Emotional Intelligence in Negotiations

By Tom DePaoli

February 20, 2017 at 4:47 AM

Purchasing and supply chain professionals must be aware of and strive to improve their emotional intelligence.  A definition of emotional intelligence is the capacity to be aware of, control and express one's emotions and to handle interpersonal relationships judiciously and empathetically. Some would say that emotional intelligence is the key to both personal and professional success.

Emotional intelligence is especially critical in negotiations. I classify three general types of negotiations and I will discuss the importance of emotional intelligence skills in each type.

The three types of negotiations that are generally recognized are: 

  • Adversarial or the win-lose approach.
  • Win-Win where both parties win on certain issues or concerns.
  • Information-Based Negotiations where a deep understanding is obtained by both parties and often a strategic partnership can evolve.

The adversarial approach requires some emotional intelligence but often degenerates into a shouting contest with great histrionics, intimidation and a brutal battle of wills. Since both parties are often acting, exaggerating and pushing their own agenda, relationship building or empathy takes a back seat to just one party getting its way or out bullying the other. In summary, emotional intelligence skills required are very low or non-existent.

The Win-Win approach starts with a discussion of the respective parties’ wants and needs. The goal is a mutually satisfying agreement. People are separated from the problems; a variety of possibilities are created and the results are based on some objective standard. There is a fairly strong commitment to empathy and no blaming is allowed. Both parties are involved in problem solving and there is a focus on each party’s interests. The focus is then redirected to mutual interests or common ground. The objective is to be trustworthy but not totally trusting. This approach does require a moderate level of emotional intelligence skills from the purchasing professional. 

An information-based negotiation is a radically different approach to negotiations. It emphasizes deep knowledge of the supplier and their industry. It transgresses from some traditional approaches to negotiations but in information-based negotiations the purchasing professional gains a deep understanding of the supplier’s industry, its margins and culture. In essence this is an immersion or empathy with the supplier and its competitive landscape. The best way to describe it is that the purchasing professional knows as much or more about the supplier and its industry as it does! 

Some would argue that this approach is highly analytical. Information drives decisions not emotions or one-upmanship. However, the purchasing professional in essence becomes highly tuned emotionally with the supplier. A deep mutual understanding of its competition, margins, challenges and constraints is mastered. Trust issues are quickly overcome and resolved. Trust becomes nearly total. It requires the purchasing professional to become the resident expert on a market and an industry (just like the supplier). It tends to yield much more significant long-term gains than adversarial or even win-win approaches. Using this approach is one of the best methodologies for transforming your supply chain and developing true mutual breakthroughs with your supplier. Below is my summary table:

negotiation tactics.jpg

 

 

 

 

 

 

My conclusion is that purchasing and supply chain professionals must not only work to develop their emotional intelligence skills, but realize their degree of usefulness and appropriateness in each different type of negotiations strategy.

 



Tags: purchasing Supply chain management Procurement Negotiations sourcing
Category: Blog Post

Tom DePaoli

user_avatar

Dr. Tom DePaoli is the Management Program Director at Marian University in Fond du Lac, Wisc., and the Principal (CEO) of which does general business consulting in the supply chain, Lean Six Sigma and human resources areas. Recently he retired from the Navy Reserve after more than 30 years of service. In other civilian careers, he was a supply chain and human resources executive with corporate purchasing turnaround experience and Lean Six Sigma deployments. He is the author of eight books and numerous articles. His Amazon author’s page is https://www.amazon.com/author/tomdepaoli

 


Please add a comment

You must be logged in to leave a reply. Login »


Related Content

The Reality of Generational Differences in the Workplace Part One … Refitting the Workforce – This Isn’t the 1980s

Jim Baehr

It’s easy to find reporting on the generational differences in the workplace. For more than a decade there’s been Read More

A New Era: How eProcurement is Helping Chinese Companies Replace Traditional Business Models

Guest Editor

It’s frequently said that the past two decades have been the golden age of internet technology development in China; the country has Read More

How Master Data and Master Data Leadership Simplifies Business and Cuts Costs

George E. Krauter

In the world of MRO supply chain management, “master data” refers to applying proper and Read More


Supplier Profiles

Staples

Staples Advantage is the one supplier that offers all the business solutions you need, all with the expertise of a specialty vendor. Read More

Digi-Key

It started in 1972 with an idea, a new concept in distribution. Today, Digi-Key Corporation is one of the fastest-growing electronic component distributors in the World. The stimulus for this growth is Digi-Key's customer-centered business philosophy… Read More

Lunney Advisory Group

Lunney Advisory Group was founded in 2007. Our firm is not your typical consulting company. Some members of our firm are highly qualified and experienced industry executives/practitioners while others are full time or adjunct university professors.… Read More


Webcasts

What CEOs Expect Of Purchasing

Guest Contributor

Procurement and supply management leaders have a seat at the table, and management’s expectations are high. But what do CEOs really want, and is purchasing delivering on these expectations? This webcast looks at how procurement and supply management … Read More

Growing Purchasing Influence On Indirect Spending

Guest Contributor

At world-class companies, purchasing’s influence touches just about every area of spending. But, how exactly do procurement teams get to the point where other departments approach them for help with sourcing such indirect categories as human resource… Read More

Procurement-Finance Collaboration

Guest Contributor

Procurement & finance are two business functions which are often at loggerheads with each other. One reason for this is the lack of perception alignment on an important metric of procurement and finance performance - 'savings'. Read More