It has become clear to us as a business that while many companies and their leaders talk a great game when it comes to innovation, supplier collaboration and of course value creation, most have no idea how to do it. The more businesses we sit down with, the more I realise that procurement has no idea how to move into the next chapter of its journey, as very few have actually done it.
Now this is no bad thing, but what I realised is the more we can share about our thinking and processes the better for the function.
The Getting to We mindset is the philosophical mantra of the Vested sourcing business model developed by Univerisity of Tenneseee researchers. Kate Vitasek teamed with co-authors Jeanette Nyden and David Frydlinger to develop a 5 step process to help organizations rethink their paradigm shift in negotiating.
The Getting to We 5-step process outlines a pragmatic approach that guides firms to establish highly functioning collaborative commercial relationships that have the right mindset during the negotiations. Getting to We involves moving beyond a short-term agenda of self interest and towards an engagement based on a collaborative mindset that delivers exponential benefit to both partners.
Getting to We is a sequential process for improving commercial relationships. An overview of the approach is detailed below.
- Getting ready for Getting to We. This step looks at three foundational elements for a successful collaborative relationship: trust, transparency and compatibility. When the parties complete this step, they will have a good idea whether they have a solid enough foundation to move onto the next step. If they don’t, they can work on solidifying the relationship and then continue. Completing this step enables partners to determine whether a WIIFWe mindset has merit for them and whether they are willing to explore establishing or renegotiating a highly collaborative relationship.
- Jointly agreeing on a shared vision for the partnership. Each party will enter this discussion with their own vision, of course. But they must then transform their separate visions into a shared vision, giving the partnership its purpose (beyond a series of transactions). This shared purpose will also guide the partners—not only throughout the negotiation process, but throughout the term of the relationship.
- Collaboratively negotiating the guiding principles for the partnership. The Getting to We process demands that partners not only improve the relationship, but also abide by a set of principles to drive highly collaborative behaviour. This is the critical step that distinguishes highly collaborative relationships from average functioning relationships. These principles provide the mindset to support the partners on their journey to live We. Without guiding principles to prevent opportunism and competitive tit-for-tat moves, partners will not behave in a collaborative manner with each other.
- Negotiating as We. It is now time to begin to negotiate the deal. Partners following the Getting to We process must not start by negotiating the details of the deal, such as the scope of work, pricing and terms and conditions. Rather, they must first establish the mechanisms they will use as they negotiate the details. This includes agreeing on the “negotiation rules,” the strategies and tactics, and the methods for ensuring the deal is fair and balanced, especially when it comes to how the parties deal with risk allocation and creating value. Once the partners have agreed to these details, they will use them to achieve a consensus on the deal’s specifics.
- Living as We. At this point, the partners have reached the final stage of the journey: living as We, which occurs when they maintain a focus on the shared vision and guiding principles throughout the life of the relationship. Because relationships are dynamic, the partners choose to focus on relationship management by taking actions and measures required to keep it highly collaborative.
If you have been reading our blog and articles such as ‘Procurement Must Move Beyond Being a Playground Bully’ in recent weeks then you will understand the importance of rethinking your commercial engagements. As well as the critical role that supplier collaboration will play in the ongoing success of your businesses.
But are you ready to stop playing tug of war with your suppliers and start working together?
If so then download our most recent whitepaper, or get in touch with a member of the team, we are always happy to share our ideas and thoughts as well as hear yours. So go on give us a shout it might actually be worth it!!