Posted on May 22, 2017 at 10:00 PM
Competitors View Ltd brings the world’s leading Negotiation thought leader – Omid Ghamami – the man Intel Corp famously dubbed “THE Godfather of Negotiation Planning” to India to help elevate the capabilities of the procurement profession and of negotiation executives throughout the country. “It wasn’t easy getting him here, it was almost impossible actually”, said Razum Rajan, CEO of Competitors View Ltd, “but you should hear what IBM, Tata, Target, Wipro, Bank of America, Rolls Royce, and other companies who’ve been on the receiving end of some of his cutting edge work here have to say!”
We managed to get some time with THE Godfather of Negotiation Planning – or Omid G, as he is often called – to find out more about him and what makes him tick, and also, what’s the secret sauce behind his track record. But if you don’t know about him, he spent 18 years as a Fortune 50 Purchasing Executive with a $16B annual scope, he’s a Professor of Purchasing, he’s written two best selling books on negotiations and purchasing, he’s been published in a multitude of articles in global journals (including Fortune Magazine), and his consulting and training client list includes the likes of Harvard University, The Institute for Supply Management, all 50 Chief Purchasing Officers of the United States, and over half of the Fortune 100. He has also pioneered the CPSCM™ (Certified Purchasing and Supply Chain Manager) Certification Program that has since gained global recognition and has received program approval by the very prestigious University of Houston.
Now let’s go to the Q & A with THE Godfather of Negotiation Planning, Omid G:
Q: Welcome to India! What brings you here? Why now?
A: Well, I’ve done work in 23 countries and counting now and India is just too big a player to ignore. You have a tremendous presence in services, IT, manufacturing, textiles, financial and on and on. India has a very price sensitive culture and that has worked its way into negotiation practices, and I think there’s a better way.
Q:A better way, what do you mean by that?
A: Well, you have all the talent in the world in your procurement organizations, so that’s not the problem. My research and practice shows that there’s an 18% savings opportunity on average by analyzing the internal demand for cost and driving strategies in simplification, reuse, standardization, and supplier innovation. Those are internal strategies – there’s a lot of cheese down that hole.
Q:Wow, that’s pretty innovative, what else are you looking at?
A: My perspective is that my job is to transform this industry. My vision is that procurement is and is perceived as a value added center of profit and supply chain advantage in every company. If we are being viewed as an internal service provider, as an overhead function, as a non-revenue generating function, then it’s game over.
Q: How is it game over? What do you mean by that?
A: Executive staff has a simple view of the world. You are either a revenue generator or you are not. If you are on the wrong side of that equation, you will always be swimming upstream. The critieria is wrong actually. It should be “you are either a profit generator or you are not”, and purchasing is definitely a profit generator.
Q: So what happens if you are on the wrong side of that equation, and are viewed as a non-revenue generator?
A: You will never have enough headcount, budget, or discretionary expenditures to run your business right. My research shows that sales professionals – the very people that purchasing negotiates with – spend 20% of their time in training, and they have better systems and tools and data than purchasing too. Do you now how much time purchasing spends in training? Just guess. The answer is 2%! Sales has the headcount, money, budget, and tools because they are a revenue generator. And when it comes to executive staff, if you don’t have a seat at the table – and non-revenue generators never do – you will be on the menu for lunch.
Q: Wow! So what else do you do to transform the procurement function?
A: Well, I’m not interested in academics or theory. I will tell you, my research and practice tells me that hands down, the biggest problem in our profession today is that we are buying goods and services instead of performance results. This is killing us. It’s causing our profession to chase their tail all day long. It’s caused our profession to become fire fighters. That’s what happens when you buy goods and services. After the supplier has your money, then the fires start. I consult with and train the Fortune 500 on how to rearchitect their entire procurement processes to focus from the very beginning on the acquisition of performance results. Not only does this result in far better outcomes, but purchasing professionals who follow my lead end up with many freed up hours in their schedule every day.
Q: This is really interesting stuff! But what about negotiations? Isn’t that you big bailiwick?
A: Yes, absolutely, it’s what’s made me globally recognized in my field. I’m not big on teaching how to hammer suppliers for lower prices. That’s been happening for thousands of years, since the invention of currency. And besides, squeezing supplier prices just shoves costs back up the supply chain – the supply chain actually doesn’t improve at all, you just get to report more cost savings while your supplier makes less profit and looks for other ways to make their money. I focus on investigative negotiation
strategies and value creation. If you assume a supplier is only after your money, that’s what you’ll end up fighting over – the money. But if you really research not just their positions but their interests – which are never on the quotation – you will find ways to create value for the supplier in ways that cost you little, but for which they will give cost and other total cost concessions for. I’ve had some incredible breakthroughs with this approach. I’ve got a system that moves mountains.
Q: You are really capturing my attention with this. Is that the summary of your negotiation philosophy?
A: No, there’s a lot more. We’re just scratching the surface. Consider this an appetizer! I get excited about working with companies and helping them transform and elevate what they do. The purchasing profession has been ignored. I got a Bachelor’s and a Master’s degree in business and never even heard the word “purchasing”, much less took a class in it, or even read a book about it. While all other business professions – sales, accounting, finance, operations, human resources, marketing, etc – are planned for by people who want to pursue those fields, the purchasing profession is 100% comprised of people who landed in it by accident. To make things worse, in most every company, purchasing eventually reports to someone who doesn’t understand purchasing. Now you know why I’m passionate about this.
Q: Why doesn’t purchasing get recognized more internally?
A: Well, besides the profit generator vs revenue generator misnomer, there is the issue that we’re using metrics that nobody in the company understands. Executives say “if you’re saving me all these millions, then show them to me! Where’s the money? Give it to me if you saved me all this money.” We need to focus on departmental ROI, contributions to EPS, contributions to corporate profitability, and the like. And there needs to be leadership at the top that is able to influence internally and secure purchasing that seat at the table.
Q: So is it purchasing that does all the negotiations inside the company?
A: Absolutely not! Every single person needs to learn the ability to influence – it’s the most critical factor in career success if you ask me. If you’re using position power to get your job done, then one day you will have a rude awakening – you will find out that you are the rich person who finds they no longer have friends when they are no longer rich. The ability to influence, to negotiate, to get people behind your agenda and be an ambassador of your vision – internally, externally, vertically and horizontally inside the company – you aren’t going to achieve this using position power. I lay the groundwork for executives to be world class negotiators. It’s not always innate. You have to reprogram how you engage with others with influence in mind. It’s like magic when you get it right.
Q: My goodness, this was so much great info. So do you have any other final thoughts before you leave India?
A: I’ve met some incredible executives who’ve really impressed me during my stay. I can’t wait to come back, and I’m already working with some of them for follow on engagements. I have to tell you though – the food here may just be the highlight of my trip! Next time I will bring more exercise clothes (laughs).