1. How to Arrive at Win-Win Negotiations

The Six-Step Process to Resolving Handling Conflict

The situation you’re about to witness involves two executives, Sanjana and Dinesh who are at odds on what the best approach to vendor management for their organisation should be. Sanjana has a more accommodating approach while Dinesh seems to favour a hard line approach. Both parties seem to want to arrive at, what experts call, a best possible negotiated agreement. Let’s see how the conversation plays out.

Sanjana: Hi Dinesh, sorry I couldn’t meet you earlier, man. I’ve been very busy. It’s a good thing we’re both free today.

Dinesh: “I’ve been busy too, but I managed to make time for this meeting. Our deadline is nearing and we haven’t even started work on this project. I think we should stop procrastinating and finish this soon.”

Sanjana: “My thoughts, exactly. Now, if you remember how this project landed in our lap. There was a huge conflict that took place between the supply chain management team and the marketing team about how vendors should be empanelled. If we…

Dinesh: Yes, and my thinking is in line with the supply chain management team. I say that we go ahead with their thinking on this.

Sanjana: I respect your point of view. I am sure that you have good reason to believe that the supply chain management team’s views are better.

As you have noticed, in the face of Dinesh’s dismissive and borderline bulldozing behaviour, Sanjana is committed to maintaining an atmosphere of mutual respect through active management of emotions – both her own and Dinesh’s. This is a discipline that must be maintained right through such hard conversations – if one hopes to lead these conversations to favourable outcomes.
Once this foundation of mutual respect is established, there are six markers to arriving at a best possible negotiated agreement. We’ll call out these markers for you as Sanjana crosses them.

As I was saying, we got this assignment because we are neutral parties to this situation. What I’d like to…
Dinesh: I am of the view that the supply chain management team is right. And, there is no such thing as neutrality in conflicts. I have been part of many similar situations in iBlaze. I’ve have seen how people manipulate and bully others to get their way. I have personally experienced this

However, that is not the point here. What I’d like to say is that the supply chain team is correct. I don’t know what your stand on this situation is, but I will go with their view.

Sanjana: Dinesh, I hear you when you say that in our organisation people bully and manipulate others to get their way. And your experiences are real. So, what you are feeling is perfectly legitimate. However, I have a small request to make, which I’d like you to consider. May I share it with you?

Sanjana did something very interesting here. Through her words, she has created a safe, respectful environment conducive for dialogue. She has made it safe for Dinesh to feel the way he does, and has let him know that he is entitled to his opinions and his emotions. In the absence of this, you will have your customer behaving in an antagonistic manner, thereby hijacking rational thought and objective action. Creating a safe, respectful environment conducive for dialogue is the first marker.

Let’s see what happens next…

Dinesh: Okay… what is it?

Sanjana: Let’s first agree as to what our bosses have asked to work on, together: we are to come up with the best possible vendor selection process and criteria for iBlaze.

Dinesh: That’s understood, right? What else are we here for?

Sanjana: Yes, it is understood. And since we are both in agreement to what it is that we are working on, I’d like to understand as to what you believe the process and criteria should be.

We crossed another marker right at this point. Sanjana has taken a moment to agree on goals and to bring the big picture into focus. In a hard conversation, it is important to establish what outcome – measured in business impact – is each party seeking from the interaction. What is the organizational goal everyone is working towards?
Moving on…

Dinesh: (Serious expression; sitting with his arms and legs crossed): “I’m very clear on what I want. For each project, we should get quotations from at least four vendors (holds up four fingers), compare these thoroughly and finalize vendors after completing all due-diligence. Vendors, who refuse to our terms should be dropped without further discussion. We should always be on the winning side. After all, we pay them for the work they do, don’t we?”

Sanjana: “May I know why you want the process to flow this way? For example, why do you want to evaluate vendors for each and every project?”

Sanjana: “Ok, so what you want is that vendors don’t take us for granted, and work is done on time. Right?”.

Dinesh: “That’s right. I think giving them too much of a leeway is an invitation to trouble for ourselves. It’s our responsibility to ensure that iBlaze gets the best deals from its vendors and that our vendors deliver as committed. We’re not here to please vendors”

Sanjana: “I get your point – I’ve also faced such problems in the past. But my approach is slightly different. My aim is to get our job done on time by good vendors, without compromising on quality and the organization’s reputation. To do this, it’s very important to maintain good relations with vendors.”

Dinesh: “Sanjana, I have personally seen what level these vendors can stoop down to in order to make money. Respecting them and talking to them nicely is just a waste of time.”

Sanjana: “I understand you’ve had some bad experiences and are now reluctant to trust vendors, but assuming that none of them have scruples is going a bit too far, don’t you think? If we don’t treat vendors with respect they might just refuse to work with us in the future”

Sanjana has now proceeded to clarify interests, both Dinesh’s and her own. And then she validated them explicitly, making clear why she holds the perspective she does. She also explored to identify why Dinesh holds the interests he has communicated thus far. That by the way, represented the next marker.

Let’s see how the conversation unfolds from here…

Sanjana: “Now, coming back to the process; I feel that we should evaluate and finalize vendors on a half-yearly basis. Based on our evaluation, we could retain some of our existing vendors or add a few new ones. What do you think?”

Dinesh: “I don’t believe you’ve been listening to me, or do you have an ulterior motive behind being nice to vendors? We must follow my process if we want the organization to benefit. It is the only way I feel that we can get what we want. That is my position on this matter”

Sanjana: “Dinesh, I’m really sorry if what I said made it look like I was dismissing what you said. I guess I phrased myself wrongly. I understand that your position is an outcome of your past experiences and so you have good reason to hold that view. Just like I have my views and position.

Now, simply holding on to our individual positions and not trying to find a collaborative solution will lead us nowhere. So, I recognise that I shouldn’t blindly hold on to my position that vendors should be evaluated every six months. Perhaps, it is prudent for us to bear in mind what our goal is, and that’s helping iBlaze get the best possible deal from vendors. Also, I just want both of us to be equally satisfied with the final outcome. All I’m asking for is that we satisfy both our concerns.

Notice how Dinesh is still on the offensive. And he levels an insinuation too, asking Sanjana if she has an ulterior motive. Sanjana keeps maintaining the atmosphere of mutual respect, and makes clear something very important. That they’re both on the same side. This marker simply recommends that one Adopt a ‘You & Me vs. the Problem’ attitude as opposed to a ‘You vs. Me’ attitude, when in a hard conversation. It serves as a great equaliser for all parties involved. Another marker down. Let’s proceed…

Dinesh: “Mmmm…okay. As you know, my only concern is that being too friendly and lenient will give vendors an impression that we can be fooled easily. For instance, while giving quotations, some vendors list various benefits and quote very high prices for these, but end up doing only half of what they promised. These things can go unnoticed if we don’t keep a tab on their work. How do you suggest we handle such situations?”

Sanjana: I agree with what you are saying. We must ensure that vendors deliver on what they have promised. I think that we can do that by setting strict standards and deadlines against which we map vendor delivery. We could also introduce a penalty clause for not delivering on commitments.”

Dinesh: “Hmmm….. sounds good. That could take care of them not delivering as promised. For me, the most important factors for vendor selection are cost, capacity to handle a job, commitment to getting the job done on time, and consistency in quality and delivery”

Sanjana: Hey, hey slower. Let me list those down (She walks over to a whiteboard and starts writing his points, one below the other). You said: cost, commitment to time…

Dinesh: …capacity to handle the job and consistency in quality and delivery

Sanjana: Your points are valid. Here are my points.
Camera shows them talking as she lists her point. She writes down the following:
• Capable vendors with a proven track record
• Consistent quality (error free delivery),
• Timely delivery,
• The best possible price
• Vendor’s preferred mode of communication
She finishes writing and steps back.

Sanjana: So, let’s compare what each of us wants.

At this juncture, Sanjana Set objective criteria to ascertain the suitability of any idea or solution proposed. This criterion becomes the sieve through which every suggestion is filtered. If the suggestion passes muster, it is retained. If not, it is rejected. This is the fifth marker in the series.

Dinesh: “Interesting. Both of us seem to think alike on how to select vendors. (He draws lines joining his points to hers. See image below for comparable points) Only, you have one point different that is ‘vendor’s preferred mode of communication’*. What does this mean?”

Sanjana: “I had a vendor, who would rarely check his emails. He insisted on meetings every time something had to be discussed. In our line of work, who has the time for meetings, all day?”

Dinesh: “Mmmm… you are right. Communication is important in our line of work. We can enquire how vendors plan on being in touch with us. Their communication style and mode should clearly match ours. Okay, so let’s start looking at each of these criteria one at a time. Let us start by seeing how we will establish track record.

They are shown walking back to the desk. They are then discussing and agreeing to points. She is taking down notes. No dialogues, only visuals.

Dinesh: “One last point of discussion then: vendor evaluation frequency. I feel we must do it for each project. Otherwise our existing vendors will become complacent.”

Sanjana: “You are saying that we must evaluate vendors for every new project. Hmmm… (2 second pause. She appears to be thinking) Dinesh, I really wonder if we will have the time to look for and evaluate new vendors for every project. Why don’t we do it on a quarterly basis to start with?”

Dinesh: “Hmmm…. we can try that. But if it doesn’t work, we must do it on a monthly basis”

Sanjana: “Deal. (One second pause). With that decided, can we review if our plan allows iBlaze to get the best deals from its vendors, while at the same time, meeting the concerns that we had both listed needs to be factored in to the plan.

Dinesh: Sure. Finding vendors with the best track record. Check. Ensuring consistent delivery quality. Check. Ensuring timely delivery. Check. Ensuring service at the best possible price. Check. Vendor’s, who are tech savvy. Check. (Turns towards Sanjana, who is still sitting down. He is smiling broadly) And we said that we evaluate vendors on a quarterly basis and if that does not work then we move to evaluation project-wise. Looks like we are all sorted!

We’ve arrived at the last marker, which is Satisfy both sets of expectations and interests. Sanjana guided the conversation to a point where both parties were able to state their expectations clearly, and then actively work to meeting them too.

Sanjana: Looks like we are!
Now that we know what we want, can we get down to dividing documentation responsibilities?”

Dinesh: “Sure, why not!”

In Summary:

This particular hard conversation stand resolved because Sanjana was able to navigate the dialogue through all six markers, in order to arrive at the best possible negotiated agreement. Neither Sanjana nor Dinesh got their own. Way in entirety, but they arrived at a decision that worked for both of them.