Top Companies in Negotiation
       IACCM Survey 2009




       IACCM All Right Reserved 2009
TOP COMPANIES IN NEGOTIATION                                                  Page 2




Background

In 2008, IACCM publis...
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Demographics




                 26%
                                          34%             Selling goods o...
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                                                                TOP COMPANIES IN NEGOTIATION




                  ...
Page 5




           Planning and teamwork are typically accompanied by an ability to offer
            clear and cohere...
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                                                                      TOP COMPANIES IN NEGOTIATION




    60%
    ...
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          Most Admired Companies For Buy Negotiation*
Ranking              Company                      Sell or...
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                                     TOP COMPANIES IN NEGOTIATION



                  Top 100 Companies*
     Rank...
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41   Northrop Grumman                  Buy Side
42        Vodafone                     Buy Side
43         Fluo...
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                                                     TOP COMPANIES IN NEGOTIATION




          81         McLane ...
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IACCM Top Companies In Negotiation 2009

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IACCM recently asked its members to nominate the companies that they admire most for their negotiation capabilities. This worldwide survey resulted in the nomination of hundreds of companies and today we publish the top 100.

The IACCM Top Companies in Negotiation 2009 Report provides the results of that survey.

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IACCM Top Companies In Negotiation 2009

  1. 1. Top Companies in Negotiation IACCM Survey 2009 IACCM All Right Reserved 2009
  2. 2. TOP COMPANIES IN NEGOTIATION Page 2 Background In 2008, IACCM published a highly acclaimed study and report on ‘The Most Admired Companies in Post-Award Contract Management’. Building on this success, the Association undertook a similar study in the period June to September 2009, to assess the most admired companies for negotiation. As with the previous analysis, there was no established baseline to define the characteristics of excellence in negotiation. While it would have been possible to assemble a group of experts to establish criteria, there were concerns that such an approach is inevitably subjective. It also creates difficulties in establishing which companies are best, since any assessment would depend upon some process for nomination and validation. Consequently such an approach becomes somewhat exclusive. For the study on contract management, IACCM sought the views of its worldwide membership, asking them to tell us about the companies they admired and the reasons for their view. We followed the same approach for the study on negotiation. Firstly, since our members interact and negotiate with other companies on a frequent basis, we believe their practical experiences offer unique insights. Secondly, in depth interviews with the top performers in the previous study appeared to validate this approach. Our goal in undertaking this study is not so much about applauding a set of winners. It has more to do with gaining attention for this important competency and – in particular – enabling an objective analysis of the behaviors and characteristics that enable success. Our primary goal is therefore to encourage the spread of good negotiation practice. We aim to do this by highlighting top performers and describing the approaches that helped them reach this position. The results do not represent a judgment or view by IACCM. Indeed, we were also surprised by some of the companies nominated by the membership and have started to explore why they made these assessments. This report provides some explanation of their views. IACCM All Right Reserved 2009
  3. 3. Page 3 Demographics 26% 34% Selling goods or services Buying goods or services Both selling and buying goods or services 40% Figure 1: Buy, sell or both 3% 16% Asia Pacific Europe, Middle East, Africa North America 51% Latin America 30% Figure 2: Region IACCM All Right Reserved 2009
  4. 4. Page 4 TOP COMPANIES IN NEGOTIATION 3% 4% 1% Aerospace / Defense 9% Automotive 11% 6% Banking / Insurance / Financial 3% Electronics Engineering / Construction 5% Healthcare / Pharma / Chemicals Legal 20% 6% Manufacturing / Processing Oil / Gas / Minerals / Utilities 5% 1% Public Sector / Government Services / Outsourcing / Consulting Technology / Software 13% 15% Telecommunications Transportation / Logistics 1% Other Figure 3: Industry Findings In conjunction with the survey of IACCM members, the Association worked in partnership with Huthwaite, a leader in negotiation training and research. Together, we organized interviews with 126 qualified participants, to understand the practices and processes that influence negotiation capability at an organizational level. The results of those interviews will be published at the end of October 2009. This report focuses on announcing the winners of The Most Admired study. But as part of that study, certain basic information also emerged.  Many believe that flexibility is the most important characteristic of ‘good’ negotiations. But in fact this survey reveals that quality of planning is considered most important, with teamwork tied for second place with flexibility.  The reason that planning matters so much is that it tends to confer authority and clarity during the negotiation process. Those with whom we negotiate are made more confident that commitments reflect capabilities. This contrasts with the behavior of many sales groups which may offer flexibility, but leave concerns that their promises will not be met.  The quality of teamwork is also fundamental to instilling confidence that commitments are honest and will be honored. Both teamwork and planning tend to result in greater responsiveness, avoiding the frustration of requests disappearing into ‘a black hole’ or taking unacceptable amounts of time to answer. IACCM All Right Reserved 2009
  5. 5. Page 5  Planning and teamwork are typically accompanied by an ability to offer clear and coherent explanations. It is critical for the other side to understand why positions are being taken. 90% 84% 80% 72% 72% 70% 60% 50% 44% 40% 30% 21% 20% 16% 10% 0% Well planned Flexible Good Rapid Other Get their way teamwork response Figure 4: Key Characteristics The companies that emerged at the top of our list of the most admired are not necessarily renowned for their flexibility. Indeed, some are among the least flexible. Their success was based on the perception that they knew what they were doing, they promised what they could achieve, they met their obligations and they were able to explain their negotiating positions in ways that – if not entirely acceptable – could be understood. However, it is also evident that reputation is based on historic experience. Some of the highly placed companies will do well to consider whether recent changes in approach will damage their status. Feedback from industry suggests that several of the leaders in our study have responded to concerns about governance and the recession by becoming more risk averse and introducing greater rigidity in their negotiations. This has led to increasing complaints about their practices. IACCM All Right Reserved 2009
  6. 6. Page 6 TOP COMPANIES IN NEGOTIATION 60% 54% 50% 40% 37% 30% 24% 24% 23% 20% 10% 10% 5% 3% 0% Detailed I work at that One time Experience I used to No personal Long term Other knowledge of company experience with a work at that experience negotiations the with the particular company but have company's company individual in heard or read internal that that the processes company company is a due to "best-in- regular class" interactions organization Figure 5: What are your selections of the companies based on? *A weighting system was used to eliminate inconsistencies that could result from people voting for their own company Most Admired Companies For Sales Negotiation* Ranking Company Sell or Buy Side 1 IBM Sell Side 2 Microsoft Sell Side 3 HP Sell Side 4 Accenture Sell Side 5 GE Sell Side 7 Cisco Sell Side 6 Oracle Sell Side 8 BAE Sell Side 9 EDS Sell Side 10 Northrop Grumman Sell Side 11 SAP Sell Side 12 CSC Sell Side 13 Honeywell Sell Side 14 Lockheed Martin Sell Side 15 Halliburton Sell Side 16 NCR Sell Side 17 Siemens Sell Side 18 BT Sell Side 19 Dell Sell Side 20 Bechtel Sell Side IACCM All Right Reserved 2009
  7. 7. Page 7 Most Admired Companies For Buy Negotiation* Ranking Company Sell or Buy Side 1 GE Buy Side 2 Exxon Mobil Buy Side 3 BP Buy Side 4 IBM Buy Side 5 Cisco Buy Side 6 HP Buy Side 7 Shell Buy Side 8 Intel Buy Side 9 Walmart Buy Side 10 Chevron Buy Side 11 Novartis Buy Side 12 Toyota Buy Side 13 Lockheed Martin Buy Side 14 Oracle Buy Side 15 AT&T Buy Side 16 Northrop Grumman Buy Side 17 Vodafone Buy Side 18 Fluor Buy Side 19 American Airlines Buy Side 20 BAE Systems Buy Side IACCM All Right Reserved 2009
  8. 8. Page 8 TOP COMPANIES IN NEGOTIATION Top 100 Companies* Ranking Company Sell or Buy Side 1 IBM Sell Side 2 Microsoft Sell Side 3 HP Sell Side 4 Accenture Sell Side 5 GE Sell Side 6 GE Buy Side 7 Exxon Mobil Buy Side 8 Cisco Sell Side 9 BP Buy Side 10 Oracle Sell Side 11 IBM Buy Side 12 Cisco Buy Side 13 HP Buy Side 14 Shell Buy Side 15 Intel Buy Side 16 Walmart Buy Side 17 BAE Sell Side 18 EDS Sell Side 19 Northrop Grumman Sell Side 20 SAP Sell Side 21 CSC Sell Side 22 Honeywell Sell Side 23 Lockheed Martin Sell Side 24 Chevron Buy Side 25 Ford Motor Company Buy Side 26 Novartis Buy Side 27 Halliburton Sell Side 28 NCR Sell Side 29 Siemens Sell Side 30 Toyota Buy Side 31 BT Sell Side 32 Dell Sell Side 33 Bechtel Sell Side 34 Lockheed Martin Buy Side 35 Oracle Buy Side 36 Apple General Side 37 Google General Side 38 EXL Services Sell Side 39 Thales Sell Side 40 AT&T Buy Side IACCM All Right Reserved 2009
  9. 9. Page 9 41 Northrop Grumman Buy Side 42 Vodafone Buy Side 43 Fluor Buy Side 44 Raytheon Sell Side 45 CCGVeritas Sell Side 46 Emmerson Sell Side 47 Ericsson Sell Side 48 American Airlines Buy Side 49 BAE Systems Buy Side 50 BHP-Billiton Buy Side 51 Koch Industries Buy Side 52 L-3 Communications Buy Side 53 Microsoft Buy Side 54 Procter & Gamble Buy Side 55 Southwest Airlines Buy Side 56 Total S.A Buy Side 57 Disney General Side 58 Shell Sell Side 59 Texas Instruments Sell Side 60 Vodafone Sell Side 61 BNSF Railway Buy Side 62 Citibank Buy Side 63 Ericsson Buy Side 64 Qatar Petroleum Buy Side 65 BMC Sell Side 66 Boeing Sell Side 67 Ernst and Young Sell Side 68 A.T. Kearney Sell Side 69 AT&T Sell Side 70 Atkins Sell Side 71 Avnet Sell Side 72 Cerner Sell Side 73 Chevron Sell Side 74 Deloitte and Touche Sell Side 75 FedEx Sell Side 76 Heinz Buy Side 77 Herman Miller Sell Side 78 Jacobs Eng. Co Sell Side 79 Johnson & Johnson Sell Side 80 L-3 Communications Sell Side IACCM All Right Reserved 2009
  10. 10. Page 10 TOP COMPANIES IN NEGOTIATION 81 McLane Advanced Technologies Sell Side 82 Panasonic Sell Side 83 Pricewaterhousecoopers Sell Side 84 Schlumberger Sell Side 85 UPS Sell Side 86 WIPRO Sell Side 87 Xerox Sell Side 88 ADNOC Buy Side 89 Alcoa Buy Side 90 Amazon Buy Side 91 AP Moller Maersk Buy Side 92 Bank of America Buy Side 93 Barclays Buy Side 94 BSkyB Buy Side 95 BVT Surface Ship Solutions Buy Side 96 Cargill Buy Side 97 CH2M HILL Buy Side 98 China Mobile Buy Side 99 Coloplast Buy Side 100 Diageo Buy Side What Next? Our hope is that this report will generate debate about the qualities it takes to be good at negotiation. In conjunction with the previous study of post-award contract management, it should offer companies the opportunity to consider their position and to determine the need for improvement. Therefore we urge recipients to ensure that executive management have visibility of the results and are encouraged to support steps to build negotiation capabilities. Overall, the ability to structure, negotiate and manage relationships through successful contracts has become increasingly important to bottom-line success. The companies doing well in these areas are also doing well in their overall performance. While good contracting and negotiation are not in themselves drivers of corporate excellence, it certainly appears to be the case that corporate excellence will not be achieved in their absence. * A weighting system was used to eliminate inconsistencies that could result from people voting for their own company IACCM All Right Reserved 2009

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