Hiring a Cat to Walk my Dog!
No, I didn’t really get a cat to walk my dog. But it made for a great title, right? (Don’t worry, there is a point to this). We all know cats know how to walk. You might even call them experts on walking. But hiring them to walk a dog is just obnoxious, am I right? Agreed.
If you wouldn’t hire a cat to walk a dog, would you hire a lawyer to perform brain surgery? Or how about a ballerina to build a house? What about a circus clown for computer support? I think you get the point. Just because you are a professional in one area, doesn’t make you one in another; no matter how closely related the tasks may be.
I don’t know why, but almost every business partner I run into (despite a few recent exceptions) thinks that they are an expert when it comes to negotiations. And they continually prove that it couldn’t be further from the truth.
My favorite story is from an Executive Director who told me “I’ve been doing this for 20 years, don’t tell me how to do my job!” And when the supplier came back with a rate of over +$25/hr. from our existing contracted rate (over >$1M difference), he quickly came back to me looking for help.
You see, even with a contracted rate with a different part of the business, the supplier isn’t forced to honor it in another part. It’s part of how they make money. They know there are silos within an organization, and they use this to your advantage. But that’s where sourcing comes in to help.
I think the problem lies in the fact that we all negotiate things in everyday life. But again, it doesn’t make you an expert. Just like a cat is an expert at walking, it doesn’t qualify him to walk a dog.
Not to mention, most people assume if you have solid business skills that are great, you also can negotiate. But again, it just doesn’t work that way. There are tons of nuances and intricacies when it comes to executing a large complex, multi-year and multi-million dollar contract. It’s like anything else – a learned skill.
So why does this matter? Well, quite frankly it matters a lot. If you aren’t well versed in the tricks of the trade, the odds are you will get caught up in them. And when thinking about negotiating complex contracts, you would think you should have the proper background to do so.
And as years go by in sourcing and procurement, I continue to see this more and more. Executives and business partners who could use a training course or two. But they think because they’ve done it before, and have been successful (in their opinions) they are experts. And they end up in a terrible contract looking for help.
When you take a look at the final contract pricing and business terms, the naked truth reveals itself.
In reviewing contracts, I’ve seen a range of price gouging that could easily change the business’ bottom line. Service level agreements with loopholes big enough to drive a semi through (that’s only IF they are there in the first place!). Or paying more than 75% of a contract upfront. Why would you do this?! It can drive you mad if you have to deal with it on a daily basis.
I think it’s easy to forget how big of impact terms and conditions can have on a deal. It’s not just the bottom line cost that matters.
Especially when it can affect the quality of the product or service you are receiving. Even just getting something to show up from the factory – ON time without any major defects.
This is why having someone who has been trained, has resources and preparation tools, benchmarks and insight is so important. I’ve seen others spend years in the procurement and sourcing function and still have terrible negotiation skills.
So what can you do about it?
If you have a bunch of extra time, there are tons of seminars, courses, and books. These specifically are focused on contract negotiations and strategies (including BATNA, Hard Bargaining tactics, etc.). My favorite is – Never Split the Difference, by Chris Voss (I’ve even attended one of his in-person training – here’s my blog on it).
If you’re just want to “get your feet wet” so to speak and learn the tricks of the trade, there are tons of resources for you too. Even reading just the right book, getting email updates from experts can be extremely useful from my viewpoint. But none of it really matters if you aren’t continually practicing.
Since very complex supplier negotiations aren’t an everyday occurrence, there are other ways you can continue to practice new skills. Like in your daily life. See if you can negotiate with a friend or family member. Try to get them to do something extremely out of the ordinary. You know something simple, like trying to get your spouse or kids to help you clean up!
Just remember – you shouldn’t hire a cat to walk your dog. Just because you are an Executive, Sales Guru, or VP of the Solar System, it doesn’t make you a skilled negotiator. Especially, when you run the risk of being bound by a multi-year contract that could cost you tens of millions of dollars in the long run.
Would you rather watch a video than read a blog? Then check out more video blogs from Ms Category Management 👉🏼 Here