Negotiating Tip #40:
In Today’s Business World, the One Constant is Change
In past generations, what business strategy worked one year could usually be counted on to work the next year. Not now: radical change is the name of the game.
Consider supermarkets. For decades, their “category captains” – big suppliers of well-selling brand products, like General Mills and Clorox – dictated what products went where on the shelves and at what price they were sold, in return for hefty “slotting fees” the big brands paid for prime space. That seemed to be the way of the world. Then along came modern technology, which allowed the supermarkets to collect and process vast amounts of data about sales.
Retailers could focus on maximizing sales growth and make more use of smaller suppliers or store brands, raising profits even though that meant giving up the fees from the big suppliers. The suppliers no longer had the upper hand, and they have had to scramble to adjust.
This example could be repeated hundreds of time over: established power relationships are being overturned, whether by big data, globalization, or technological change. No company, no industry is immune. Indeed, this process could well be at work now in an industry as huge as automobiles, as the big names of past generations struggle against upstarts in what seems to be the burgeoning field of electric cars.
The lesson for we negotiators is: constantly be on the look-out for game-changers – either ones you can take advantage or ones which will dramatically undercut your position. We need to carve out the time to focus on more than just how to get another dime here from a slightly better price: we need to consider what could really turn things upside down.
A really informative account of the changes, by Annie Gasparro and Jaewon Kang, appeared in The Wall Street Journal of February 20, 2020 (“Grocers Wrest Back Control of Shelf Space), but it’s behind a pay wall.