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5 Steps to a Highly Collaborative Supplier Agreement

By Kate Vitasek

If your recent experiences with contract negotiations are something like visiting the dentist for a root canal, there is a much better—and pain-free!—way to go about wrangling that strategic agreement.

It’s called Getting to We—a five-step process for crafting business relationships with the intent to drive collaborative partnerships. (The process is described in the book, Getting to We: Negotiating Agreements for Highly Collaborative Relationships.)

There are plenty of negotiation ”how-to” books out there. So, what is different about the Getting to We methodology? Simply put, Getting to We puts the focus on negotiating the foundation of the relationship, not just on getting to a deal. You still get to a contract, but how you get there is vastly different.

Getting to We starts by changing the way you approach your negotiation to embrace a “what’s-in-it-for-we” (WIIFWe) philosophical mantra, forming the structure of a collaborative and trusting relationship.

Negotiating the true nature of the relationship under a WIIFWe mindset means that the negotiating parties move away from the usual tit-for-tat cycle of tradeoffs and concessions; instead, they create a negotiation atmosphere that encourages cooperation.

So, how do you do it?

Five Simple Steps

  1. Getting ready for WIIFWe

The first step is to candidly discuss three foundational elements for a successful collaborative relationship: trust, transparency and compatibility. Completing this step helps the parties to understand to what extent they can build the foundation for their relationship. The more trust, transparency and cultural fit between a buyer and supplier, the more the parties will be comfortable making investments in the relationship, innovations and continuous improvement opportunities that can benefit both parties. 

For example, let’s say that you traditionally negotiate an annual contract renewal with an incumbent that has been a trusted “strategic” supplier for the last five years. You have a good cultural fit and work well together, but have operated under a conventional transaction-based business model with limited transparency. This year, you decide to host a two-day offsite meeting to discuss the art of the possible with the relationship; the agenda starts with a discussion about ways to improve trust, transparency and compatibility. The conclusion? You can make a good relationship great by being more transparent, which will enable the parties to work collaboratively to reduce total ownership cost and not just the “price.”

Read the next four steps. 

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