How to Handle Extreme Negotiations with Suppliers

In 2010, Jeff Weiss and Jonathan Hughes, together with Major Aram Donigian, published an article in the Harvard Business Review entitled “Extreme Negotiations.” That article explored lessons from the U.S. military about negotiating in high-stakes, high-pressure situations— lessons with potential relevance to complex negotiations in the business world. A key insight underlying the ideas from the article is that negotiation behaviors tend to be deeply ingrained and are often reactive rather than deliberate, especially under conditions of significant stress. By carefully analyzing how military officers in theater were often able to defuse dangerous situations, five replicable strategies emerged. Although these strategies differ from most people’s default reactions to stressful negotiating situations, the ability to implement them can indeed be learned. More information is also available on our negotiation training page.

This article is a companion to the Harvard Business Review piece and addresses how the same approaches can be employed in especially challenging negotiations with suppliers. Over the past several years, we have helped sourcing and supply chain executives and professionals employ these strategies when traditional forms of leverage seemed unavailable (for example, with single and sole source suppliers), and/or when business-critical suppliers seemed to be engaging in opportunistic or even adversarial negotiation tactics.

Negotiation strategies outlined in the article include:

1. Broaden your field of vision, question assumptions, and re-think objectives.
2. Uncover underlying motivations and invite collaboration.
3. Focus on fairness to persuade and build buy-in. 
4. Actively build relationships based on mutual trust and respect.
5. Focus on shaping the negotiation process, not just trying to control the outcome.

"At core, perhaps the most fundamental lessons when negotiating in high-stakes, high-risk (“extreme”) situations is that in the very contexts where we feel the most pressure to act quickly and forcefully, it is best to do neither."

These strategies are not only useful at the bargaining table but can (and should) also serve to reshape planning and positioning far in advance of formal negotiations.

For more on this topic, please visit our Negotiation page.