Aspirations in negotiation: how to use them in purchasing
When talking about negotiation techniques, one of the first ideas that comes to mind is the BATNA methodology (Best Alternative to a Negotiated Agreement), in fact, very useful and defended by professors in the field – and already covered in our blog.
However, there is a stage prior to the use of this technique – equally important and with fundamental participation in the final result of any agreement: that of defining the aspirations of a negotiation. To help you learn more about this concept and how to apply it in your daily life, Soluparts has gathered some important information:
What are aspirations in negotiation?
First of all, it is necessary to remember that aspirations are the stage prior to the negotiation and are based on a clear understanding of the needs of each party (which can be cost reduction, delivery time, among others).
According to Douglas Stone, Harvard professor, in his book “Difficult Conversations: How to Discuss What Matters Most” this is the first stage to start a conversation, in which the gain value is identified, one begins to understand the main interests involved in the move and to develop a fact base to support the arguments.
Translating this into actions can be simpler than it sounds. According to Andrea Kupfer Schinaider, law professor at Marquette University Law School and author of different books and articles in the field of negotiation, it is possible to establish three essential criteria to define aspiration before a negotiation: objectivity, optimism and legitimacy.
This first concern translates wishes, often expressed vaguely, into practical actions. Clear objectives, such as setting a specific price for the purchase of products or parts, must be defined before any conversation to obtain better results.
The second point, optimism, can be translated into: don’t be afraid to dare. In a negotiation, you will hardly get more than you initially asked, so defining an argument as close as possible to what the ideal outcome would be is always a good strategy for great results.
Last but not least, aspirations must be legitimate. Meaning: there must be some justifiable reason behind what is being asked for. Demands that are not fully focused on a plausible argument encourage the negotiator on the other side to make counter offerings that are meaningless or very distant from what was initially requested.
Applying these techniques to the purchase of indirect materials
Especially in the purchase of indirect materials, many challenges are placed ahead: culture, language and even barriers to reach an agreement in different regions of the world. Therefore, in international business, it is recommended that you not only know the person with whom you are going to negotiate, but also understand the role that he plays within that context.
After knowing this scenario, it is necessary to understand the organizational processes in which each professional is inserted. Although it is difficult to generalize – and many people take time to adapt to them – these processes tend to take one of several forms, namely: top down, consensus and building coalitions in several stages, according to James K. Sebenius, American economist, and Gordon Donaldson, professor of business administration at Harvard Business School.
The first consists in identifying who are the decision-makers within an organization, very common in the USA; the second addresses situations that require an agreement between members of the negotiation team on the other side or between the company as a whole and even the company with governments; and the third concerns a union of forces to make decisions, as a “winning group”.
After defining aspirations, you need to know how to use them
According to Bill McCouch, a specialist with more than 40 years of experience in the sector and SVP of Procurement Services at Corcentric, when buying indirect materials abroad it is necessary to consider 4 different topics:
- Leverage: Use market intelligence to assess suppliers against competitors. Knowing how to use information in order to be able to negotiate well with them, making them, for example, able to reduce prices.
- Timelines: Remember that not all negotiations will be simple and straightforward, but saving time is essential. Use reminders and notes to check how the buying process is going and where conversations are with suppliers. Another way to do this is by adopting specific software for the purchasing department that can help you control all your processes at the same time. See more in 10 software for the purchasing department that you need to know.
- Relationships: It is important to find the right attitude towards each person. It is possible to be formal or more friendly, as long as you can establish clear and concise communication at all times.
- Play hard: Sometimes negotiations reach an extreme point where the only possible alternative is to cancel contracts. This should be done as a last resort, but it can also be used to discredit a supplier’s value proposition.
What are the next steps?
After defining the aspirations, it is possible to move on to the other four stages of the negotiation: establish the initial positions of each party, listen and defend the justifications, bargain and solve problems and close the deal to begin the implementation.
Aspirations are an important step in any negotiation and must be defined based on three main goals: objectivity, optimism and legitimacy. Defining them can help to obtain increasingly satisfactory results – always, of course, within feasible and well-established limits.
The purchase of indirect materials involves dealing with different cultures and aspirations, in addition to different techniques for negotiations. Thus, having attention to details and knowing how to use the techniques and information to your advantage are important differentials.
On Soluparts blog you will find a learning path for you to further develop your trading techniques. Click here to access the material.
Another suggestion is to have a partner specialized in negotiation for purchases of indirect materials such as Soluparts. Our multicultural team has extensive experience in negotiating with suppliers from different cultures, located in 40 countries around the world.