Emotional Intelligence in Negotiations
by Tom DePaoli
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 try to discuss the importance of emotional intelligence
skills in each type.
The three types
of negotiations that are generally recognized are:
1.
Adversarial
or the win-lose approach
2.
Win-Win
where both parties win on certain issues or concerns
3.
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 parties’ 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. (See
Information-Based Negotiations: A Different Approach) 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, their margins and their culture. In essence this is an immersion or
empathy with the supplier and their competitive landscape. The best way to
describe it is that the purchasing professional knows as much or more about the
supplier and their industry as they do! 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
their 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 Tactic or Strategy
|
Degree of Emotional Intelligence
Required
|
|
Adversarial
|
Little
or none
|
|
Win-Win
|
Moderate
|
|
Information-Based
|
Deep
|
My conclusion
is that a purchasing and supply chain professionals must not only work to develop
their emotional intelligence skills, but realize its degree of usefulness and
appropriateness in each different type of negotiations strategy.
Contact Dr. Tom = thomasdepaoli@yahoo.com
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