269: Negotiation Dangers

<p style="font-weight: 400;">Former American President John F. Kennedy left us with a great quote: “Let’s never negotiate out of fear.  But let us never fear to negotiate”.  Actually, we do fear to negotiate though, don’t we.  We worry about asking for too much or too little.  We usually imagine a “negotiator” as someone totally unlike ourselves, a tough individual with ice coursing through their veins. </p> <p style="font-weight: 400;">Ironically, we are all negotiating everyday within our families, circle of friends and companies.  Decisions have to be taken, a direction has to be chosen and we need others to agree with our idea.  This often requires compromise or even giving up our idea, in preference to competing suggestions.  We are not taught how to negotiate though and so we are mainly unschooled amateurs flailing around.</p> <p style="font-weight: 400;">Somewhere along the line, we find ourselves in a sale’s role and we have to negotiate with the buyers.  Procurement officers are often highly expert in negotiations or at least they are deaf to our appeals about the value we provide.  In Japan however, they are rarely specialists and often take a very basic approach. </p> <p style="font-weight: 400;">They have their matrix with your name arranged vertically along the left side of the spreadsheet, together with all your competitors.  Across the top they have the products nominated.  In the corresponding spreadsheet cells, they plug in the prices.  Bingo, find the lowest priced cell and buy from that company.  This is bad.  There is no allowance for any differentiation which you may have, because they are applying a very basic code of reference here.  In these cases, we need our internal champion to intervene and fight for paying more for better quality.</p> <p style="font-weight: 400;">Let’s now look at the usual negotiation cases, where we are not dealing with procurement officers. This “negotiation” issue is a big topic, so let’s narrow the focus to common mistakes we may be making right now, which we sho