Can you cut it in the private sector?

Posted on June 6th, 2013 by

Photo of an axe embedded in a block

Can you cut it in the private sector?

For some public sector buyers, from new entrants to seasoned professionals, there is a lot of doubt and hesitation as to whether their skills are transferable to the private sector, with the firm belief that that procurement in the private sector is fundamentally different.

When I’m out and about on a consulting programme, running a workshop or talking to our clients studying for CIPS, a typical question I get asked is: “I don’t get involved in negotiation, so how can I possibly make it in the private sector?”, to which my response is, “Really? Are you sure? Well, let’s consider that with a different hat on…”

Negotiation in everyday life.

Every day, all of us ‘negotiate’ in some form or another and, once we start to view negotiation in a much broader sense, we can start to remove this barrier. Before reading on, just think for a minute about the things you have negotiated today. OK, if you are still struggling, here are some pointers for those who have children. Negotiation begins from the point of waking up, from what’s for breakfast through to getting to whose house they can go to play at after school, what’s for tea and, finally, the dreaded bedtime hour.

Living with children is a constant process of using different negotiating levers and styles:

Negotiation Style Statement to Illustrate
Threat and coercion “If you don’t do your homework, you can’t have any pudding.”
Intimidation “That’s OK, you explain to your teacher why you haven’t done your   homework.”
Logic and reasoning “Doing your homework and getting good grades means you can be the   world’s best buyer just like me.”
Power “You are not going to bed until you have done your homework – because I   say so.”
Emotion “Please do your homework. It will make me very happy.”

Planning is key to success

Now, extend these principles to discussions with your partner and, again, it becomes quickly apparent that negotiation is a daily process. The game may now become more subtle as we start to introduce conditioning messages as a precursor to the main event in the hope that it will strengthen our negotiating position.

As with any B2B negotiation, a blunt request typically gets a blunt response. So, “Can I stay out all day for Super Saturday?” requested the night before might get a curt “Pah!”. Yet many months of conditioning in advance combined with concessions should generate a different response, as both parties will have had time to understand each others’ ‘positions’ and understand what needs to be conceded and gained to satisfy the interests of both parties.
Photo of an adult and child in discussion

Evaluating all the options

The majority of us also negotiate for cars, houses, mortgages and insurances, and I’m pretty certain none of us accept the ‘opening’ offer. In these situations we use competition as a lever to request reductions, seek for extras (concessions), challenge offers and then make a decision which is based upon multiple options, all of which have been costed across the life-cycle of the product or service.

In deliberating whether to buy a new or used car, we balance the immediate devaluation of a new vehicle against the relatively low total annual operating costs, and compare it with a higher-maintenance older vehicle which would depreciate on a less steep curve (and whether those funky seat covers can be thrown in?).

Back in the commercial world 

Professionally, we all interact with stakeholders at all levels across many different functions and few of us these days present an internal stakeholder with a fait accompli as the repercussions are immediate: denial and refusal to work with the chosen supplier; deep resentment towards procurement as a function; direct criticism of both the individuals’ competencies and the process, which delays and/or influences the procurement strategy. So, to keep all parties happy, we need to enter into the realm of influencing and persuasion which are at the heart of successful negotiation.

Want to improve your negotiating skills? Get your free copy of our great Guide to Negotiation

So can public sector buyers cut it in the private sector?

So, in response to the original question, my response is, of course! Buyers need not be concerned if exposure to ‘negotiation’ is limited, as in other aspects of work and life we all negotiate daily but in many different ways.

You are applying the same principles in terms of methods of persuasion, styles and influence but perhaps not as directly with the supply chain as you can in the private sector. I am fortunate enough to have worked in both, experienced a privatisation process and consulted across both sectors. Direct negotiations with suppliers are a necessary ingredient in the private sector, but public sector buyers should not be inhibited to cross over to the Dark Side through fear or lack of exposure. The truth is, we all negotiate every day from the moment we wake up.

Are you thinking about moving from public to private or vice versa? If you have made the move, did you notice any major differences? Or any tips for those just entering the Private sector?