MAKING YOUR NEGOTIATING AP-PEELING :)

In the classic 1949 play ‘Death of a Salesman’ by Arthur Miller the hero Willie Loman’s cry of desperate despair in being made redundant after a long selling life of hard graft is

“You can’t eat the orange and throw the peel away – a man is not a piece of fruit.”

Negotiation specialist Clive Rich uses the analogy of an orange in a more creative way.

Remember to negotiate the whole package
Peel and all !

He tells a story of an orange on a kitchen table. Opposite each other across the table are two elderly sisters. Both desire the orange. The orange is cut in half and shared. 

Clive Rich’s clever twist on the story is to explain this was not the best result for either sister, since one wanted to eat the orange segments and the other the peel for a cake.

The moral being, if they had been better negotiators they would have been better satisfied.

here are some tips to be a better negotiator:-

·         Prepare and do your home work.  Setting Objectives and Preparation

·         Will the atmosphere be warm, cool, hostile or even playful? How will you adapt your negotiating style.

·         Are you dealing with the decision maker?

·         Are they relaxed or nervous?   Reading Body language

·         Are they trustworthy?      Selling ? Buying ? TRUST

·         Do you really know the strength of your position?

·         What is your  contingency plan  if the negotiations drag on or fail?

·       

Think of the peel as your negotiating variables
 - little cost to you great value to them

  It’s not always about Price. You may want the orange –they may want the peel.  Peels could be flexibility on timing, level of guarantees etc

·         Don’t bluff or lie. In the long rung being deceptive usually back fires

·         Be the first to make an offer. If you go first get to set the agenda, tone and your stake in the ground.

·         Use more assertive words like “I want” or “I require” rather than “I prefer” but make your first offer reasonable.

There are a number of skills in Negotiation that Selling shares but they are not necessarily the same process.

Better negotiating skills means “your future is Orange” . ( Other mobile network providers are available ! J )

Related Links

Negotiating in a VUCA world

Skills , Knowledge and Qualities of a Negotiator

Retaining high potential talent

 12 Step Negotiation Process

 Speed in Negotiation

Idea for post prompted by Richard Farleigh's column in City AM Monday 25th November

http://www.cityam.com/profile/richard-farleigh

9 research polls and the future of Selling in 2013

The prediction business has been in full flow at the beginning of the year.

 The stalemate of the Republicans and Democrats pulled the US and us all(!) back from the Fiscal Cliff – for the moment.

Will we have a triple dip recession?  Will the Euro zone falter ? Will UK lose its AAA rating?

The expert analysts seem split on almost everything  from which  Supermarket won the Christmas race to the end of the world.

Some are seeking green shoots of recovery , other prefer to relish the gloomy straws  of a triple dip.

I guess we members of the unwashed must ignore a lot of what we hear day to day and half of what we see. Much will depend on our psychological make up. Optimistic or Pessimistic.
 
There seem to be an amazing number of videos around from the stand up comedians. They each have to offer their USP to differentiate from each other. Some are cheerful and optimistic others prefer the sceptical  or even morose approach.
 
I guess those of us in selling have to elect to be optimistic but also realistic.

Maybe we can look at the forecasts from the pundits  as the comedian Russel Howard does in his Good News show in an upbeat way.   http://www.bbc.co.uk/programmes/b00phwkz
 
Here is a round up of the first fortnight's worth of Trade and Selling related data. make of the data what you will. Here are 9 reports that caught my eye.
 

1. Chartered Institute of Purchasing and Supply (CIPS) Index published January 2013  as reported by London Evening Standard 2^nd  January 2013

Score of over 50 signals growth December 2012 UK hit 51.4

Manufacturers enjoyed their fastest expansion for 15 months.

The revival was driven by rising UK orders more than offsetting another fall in export orders.

An eighth month run of job shedding among manufacturers also looks like coming to a halt

Chief Executive of CIPS David Noble

“While December’s figures do not reverse the disappointing performance over the year as a whole, manufacturers will hope that the solid upturn in production volumes is the first sign of a more stable footing going into 2013”

2.  UK job seekers faced more opportunities in the final three months of 2012 than at any other point since 2009 when Reed started their index. Reed report than 81% of sectors had better shape than a year before.

November 140

December 134  but Dec 2012 was 121

“2012 has been a consistent recovery for the jobs market” MD Mark Rhodes said “We have seen growth across the board in the majority of sectors and regions and employers are becoming increasingly less cautious about their approach to taking on new personnel”

Northern Ireland and the North East posted the highest growth among the regions , all of which enjoyed some improvement with already strong London also seeing  opportunities up 10% over the year.

3. The Lloyds TSB business confidence index climbed to 19% looking forward to 2013 up from 12.5%

Sales and orders likely to be on the rise

Prospects for the first half of 2013 look more positive with expectations for total sales and orders in the next six months – two of the key barometers of business confidence - both improving. Over a third of businesses (36 %) said that they expect orders to increase during the first half of the year, compared to one in ten (12 %) that think orders will fall. This results in a 24 % overall net balance expecting orders to increase.

Two fifths of businesses (43 %) stated that they think sales will increase in the next six months, while a fifth (19 %) expect a decline, leading to a 24 % overall net balance expecting sales to increase.

The confidence levels for both sales and orders were last surpassed in the July 2010 survey.

 

 4. According to a poll from the Institute of Directors (IOD) the number of Directors who thought 2013 would be better than 2012 surged ahead of those with a pessimistic outlook by 31%

This result reverses the balance of minus 31% in the same poll last year.

Despite this optimism, they remain worried about the possibility of the recession turning into a triple dip with 65% thinking there was a moderate risk or high risk of a renewed slump.

 

5.  The UK will probably have negative growth in Q4 2012 and there must be a chance of a weak Q1 2013 as well, although data from the ICAEW Grant Thornton Business Confidence Monitor and FSB Small Business Index have been encouraging enough to suppose there are cautious grounds for optimism going into 2013. So CEBR gives a 50-50 chance on a triple dip.

 

6. The Chartered Institute of Purchasing and Supply’s  (CIPS)  services activity index sank to 48.9 for December. The index was depressed by a fall in new business with clients reluctant to commit to spending amid economic uncertainty. Chief executive of CIPS David Noble said “ The underlying trend is one of continuing uncertainty. Businesses are holding back on investment, leading to falls in employment and increased spare capacity”

Rob Harbron economist at CEBR  “ As the service sector makes up nearly three quarters of the UK economy, a contraction in the sector is bad news for economic growth”

7.  Manufacturing is responsible for half of UK exports and its productivity regularly outpaces economic growth so it’s worth taking note of EEF.

The manufacturers organisation for the UK EEF reckon manufacturers will produce  just 0.7 % in 2013 down from earlier forecasts of 1.5 % growth.

However on the more positive side 30%   of firms said they expected overall conditions to improve versus 23% who expected the economic climate to worsen.

EEF boss Terry Scuoler believes factory firms could boost exports and add more value despite global difficulties. “ The past year has been a challenging one for manufacturers , but as they look to 2013 there is still potential  for growth in their business. The increase in investment in recent years will bear fruit as companies see opportunities  from new product development and the commercialisation of new technology.”

But firms were still worried about a slowdown in the world economy with around two thirds of companies citing that as the biggest risk to growth  risk to growth up from just 1 in ten last year (2012).

8.  The 2012 Deloitte fourth quarter survey took place between 25th November and 11th December. 112 CFOs participated, including the CFOs of 36 FTSE 100 and 38 FTSE 250 companies. The rest were CFOs of other UK listed companies, large private companies and UK subsidiaries of major companies listed overseas. The combined market value of the 84 UK listed companies surveyed is £672 billion, or approximately 35% of the UK quoted equity market.

Conducted over the fourth quarter of 2012 93% of finance chiefs surveyed said there was a 40% chance the UK would suffer a return to economic contraction in the coming years.

But the survey’s results were not entirely negative . Those expecting a return to recession in the next two years was lower than in the last two quarters and overall economic confidence moved marginally into positive territory.

9.  CEBR and FSA Ups and dons of FSA approved jobs

Ups                                                          Change on 2008 peak

Insurance Brokers                                   up to 10, 846 ( peaked in Feb 2005 at 11,970)

Fund managers (investment advice)     up to 7.7%  to 45,911

Financial technical support                    up to 22% to 912

Research and outsourced services         up to 41% to 2,539

Downs                                                     Change on 2008 peak

All approved persons                              Down 10.6% to 151,835

Lending                                                   Down 17.2 % to 36,380

Finance and Brokers                               Down 54% to 1,454

Traders                                                    Down 13% to 21052

Debt Management                                                 Down 19% to 153

Investment distributors                          Down 12.1 % to 27,661

Insurance firms                                       Down 26.8% to 4,809

Insurance support services                     Down 7% to 1,048

Life firms and mutual                             Down 14% to 1530

The drop in regulated jobs continues . The FSA’s approved  persons list down 10.6 % on Fevruary 2008.The banking centre led the decline with 17.2 % fall taking the number of staff down to 36,380. The large-scale savings at UBS  11,000 and Bank of America losing 16,000. Big banks have high cost bases, there is little activity in bond, equity and derivative markets so they are cutting back according to Robert Harbron of Centre for Economics and Business research who estimates 100,000 city jobs have been lost since the financial crisis.  But a few areas have seen growth with the number in investment advice roles up 7.7%.

 

 

 

 

Robust Flawed or Inadequate Railway Franchise Processes RFIs RFPs and ITTs

Few of us outside the Rail Industry know the details of what has  really happened in the troubled franchise process for West Coast mainline.

The media will be focusing on the huge compensation bills. The Labour opposition will no doubt enjoy the discomfort of the Coalition Government with the story  fortuitously blowing up during their Party Conference in Manchester. No doubt past awards under Labour Governments will  be raked up etc.

For  those  in  Professional Selling and Procurement though ,there could well be important lessons for Procurement Processes and Supply Chain Management in the Private sector as well.

 Taking a look at the guide to Rail Franchises issued by the Department for Transport the language and structure of the process is pretty similar to the due diligence language and approach of Private Sector Procurement and the growing Procurement Outsourcing World.

 

Click here for link to Department for Transport Gideines for ITT for Railway franchise

More and more in Sales have to compete in beauty parade presentations to qualify for approved supplier status and then jump through the hoops of Tendering processes in response to RFI, RFP and ITT. These are time consuming and expensive activities. Even after being awarded a bid further negotiation can still take place.

Those familiar with the rigorous procedures such as ARIBA system, or the request from Outsourcing Giants like Accenture will know the experience all too well.

 

 

The rise in outsourcing procurement has also led to process driven procurement systems driven by the continual drive for Year on Year savings.

The power is weighted heavily on the buying side whose final decision is seldom challenged in the Private sector. They are the 'customer' after all.

I guess one of the interesting differences in the public procurement field is that decisions are occasionally challenged and the process is more transparent.  Of course the decision to challenge is a brave thing to do. It is also an expensive action to take.

Sir Richard Branson’s initial challenges to the Department for Trade Dft came to nothing. The challenges fell on deaf ears ( no responses given) until he decided to go to court. The e petition  gathered 173,994 + votes helped garner Parliament and the broader customer public to take an interest in the case.

Take a look at the Video clip of Sir Richard speaking at the House of Commons  Transport Committee  on 10th of September Click here for BBC video clip

The Department for Transport  has dropped their plans to remove Virgin Trains of its right to run the main London to Glasgow rail route.  The Daily Mail’s Ray Massy and Hanah Roberts reported October 3^rd 2012 Transport  Secretary Patrick McLoughlin

“I have had to cancel the competition for the running of the West Coast franchise because of deeply regrettable and completely unacceptable mistakes made by my department in the way it managed the process.”

“A detailed examination by my officials into what happened has revealed these flaws and means it is no longer possible to award a new franchise on the basis of the competition that was held.”

“I have ordered two independent reviews to look urgently and thoroughly into the matter so that we know what exactly happened and how we can make sure our rail franchise programme is fit for purpose.”

The issues  apparently are around inflation calculations, risk measurements and Quality assurance . Reports suggest these have been found wanting in the Procurement Processes of the Rail Franchises . Another question many of us will be asking is

 "Are there similar issues in Private Procurement Processes and Systems ?"

 Suppliers want a level playing field. Procurement  wants the best suppliers.

from some notes I took at a CIPS presentation

Related Links

  Public Procurement Articles

 

3 ways to Improve your chances of winning Sales

In the Tack Buyers views of salespeople 2012 - Selling in a VUCA world , 89% of Buyers had looked for new suppliers a 10% lift since 2010. 

 Whether prospective new suppliers are able to offer a sufficiently persuasive alternative is more debatable .

What are the chances of winning new business ?

 In a post published on the HBR blog in July 2012 by Steven W Martin , he shared some research he had undertaken on 1,000 bids to analyse at what point of time decisions were made by buyers in the bidding process.

30% had decided the winner before the selection process began

45% had made their mind up by half way through the process

Only 25% decided at the end of the process

Therefore, if you are not clearly in the lead at the half way stage of the sales process, the likelihood is that you are going to lose

In almost every case Martin observes, the decision wasn't even close between the top two choices.

Even though customers had made up their minds, they still demanded all the other salespeople to jump through a series of hoops for nothing, wasting their valuable time, resources, and mental and emotional energy.

The main point from the above  ? There is little point training your sales teams on how and why prospective customers make their buying decision if your training isn't based upon direct rsearch with decision makers about won and lost business and what they feel about salespeople. Hence why the Buyers' Views of Salespeople has been a work in progress the last fourteen years.

Three ways to improve the team to win more.

1. Sharing success stories about key wins especially when explained using examples  will help the entire sales team  understand and learn from them.

Click here for tips on elevator pitches

2. In your sales training include role play exercises on everything from your elevator pitch and cold calls to the corporate presentation and negotiation.

2. Best practise .Consider asking your top salespeople to be interviewed in a panel-type setting about their sales philosophy, client interactive categorisation strategy ( see below), and where they win and lose. This can be  followed by a robust audience question and answer session.

Client interaction Categorisation is a method of segmenting customer interactions based upon prospective customers' roles within the organization, their speciality (technical, financial or operational), their political power,  and how they process information.

Client Interacton Categorisation

The purpose of such categorsation strategy is to produce a predictive framework that helps salespeople anticipate client behaviour.

Since the salesperson has a deeper insight about customer behaviour based upon past interactions, (s)he is able to conduct more persuasive sales calls.

 This strategy also serves as a communication methodology to educate and prepare the support team members (pre-sales engineers, consultants, and sales managers) who may attend the sales call with the salesperson.

Related links:

 Click this link To forward order your copy of the Exceutive Summary of the 2012 Buyers Views of Salespeople 2012 

 Click for posts on Professional Selling

Tender M.E.A.T - Challenging Tenders and Supplier Relationship Managment SRM.

As is so common at today’s business exhibitions , along with the conventional lecture halls for the main talks there were open workshops held in open sided presentation ‘theatres’ without walls.

My heart always goes out to those speakers who have to present in such spaces with all the noise and visual distractions that accompany such areas. Holding an audience’s attention is very hard in such circumstances. The plasma screen television sets are usually too small to project any but the simplest of visuals for audiences to read save the front two or three rows of the bear-pit.

Yet two workshops I did enjoy were one in the legal theatre and one in the Procurement Skills Workshop space.

The current financial climate and the October 2010 Spending review have meant central and local government and the broader public sector are having to deliver more with less. There has been an increase in legal challenges from private sector bidders ( the sales side) anxious to win work. So the reduction of procurement spending is more laden with risk than ever for the procurement side.

On the Tuesday of the show one of the sell outs with 'standing room only' at the back- four rows deep was for Ceri Delemore a Partner in the law firm Geldards.

The teasing title of her talk was “ Up for the challenge? How to make (your) tenders challenge proof.”

The EU rules on tenders have put an extra burden on Procurement Managers in the public sector so attending such a talk could prove useful for the Sales side ( Bidders) to learn from as well to understand these rules from a buyer's perspective.

Of course Ceri admitted from the outset that you can’t make a tender challenge proof but she was going to offer the sell out crowd some pointers.
The topic is important as challenged tenders cause a great deal of extra work as the process has to be done all over again.
Ceri highlighted the most common errors that can lead to challenges- prevention being better than cure.
• Get the Contract notice wrong and…
• Contract criteria and weighting must be ‘reasonable’ ( Permissible) if not…
• Not treating bidders equally…
• Failure to notify or incorrectly notify…
• Making post award amendments of substantial or material nature…

Ceri’s suggested that scoping parameters is a stage not to be rushed. Pr-planning and particularly testing were key. For example he recommended that a set of dummy scores be run to test out scoring matrices.

She reminded the audience of the MEAT acronym Most Economic Advantageous Tender

To the question of the issues with criteria and measure of assessment her views were clear

TRANSPARENCY
FAIRNESS

She also warned those procurement mangers present not to mix up the selection ( The What) and awarding ( How)stage.

She also strongly advised that a good audit trail throughout the whole process was essential.

Unsuccessful bidders must be notified given their scores and reasons for the choice of the award winner. Although an oral briefing is OK for an experience panel Ceri’s advice was a debrief in writing given at the be earliest possible stage.

Be vigilant on any post contract award changes. Material changes will often ‘invite’ a challenge. Ceri said that often this problem could have been covered if such areas had been included in the scoping document.

Her talk also covered the importance of taking up of references. She suggested that too often references are not taken up.

One point she made on Evaluation of Bidders at their presentation met with a lot nods from the audience when she said that too often ‘slick presentations’ win over content.

Ceri suggested that you could mark the presentation so long as you make it clear in advance what you are marking.
The next workshop attended was one of Stephen Ashcroft’s marathon 8 sessions over the two days of the show for Brian Farrington Procurement Consultants. The 121 clinic I chose to experience was Supplier Relationship Management SRM.

Stephen opened his session with a question “ Who is responsible for SRM – Is it Procurement or the Client Bidder?

He suggested that the Adversarial Approach was no longer acceptable.

In the age of the EU regulated environment the escalation procedure was expensive and costly in time. He referred to the stages of litigation, Mediation, Arbitration and Negotiation.

(Stephen taking questions after his talk)

SRM was best suited to the post award activity.
Stephen then took he audience through his four sector Spend /Business Impact matrix .

For those salespeople who do key account work you would recognise the approach. Stephen for sectors were Operational, Tactical Alliance and Strategic.

Stephen’s slides can be accessed on this link www.brianfarrington.com

Procurement Law Consultancy-support-Dispute resolution-Training www.QGProcurement.com

Other related links
Government procurement update
http://fruitsofsuccesswithhugh.blogspot.com/search/label/Procurement%20-%20Public%20Sector

Public Procurement Show 2011
http://fruitsofsuccesswithhugh.blogspot.com/2011/06/guardians-public-procurement-show-2011.html

CIPS Presentation at Public Procurement Show
http://fruitsofsuccesswithhugh.blogspot.com/2011/06/decline-and-fall-of-just-in-time-jit.html

“Going forward” and “covering off points”- the drive for better procurement in Central Government and beyond.

In his keynote address for the opening of the Public Procurement Show at London’s Excel Centre , Martin Chown, director of business services of Buying Solutions gave an update of his team’s role and achievements over the last year.

The slice of the pie chart projected with some difficulty -due to the stubbornly unresponsive slide changer - showed Procurement representing £236 billion, some 30% of Public Spending.

A hefty £66 billion is Central Government.Director of business services at Buying Solutions Martin Chown

It is clear that Procurement has to be tackled and reduced. To make this happen much has to be learned from the Private sector and much listening has to be given to those who have to implement Government and EU directives and their stakeholders.


Short term wins have been through Demand Management Reduction, Price Savings and Efficiency gained in areas such a fleet where better utilisation has helped gains as much as Price % reduction.


The total Central Government spend has reduced from £13 to £10 billion.

Not for the only time of the talks I attended at the show, The Green Report was raised as a rude awakening of public sector procurement’s shortcomings but Mr Chown pleaded that things were already improving.

The Green review had positive points to make as Mr Chown emphasised such as Energy and Fleet but he also stated much improvement was required in areas such ICT, Travel and Print.
Mr Chown stressed the importance of executive buy-in from the top from Cabinet Officer Minister, Francis Maude and the appointment of the first cross-Government CPO, John Collington. Government policies were driving improvements in Processes, People, Technologies and Results.

Plus

• More spend with SMEs
• Meaningful transparency
• Reduction in sourcing and time
• A higher % of trained and qualified staff
• Deployment and operation of enabling technology

In Mr Chown’s greyhound-like paced presentation, there was much ‘covering off of points’ and ‘Going forward’ a verbal habit that I think was revealed a symptomatic need to drive change in the world of Public Procurement which like an ocean tanker takes some time to change direction for a more profitable course.

Results to date had rendered spending controls of £1 billion so far

• The Launch of Contract Finder had produced 1400 contracts so far( scroll down for link)
• Consultancy spend had been reduced by 55%
• Travel was down by 32%
• And Office supplies by 35%

• The MCO initiative led to renegotiation with top suppliers and some £ 800 million has been saved.

For the future (“Going forward” for the nth time!) Mr Chown summed up his key factors:-

• Lean and efficient structures and processes

• Top level Buying and support
• Transparency

• Centralisation and aggregation of spend

• Effective use of technology

And finally most importantly engaged and motivated people supported by better Processes, Training and Technology.



(Les Johnson's sculpture at the foot of the west entrance of the Excel - " Landed" A metaphor for Public Procurement ? It has always been "the people" who embrace change that make a difference. Either they get their hands 'dirty' or they administer the change. Maybe some do both!)

Martin Chown took some questions-in the answers of which he expanded the point about Contract Finder that of the 1400 contracts of £10k + of which 440 went to SME. When challenged whether the Government’s 25% SME value target was just a dream for headlining- Mr Chown robustly denied this.

Contracts were seen as good but Framework Agreement were coming under the microscope only if they did not cover

• Price
• Performance Matrices
• Value for Money

The Good Framework Agreements already, he emphasised, did so. There was still a long way to go on the journey and currently the focus was on Value and Pricing rather than efficiency.



( Buying decision changes from 12 months ago Buyers Views of Supplier Salespeople Survey scroll down for link for free executive summary of study)

From the Sales’ perspective all those in bidding and supplying public sector need to get close to the undoubted changes going on in Public Procurement. Those suppliers who are relying on the influencing power of their favoured stakeholders will be found wanting if they don’t build relationships in the growing power of Procurement management.

The changes occurring within Mr Chown’s current area of focus will be spilling over and sprayed across many other public sector areas beyond the confines of Central Government.


http://www.contractsfinder.businesslink.gov.uk/

Click for free executive summary of Procurement's Views of salespeople research study