I'm trying to develop a "fun" list of self-explanatory and illuminating procurement, negotiating, and contracting axioms.  If you have any axioms that you think are particularly interesting, fun, or true-to-life in a tongue-in-cheek way, please post your comments or e-mail me at stephenguth@vendormanagementoffice.com and I'll put together a complete list of axioms for all to enjoy.

• Procurement.  Begin with the End in Mind.
• If You Don’t Manage the Vendor the Vendor will Manage You
• Negotiation? Preparation, Preparation, Preparation!
• Knowledge = Power = Negotiation Leverage
• There is a Direct Relationship Between Urgency and Money Left on the Table
• Money Creates Abnormal Behavior
• The Smaller the Deal, the Greater the Legal Risk
• 20% of Vendors Account for 80% of Spend
• 20% of Vendors (Usually Different from Those Above) Account for 80% of Your Headaches
  
• You Can’t Manage What You Don’t Measure
• Something Will Go Wrong
• A PDF Contract Template From a Vendor is a Leading Indicator of the Future (Poor) Relationship

Contributed Axioms:

• In negotiations, time is money.  Use time wisely to save yourself money.  Don't jump on the first offer tooquickly.  (Thanks to Gordon G. Benning,Sr., American Financial Group.  I agree,time is probably the most critical element of negotiations.)
• When for savings opportunities, pick up the fish on thebeach first.  (Thanks to DaleBartholomew, NRECA.  An underlyingmessage here is that if you don’t take the easy savings, they get “stinky” andsomeone else will notice that you haven’t done your job as a procurement pro.)

        

I'll probably be banned from the Institute for Supply Management (ISM) for speaking my mind, but I'm not one to be shy...

First, in my opinion, ISM took one huge step forward with the Certified Professional in Supply Management (CPSM) certification in terms of adding some additional credibility to the certification by requiring a degree (although, I do believe there should be an interim certification like the old A.P.P. that doesn't require a degree).

So, kudos to ISM on the CPSM.  But, after getting the proxy from ISM for the Board of Director appointments and the bylaw changes, I believe ISM is taking two steps back. The first step back is allowing folks to be appointed as a director who don't have at least an A.P.P. certification. If you haven't been in the profession long enough to qualify for a CPSM or you haven't taken the time to get the certification, you don't belong on the board. The second step back is the bylaw amendment allowing "persons who are primarily engaged in sales activity" to be ISM members. Huh, what!? Despite the eloquent explanation in the Membership Vote Information brochure as to why the bylaw amendment is good for ISM and ISM members, I think allowing sales folks to be members dilutes ISM as a professional trade association for supply management professionals. If ISM needs the dues revenue so badly, propose a membership increase or think about additional fee-for-services programs to cover revenue shortfalls.

Anyway, I voted accordingly...

Sorry, Candidate #1, your qualifications are great but you need to get your ISM certification first and it would be nice if you had some history of involvement with ISM (maybe you do have certification and prior ISM involvement--in which case I apologize--but your bio in the proxy brochure didn't mention either).

Welcome, Candidate #2, to the ISM Board of Directors, and congratulations on having your C.P.M. and for being involved with ISM for years.

Oh yeah, and "no" on the bylaw amendment--I don't want to be in my local ISM chapter meeting discussing negotiation tactics while I'm sitting next to a bunch of sales folks. No offense, I love you sales folks, but I really doubt you'll let me in to your meetings to hear your "secrets."

I encourage all ISM members to not blow off the proxy and vote your position.

        

I came across a short pamphlet produced by the DC Bar entitled "Voluntary Standards for Civility in Professional Conduct" which contains a few civility standards specific to negotiations.  I thought they were particularly well done and I adapted them to the procurement profession since I haven't come across anything similar in the past.  I'd like to create a more robust list, so if you have any other standards you'd like to suggest, please do!

• A buyer will stand by all proposals the buyer has made in negotiations unless newly received information or circumstances provide a good faith basis for rescinding them.

• A buyer will not engage in abusive or discourteous conduct in negotiations.

• A buyer will not make changes to written documents under negotiation in a manner calculated to cause the seller to overlook or fail to appreciate the changes.  A buyer will clearly and accurately identify for the seller all changes that the buyer made in documents submitted to the seller for review.

• In memorializing oral agreements the parties have reached, a buyer will do so without making changes in substance and will strive in good faith to state the oral understandings accurately and completely.  In drafting proposed agreements based on the expressed intent of the parties, the buyer will strive to draft documents that fairly reflect the agreement of the parties.

        

In procurement settings, both buyers and sellers routinely use electronic documents within their respective organizations to collaborate on negotiation positions and strategies.  Once finalized, these same electronic documents are frequently sent to the other party in furtherance of the procurement.  For example, a buyer may use a Microsoft Word contract template to gather input from internal stakeholders on initial and fall-back negotiation positions.  These stakeholders provide input in the form of "redlines" (called "track changes" in Word) and electronic comments.  After all of the stakeholder input is reconciled, the buyer accepts the redlines, deletes any comments not intended to be seen by the seller, and then e-mails the electronic document to the seller.

Normally, as the next step in negotiations, a seller would review the buyer's document and develop a response to the buyer's offer.  Some sellers add an extra step:  after receiving the buyer's document, they run it through their "metadata" mining tool.  These tools, cheaply and readily available on the Internet, reveal a document's revision history and all of the comments previously deleted.  Sometimes, the "extra step" exposes a buyer's negotiation position and strategies to the seller.

Metadata is basically "data about data."  In the context of Microsoft Word, metadata describes characteristics of a document such as size, date created or modified, word count, and past revisions and comments.  In other words, when a user makes redlines or inserts comments which are later accepted or deleted, the detail of those changes are maintained (but are not obviously visible in the document) as metadata.  Special tools, called metadata mining tools, can be used to then reveal the "invisible" metadata contained in a document.

In the legal profession, the issue of metadata is a hot ethical debate.  Some jurisdictions take a strong stance and say that it is unethical to mine documents for metadata and that it is a breach of a lawyer's ethical obligations to send a document which reveals--via metadata--a client's confidential information to a non-privileged party.  Other jurisdictions take a wholly contrary position.

Forget the ethical debate for a moment and first think about not becoming a "victim" to a metadata mining tool.  Similar to metadata mining tools, there are metadata scrubbing tools cheaply and readily available on the Internet.  These tools typically provide the user with an option to truly delete certain types of metadata (such as previously deleted comments) from a document and to keep other, innocuous types of metadata.  Fortunately, Microsoft Office 2007 includes a metadata scrubbing tool called "Document Inspector" that helps to protect users from metadata miners.  More about Document Inspector can be found here.

Now, the ethics...  Is it ethical for a buyer to use a metadata mining tool for the purpose of exposing a seller's metadata to advantage the buyer and disadvantage the seller?  The Institute for Supply Management Principles and Standards of Ethical Supply Management Conduct states that a buyer "Accept no confidential or proprietary information unless you have the
right and need to use it."  While not directly on-point, this guideline can be creatively extended to address the ethical issue of metadata in a procurement context.  When a seller mistakenly or unknowingly sends a document containing metadata to a buyer and the metadata describes information that the seller intended to not be revealed, that information, by way of the seller's intent, is confidential and proprietary.  While a buyer may have a "need to use" that information to his or her advantage, the buyer does not necessarily have the "right" to use the information.

I believe that the best course of action for procurement professionals is to not use a metadata mining tool, and, if a procurement professional has any reason to believe that a document sent by a seller contains metadata confidential or proprietary to the seller, the procurement professional should advise the seller to use a metadata scrubbing tool.

        

It's official!  After passing the July 2009 District of Columbia Bar exam on the first attempt with only a 53% overall pass rate (ouch!), I was officially sworn-in before the District of Columbia Court of Appeals on December 7, 2009.  Virginia, watch out--you're next.

        

Curious about procurement best practices and how you can implement them to improve your skills or to build a high-performance procurement function?  Well, you've come to the right place, so read on!

Resources.  In implementing procurement best practices, you'll need five critical resources.

First,  the Procurement Maturity Model, containing over 60 procurement best practices, which you can download here for free.  The model is Excel-based, contains instructions, and is easy to use.

Second, a good foundation for your procurement organization is critical.  You'll need to know how to build and shape your procurement organization such that you can maximize its effectiveness.  For that, you'll need The Vendor Management Office: Unleashing the Power of Strategic Sourcing, available on Amazon.com and Lulu.com.

Third, to document, communicate, and optimize your procurement organization's processes, you'll need a structured procurement methodology.  The premier standard is the Project Management Institute's Project Procurement Management processes.  Project Procurement Management: A Guide to Structured Procurements, available on Amazon.com and Lulu.com, will take you step-by-step through building robust yet real-life procurement processes.

Fourth, to facilitate the speed and efficiency of your procurement processes and to ensure that your getting the most favorable price, terms, and conditions, you'll need a portfolio of your own contract templates (don't use the vendor's contract template!).  You can download Procurement-Based Contract Templates, which contains over a dozen buyer-favorable contract templates, here for free.

Finally, to help understand the nuances of your contract templates and to ensure that you and other procurement staff are highly trained on negotiation ploys and tactics, you'll need The Contract Negotiation Handbook: An Indispensable Guide for Contract Professionals, available on Amazon.com and Lulu.com.

The Procurement Maturity Model.  The Procurement Maturity Model (PMM) was developed to assist procurement professionals in implementing procurement best practices as a means to improve organizational performance and professional skills.  The PMM enables users to easily select, in a spreadsheet format, example current practices in order to compare themselves against over 60 best practices.  The intent of the model is to provide procurement professionals with practical and actionable practices to improve procurement performance.

Procurement as a Profession.  While procurement has been a recognized career field since the days of the World War II materials shortages, there has been a rapid acceleration in recent years pushing procurement toward a full-fledged “profession.”  Universities are now offering bachelor’s, master’s, and doctorate degrees in procurement, contracting, or supply chain.  The Institute for Supply Management has recently invigorated their premier certification in the form of the Certified Professional in Supply Management, which reflects the expanded knowledge, skills, and abilities needed to be a successful supply management professional.  There are also standard terminologies and professional codes of ethics posited by the various procurement-related trade associations.  Most telling, employers are increasingly requiring of prospective employees a degree, professional certification, and involvement in the profession, such as speaking or writing.  In culmination, procurement organizations are coming under increasing scrutiny to raise their standard of performance.

Factors Affecting Organizational Performance.  In the procurement profession, there is a broad set of external factors which directly affect organizational performance: customers, policy, staff, processes, vendors, tools, and organization.  Regardless of whether the external factors are enabling or inhibiting, the procurement function must deliver value—usually in the form of cost savings, enhanced vendor performance, and mitigated legal and operational risk.

Traditional Measures of Organizational Performance.  For a procurement organization, there are a variety of imprecise means by which to measure performance: customer satisfaction surveys, vendor surveys, employee feedback surveys, achievement of business goals, and the achievement of internal performance metrics.  While such efforts to measure performance are admirable, they are materially flawed in that they only compare the elements of an organization against itself.

Benchmarking.  To truly gauge organizational performance—and therefore, value—the best measure is to compare an organization against other, best-in-class organizations.  The object of such a comparison is to identify “benchmarks,” which represent standards of best practice in measuring areas such as quality, value, or performance.  The process of comparing one organization against another and then adopting (or adapting) identified benchmarks to achieve improvements is known as“benchmarking.”  Benchmarking identifies where major changes to enhance performance are required or possible, prioritizes opportunities for improvement, and acts as an incentive to accelerate the cycle of change.

Strategic Planning for Improved Organizational Performance.  While some benchmarking may result in improved performance at little or no cost, truly impactful best practices commonly have some sort of adoption cost.  Clearly, the value resulting from a desired best practice must exceed the adoption cost.  Assuming so, a procurement professional will likely then have the next hurdle of obtaining organizational buy-in (in the form of resources) to implement the desired best practices.  To improve the odds of success, the best vehicle to “sell” the investment in best practices is a near-term (three to five year) strategic plan.  The strategic plan should be high-level, including summaries of the best practices with corresponding implementing initiatives, with the understanding being that supporting business cases and detailed cost justifications are prepared as a part of annual, tactical business plans.  Thus, buy-in is obtained more easily at the strategic level with needed resources (such as budget) obtained on a case-proven basis at the annual, tactical level.  An excerpted example of a strategic plan [with explanation in brackets] which seeks to improve organizational performance through the increased use of automation follows:

• Automate Existing Processes [The high-level summary.]
  • Implement an eRFx System to Automate the RFx Process (2011) [This and the subsequent two bullets are the implementing initiatives.]
  • Implement a Contract Risk Level Tracking System (2012)
  • Implement a Vendor Portal that Permits Vendor Qualification and Certificate of Insurance Administration (2012)

Using the Procurement Maturity Model.  The Procurement Maturity Model (PMM) facilitates the process of benchmarking by pre-defining over 60 procurement best practices.  These best practices are contained in the table following this article.  The PMM was developed by a large not-for-profit organization, the National Rural Electric Cooperative Association, that was seeking to improve its procurement organization by comparing itself against best practices.  Initially, a broad set of external elements were identified that have a high correlation to procurement performance: customers, policy, staff, processes, vendors, tools, and organization.  After a significant amount of research into procurement best practices, key best practices were then associated with each of the external elements.  In turn, for each of the key best practices, a range of common current practices were identified.  All of these elements, best practices, and current practices were then combined to create a simple spreadsheet model.  The model can be easily manipulated by a user to select a current practice and compare the current practice against the corresponding best practice.  The model then performs a gap analysis, identifying and prioritizing measures that the user can undertake to implement best practices and improve organizational procurement performance.  The PMM consists of five worksheets:

• Instructions
• Assumptions
• PMM Rating Input and Scores
• Graphed Measurement Area Scores
• Graphical PMM Comparison

 The PMM Rating Input and Scores worksheet is comprised of columns as explained below:

• Measurement Area – Identifies the broad elements of Customers, Organization, Policy, Processes, Staff, Tools, Value, Vendors
• Measurement Element – Further categorizes each Measurement Area into topical classifications
• Current Practice – Represents a choice of current practices; the number corresponding to each current practice represents a numerical rating and not the order of the Current Practice
• Your Rating – The user selects the “number” of the Current Practice that most closely approximates the user’s practice for the Measurement Area/ Measurement Element
• Your Calculated Score – Represents a calculation of Your Rating, weighted by a pre-determined level of Measurement Area / Measurement Element importance
• Best Practice – Describes the associated procurement best practice
• Best Practice Score – Represents the score value of the indicated best practice
• Significance of Gap – Based on the difference between Your Calculated Score and the Best Practice Score,  a qualitative description of the gap significance is displayed:Substantial Gap, Significant Gap, Minimal Gap, Best Practice Achieved

Once completed, the PMM Rating Input and Scores worksheet provides the user with a prioritized gap analysis (based on the result in the Significance of Gap column) that guides the user in the development of a strategic plan and supporting business cases.  Additionally, the user is provided with a graphical representation of the gap analysis by Measurement Area.

Procurement Maturity Levels.  In addition to providing an actionable gap analysis, the Procurement Maturity Model (PMM) graphically plots the subject procurement department against six pre-determined levels of procurement organization maturity: Inhibiting, Performing, Enabling, Optimizing, Best in Class, and World Class.  For each of the maturity levels, there are generalizations that represent certain attributes or characteristics of the procurement function.  These generalizations are described, by maturity level, in the following illustration.

List of Procurement Best Practices.  The following table describes the best practices contained in the Procurement Maturity Model.

Measurement Area	Measurement Element	Best Practice
Customers	Engagement	Formal process exists which facilitates the involvement of staff early in the customers' project cycle such that an effective competitive bidding process can be conducted.
Customers	Procurement Instructions	Documented procurement instructions manual (or catalog), which describes means by which internal customers acquire goods or services, made electronically available to internal customers.
Customers	Relationship Management	Procurement department staff understand the essential need of customer relationship management, and actively and purposefully cultivate and maintain relationships with customers beyond the framework / lifespan of a transaction.
Customers	Satisfaction	Regularly-scheduled (no less than annual) customer satisfaction survey actively used by procurement department to identify deficiencies for which corrective action is subsequently taken.  Customers made aware of survey results and corrective actions planned / taken.
Customers	Status Reporting	Regularly-scheduled reports, provided to customers in a sortable electronic format, that provides current and accurate status of negotiated purchases (such as RFx and contract negotiations).
Organization	Best Practices	Documented objectives directed toward achievement of identified, externally-developed best practices.
Organization	Business Plan	Documented annual business plan developed with department staff input and purposeful thought, aligned with the vision and mission of the procurement department.  Business plan items are specific, measurable, actionable, relevant, and time-bound.
Organization	Executive Support	Strategic plan is supported by executive management, and support is evidenced by the allocation of resources, such as budget, headcount, and training opportunities.
Organization	Mission Statement	Documented and current mission statement that department staff can either recite or easily locate for reference.
Organization	Strategic Plan	Documented and current strategic plan, containing relevant and quality content, approved and resourced by executive management, that department staff are familiar with.
Organization	Structure	Highly centralized procurement department which is responsible for at least 90% of all company spend on procurement spend.
Organization	Vision Statement	Documented and current vision statement that department staff can either recite or easily locate for reference.
Policy	Approval Authority Levels	Documented, formal approval authority levels that are both reasonable (meaning few) and financially prudent.
Policy	Business Continuity Plan	Documented, formal business continuity plan that identifies mission critical vendors and procedures for acquiring products and services in the case of a business disruption.  Mock scenarios are conducted with vendors no less than annually to assess the capabilities of vendors as well as the accuracy and comprehensiveness of the plan.  Procurement department staff are cross-trained and have the ability to work remotely to performance critical job functions.
Policy	Delegation of Spend	Involved in at least 95% of the total spend profile.  Where spend categories or commodities are excluded or delegated, such exclusions or delegations are documented and formalized.
Policy	Procurement Authority	Defined, formalized, and documented procurement accountability and authority.
Policy	Procurement Policy	Documented and current procurement policy, containing relevant and quality content, that department staff and internal customers are familiar with.
Policy	Procurement Standards	Documented and current procurement standards, containing relevant and quality content, that department staff are familiar with and adhere to.
Policy	Record Retention	Documented and formalized record retention policy, consistent with organizational and / or regulatory requirements, and compliance verified.
Processes	Audit	To ensure compliance with policies, procedures, and processes, procurement department is routinely audited (no less than annually)  by an independent party.
Processes	Competitive Bidding Plan	Documented competitive bidding plans created (annually) and resourced to identify and address potential opportunities for expiring / terminating contracts, re-bids, and new purchases.
Processes	Cost Reduction Plans	Documented cost reduction plans created (annually) and resourced to identify and address potential opportunities for cost savings related to pre-existing procurement spend.
Processes	Forecast	Documented spend forecasts created (annually) and resourced to identify and address potential opportunities for costing avoidance on projected procurement spend.
Processes	Negotiation Planning	Negotiations planned for majority of procurements, using a formalized structure for negotiation strategy development.  Negotiation planning process tends to be inclusive of internal customers and seeks their input.
Processes	Purchase Order Generation	Purchase orders generated electronically, and cover 80% of all procurement spend.
Processes	Spend Profile	Spend profile is extracted (no less than quarterly) from a financial system and indicates spend by vendor and major commodity.  The spend plan is used to identify opportunities for savings, vendor rationalization, and driving low-value procurement to automation.
Staff	Certification	C.P.M. or other industry-relevant certification required for procurement department staff (subject to job level).
Staff	Commodity Training	Procurement department staff received twenty-four or more hours of commodity training annually.
Staff	Customer Engagement	Customers view procurement department staff as virtual extensions of their own staff, engaging procurement department staff in customer-specific processes, such as customer staff meetings.
Staff	Employee Engagement	Third-party surveys conducted annually to determine level of procurement department staff employee engagement; results are benchmarked against other organizations and are acted upon to improve survey results.
Staff	General Training	Procurement department staff receive twenty-four or more hours of general training annually in the areas of customer service, "soft skills," and tools-based skills.
Staff	Job Qualifications	Documented job qualifications for procurement department staff, staff seeking mid- to senior-level positions required to have one or more professional designations / certifications, bachelor's degree in a relevant discipline, involvement in the procurement industry, and significant procurement experience.
Staff	Performance Management	Formal, documented performance management process, with at least semi-annual reviews, where employee's past and current performance is reviewed and corrective action is discussed openly.
Staff	Performance Objectives	Annual, documented performance plans that align with annual procurement department strategic plan and business plan.
Staff	Procurement Training	Procurement department staff receive twenty-four or more hours of formal and external procurement training annually.
Staff	Training Plan	Documented, formal training plan in place for procurement department staff, closely followed, and training objectives included in annual performance plan.  Training described by the plan comprises no less than seventy-two hours annually.
Tools	Contract Approval Workflow Automation	Contract approvals and workflow are managed using a third-party automated system.
Tools	Contract Labor Sourcing System	Where contract labor exceeds 100 contractors annually, an automated third-party system exists to intake contract labor needs from the end customer based on labor profile templates, routes the need to approved vendors, and intakes proposals / resumes from the approved vendors.
Tools	Contract Management System	Automated third-party system exists to manage contracts, from the point of intake, through negotiation, and to record retention.  System allows for input of vendor and contract data, identification of key issues, documentation of cost savings / avoidance, input of scanned items such as executed contract, and reporting.
Tools	Contract Templates	Substantial number of contract templates exist, and procurement department staff are trained on their use, to address at least 80% of possible procurement scenarios.
Tools	eRFx	Third-party eRFx system used for 80% of competitive bids.
Tools	External Website	Dynamic external website exists, provides information to vendors and access to e-procurement systems such as a vendor portal (for activities such as vendor registration).
Tools	Internal Website	Dynamic internal website exists, provides information to internal customers and access to e-procurement systems such as an e-catalog.
Tools	P-Cards	P-cards widely used, and a card issuer rebate has been negotiated where p-card related spend exceeds $1,000,000.
Tools	Procure-to-Pay Process	Fully automated procure-to-pay processes, through which a significant portion (50% or greater) of procurement spend flows.
Tools	Requisition / Purchase Order System	Fully automated requisitions and purchase system, through which purchase orders are generated for a significant portion (80% or greater) of procurement spend.
Tools	Reverse Auctions	Online reverse auctioning frequently used for commodity purchases, and guidelines established for use of the tool.
Tools	RFx Templates	Standard RFx templates exist and are actively used by procurement department staff.  Procurement staff follow a standard process for conducting RFx projects.
Tools	Third-party Research	For commodities requiring research, procurement department staff have required access to third-party research.
Tools	Vendor Profile System / Vendor Portal	Vendors are provided with an external portal using a third-party automated system to permit vendors to conduct certain administrative functions (such as submitting a W-9, certificate of insurance, or financial information).
Tools	Vendor Relationship Management System	Vendor information, such as account contact information and metrics (such as service levels), are actively maintained and utilized using a third-party automated system.
Value	Contract Disputes	1% or less of all contracts executed result in a contract dispute within the 12-month period following contract execution.
Value	Contract Risk Level	Risk level of contracts are objectively determined using pre-defined criteria, with the risk level being recorded in a contract management system.
Value	Contract Template Ratio	80% or more of all contracts executed using procurement department contract templates.
Value	Contract Turn-around Time	80% or more of all contracts negotiated and executed within 30 calendar days, with 95% or more of all contracts negotiated and executed within 60 calendar days.
Value	Cost Avoidance / Cost Savings	Cost avoidance / cost savings defined, measured, annual goal approved by management, and goal met.
Value	RFx Turn-around Time	80% or more of all RFx projects completed and contracted within 60 calendar days, with 95% or more of all RFx projects completed and contracted within 90 calendar days.
Vendors	Approved Vendor List	Formal, current, and documented approved vendor list exists, and is used to ensure that 75% or greater of spend is through approved vendors.
Vendors	Measurements and Metrics	Vendor performance is objectively measured using pre-defined metrics, with performance recorded and tracked in a contract management or related system.  Vendor performance measurement may be related to procurement-specific metrics (such as RFx win rate) and / or contract-specific metrics (such as service levels).
Vendors	Vendor Categorization	Formal hierarchy of vendor categories exist, with vendors assigned (via a system or documentation) to the categories.  Customers understand the process, and use the process for decision-making purposes.
Vendors	Vendor Qualification	Prospective vendors are qualified using a formal, automated process.
Vendors	Vendor Rationalization	Vendor rationalization program exists where the vendor base is reduced subject to program criteria and the vendor base is pro-actively managed to the pre-defined level.
Vendors	Vendor Recognition	Vendor recognition program exists where vendors are selected (based on quantitative and qualitative criteria) and recognized (with some sort of formal recognition, such as a press release) for their performance.

        

Good old Ben. Ya gotta love him. Among other nifty inventions, he gave us electricity, the public library, the bifocal lens, and…swim fins (seriously).

What else was Ben well known for back in the day? Well, he had a tremendous knack for being able to negotiate pretty much anything in his favor. For example, with zippo leverage, Ben talked the French into betting their financial and military resources on a bunch of hardscrabble revolutionaries. Among his contemporaries, Ben was renowned as a master negotiator. Time and time again, there was one single negotiation technique that he relied on.

His secret negotiation technique? Questions. Yep, that’s it, “questions.”

Old Ben didn’t invent his secret negotiation technique. In his autobiography, Ben admits to “borrowing” the method from Socrates, “I procur’d Xenophon’s Memorable Things of Socrates, wherein there are many instances of the [Socratic] method. I was charm’d with it, adopted it, dropt my abrupt contradiction and positive argumentation, and put on the humble inquirer and doubter.”

At first, Ben admits to being attracted by the dark side of his secret negotiation technique, saying he became an expert at “…drawing People even of superior Knowledge into Concessions the Consequences of which they did not foresee, entangling them in Difficulties out of which they could not extricate themselves."  Jeez, Ben, that's just plain mean.

After ticking off some people royally (Get it? Royally?), Ben tempered and honed his secret negotiation technique, using questions to imply and communicate his position without having to use absolutes and take hard positions. That gave him tremendous flexibility in negotiations—he could easily alter or retract his strategy if a question went over like a lead kite. Questions also tend to deflect negotiation positions away from the individuals involved in a negotiation and channel the individuals toward teaming to solve a mutual dilemma.

To get you started thinking in the right direction for pulling a Ben Franklin in your next negotiation, here are some examples of where buyer questions soften the message to the seller and provide negotiation flexibility but that still get the message across.

1) If I could get the deal done by the end of [timeframe], what additional concessions do you think would be possible?

    Vs.

A) If I get this deal done by the end of [timeframe], I’m going to need more concessions

   

2) If I couldn’t meet your price, how could the deal be re-structured to reduce the price?

    Vs.

B) There is no way I’m going to pay that—you’re just going to have to get to my price.


3) If your company decides to invoke [some sort of nasty contract provision that negatively impacts the buyer], what does your company expect out of the relationship over the long-term?

    Vs.

C) If you guys invoke [the nasty contract provision], watch your back!


Here’s a concluding quote from Ben (re-written in modern English) that every buyer should strive to achieve in both negotiations and with a significant other, “Remember not only to say the right thing at the right time in the right place, but far more difficult still, to leave unsaid the wrong thing at the wrong moment.”

        

For those of you who are buying a Kindle for that special procurement professional in your life, you can add some real awesomeness to your gift by including one--or better yet, ALL--of my procurement books.  Check out the following links to get my books for the Kindle.  The prices are less than the print version and you'll feel all warm and fuzzy because you're helping to save some poor little tree.

Vendor Management Office: Unleashing the Power of Strategic Sourcing

The Contract Negotiation Handbook: An Indispensable Guide for Contract Professionals

Project Procurement Management: A Guide to Structured Procurements

        

I’m happy to announce that my latest book on procurement, Project Procurement Management: A Guide to Structured Procurements is now available for sale (click here to get your copy).

After writing my book on how to develop a strategic sourcing organization and then writing my book on the down and dirty of hand-to-hand negotiations, I realized there was a gap that connected the two—how to implement a structured procurement methodology.

The good news is that the Project Management Institute (PMI), the leading professional organization on the subject of project management, includes such a structured procurement methodology in their Project Management Body of Knowledge (PMBOK) called “Project Procurement Management.”  So, why re-invent the wheel when an organization like the PMI has created a structured procurement methodology to fit within their other PMBOK knowledge areas?  What the PMI has done through Project Procurement Management is to bring procurement into the disciplined practices of project management.

In my new book, I use PMI’s Project Procurement Management as a basis to describe key elements of structured procurements, including procurement planning, competitive bidding, negotiations, legal considerations of procurement, contract management and administration, dispute resolution, and procurement ethics. I also explain and elaborate on Project Procurement Management, bridging the gap between project managers and procurement professionals and guiding the reader on the “how to” of implementing a structure procurement methodology in a real life setting.

Whether you are a project manager seeking to understand procurement, a PMP candidate preparing for your exam, or a procurement professional who is considering Project Procurement Management as a basis for your structured procurement processes, this book has something for you!

        

In my Contract Negotiation Handbook, I describe "good salespeople vs. bad ones" from the perspective of a procurement professional.  I came across an article on the same subject, but written from the perspective of a person who has been in sales and has trained people in sales.  I'm always interested in what sales folks have to say about their own profession because it helps me to be a better procurement professional.  What I found refreshing in this article is the author's candidness.  One bad trait he points out is where sales folks "...focus too much attention on the product or service they are selling and not enough on the real needs and wants of the potential and existing client."  Can I get an AMEN on that!?  It's a short, but very good read that you can find here and that you may want to send to that special sales person in your life.