Are You an Amateur Negotiator?

Join Ben from Innovate Podcast and Darren A. Smith with their talk on how to become an effective negotiator. Learn useful tools like the squaredance for negotiating and disregard bad practices like running to PowerPoint first. Read on to discover the basics of effective negotiation that you can start using today.

You Can Read the Full Transcript Below:

Darren A. Smith:

What else could we do? What could I explore? What do you want from me? Could we talk about a contract that's 50 years long? No, we can't, Darren. Alright, what about one's five years long maybe? Okay. Could we talk about improving the quality, and reducing the packaging? Could we work together on blah, blah, blah? There’re a million things we could talk about. Now. None of them might bridge the gap between a 10-pound case and an eight-pound case. But let's try.

Ben:

Welcome to the Innovate Podcast, a show where we discuss, dissect, and attempt to rebuild the world of product and category within consumer goods. Today I'm delighted to be joined by Darren a Smith a veteran of the grocery industry with over 3o years of experience, I think working either for retailers or advising manufacturers and brands. Darren and I briefly crossed paths as buyers and category managers at Sainsbury back in the very early naughts, which we may discuss in a moment. But Darren, welcome to the Innovate Podcast. Delighted you can join us. How are you? How are you today?

Negotiating is a key business skill

 

Darren A. Smith:

Hey, Ben. I'm good. We're in process of moving house, not today, but in the next couple of weeks, so I am struggling with that process. There's a reason it's stressful.

Ben:

So yeah, you just thought you'd add another huge seismic life event onto the already kind of generational economic challenges that we're facing.

Darren A. Smith:

That's absolutely true. I think we just squeezed in for the interest rates went through the roof.

Ben:

Right. Yeah, yeah, yeah. That's not a joking matter actually. Yeah. Okay, cool. Good. So, Darren, just for the benefit of the listeners, I guess a natural place to start would just be to introduce yourself, talk through your kind of background from Sainsbury through to now and just talk about what you're focusing on with your current business MBM, if that's okay.

Darren A. Smith:

Of course. So I started Sainsbury in 1990 and at that point, I was the assistant. Now that's the important part. I was the assistant cottage cheese buyer. I wasn't even the real one. I didn't even know what cottage cheese was at the rightful age of 19. So that's where I started. Then I took on various buying roles for the next 13 years. My last real job was looking after the fruit team for Sainsbury, where I decided that actually I wanted to go and see if I could do something by myself, set up MBM, and ever since we've worked on soft skills training.

Ben:

Okay, awesome.

Darren A. Smith:

For the last past 20 years now.

Ben:

So soft skills training, I guess that could be quite broad. It's clearly focused on people. What are kind of the key areas that you focus on in terms of developing skills?

Darren A. Smith:

The key ones that people want are how do I get the most out of my time — time management. How do I get the most out of my people — people management, leadership skills, and how do I get the most out of my deals, particularly in the industry that you and I are in? So it's negotiation predominantly.

It's time management and it's people management skills. They're the three. There are a number of other soft skills. The bit I really like is Jack Ma, recently the chairman of Alibaba said that with the progress of AI, soft skills is the only way forward. Love it.

Ben:

Right. Awesome.

Darren A. Smith:

Which is great. So we can try and process data really quickly and be analysts, but ultimately it's about how you and I interact about the teams we build and about how we lead people is the future.

Ben:

Yeah. That's very interesting. So we're recording this in mid-November. It is an incredibly challenging market both within grocery and food and drink specifically. But you know, generically we have just kind of western consumers, we've kind of lurched from the generational challenge of covid through to the kind of the latest generational challenge of the economic crisis.

So you talked about negotiation skills there, clearly manufacturers, private label and brand. That's probably one of the main things that their commercial teams are doing at the moment. That process in terms of working with their retail partners, and their food service partners to effectively kind of reach a commercial position that can enable survival.

Not to sound kind of too dramatic about it, but I think that's what many manufacturers and in fairness retailers are facing at the moment. So that's the topic that we're going to dig into today. It's looking at negotiation, negotiation skills, and how our listeners can kind of improve those skills from their own personal perspective and kind of bring some of those ideas into their businesses as well.

Do you want to just give a little bit of background, I guess, to start before we kind of delve into some of the specific areas about how you know, what the kind of the key principles within negotiation that people should be thinking on? Then we'll move on to this kind of seven areas that we're going to discuss today.

Darren A. Smith:

I think it's firstly worth saying, Ben, I'm feeling for all those people Both account managers on this side, and buyers on this side. It's tough, it's hard. Yes, they get paid the big bucks as you and I did as buyers and as account managers, but it's hard. Conflict is hard. Anyone who says that they enjoy conflict, or they don't mind conflict, they're lying. Conflict is tough.

It's mentally gruelling. You go home at the end of the day and it's still spinning around in your mind. So it's really tough for these guys at the moment. Now here's the real crux of this. It's harder to negotiate with an amateur negotiator than a professional one. The reason for that is amateur negotiators tend to do fight or flight or sanctions. If you don't give me that, I'm off to find someone else. That's really hard because they're not working with this art form.

They're not dealing with the complexities of the negotiation. It's just fight or flight. So what we aim to do is try and help the buyers and the account managers to be more, let's call it professional or we prefer effective negotiators because they're easier to work with. They understand the science, the art, the game, and they understand that a win-win must happen.

Ben:

Yeah, that's interesting. The empathy piece I think is quite important because the buyers that I still know in the industry, they've had a pretty miserable 18 months actually. I know it's on both sides, but the amount of kind of requests coming into them from a cost and commercial perspective has been unremitting. That's pretty much certainly the ones that I talk to.

That's all they've dealt with. That's not a particularly kind of joyful thing to do at all. You and I know as former buyers, that actually the much more kind of positive elements of a buying role are looking at kind of category strategy and how you increase the size of the pie, not how you kind of shrink margins and all that, all that type of thing. There's very little of that. I think it is just unremitting. So I do think that empathy is a good place to start. Yep.

Darren A. Smith:

It is. It is very tough for them on both sides. They both want to get through this. They don't want a fourth or fifth or sixth round of price increases on either side. Unfortunately, it's the way the world is. They've got to get through it and they've got to try and be friends at the end of it.

Ben:

From your dealings across the industry, do you see the retailers giving their buyers a lot of support at the moment in terms of kind either negotiation skills, training or just general kind of support for what they're going through?

Darren A. Smith:

I think there is a lot of support out there. It's also not forgetting that it's damn tough. I think no matter what support you give, ultimately, you've got to go up against that cold face and you've got to face into every day, 3, 4, 5 price increase requests. Yeah. That you just don't want to deal with.

You'd rather deal with the other stuff that grows the category; not just makes you stand still. It's a bit like getting service on our car at times, isn't it? You go to the garage, you get your service, you pay your 500 quid, get back in your car, and nothing's different. Price increases can feel a little bit like that. A lot of hard work for not a lot.

Ben:

Yeah. And there's certainly the benefit to the consumer is not obvious. It's not front of mind, is it? There's no real kind of change to shelf price in many of these instances. So yeah. Difficult times.

Darren A. Smith:

No one's going to thank you for it. The shop is not thanking you for higher increases.

Ben:

No.

Darren A. Smith:

The buyer's not thanking you, and so forth. Let's see if we can help some of these guys to be more effective negotiators and make their life maybe 1% better.

Ben:

Yeah. Indeed, indeed. So, on that note, there are seven areas that we're going to talk about today that you work with on a daily basis in terms of the work that you would or the kind of approaches that you would advise people to adopt when it comes to improving negotiation skills.

So I guess in terms of the obvious first one to start with is preparation. I've heard you reference this term of the squaredance before. How do you kind of work with people when they're preparing for a negotiation, first of all?

Darren A. Smith:

So it's worth providing some context first of all. There are roughly four stages of negotiation. If you were to Google it, there are four or 5, 6, 7.