What to Do When Your Negotiation Goes Wrong

Negotiation failure is an inevitable part of being a procurement professional. Here’s how to get back on your feet when it all goes wrong…

As procurement professionals, one thing we’re all sticklers about – and with good reason – is our negotiations with suppliers. After all, negotiation is one of the key skills that we pride ourselves on, and the idea of a negotiation failing feels akin to career suicide.

Yet, it happens. In fact, in our careers, it’s likely to happen multiple times.

Negotiations can fail in many ways. You can fail to get the financial outcome you wanted. You can also fail to agree on critical terms. Terrifyingly, you can fail to agree at all, and a coveted supplier that you felt was critical to your success can simply walk away. All of these failures hurt. So, what next?

In reality, failed negotiations are part of any successful procurement professional’s life, so here is what to do when the inevitable happens to you:

1. Rescue your ego

One of the reasons that negotiation failures hurt so much is that in procurement, we simply don’t expect them. As a result, a failed negotiation normally results in a bruised ego. But it’s important not to dwell here.

Often – and with good cause – we think that a failed negotiation will damage our reputation. However, Jeff Weiss, author of the HBR Guide to Negotiating, says that this almost always won’t be the case. He says:

“A reputation comes from consistent behaviour … [so] don’t assume this is the end of the world. This is just one transaction of many.”

2. Remember to not be so ‘black and white’

In procurement, sometimes there’s not a lot of room for ‘grey’ so to speak. Your supply chain is sustainable , or it’s not. You secured a great deal with a supplier, or you haven’t. You effectively managed risk, or you didn’t. These binaries are important but it’s also critical to realise that there’s some room for compromise in between.

After a negotiation, it’s certainly true that you may not have won on your terms. But the best negotiators find value and benefit in ways that ultimately may not seem so ‘black and white’.

For example, are there terms and conditions that could be added that balance out other losses? Or perhaps there are other long-term benefits of a certain supplier, for example their sustainability credentials, which are notoriously difficult to monitor? Even if these small wins may result in less savings, they can still be tabled as wins, albeit not in the ‘black and white’ way you originally intended.

3. Analyze what went wrong 

At some point, a negotiation feels as if it has ostensibly failed. At this point, you have exhausted all possible small wins and simply just need to walk away.

However, even at this point, failure is not always total and complete failure,

Given that one of the time-honoured mandates of procurement is to secure beneficial outcomes for the organisation, it can feel extremely frustrating when you not only not achieve those outcomes, but waste time (and possibly money) on a negotiation that fails. When this happens, it’s important to analyze what went wrong … and what you can do differently next time.

With any negotiation, the phrase ‘it takes two to tango’ is universally true. So, before you blame a failed negotiation on a difficult supplier, look at your own processes and behaviour first. Did you approach the negotiation in an adversarial way? Did you fail to take into account important supplier relationship management principles? Did you communicate your requirements thoroughly via an RFQ?

If the answer to any of these questions is ‘no’, then now is the time to revisit your approach and see what can be improved.

In procurement, there’s no doubt that a negotiation failure really hurts. But what is more important than the failure itself is your ability to learn from it and do things differently next time. 

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