Eskom Procurement Book 2015

NEGOTIATION

7.11 HOW TO BREAK A DEADLOCK Deadlocks happen when parties fail to agree. There are situations where all routes to settlement have been explored, all tactics tried, and all avenues of conciliation and aggression tested. Yet points still remain on which neither side is prepared to concede to reach agreement. Imagine the case of a supplier that has been identified as the sole supplier of a product or service. The product or service is essential to your on going operations and both parties have agreed in general terms on a co-operative partnership. Prices are within budget (after negotiation); delivery terms and conditions acceptable; the supplier stockholding commitments are adequate to ensure on going availability; and the supplier has even agreed to a training commitment to ensure your employees do not cause unnecessary failures of the product. Still, after all this, you are under instruction to implement company policy of securing a 12-month full warranty, and the supplier is not prepared to offer more than six months, which is already double their standard three-month guarantee. Walking away at this point would mean: • The supplier would be lost and the time spent up to now wasted. • The supplier would gain power. He would justifiably use this against you if you had to re-open negotiations at a later date. • You would potentially have to rethink your entire operation to compensate for not having the essential item under negotiation. • Your customer, the department or individual who made the purchase request would be angry. Deadlock is not the end of negotiation unless you allow it to be. Deadlock can occur, but it is up to you to do something about it. Remember that power in a negotiation is not unilateral. As soon as a supplier knows you need its product or service, it also has power over you. Further, do not expect your supplier to attempt to break the deadlock: it is more likely that both parties will simply go back to their offices to wait for the other to make the first move. Deadlock is also about losing or saving face: attempting to reopen negotiations could easily be seen as a ‘climb-down’ and be exploited by an aggressive counterpart. Let us be under no illusions: breaking a deadlock can be very difficult. Learn to walk away from a deal, and walk back to it graciously. • Change the shape of money. A large deposit, a shorter pay period or a different cash flow works wonders, even when the total amount of money involved is the same. • Change a team member or the team leader. • Set the problem topic aside temporarily, i.e., postpone some difficult parts of the agreement for re-negotiation at a later time when more information is available. • Suggest the possibility of risk sharing. Awillingness to share unknown losses The following ideas will help you return after deadlock with minimum loss of face:

167 CHAPTER 7