Build Better Business – setting the scene for effective negotiation
BBB meeting 2013
This meeting was organised to introduce and discuss the ‘Code of Good Trading Practice’.
In addition we were most fortunate to have two speakers from industry to relate their experiences of trading in UK Garden Centres and Dutch ornamental sales outlets.
Thirdly, we were given some guidance regarding the potential of training to improve the business style and within growers’ companies. The day was introduced by Ian Riggs who gave an assessment of the current market in ornamentals and the effects of the recent erratic weather on the trading situation and the balance between risk and reward.
Adam Quinney, NFU Vice President, gave the meeting an introduction to the COGTP and the thinking behind it. He was keen to underline the need for the code to focus attention on the potential unfairness in trade and the possibility of improving the sustainability of the long-term relationships necessary to create a viable supply chain. By reducing the potential for misunderstandings between supplier and buyer the risks to ornamental producers can also be reduced.
Adam said that the Code is a living document to be used as a basis for negotiation and as a voluntary agreement for all parties involved to adapt to their needs whilst maintaining the principles outlined in it. The point being that the NFU has witnessed how the use of similar codes in other farming areas has improved the basis of trade but it takes time to establish the practise.
Legal guidelines or myths slayed
Nina Winter, NFU chief legal adviser, spoke about the basic legal principles behind contracts, including verbal ones. She set out a number of situations and explained clearly how the myths around the perception of contract law can be confused.
The main point of her presentation was to underline the benefits of using contracts and written ones wherever possible. In this way, the trade can be regulated to some extent and the rights of all parties to the contract can be protected. One member raised a question regarding the delay in issuing the purchase orders and this was referred to in Nina’s presentation as the ‘trigger points’ for the contract (often payment), need to be checked carefully and if not agreed then challenged until an acceptable form is settled. It is possible for NFU members to check such details with the help line where advisers can assist in clarifying the legality of contract clauses.
Iain Wylie, CEO of the GCA, spoke about the need to be working together: growers and garden centre buyers. He also recognised the difficulties caused by the weather conditions and its effect on the consumer activity in the garden centre. The way forward, according to Iain, is to liaise closely with your customer and when there are problems work together to find good solutions that work for both parties.
Iain also illustrated his talk by referring to the possibility of growers increasing the value of products which could be done in cooperation with the garden centre which was in close contact with its consumers. He spoke of the benefits of promotional schemes from trade associations and the GCA itself. He also observed that there was good potential for selling Home Grown products to UK consumers who are aware of the local nature of the product as well as the environmental impact of ‘plant miles’.
He commented that there will always be potential problems with fitting supply to market conditions and the future of long term success will be by seeking the solution together. He said that he was ready to pursue the code in practice and find ways of working together.
The Dutch trade position
Gert v.d. Pligt, MD of Pligt Professionals with 8 ha of glasshouse production, described how his company had evolved from a vegetable producer to large scale ornamentals selling to many hundreds of customers all over Europe. His appreciation of the market in ornamentals was rather different to the UK situation but has something to teach us. Gert’s argument is that customers are free to purchase where and how they wish and his job, if he is to be successful, is to keep them coming back. In other words, he will be the most ‘needed’ supplier and therefore preferred by dong what the buyer needs almost before they can identify their need. He does not feel that he can tie them to contracts and instead prefers to offer them wide ranges and plentiful availability in excusive branded lines. In this way his clients cannot easily substitute other goods for his products.
Preparation for Negotiation
Ian Merton, with over 40 years in fresh produce trading with supermarkets, gave us some insights into the need for strong communication skills and the benefits in developing good relations with retailers. He spoke about the needs of retailers in terms of category management and building their profits in store as well as developing new products together. He asked growers to review the skills available in their businesses and if there are features missing in the team then source the skill from outside possibly by engaging a non-executive director or further training for staff.
Training: A series of three sessions aimed at deepening the understanding of growers into the methods of negotiation
Team building: following on from Ian Merton’s suggestions regarding team management, Steve Davies introduced some methods of thinking about the management team, assessing its skills and capacity and how it can be used to reach the company’s goals.
Financial control as a preparation for negotiation: Alan Bunting gave the outlines of preparation by studying the financial parameters of the business and how this would be fundamental to successful contract negotiation. A thorough knowledge of the cost basis of the business is necessary to ensure that effective agreements are made that are beneficial to the grower’s company in the long term. See the slides here.
Final thoughts on dealing with the negotiation: Phil Harlow, gave a final talk on Negotiation Effectiveness where he invited us to consider the standpoint of the buyer and their needs, objectives or goals. He finished by stressing three points: Clarify details, in any dispute go back to the process and confirm detail in writing. Effectively, this took us back to the start of the day when we considered the code of practice and Nina coached us on the benefits of written contracts to protect the rights of all parties and ensure good long term relationships.
Ian Riggs summed up the afternoon reminding all that the COGTP is a living document and that we will need to take the next steps with our partners in the trade to achieve recognition of the voluntary code. He thanked members for attending, the speakers for all their valuable contributions and the NFU and sponsors MorePeople for their support for the event.
Guy Moreton thanked all on behalf of MorePeople for their attendance and participation during the day.