Purchasing and Negotiation Training

Robert Menard,

Certified Purchasing Professional,
Certified Professional Purchasing Consultant, Certified Green Purchasing Professional, Certified Professional Purchasing Manager

Editor’s Note:  Kelly Barner wrote this book review of Green Purchasing and Sustainability.  Kelly is an owner and principal of Buyers Meeting Point (BMP) www.buyersmeetingpoint.com, an online knowledge and professional development resource for procurement and supply management professionals. See more about Buyers Meeting Point below the review.   Kelly’s review is pasted herein with permission.  To see the text on BMP’s site, visit Featured Publications or this Scribd page.

“The idea of being green is certainly not new to corporations or to purchasing professionals for that matter. That does not mean that the effort is easy, or that the path to sustainable purchasing is clear. Green Purchasing & Sustainability, written by purchasing professional, author, speaker, trainer and consultant Robert Menard, is a practical book that will help you get started down that road.”

“One of the key themes in the book is that while we’ve all gotten used to the ‘softer’ side of sustainability as consumers, there are some very real ‘hard dollar’ benefits to be gained by making the right decision – positively impacting the bottom line and the planet at the same time. As stated in the book, “We have shown consistently that translating all initiatives to ‘dollars and numbers’ is essential in selling, understanding, and evaluating any sustainability initiative.” (p. 108). The fact of the matter is that without quantifiable benefits against the right metrics, no purchasing organization will commit resources to sustainability.”

“But is sustainability purchasing’s responsibility? Menard makes the point a number of times in the book that we are the best place for sustainability to take place, due in large part to our visibility throughout the supply chain. In most cases, it is through our suppliers (and their suppliers) that we make the decisions that lead to lower costs and more efficient resource utilization. After all, sustainability is a long-term play that is carried out through short-term actions.”

Green Purchasing and Sustainability

“The book is full of case studies that provide examples of how companies like Wal-Mart, Kohl’s, Home Depot and Maersk Line implemented successful sustainability initiatives. Each chapter ends with an exercise to confirm that you retained the key points from that chapter (a somewhat humbling experience in a couple of the chapters).”

“Not all companies or industries will carry out their sustainability initiatives through the same strategies or categories of spend. Some of the examples outlined in the book are construction and facilities, energy management, and chemical management. Find the opportunities that work for your situation, clearly state your intent, and put the metrics in place to capture the results.”

“Menard does address the politicization of sustainability, which tends to (in my opinion) lean towards the ‘softer’ side of sustainability we are faced with as individual consumers. Put a green leaf on a package and we feel better about the purchase. This is not your congressman’s sustainability: this is specific, measurable, and good for business. At the end of the day, purchasing’s mission is to focus on the sustainability of one resource in particular – the company’s working capital.”

“Savings, whether achieved through reduction, conservation, preservation, recycling or other means are cost reductions. Cost reductions are the province of purchasing and thus the inviolable contention that purchasing pros can and must lead the green revolution.” (Preface, i).” 

“At Buyers Meeting Point, our mission is to support overburdened professionals by making information accessible – by centralizing access to resources on our site, by digesting content and evaluating sources looking for the highest quality information, and by making sure all our coverage is done clearly and simply with no presupposition of pre-existing knowledge or experience. There is a world of information available to you and our site and resources provide an avenue for you to gain market knowledge and expertise from others and to apply them where appropriate for your business. Watch our news articles and blog postings for information on webinars, solutions, research reports, publications and whitepapers being discussed by your colleagues. For more information, please visit or email management@buyersmeetingpoint.com “

Robert Menard

Certified Purchasing Professional,
Certified Professional Purchasing Consultant, Certified Green Purchasing Professional, Certified Professional Purchasing Manager

The Certified Purchasing Professional (CPP) and Certified Professional Purchasing Manager (CPPM) designations conferred by the American Purchasing Society are perhaps the most popular, and certainly the most valuable within the purchasing profession.  During this extended economic downturn, businesses increasingly look to reducing costs in the supply chain to offset sluggish top line growth.  The costs of doing business are everything else but profit.  That means for a company that earns 10% net, the other 90% of revenue went out the door in various forms of cost.  To properly manage costs, skilled, educated, and trained purchasing professionals are in demand.   

There are two strong motivations factors contributing to the spike in the CPP and CPPM applications, one each for the employee and employer.  The first is the individual practitioner’s (employee) perspective, an overpowering inducement is the direct correlation to earnings.  The Society conducts an extensive salary survey annually that takes many factors into consideration including certification.  By a substantial margin, those who have earned the CPP or CPPM earn more money. 

This fact makes obvious economic sense.  Those who are devoted to self-improvement and professional advancement do a better job and are therefore more valuable to employers.  See what fellow purchasing pros have to say about the value of certification and the impact it had on their careers.

The input of these renown purchasing pros, and my interaction with many thousands of purchasing pros in hundreds of seminars, consulting assignments, and corporate training engagements prompted me to record this video.    The Society has asked me to instruct and coach both CPP and CPPM students and it is an honor to do so.  Helping those serious about their professional is a gratifying experience.  Here is a post about which certifications you should pursue.

The second motivating factor is the demand from employers.  Job seekers increasingly face the disqualifying barrier of lack of certification.  Requirements of experience and academic education routinely run second to certification criteria in the current employment market.  Employers view certifications in purchasing disciplines as mandatory to any management position.

The CPP program is for purchasing professionals who have demonstrated the skills to successfully implement improved purchasing and supply chain practices as part of a business solution in an organization. To learn more about the Certified Purchasing Professional (CPP) certification, click here. 

During the trough of the business doldrums in 2009, many purchasing pros lost the financial backing of employers to pursue training and especially certification.  Using that year as the baseline, here are some daunting statistics about the value and demand of the CPP designation.   In year 2010, CPP registrations grew 6.7% over 2009.  Year 2011 saw a 53% jump over 2009, 2012 experienced an 87.4% growth and 2013 is on a trajectory for a 91.4% increase, almost double the enrollment in a four years period.  The graphic view is to the left.

Clearly, the CPP is an influential force in the market and desired by both employee and employer alike.  The steep trend line is ample evidence of the wisdom of earning the CPP designation.

If the CPP designation memorializes the skills, education, and training of purchasing practitioners, the CPPM designation should be obtained for anyone interested in purchasing management. As a prerequisite, this certification requires that CPP Certification already be obtained.  To learn more about the CPPM click here.  

Again using the year 2009 as the baseline, CPPM applications for year 2010 grew 14.3% over 2009.  Year 2011 saw a 34.2% jump over 2009, 2012 experienced an 22.9% growth and 2013 is on a trajectory for a 134% increase, far more than double the enrollment in a four years period. 

The total number of applications for CPPM is smaller than CPP because there are always fewer managers than staff members.  Nevertheless, the trend line for CPPM almost exactly parallels the steep climb of the CPP trend line.  To the right is the graphic view.

To apply for CPP or CPPM or for answers on administrative or content issues, please contact the Society at 630.859.0250, propurch@propurch.com.  I’ll be happy to help as well by phone at 214.513.8484 or email robertmenard@propurch.com. 

Robert Menard

Certified Purchasing Professional,
Certified Professional Purchasing Consultant, Certified Green Purchasing Professional, Certified Professional Purchasing Manager

 

Editor’s Note:  Many clients and fellow purchasing pros have requested a basic template for supplier certification information.  This blog post is in response to that demand.  Much more supplementary information will be available in the online course Supplier Relationship Management which is due for release in the fall of 2013.   

The document below is a basic template to use in preliminary research when sourcing new suppliers.  Other supplementary and complementary forms are available to members on the web site of the American Purchasing Society .  These include 

1.     Check a Supplier’s References Periodically       First published in October 2005, it has some new and some reinforcing information to absorb on both public and private businesses. 

2.     How to Evaluate Supplier Stability    First published in January 2002, it speaks of supplier finance, supply interruptions, contact clauses, checking supplier references, D&B reports, union and non-union workforces, and much more.   

3.     Interviewing the Sales Person is Buyer’s Checklist Number 2.  It provides interrogatories for obtaining information needed in the qualification process. 

4.     Provide Suppliers with Enough Information       First published in October of 2002, it equips the buyer with sophisticated techniques for parrying and managing inquisitive suppliers. 

5.     Supplier Information and Qualification is a forms download on the Society’s site. 

New Supplier Certification Form 

All prospective suppliers must complete and submit this form electronically.  The latest three years of audited financial statements must accompany submission of the completed New Supplier Certification Form.  You are encouraged to attach documents, descriptive data, and other information which will amplify or elaborate on the basics.

Failure to provide complete information may result in elimination from consideration. Any inaccuracies discovered in a review of your submission may also result in elimination from consideration. 

Product/Service Types                                                         

 Company Name         

Address           City:            State Zip              Telephone                       Web Site URL     

 Chief Executive or Operating Officer and Company Contact

Name               Title                   Telephone                     Email                                                       

Business Data

Headquarters Information        

Company Federal Tax Identification Number Include copy of W9)

Years in business             Average number of employees 

Annual Gross Sales 3 most recent years      

Dun &Bradstreet Number                                      

Electronic Data Invoicing (EDI) Capabilities        

Related Organization Data

Provide the same information as itemized immediately above for all affiliate, parent, subsidiary, joint venture, or any other related organization.

Organizational/Ownership Information

Legal Structure                     

Diversity Category         % Minority Ownership     Minority Owned          Veteran                   Disabled Veteran                    WBE             DBE        Other

Provide copies of documentation substantiating all claims of status made under this section

Certifications, Licenses, Permits, etc

Registrations                                                   

Product Information

Have you previously done business with us or any of our business units in the past five years?

Description of Innovative Product/Concept or Manufacturing Capability

Liability Insurance Provider  Include copies of all outstanding policies.

Major Customers and Annual Volume

Geographic Service Areas            

Why is Your Product Innovative or Different (first to market, only)?

Target Customer For Your Product or service (if applicable)

Age Group             Life Style/Other     Gender                          

Additional Comments or Special Awards Received

 You acknowledge and agree that no agreement is entered into between you and us for your products or services by submitting this business opportunity proposal.  You further acknowledge that unless and until a definitive agreement is signed, neither party will be under any obligation or any kind whatsoever with respect to the business opportunity you have presented or any transaction by virtue of this form, or any other written or oral expression with respect to such a transaction made by any of our respective Directors, Officers, Employees, Agents or any other representative.  You further acknowledge that we have or may be presented with products or services that are similar to your products or services.

_________________________________________________________________________

Authorized Signature                              Date

Typed name and title

Robert Menard
Certified Purchasing Professional,
Certified Professional Purchasing Consultant, Certified Green Purchasing Professional, Certified Professional Purchasing Manager

In the spring, we announced  the upcoming Spend Analytics Using Excel online course was near ready for release.  We took extra time to vet the curse and now it is fully ready.  You can access it here.  When you enroll in the course, please send me an email with your feedback and I’ll send you a free copy of my negotiation book.

Many buyers use Excel to analyze spend data but struggle with how to do it effectively.  This online course demonstrates techniques, logic, and application so you can organize and manage data using Excel to calculate and present “dollars & numbers” rational business decisions.  This online course solves one of the most vexing problems in the purchasing profession, how to manage, control, and benefit from Spend Analysis Using Excel.  It will:

1. Demonstrate proven practices and needed to analyze and evaluate spend data and the underlying forensics for discovering lost savings opportunities
2.  Provide step by step processes, lists, and actions that must be taken and/or avoided to produce the best results
3. Stimulate the investigative and diagnostic skills applied to spend data that are expected of and by executives
4. Encourage sophisticated applications of spend analysis limited only by skill and intellectual curiosity
5. Describe shortcuts on sorting, presenting, and analyzing data, including the creation of persuasive charts and graphics

You will learn how to analyze supplier responses to RFQs, evaluate supplier performance, and how to manage, manipulate, and organize mountains of spend records to save hills of money.

To see a minute video about the course, click here .

Robert Menard
Certified Purchasing Professional,
Certified Professional Purchasing Consultant, Certified Green Purchasing Professional, Certified Professional Purchasing Manager

Editor’s Note:  This is the fourth and final part of a series on using professional negotiation skills as applied to personal life.  The tone is intended to be light and instructive but ultimately demonstrates just how critically important your negotiation skills can be in this entirely (certainly so) “hypothetical” story.  See also the Set Up of Part 1  Research, Planning and Strategy of Part 2, and the Denouement of Part 3.  

There are many negotiations lessons to glean from this life experience.  Let’s recite some of the most prominent in chronological order. 

 1.   The discomfort of personal negotiation     I see this as akin to the lawyer’s adage, “He who represents himself has a fool for a client.”  A sure trip wire is the emotional investment.  Protecting one’s child certainly qualifies and can be a disabling factor.  The Duck Metaphor can be balanced out by resort to professional training and experience.  Both are required but the training especially so.  Soldiers, athletes, physicians, actors, indeed pros of any stripe reach and maintain the pinnacle by constant training and practice.    

Children are a work in progress.  I like to say that I am still improving, evidence that God is not done with me yet.  We owe our children the benefit of our wisdom.  Were Jane’s parents upset?  Of course, but they closed ranks and resorted to dad’s training and experience fight back and win against the bureaucratic behemoth.   

2.   Research, planning, and strategy       This is where the training of a real pro pays off.  The research practiced every day in sourcing, qualifying, and evaluating suppliers is a continuous part of our negotiation planning.  It is second nature to us.  Knowing your supplier is not necessarily an adversarial pursuit.  However, some times the other party will not be as invested in Win-Win  negotiation strategy as are we and they become an adversary, which changes our strategy.  We turn our research and planning against them in such cases. 

3.   In Win-Lose situations, exploit the opponent’s weaknesses       In this case, the college personnel were ignorant of their own policies and procedures.  The predictable result was constant violation, an unfortunate situation which set them up for a potential colossal failure. 

Jane at 14

4.   Surprises are not necessarily bad     A fact not disclosed in the story was that Jane had withheld a piece of information from dad because she thought it was damaging.  Damaging information may be inconvenient but must be known so preparation can be made to soften any bad impact.  There were two surprises in this case, one with Lilly and the other with Abe.  We already know about Abe’s pleasant surprise.

Lilly confronted dad with a silly letter written by Jane that contained admissions against her interests.  Lilly pretended that the hand written letter was a smoking gun when it was little more than a rubber band on a finger gun.  Dad was able to disarm the weapon but the effort was a needless diversion of energy.  Jane learned never to withhold valuable information, whether or not that information was considered damaging.  

5.   The parallel to being an expert witness in purchasing               Google “expert witness in purchasing” and depending on the day, mine or the American Purchasing Society’s name comes up in four of the five first organic results.  Expert witnesses are rare indeed – an expert witness in purchasing is close to unique.  An expert witness is valuable to attorneys even when the news is bad because it changes the legal strategy.  Often, bad news is an inducement to settle, whether for plaintiff or defendant, as going to trial might prove a far worse result than a settlement. 

6.   Jane learned not to be chatty in negotiations             Information gathering is a continuous part of negotiation.  One cannot know what the negotiation strategy of the other side when unusual circumstances arise is and it would be foolish to assume anything.  Never lie or spill out every stream of conscience thought.  Answer questions truly, directly, and discreetly, but do not volunteer anything more than asked.  Exchanges should be more like ping pong, short crisp strokes, and less like tennis with full wind ups and long follow through.

7.   Speak of as many of the other sides personnel as possible         As in the case of the campus police, it is important to your negotiation that you consult as many employees of the counterpart organization as time permits.  This is not unlike what you can learn from a site visit to a supplier. 

8.   Never accept a “No” from someone who cannot say “Yes”        I highlight this in my book  because of its importance.  The tired and transparent practice of assigning people with no power to “customer service” roles is a sign of poor management.  The equivalent situation here was having Lilly, a powerless and incompetent bureaucrat, fend off a determined father whose child had been wronged by the college.  Her superiors foolishly believed that they could hide their ill-conceived change of policy behind her skirt.   

In this case, I chose to play small ball with Lilly before pulling out the trump card and calling in the heavy artillery.  Lilly was so overwhelmed and fearful of her own failures that she was forced to seek reinforcements.  Had I stood pat on insistence of seeing the top dogs first, this negotiation might not have been so successfully.   

9.   The rules of negotiating with a bureaucracy are different      I learned this about 15 years ago when a client based in northern Quebec sent a private jet to gather executives around the US for a strategic planning session at headquarters.  I was the facilitator for the purchasing council and the only non-Canadian amongst a group of about a dozen people.  The company had built its own airstrip on site and had on-demand customs and immigration services.  Everyone else used the Canadian citizen line and was waved through by the officially dressed Douane, French for customs agent.  

It was only respectful that I wait for the citizens so at my turn, I brightly announced my name, produced my passport, and made small talk, all in French.  I have French-Canadian ancestry, was in French speaking Canada and thought I was doing the right thing.  The Douane only spoke English and was insulted that I was trying to show him up.  Of course, I harbored no such intent; his cap was labeled Douane and I thought he might not be able to speak English in this part of the province.   

I then needed to go through immigration.  He disappeared, made a cup of coffee, and I awaited the immigrations officer.  After an uncomfortable delay, the same man showed up except the label on his cap read, “Immigration”.  He had made me wait while he squeezed every last bit of his limited power out of this situation.  This is a great part of the reason why I endured negotiating with Lilly.   Here is where experience paid off.

10.                A very important lesson to always recognize is the truism that, “litigation is the failure of negotiation.”  With negotiation, you are in control of your own destiny. In court, no matter how strong the case, the result is always unpredictable.  Here are some favorite quotes about juries attributed to the individuals named. 

• When you to into a court, you are putting your fate into the hands of twelve people who weren’t smart enough to get out of jury duty.  Norm Crosby
• The jury consists of twelve persons chosen to decide who has the better lawyer.  Robert Frost
• A jury is composed of twelve men of average ignorance  Herbert Spender
• We operate under a jury system in this country, and as much as we complain about it, we have to admit that we know o0f no better system, except possibly flipping a coin.   Dave Barry 

Robert Menard

Certified Purchasing Professional,
Certified Professional Purchasing Consultant, Certified Green Purchasing Professional, Certified Professional Purchasing Manager

 

 

 

 

 

 

 

 

 

 

Editor’s Note:  This is the third part of a four part series on using professional negotiation skills as applied to personal life.  The tone is intended to be light and instructive but ultimately demonstrates just how critically important your negotiation skills can be in this entirely (certainly so) “hypothetical” story.  See also the Set Up of Part 1,  Research, Planning, and Strategy  of Part 2, and Lessons Learned of Part 4.

The face to face meeting

On the Monday of Thanksgiving week, dad and Jane returned to the campus where we (I meant to say, they) visited the campus police.  This armed and very professional law enforcement cadre had been called after the fracas early Saturday morning.  The two officers interviewed were straight down the middle as to facts and enforcement measures but volunteered what they termed “irregularities” in the college’s disciplinary actions.

They advised us that two young men were expelled earlier in the semester after confrontations involving physical violence in one case, and the use (or at least illegal carrying) of a fire arm in another.  In both cases, criminal charges were referred to local police.  Upon hearing this, dad took on a “Tarzan” persona and decided that the King of the Jungle would swing this Win-Lose strategy and make a monkey of the opposition who clearly had a “take no prisoners” philosophy.  Indeed, the foolish policy of “zero tolerance” is almost always disastrous.  In this case, the college would not differentiate between felonious acts and a scrap between two roommates even though the history of bullying was in evidence.

At the housing office, Jane and Tarzan were met by the college housing manager, an imposing woman of 6 foot 4 inches in height, but miniature in authority and proportionately small in logic and knowledge.  Let’s call her Lilly, short for Lilliputian .  Because of the holiday calendar, all high ranking college officials who could over rule the low level bureaucratic decision were “unavailable”.  Tarzan recognized the “Higher authority”  tactic immediately so ran through the motions of destroying silly and unjustified objections with until his patience was exhausted.

According to dad’s instructions, Jane pointed out in highlighted passages the many citations in the college’s documents that demanded actions that the college had ignored.  Lilly insisted at every turn of Jane’s contentions that the language in the documents was “subject to interpretation”.  Upon direct questioning from Tarzan if Lilly had ever read the college’s policies and procedures documents, she said that “It was not necessary”.

The trump card and cannon fire

Then dad played the ace and asked about bullying that had been reported but ignored.  Dad pressed the point about physical intimidation of the 300 pound roommate against the 120 pound Jane.  Lilly noted in a huff that she knew all about intimidation due to her height.  Further, she was expressed feigned offense that dad would cite bodily and cultural differences between the roommates.  This heretofore very uncooperative Lilliputian woman collapsed into submission when dad introduced three truths.

1. Because of her height, Lilly should have been more sensitive to intimidation
2. Her reference to body weight reflected her prejudice; clearly, a body outweighing another by 250% is a significant bullying factor and not subject to “interpretation”
3. Dad thanked Lilly not to impute her prejudices toward his daughter or into the travel of the case

The cannon fire followed playing of the trump card.  On cue, Jane slipped the highlighted college authored document which said unequivocally, “under no circumstances shall any student be subject to denial of tuition or housing services for which full payment has been made and that expulsion or removal from campus can only be ordered by the college president and then, only after all appeals have been exhausted.”  Tarzan asked straight faced if another interpretation of that quote was possible.

Time for Tarzan to swing

Dad then asked Lilly to find someone who had authority as he had travelled a long way and no one was yet responsive.  He warned that the college was clearly in violation of its own policies and procedures and that he had proof that the college’s self-proclaimed case by case evaluation was in fact a “zero tolerance policy which caused daughter Jane to be lumped into a class of felons.  Dad’s threat was that it would be a lot easier to handle things today as the matter would escalate to an unpleasant height if he were to be ignored.  This was an ultimatum.

Lilly left the room in high dudgeon, asking Tarzan and Jane to wait a short time.  Within a few minutes, authorities at the executive level, who had mysteriously been unavailable, appeared in the form of three high officials, including the Chief Operating Officer of the 12,000 student junior college.  Jane later thanked dad for the lesson of how effective preparation could be in bringing recalcitrant parties to the table.

Rather than rehash the demolished arguments that were Lilly’s demise, Tarzan resorted to some small talk to relieve any negative expectations that been put into the trio’s their ears by Lilly.  When the high level reps defended the party line, Tarzan re-applied the trump card and cannon fire.  Incredibly, it seems that Lilly had not informed the brass had of either argument.  It seems likely that no one else in the room, save for Tarzan and Jane had read them.

The COO, let’s call him Honest Abe, asked for a moment to confer with his folks.  Upon immediate return, he directed everyone but Tarzan to leave the room and gave no reason why.  They college reps walked out in confusion and Jane walked in with knots in her stomach.

Click for Bob’s 3 CD set

An unexpected twist

Surprises are never good in business negotiations but are to be expected when parties have set out adversarial positions and stated a “Win-Lose” strategy.  Abe was a formidable character and would no doubt be an able opponent if the two men went to the mat but he had another solution in mind.  He conceded that Tarzan and Jane had clearly done their homework and that the college had made mistakes of omission and commission.

His next sentence was a surprise.  “I do not want to tangle with you.  While I would win a short term victory, the cost of you coming after the college in defense of your daughter would surely lead to a long term and perhaps decisively expensive defeat.”  As Tarzan paused to consider Abe’s words, the silence was broken by explanation so there was no mistaking the offer.  Abe asked if Tarzan thought that Jane needed to learn a lesson.  Abe had softened his approach and Tarzan reciprocated by agreeing.  Abe then stated his offer.  “There are only ten class days left.  If you allow me to ban her from the dorm, I’ll credit you the rent and allow her to take classes.” 

Tarzan’s training and instincts should have led to rejection the first offer but he said nothing.  Abe went on to offer no discipline on Jane’s record.  He then exposed the college to potentially much greater damage by admitting that the lack of compatibility measures was a foolish policy.  He also noted that customers like Jane’s parents, who pay full boat need extra consideration.

Tarzan faced a decision.  Abe had made a reasonable offer but was in a position to lose a great deal if the matter were not settled.  To reject the offer, Abe would endanger his daughter’s semester at school.  Jane also needed to learn a lesson in maturity and responsibility.

Click for Bob’s 2 CD set

Agreement

Tarzan put aside his instincts and training and did not attempt to negotiate a better offer.  Abe had exposed his throat first, based upon what he later admitted to be a sizing up of Tarzan as a reasonable man.  Abe gambled that Tarzan would accept the temporary pain for Jane, admittedly deserved, in return for a clean slate.  The temptation to break the college’s back financially was tempting but litigation (equal to the failure of negotiation) is never a sure bet.  Jane’s future was more important.

The two men shook hands in agreement with little about four minutes of expired time.  They then engaged in another 45 minutes of lively banter about politics, education, business experiences, and holiday celebrations.  They broke company with a promise to stay in touch and they have done so.

Cleaning up the mess

Jane observed how the life skill of negotiation impacts and can overcome mistakes on the path toward maturity and responsibility.  Her esteem for her father grew in ways which she will only come to appreciate as she matures and raises her own family.

Dad confirmed his belief in good faith by accepting the candid concessions of a seeming adversary who became an ally.

The bureaucrats at the college, as far as we know, were subsequently educated and trained in how to handle such matters in a far better and more customer service fashion.

The lessons learned are next.

Editor’s Note:  This is the second part of a four part series on using professional negotiation skills as applied to personal life.  The tone is intended to be light and instructive but ultimately demonstrates just how critically important your negotiation skills can be in this entirely (certainly so) “hypothetical” story.  See also the Set Up of Part 1 , the Denouement of Part 3, and Lessons Learned of Part 4.

Robert Menard,

Certified Purchasing Professional,
Certified Professional Purchasing Consultant, Certified Green Purchasing Professional, Certified Professional Purchasing Manager

 

 

 

 

 

 

 

 

Research  

Jane’s dad was an accomplished veteran professional buyer, trainer, and consultant in purchasing and negotiation with many earned certifications and designations with a worldwide clientele.  He would have preferred his daughter’s antics had not occurred but if wishes were horses and turnips were bayonets is not a realistic approach to winning a complex negotiation. 

Before leaving campus on Sunday morning, dad, mom, and Jane gathered all the relevant contractual and related documents.  These included a Student Code of Conduct, the Student Manual, and Contract for Housing Services, among others.  Dad knew that any bureaucracy’s documents are chock full of regulations, policies, and procedures that almost none of the employees had ever read.  Most are only vaguely aware that they exist and conduct themselves in a manner they see practiced by superiors, who also are also generally ignorant of the standards. 

The research and planning stage must precede the establishment of sound negotiation strategy so dad put Jane to work on the ride home studying the documents and gathering information.  She had created the problem so had a big stake in the outcome.  Dad tasked her with highlighting passages to use in advancing her case.  Jane knew she had screwed up and took the research assignment seriously.  It was also a life lesson she would never forget and, her parent’s hoped, a mistake she would never repeat.    

A splash of genius never hurts

 The document review is de rigueur, necessary but not sufficient.  The sole contribution of mom proved to be one of the most compelling arguments, perhaps even the match in the powder barrel; the college certainly thought so. 

Recall that the roommate was a very large young woman and she and Jane were not compatible.  Jane related several exchanges in which she stated the dislike of the roommates for each other.  There had been some intimidation and threats that Jane had reported to the housing office, although not to her parents until the debrief session on the weekend.   Dad ascribed the exchanges to immaturity but mom was much more prescient.  She recognized the exchanges as “bullying”, the topic that trumped all others in the obsessive scholastic sphere.  

The research and evidence were being fashioned into an impressive arsenal of negotiation weapons, but none more powerful than the bullying cannon which would ultimately collapse the college’s arguments and force the negotiation to conclusion. 

The arsenal

Colleges’ have a societal interest and perhaps a legal obligation under the doctrine of “in loco parentis” in minimizing and controlling inappropriate behavior of the young adults in their quasi-charge.  When fillies and colts leave the corral, they can often wander into unfamiliar pastures.  When the gentle guidance of fences is breached, the bit, bridle, and saddle (sometimes the whip) become necessary.  The college’s fences were its documents.  When kept in repair and updated, the fences serve their purpose.  When neglected, the youngsters are left to their natural devices.  To extend the metaphor, in the practical business world, no institution is allowed to breach its own fences and then claim that the horses are at fault.   

Not only did the college personnel not know their standards, they egregiously violated them and felt justified in applying the whip.  The relative recency of the VMI campus violence led this college (by its own admission) to revisit their policies and procedures.  Jane’s college had adopted the ill-advised policy of case by case evaluation which
reeks of subjectivity.  The obvious consequence is its embedded “ad hoc” nature which breeds inconsistency. 

online negotiation course

The second most effective weapon

 Jane and dad had done their due diligence vis-a-vis research and strategy formation.  Dad’s decision of negotiation strategy a Win-Lose  because the college had violated its own standards and arbitrarily subjected Jane to unwarranted discipline.  While most parents want to believe their child is good but might sometimes stray, dad found several devastating faults to hoist the college on its own petard by showing how their many violations had voided any self-serving decisions.   

The college’s documents cited in many places with respect to disciplinary actions that “under no circumstances shall any student be subject to denial of tuition or housing services for which full payment has been made and that expulsion or removal from campus can only be ordered by the college president and then, only after all appeals have been exhausted.”  This black letter law  contributed to the college’s demise in this negotiation but would not have done so absent the extensive research of Jane and dad.

Planning and Strategy

 Dad’s decision to pursue the take no prisoners Win-Lose negotiation strategy was not his preference but dictated by the college’s actions.  The facts were immutable but positions of the parties can change and soften.  Go to the Denouement (link) page to learn how the negotiation played out and how the research, planning, and strategy paid off. 

Robert Menard
Certified Purchasing Professional,
Certified Professional Purchasing Consultant, Certified Green Purchasing Professional, Certified Professional Purchasing Manager

Editor’s Note:  This is the first part of a four part series on using professional negotiation skills as applied to personal life.  The tone is intended to be light and instructive but ultimately demonstrates just how critically important your negotiation skills can be in this entirely (certainly so) “hypothetical” story.  See the Research, Planning, and Strategy of Part 2 , the Denouement of Part 3 and the Lessons Learned of Part 4.

Do you agree with this premise? 

 Many if not most professional buyers are fair to good professional negotiators but marginal to poor personal negotiators.  Our personal negotiation skills dwindle in direct proportion to emotional influences. 

One supporting reason for this premise is that in more than one thousand public seminars in the 1990s, the topic of buying a car was by far the most popular challenge raised by the audiences.  In later years, this observation prompted me to author an online course on How to Buy a New or Used Car . 

 The Duck Metaphor

 The Duck Metaphor explains how the personal overwhelms the reasonable.  As professional buyers, we are somewhat a duck out of water when it comes to buying personal vehicles.  Ducks know the moves and noises to make but the landscape is different from their accustomed and more comfortable waters.  Ducks also know that they are not as adept at countering predators on land as we are on water. 

The car buying experience trends toward the emotional sector or “right brain” for a number of important factors and thus reduces our negotiating ability.  Personally, a vehicle may be a necessity, a luxury, or anything in between on the continuum of “needs-to-wants”.   

We buyers probably do a better job than the average duck but know in our hearts that we did not do as well as we do on the waters at work.  Who enjoys that heartburn? 

The uncomfortable reality of the personal negotiation 

As if the car buying negotiation were not sufficiently stressful and unsatisfactory, we face other negotiations for which we are less prepared or capable because they involve a deeply personal well of emotion on our part.  These negotiation situations typically involve children and/or parents. 

In order to clear the fog of confusion we all might experience in these situations, let’s just concentrate on one hypothetical albeit painful situation involving almost adult children.   

The scenario

 For the purposes of purely speculative illustration, let us assume a fictional scenario involving a college age daughter.  We’ll call her Jane.  After high school, in which Jane was not the best of students, she enrolls in college the following fall and lives in a campus dorm.  Her maturity and responsibility are not her long suits but Jane is a loving and bright young woman who has yet to achieve her potential.  Can anyone empathize with this scenario so far? 

During her first semester, the increase in freedom and shortage of self-discipline combine to damage her scholastics but all this free time inures to the benefit of Jane’s social life.  The college’s policy is to make no effort to assign compatible roommates so the stress of sharing a room with a young woman of twice her size who’s cultural life style is quite a shock to Jane’s system.  The two roommates were not friends and had each turned in the other to campus authorities for alleged offenses. 

The conflict

On the Friday night before Thanksgiving week, Jane returns to her dorm room about 3 AM Saturday (Yes, I know but let’s stick to the negotiation angle) and interrupts her roommate entertaining an illegal visitor on the property.  In that some unspecified form of “flagrante delicto” was transpiring, the couple evacuate the room immediately to deprive Jane of an opportunity to report a major misdeed. 

Fearing retribution from the very large and in Jane’s view, uncouth roommate, she barricades the door to deny reentry to the roommate and preserve personal safety in case both offenders return.  The situation devolved into a pushing match which the larger woman wins.  Fearing for her safety (As later related to her purely “theoretical” father), Jane switches from defense and surprises her roommate with a few slaps.  The roommate retreats but nothing is settled, yet. 

Click to see Bob’s online training courses

The plot thickens

 The roommate reports the assault to the campus housing authorities (a loose reference to bureaucrats with no access to common sense) and Jane is thrown off campus the very same day before noon.  The transgression of which Jane is convicted is “campus violence”, a buzz word related to the VMI massacres of the previous year.  There are ten class days remaining before the Christmas break. 

 Jane had no vehicle so her friends transported her and all of her belongings to a friend who had a tiny (300 SF) apartment in town that she shared with her tiny infant.  Having exhausted her alternatives, Jane is forced to call her parents on Saturday night.  The parents, to no one’s surprise, are not told the whole story, but while not enamored of the situation, they recognize that their girl needs help.  Mom and Dad drive three hours to Jane’s college where they meet her for a late dinner and an overnight at a local hotel.   

Now what?

 Over dinner, Jane relates the travel of her case.  She omits some damaging facts but on balance, it seems like the college has acted inappropriately.  The decision is taken to return to the family domicile on Sunday morning and plan a counter attack, or in more familiar terms, a negotiation strategy. 

 What would your strategy be?  Go to the Research, Planning, and Strategy (link) to learn what they did.

Finding a skilled and experienced consulting for purchasing matters is a very tough sourcing assignment for most clients – they do not know where to start.  The usual presenting symptom is a big loss, an auditor’s report, a financial disaster attributable to suppliers, or even a combination of these troubles.  Management sends purchasing and financial pros scurrying off in search of help.  Almost always, a major tandem problem is that they are not fully certain of what they want but they know they need help.  They also fear that there is much more bad news awaiting a detailed examination.   

Robert Menard

Certified Purchasing Professional,
Certified Professional Purchasing Consultant, Certified Green Purchasing Professional, Certified Professional Purchasing Manager

In a post last year, I addressed some of the issues that clients raise as goals of a consulting engagement.  As a live example of how the purchasing consultant adds value, here is what a major current client requested and how we were mutually able to ratchet up the Return on Investment ROI).

 Goal               to identify strategies for cost savings

 Scope

• ·          Analyze current cost structure and make recommendations on how to reduce costs for goods and services purchased
• ·          Determine best purchasing strategy by identifying/determining the optimal costs for goods and services purchased
• ·          Make recommendations on effective organizational structure for procurement

He also included a PowerPoint presentation providing an overview of the supply chain with a few specifics on spend details.   

To be sure, the Goal is as clear as it is vague.  This is not uncommon.  The Scope is extremely short and open-ended, another very common occurrence.  But since this initial request came from a purchasing pro, he knew that hiring me would in some cases affirm what he already suspected but that there were many other issues that I would uncover in a full scale examination of the supply chain practices in place.   

The client had interviewed some of the big accounting and consulting houses, but was unsatisfied with what he found.  First, the proposed onsite talent is often newly minted MBAs or academics, neither of which is particularly skilled and experienced in professional purchasing.  Second, and this is borne of client representations, expertise in purchasing is a rare quality indeed even though purchasing is the greatest generator of cost savings and profitability in all of business.  I call this the “Rodney Dangerfield” syndrome; “I tell ya, we just get no respect.”   

The clincher for the client came when I responded to his question of what differentiated my services from those of my larger competitors.  My first statement was to reject the premise of competitors.  Consumers of purchasing consulting services cannot find the combination expertise as demonstrated by professional credentials of Certified Purchasing Professional (CPP), Certified Professional Purchasing  Manager, (CPPM), Certified Green Purchasing Professional, (CGPP), and especially Certified Professional Purchasing  Consultant (CPPC) in any other sources.  

consulting services

My range of skills in consulting, training, expert witness, author, and speaker are complementary meaning that clients want a consultant who knows, practices, and has gained the highest level of expertise in all areas of the profession.  A client list that any big house would envy is another asset.   

Large house consulting reports are notorious for lots of “what to do” and little “how to do it”. “How” matters more to clients since they already know most of the “what”!  My reports are punctuated with practical, implementable solutions with plenty of specifics on how to implement them.  This is the principal reason that my consulting clients are public and private, large and small, and that they recommend me.   

The best part for the client and me came when he asked if I would be “involved in negotiations with vendors on our behalf or the implementation of cost savings programs”. We want you to work alongside our team as required.  Since I enjoy working with client personnel, my answer was an enthusiastic affirmative.  Such occasions are hands-on training labs for which I coach client personnel before and debrief after the sessions.

He then raised another question about the terms of realized savings, seeking to learn if I intended to claim a share of ongoing savings.  My answer was a resounding NO. Most organizations of any type or size claim a share of savings.  This is not how I do business.  The client pays the fee and keeps all the savings.  I far prefer a happy client who hires me again and recommends my services to others.  When the client keeps paying, the relationship suffers.  

Finally, he asked if I was willing to train their people.  Training has long been a substantial part of my practice, having delivered more than 2,000 seminars, workshops and talks over two decades.   The preparation provided by the consulting work helped to substantially reduce the training fee so this was the final win-win outcome that sealed the deal.   

Competent and effective purchasing consultants are extremely rare but in the view of a satisfied client, worth the cost measured in a very high ROI. 

Robert Menard

Certified Purchasing Professional,
Certified Professional Purchasing Consultant, Certified Green Purchasing Professional, Certified Professional Purchasing Manager

 

A story in ENR , a flagship periodical of the engineering and construction industry published by McGraw-Hill cites the conversion of a northwest Ontario power plant, Atikokan Generating Station, from coal to biomass, principally forest waste products  a sustainable fuel.  Unfortunately, as is often the case in the press that disfavors coal, the whole truth is obscured.   According to Ontario Power Generation’s (OPG)’s web site, “…the Atikokan Generating Station… has one coal-fuelled generating unit that produces up to 211 megawatts (MW) of electricity, using low-sulphur lignite coal from Western Canada.”  The ENR story relates a $170 million retrofit to transform the 28 year old plant from coal to biomass to comply with government dictates to remove coals as a fuel by 2014.  The plant’s station manager, Brent Boyko, states that “The biomass fuel source cuts emissions but retains the plant’s ability to generate 205 MW of electrical power.”

Here is the missing and overwhelmingly essential information.  OPG’s site states that, “In the past decade, annual electricity production has been as high as 1 billion kilowatt-hours (kWh), enough to supply about 83,000 homes for a year. More recently, due to economic downturn and emission regulations, Atikokan role has changed to providing reliability during peak demand times and back up electricity generation when other sources are not available.” (Emphasis supplied) 

This is a stunning omission in the ENR story.  Decreasing capability from 1 billion kWh (equal to 1,000 MW) to a mere 20% shadow of its former capacity represents a massive downgrade.  The same story also does not specify the huge inherent advantage of coal, expressed in Btu/$, over biomass.  My book, Green Purchasing & Sustainability , the basis for the Certified Green Purchasing Professional  conferred by the American Purchasing Society clearly proves that coal has about 500% greater value (Btu/$).  Doing the math, the retrofit plant will have 1/5 of the generating capacity because the feeder fuel has 1/5 of the Btu/$ capability.   

The ENR story further cites the Sierra Club , dictates of the US  Environmental Protection Agency and both US and Canadian government regulations.  What it does not state is that the ultimate cost to the consumer will be a staggering price increase in electrical power as is obvious in the economically silly switch from high energy intensive fuel to clearly sustainable although inefficient fuel. 

As the old NFL ad campaign http://www.youtube.com/watch?v=lzQb7AnnFJo liked to say, “You make the call.”