A soft ball approach to negotiations just won the edge over taking a tougher stance when the two styles were debated at the CIPS Australasia Annual Conference in Sydney this week.
The 10th annual event, held at the Rosehill Gardens Racecourse in Sydney, was based around the theme ‘the journey from purchasing evolution to procurement and supply revolution’.
At a breakfast debate, Andrea Gregory, director of group procurement at dairy giant Fonterra in New Zealand, spoke on behalf of ‘soft ball’.
She defined this as open, friendly and with a problem-solving approach to finding common ground. She said it required a willingness to make reasonable concessions and resulted in more open communication with fewer tantrums. “It clearly identifies the needs and objectives of both parties and works best with multiple requirements, not just price.”
Gregory said the advantages of this style were that ‘soft’ negotiation preserved relationships and left egos in tact. She also said it reduced the risk of deadlock, produced faster, longer-lasting creative agreements and resulted in greater satisfaction for both parties.
Billie Gorman, procurement excellence manager, strategic procurement, at integrated engineering and services provider Thiess, presented in favour of the hard-ball approach.
She said the advantages of this style were that you’re taken more seriously, there are immediate benefits to be gained, you can extract more value and there’s less risk of losing face, having inferior contract terms or making concessions.
She argued that taking a tougher stance actually resulted in more aspirational goals, a true partnership and loss of leverage post-contract. Gorman said: “Hard ball should be very high on the agenda for any procurement professional, especially in a climate where a lot of organisations want procurement to lead on external cost reductions. This doesn’t mean you are unreasonable or unprofessional, it means you are commercially savvy, aware of the market and your position of influence in the negotiations.”
Gregory conceded that there are disadvantages to taking a softer approach. She listed these as the potential to make concessions too easily, “you must remain focused on the outcome, not just closing a deal,” she advised. She also agreed it could convey weakness, had the potential to end with a less favourable result for both parties, that negotiations could become more complex and time-consuming and it is unworkable if both parties are not committed to finding mutually beneficial solutions.
Her advice was that people using the softer style must use facts not feelings, know what they want and what’s important and find points of agreement to expand on.
Gregory added: “There is ‘no one size fits all’. At times you need to adjust to the situation and opponent. If the other side wants to play hardball, sometimes that is the only way to go.” Asked if the hard ball style risks alienating suppliers, Gorman said: “If you can’t have a conversation on the hard issues – are they really the right supplier to partner up with?”