What do you do when disengagement is not an option? Alexandru Butiri shares four learnings from high-stakes kidnap negotiations that can be applied in any procurement function.
As far as negotiations go, nothing could be more high-stakes than a kidnap negotiation. How on earth do you put a price on a human life?
Sometimes a procurement negotiation can feel like a kidnapping or hostage situation. Think about the times you’ve had to negotiate with ruthless, uncompromising parties. They maximise all of the perceived or real advantages that they have.
Recently, I had the opportunity to spend time with a kidnap response consultant in a kidnap simulation exercise. We were given a case that involved sea pirates and the kidnap of a crew from a container ship. This training stayed with me long afterwards because I found it so relevant to the day-to-day negotiations we undertake in our procurement roles.
Here are four negotiation tips that I’ve learned from the experience:
1. Set up a response team
The first thing that organisations do in a kidnap situation is to set up a crisis response team of experts, which may contain negotiators, experts in the field of operations, psychologists and others.
When preparing for a critical upcoming negotiation, procurement can take the lead in setting up a dedicated team of cross-functional experts within the organisation. Everything should be coordinated through this lean, agile team. Two key tips to remember are:
- Leave it to experts to negotiate. People with a stake in the game are poor negotiators. Would you let you CEO negotiate directly with your top suppliers who may subject her or him to pressure tactics?
- Each team member should have a clearly defined role. Not everyone is the lead – and never underestimate the importance of the note-taker.
2. Build resilience to pressure tactics
It’s vital to be aware of pressure tactics, and (more importantly) to be aware of how you react in pressured situations. Sometimes kidnappers will ask for a big payment in a very short timeframe to “solve the issue rapidly”. But it if you give in and pay, this becomes only the first instalment in long line of payments.
In the corporate world, pressure tactics may refer to tight, unrealistic expectations, timeline pressures to make a “quick” decision. Sound familiar? Avoid an amygdala hijack by planning ahead and putting a process in place that will help you avoid making a mistake under pressure.
3. Understand the game and develop a plan around it
Kidnappers’ demands can seem arbitrary, out of control and very unpredictable, which is why kidnap negotiators make it a priority to understand their motivations and hence predict their behaviour and develop a strategy around it.
In procurement negotiations, take the time to research the other parties’ motivations and their commercial construct. Spend more time in planning and less in negotiating for a better outcome. Game theory-based tools can help in modelling various scenarios. This will help to minimise the quick “think on your feet” risk by anticipating various outcomes and knowing your best position in each scenario. Cost analysis and clean sheets will help you understand not only your commercial model, but also that of the other party.
4. Learn to influence without a mandate
We’re constantly influencing (and being influenced by) others without being aware of it. Expert negotiators know how to use influencing principles to reach their objective.
How do you influence without a mandate? There are a set of influencing principles valid in all cultures and societies that can get you closer to your objective. Notice that I’m using the word “influencing”, not “manipulating”. Here are some of them to get familiar with:
- Peer pressure
One classic influencing technique is to make a small concession (typically of very little cost to yourself) to put the other party in your debt. A kidnapper, for example, might extend a payment time-frame, or agree on a communication schedule. In a procurement negotiation, learn to recognise when the other party gives away something menial to make you feel obliged.
Procurement professionals can put these learnings to use not only in negotiating with suppliers, but in their day-to-day dealings with stakeholders in their own organisations.
What do you think? Leave a comment below, or get in touch with me if you’re interested in finding out more details.
Are you based in Australia? Join Alexandru Butiri at the upcoming Big Ideas Summit in Sydney on Tuesday 30th October!