American Red Cross Integrates ICON Framework for Negotiation Success

Business Issue

The American Red Cross (ARC) incorporated Accordence's ICON Framework into their approach to negotiation for their contracts to supply blood products to health systems. In the past, these contract negotiations challenged the ARC to maintain effective working relationships while making changes to pricing structure for their products or to contract language. ARC national leaders sought to equip account managers and regional CEOs with skills to enhance both their working relationships and contract terms with an eye toward measurable, lasting, win-win results.

Following her training, Becki Blake, a Regional Account Manager in the North Central Region, applied the ICON Framework to her renegotiation with the largest health system account in her region, a multi million dollar contract for ARC. In an initial conversation with her counterpart, the President of Laboratory Systems for the health system, Becki described her desire to use the ICON model and tools to conduct the negotiation. She expressed her hope to focus explicitly both on the working relationship between the two organizations - which are intertwined on a number of levels - and on the substance of a new contract.

Process

As a first step, she purchased a copy of Accordence's book Expand the Pie for each person on both teams. Despite some initial skepticism as to whether the teams would read the book and embrace the concepts, in the end the health system's Lab Administrator, Blood Bank Director, Medical Director of Clinical Laboratories and Lab Manager, and the ARC team, all signed on to the ICON approach.

As the negotiation began, Becki's ARC team and negotiators for the health system identified, shared and prioritized their interests. As nearly 75 interests emerged, the teams placed them in 9 categories. They differentiated issues that were relationship driven from those necessary for the contract, to address each separately. Focusing on interests in this way provided, Becki says, "a deeper understanding of drivers and motivators of each institution."

With the interests in mind, the teams jointly brainstormed options, creating lists of over 100 to choose from spread amongst the 9 categories. As in any negotiation, Becki says, "it's hard to remember not to be positional, but other than that the process was pretty easy. What I like about it is that it is based on open and honest communication: 'Here are all my cards, here are all yours, let's see what we can do.' It's so freeing, it removes the barriers."

The teams narrowed their options using mutually agreed-upon criteria, and crafted a contract that met the needs of both organizations. Several things helped keep the ball rolling and contributed to their success:

  • Once interests were identified, "we set an agenda according to where we were in the process," Becki says, and by paying attention to the process, maintained buy-in from all team members.
     
  • Every meeting finished early, which contributed to people's desire to return to the table for the next step.
     
  • The teams “had a hell of a lot of fun,” according to Becki. Goofy pencils, day-glow sticky notes, lunch treats, question marks and exclamation points to say “Huh?” or “I can't wait, I have to say something right now!” all added to a sense of camaraderie. “Our table was always cheery – not to trivialize the process, but to make it more fun. It worked for them and it worked for us.”

By mutual agreement, the teams addressed pricing issues last. Becki opened the discussion with a question, and answers to it, that had already been covered in the teams' conversations: What value-added services are included in the price of a product?

  • Medical support and consultation
  • Consistent component availability
  • Reimbursement information
  • Quality products
  • Education programs
  • Reference laboratories

With the value-add components in mind, the teams developed pricing guidelines for ARC products provided to the health system, and followed through on options they crafted together throughout their negotiations. Final contract issues were closed easily. The group as a whole dealt with items that might have irritated any individual, though nothing was able to rise to the level of deal breaker.

Result

One end result of this negotiation is a contract that meets the needs of both the ARC and this health system. Becki described another lasting result: “In the past, I did not feel comfortable walking into that organization. Now it is all clearer. I know who to talk to, where to go with questions; and if I have a question, they know not just what I'm asking, but why I'm asking for it. There is a new foundation of understanding of each other's business. It makes our lives easier on a day-to-day basis.” She concludes: “I think I can replay this same scenario with any customer.”

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