you’ll later regret. At the same time, it’s important to determine whether you have any “gives” in your arsenal – and at what point you might offer them – to come to an agreement. Before you take that my-way-or-the-highway approach, you have to have considered the long-term.
- (Really) know who you’ll be dealing with before the meeting. There are usually several people in a room during a negotiation. Being familiar with the other person’s background and whom they do business with will help you predict what their reaction will be to your offer and plan accordingly.
- Create and embrace competition. It may seem obvious, but the power of a credible threat (usually one of your opponent’s competitors) is enormous, and having one in hand is critical. A year ago, cotton commodity prices were coming down. Cotton is a key input to our materials, and fabric is a key input to the total costs of our products. So it was imperative we renegotiate our materials costs. With falling prices, we had an advantage, but we went into negotiations without enough viable supplier competition to further leverage the deal.
- Don’t bluff, and keep your options open. Especially in supply chain where business is transparent, there’s no point in pretending you have other offers. We want open, collaborative relationships with our suppliers, and bluffing breeds mistrust that hurts that partnership. You could have the best strategy in the world, but you need a plan B if the other party doesn’t accept your terms. Let’s say you don’t have a plan B and they reject your offer. In that case, make sure whoever you’re negotiating with understands that although you don’t have another option at the moment, you will be actively pursuing other options going forward. Then it’s back to the drawing board. Do your homework and be prepared to go back in the next few months to engage them again. Stay persistent!
- Be lighthearted at times and adjust to the circumstances. There are times when meetings go on for hours, and things can sometimes get contentious. I try to add some levity at certain moments to let people breathe a little. You never want to leave things on a bad note. You want everyone to shake hands at the end. And be self-aware. There are plenty of times I adjust my tone and language to keep the conversation going.
These are a few strategies that have worked for me, but there are plenty of other effective methods to having successful negotiations. What has worked for you? Sound off in the comments.
Liz O’Neill, SVP Product Development and Sourcing, leads all global supply chain sourcing and strategy activities for Levi Strauss & Co. She is responsible for the management of product development and sourcing for over 150 million units shipped to over 100 countries. Through her work with global partners, Liz seeks to build strategic partnerships to improve supply chain agility while supporting investment in environmental sustainability initiatives and workers’ well-being.