“So I told them that the terms they were stipulating were very unfair to us,” Nancy said.
“Really?” I asked, “You said that? That’s great.”
“Yup. Then I sent over a proposal in line with our usual billing, which is very fair.”
“Well, what do you think they’ll do?” I asked.
“Probably reject it. Sometimes large companies fall back on, ‘Well, that’s just the way we do things.’” she said. “We might lose the business, you know.”
“Well,” I said. “I’m not interested in doing business with companies that insist on fundamentally unfair terms.”
And in that moment, in that decision — and countless like it — an organization, a company, a health system, a department, a division or a human being defines itself in a very important way: “I will only enter into arraignments with others on terms that are fair — regardless of who has the ‘power’ at the time.”
Of course, the alternative approach is: “I will take what I am given and be glad to have it.”
But let me return to the important concept of power. To be able to say no to an unfair deal, a seller needs to not need the deal. And by that I mean, financially need it. Of course, we all would like to get the business, but have we put ourselves, thorough financial prudence, in a position to say no and keep the lights on? If not, we may just have to take the crumbs and avoid eye contact.
And just as important as having a few bucks in the bank, we want those organizations interested in doing business with us not to be able to get the same thing around the corner, for commoditization makes one just as powerless as poverty. Have we created unique offerings?
So it’s clear we must put ourselves in a position to have flexibility; flexibility achieved by the development of options, and that equals power in negotiation. In fact, in “Getting to Yes,” power is defined as having options. And, as the book also recommends, the negotiations that follow must be conducted on the basis of looking for a fair deal — not to win, certainly not to lose, but to strike an honorable arrangement.
So the key yardstick, the key measure, the one we use at healthsystemCIO.com, is fairness. Are the terms fair and is the proposal fair? And by fair, we mean to both parties. As Kate found in her recent survey on negotiating with vendors, most CIOs agree.
What does this mean to you? It means you need to play fair when you’re in the driver’s seat and the back seat. In one negotiation with a startup, lay out fair terms, even though they sure as heck need you more than you need them. And then when you’re taking a back seat, dealing with the largest of the large EMR vendors, when you can barely get someone to take your call so you can buy their darn stuff, stop, take a breath, and, again, insist on engaging only if the terms are fair. In both cases, you will have represented your organization and yourself well.
Interestingly, the aforementioned company Nancy was dealing with agreed to her counterproposal, and so we stand on a fair and firm footing to do future business with them. If you find yourself in the same situation, make your case, because it is far easier to propose one-sided terms than to defend them.