Being collaborative in a situation where you need to be combative is the easiest way to lose your shirt in a negotiation. Conversely, the best way to blow a great opportunity is to negotiate aggressively when you should be collaborating.
Use the graphic above to check your key relationships – do they have the potential to be collaborative over the long term? Or are you always going to be exploited and bullied?
Strategic Alignment: Specialist, premium or “showcase” retailers have a natural alignment with innovative, added-value and prestige manufacturers. Likewise, price-led and discount retailers naturally align better with mass brands, and lowest-cost suppliers. Their business objectives match more closely, and the scope for collaboration is much greater. Low alignment doesn’t mean there isn’t potential for great growth, but it does mean the relationship will always be competitive, and you’ll need to be prepared to “tough it out” on a regular basis.
Power Balance: Where alignment is low and power balance is one-sided, competitive behaviours can easily tip into exploitation and bullying. But even where alignment is high, if the power is one-sided, the underdog will always be vulnerable: a shift in strategy or a change in personnel can quickly pull the rug, and the profit, from a relationship. Building your balance of power and mutual dependency is just as critical for sustaining a collaborative relationship as it is for controlling a competitive one. I’ll cover how to do this in more detail next week.
Repositioning: The chart shows you the relationships that need to change. To move a relationship to the left, front line negotiators can simply adopt a more competitive style. However, moving a relationship to the right will usually need a Higher Authority to help make the shift.
BOTTOM LINE: Your strategic alignment should dictate the long-term negotiating style of the relationship, whilst the balance of power will determine how effective and sustainable that style is going to be.