Business Today: Are We All Playing The Same Game?!

I regularly listen to podcasts when I am working out at the gym. I can stay on the treadmill longer if my mind is engaged. Today I was listening to  The Sales Round Up  these guys (Joe and Mike) are Good and they make me laugh out loud, and enjoy learinging.

The topic was Surviving Procurement and it talked about how this part of the buying team is often incentivized not on value brought to the organization but on money saved. There is a difference.  (I’m getting there.) They interviewed Linda Richardson from The Richardson Company who reported that just as sales professionals train, so do procurement professionals. She noted one glaring difference! While much of the sales literature speaks to the need to go for the WIN/Win and to focus on your buyers needs; many procurement titles actually stress a more adversarial role.

I know that every formal procurement process I have been through has come down to the phrase “your price needs to be lower” this in spite of the fact that a lower price will result in lower value. 

Is this really the way we want to do business with each other? It’s interesting I have recently seen a few posts and articles on the Speed of Trust ®. From my friend Dave at ECI Learning to Dov Seidman in an article for Newsweek last week, people are talking about how business is more profitable, business is more fun and business is more fulfilling when trust is involved. Dare I say it, the transaction is more valuable with mutual trust?

So what do we need to do; to ensure that trust and the WIN/Win overcomes the adversarial roles? Joe and Mike offer a few points to get through the negotiation:

1. Prepare and know how they are thinking
2. Prepare the Business Buyer for what is coming and let him or her  know that you need their support
3. Plan what you can give away and build enough in to giveaway

But is this the best we can do? Does each side nee to find work arounds to get our needs met? What happens if we both come to the table, communicate openly in the spirit of trust?

Sellers and Buyers we have to change the way we have been doing business. When the intent is for everyone to win, business grows and thrives. When we start cutting corners and treating our stakeholders (customers and or sellers) poorly, our business is on the edge of decline.

One Comment:

  1. Hi John,

    You really nailed the differences here. Procurement departments are 100% focused on getting the lowest price possible. Nothing against these guys, but to them, everything is a commodity. Yet the rest of us realize that this statement is just not always true.

    Face it.. toilet paper is not just toilet paper. Some is much better than others.

    On the other side of the equation you have salespeople taught to sell value.

    To me the issue is not so much trust as it is ROI (Return on Investment). As long as the corporate world continues to focus on short term profits versus long term growth and profitability we will face this problem.

    One part of this challenge is that top management rarely stays in place for more than a few years. They have short term contracts to get short term results. And the easiest way to get short term results is not to build your sales funnel, but to cut your costs.

    At some point in our past we have moved from the position of stakeholders meaning customers, employees, shareholders (Wall Street), and community to a new definition that lists the only stakeholders as shareholders.

    While there are many causes of our current economic downturn, I believe this to be one of them. No one was prepared for handling a down economy with their short term business models.

    In short, when the business world moves from thinking about the short term only to the long term impacts, then you will see procurement looking for value and not just price.

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