Negotiation methods and tactics are constantly changing to adapt as the industry changes. If you’re newer to the procurement and negotiation world, you don’t always know who to trust and who to learn from. In this episode of Negotiations Ninja, the well-trusted procurement professional Josh King joins me to share some strategies for negotiation planning, managing your emotions, and improving your negotiation skills.
Josh King is the Vice President and Chief Procurement Officer at American Water. After college, he joined the navy where he was a submarine officer for 7 years. During his last two years of service, he got his MBA at Villanova. While there, he took a supply chain class and loved it. He got into consulting and focused on supply chain for utilities, eventually ending up in utilities, where he is now.
Outline of This Episode
- [1:13] Josh King’s impressive background
- [4:31] The art and science of a negotiation
- [7:14] Compensation based on results
- [9:05] Procurement or internal management consulting?
- [11:30] What to do when a negotiation goes wrong
- [14:33] How to manage your emotions like a pro
- [17:08] Find role models and mentors
- [19:35] 3 tips to improve negotiation skills
- [21:09] Connect with Josh King
The art and science of negotiation
Negotiation has evolved from caveman tactics into something more progressive. Josh points out that you can’t just slam your fist down on the table and say “lower your price!”. He believes there is both a science and an art to negotiation and that you must find the perfect balance between them.
On the one hand, he recommends researching the public information surrounding what you’re buying. A lot more is available now than there used to be. The key is to understand what you’re buying, what the market is, and what the cost makeup is. You have to get the facts to back up what you’re negotiating for.
On the other hand, there is an art and finesse to negotiation. You have to learn about who you’re meeting with. Your negotiation tactics need to be adjusted based on if you’re talking to a salesperson or the GM of the business. Salespeople may be more motivated by their commission, while the GM is looking for a long-term partnership.
Approach from a total value perspective
We discuss the theory that procurement compensation should be tied to the results they achieve. Josh believes this would be a complete mistake. It puts more emphasis on purchasing the cheapest widget or the cheapest part when your focus should be on the overall lifecycle of the item. There are things that you can get beyond saving a buck that aren’t quantifiable—such as the vendor relationship, or value-adds that they throw in because you’ve asked for it. Josh believes it’s about finding a balance.
When he delivers a scorecard to executive management, they focus on two things:
- The actual metrics: How much was saved, what costs were avoided, and hard costs.
- The soft-value piece: The story behind what was achieved or how it was achieved.
Josh has learned that management is more often focused on the soft value. They’re interested in the long-term value that was created in the transaction.
Manage your emotions to maintain credibility
To be an effective negotiator, you have to learn how to manage your emotions to maintain your credibility. You can’t let emotions drive the process and most certainly can’t take things personally—or the conversation will go south quickly. We all take pride in our roles, but we can’t let our pride—or our tempers—get in the way.
In this episode, Josh shares an example of taking the high road. About a year ago, he was working on negotiating a settlement (after something went wrong). He was negotiating with the CFO of a company that came in and immediately took an aggressive position. After trying to deescalate the situation he found himself becoming increasingly frustrated.
He finally decided to call for a break. Things were getting heated and they were going nowhere. They needed time to calm their tempers. He points out that if things get out of hand, you lose your credibility. It is okay to recognize that you need to take a step back and reconvene when everyone is in a better state of mind.
Seek out a role model
Throughout your career, you work with and you see a lot of different kinds of people and styles. Some of those people you can immediately pinpoint and say “That’s NOT my style”. You may observe someone else and go, “Wow, I respect the heck outta that person”. Josh sought out mentorship from people who were calm, cool, and collected in a negotiation.
Barb Gomez and Mike Rich are two people that he gave a shout out to as people who enriched his career. Both of them embodied the work ethic he sought to achieve. They exude confidence and have the ability to keep their emotions in check—which is leverage in negotiation. We both recommend finding a negotiation style that fits your personality and embracing it, learning from others when you can.
Listen to the whole episode to hear the rest of Josh’s sage advice for the young negotiator.
Resources & People Mentioned
Connect with Josh King
- Josh on LinkedIn
Connect With Mark
- Follow Negotiations Ninja on Twitter: @NegotiationPod
- Connect with Mark on LinkedIn
- Follow Negotiations Ninja on LinkedIn
- Connect on Instagram: @NegotiationPod