Negotiate
this!
CHRIS FOX, a consultant with the international business communications
consultancy Canning, lets you in on a few secrets of how not
to offend.
Those of us who have blundered through international negotiations,
feeling our way in the dark and hoping that our instincts are
helping, rather than hindering us in our quest to adapt to the
strange ways of our overseas business partners, will sigh wistfully
at Burns’s words here. For it is our inability to ‘see
ourselves as others see us’ which leads to one of the
key problems in negotiating across borders: we often spare little
thought for how our potential overseas partners might prefer
these negotiations to progress. Instead, we blithely assume
that they will share our own preferences. Chances are, they
see your ‘normal’ way of doing things as at best
strange, and at worst, a dirty trick designed to destabilize
them.
On exactly such misunderstandings have many an international
negotiation fallen apart.Now let’s not kid ourselves that
a bit of cross cultural know how will seriously adjust the power
balance in a negotiation. As we will see, negotiating with people
from Latin American countries can be quite a challenge for people
used to dealing with the business environments of Britain and
the United States. But I’m pretty confident that when
J K Rowling’s agent opens negotiations in Mexico for the
rights to the latest Harry Potter novel, her agent doesn’t
need to worry too much about the complex personal synergies
of doing business in Mexico. When you have something to offer
that people desperately want they are going to need to dance
to your tune rather than vice versa.
But all the same, even in this highly privileged situation,
your attention to niceties of how your counterparts see the
world compared to how you see the world is important and may
result in you getting an even better deal than you would have
got anyway. Besides, though on this trip Rowling’s agent
might be touting a ‘must have’ title like the new
Potter, on the next trip it might be a much less desirable tome.
If too much weight has been thrown around when the power balance
was in the agent’s favour, you can be sure that the publishers
will seize the opportunity to exploit their own power when the
boot is on the other foot.
Your negotiating power - the desirability of what you have to
offer - is of great importance in any negotiation situation.
But in many cases, neither of the two parties to the negotiation
will have considerably more negotiating power than the other,
and will not generally be able to impose a deal on the other.
In practice, negotiation is about finding the best possible
way for both parties to achieve movement towards a mutually
acceptable deal.
To achieve this critically important objective, you need to
do justice to yourself when you approach the negotiating table.
And, paradoxically, the best way to do justice to yourself at
the negotiating table is to understand as far as possible all
the significant factors that are affecting, or are likely to
affect, the people with whom you are negotiating.
Let’s go back to the poem with which I began this article.
Yes, it’s a tragedy that we are unable to see ourselves
as others see us, because this inability so often fails to allow
us to do justice to ourselves.
By restricting our imaginations solely to the matters and preoccupations
that bother us we behave, in the eyes of our counterparts, as
if we are trying to impose a deal, rather than negotiate one,
even when the balance of power is by no means weighted in our
favour. This causes suspicion and resentment, and stops the
crucial movement required to get a deal. Here’s just one
example I picked up in my role as an international negotiations
trainer that demonstrates what can happen when well-meaning
international negotiators fail to ‘see themselves as others
see us’.
Two companies had been short-listed for a major infrastructural
contract in Mexico. One was North American, the other Swedish.
Both companies were invited to Mexico to present their proposals
to the relevant ministry and to start negotiating the terms
of a deal.
The Americans put a lot of effort into producing a high-tech,
hard-hitting presentation. Their message was clear: ‘We
can give you the most technically advanced equipment at a price
our competitors can’t match.’ The team - which consisted
of senior technical experts, lawyers, and interpreters - flew
down from their New York head office to Mexico City where they
had reserved rooms in one of the top hotels for a week. In order
to put on the best possible performance for the minister and
his officials, the Americans had arranged to give their presentation
in a conference room at the hotel; and they had brought all
the necessary equipment with them from the States. All the arrangements
had been written down in great detail and sent to the Mexican
officials two weeks earlier.
At the agreed time the American team were ready to present,
but they had no-one to present to. The people from the ministry
arrived at various times over the next hour. They didn’t
apologise for being late, but just began to chat amiably with
the Americans about a wide range of non-business matters. The
leader of the American team kept glancing anxiously at his watch.
Finally, he suggested that the presentation should start. Though
the Mexicans seemed surprised, they politely agreed, and took
their seats. Twenty minutes later the minister - accompanied
by some senior officials - walked in.
He looked extremely angry and asked the Americans to start the
presentation again from the beginning. Ten minutes later, he
started talking to an aide who had just arrived with a message
for him. When the American presenter stopped speaking, the minister
signalled that he should continue. By this time, most of the
audience were talking amongst themselves. When invited to ask
questions at the end, the only thing the minister wanted to
know was why the Americans had told them so little about their
company’s history.
Later, during lunch, the Americans were very surprised to be
asked questions about their individual backgrounds and qualifications,
rather than the technical details of their products. The minister
had a brief word with the American team leader and left without
eating or drinking anything.
Over the next few days, the Americans contacted their Mexican
counterparts several times in an attempt to fix a meeting and
start the negotiations. They reminded them that they had to
fly back to the States at the end of the week. But the Mexicans’
response was always the same: ‘We need time to examine
your proposal amongst ourselves first.’ At the end of
the week the Americans left Mexico angry, frustrated and empty-handed.
The result of this particular case was that the lucrative contract
on offer from the Mexican ministry was awarded not to the American
company but to the Swedish company. The Americans had played
by what they regarded as the ‘rules.’ According
to their own cultural perspectives on the business world, the
Americans did everything they should have done.
But the trouble is they were doing everything they should have
done according to their own interests and agenda. They weren’t
thinking about - or perhaps they weren’t even caring about
- how the Mexicans saw them and the world.
In practical terms, the Americans were over-focusing on their
own cultural ‘given’ that people should be judged
solely on what they do. Like it or not, in Latin America (amongst
other places) people are judged not only on what they do but
also on factors such as age, position, and family connections.
When the Americans presented to the Mexican team, the Mexicans
were not as interested in the technical abilities of the Americans
as the Americans thought they might have been.
The Mexicans were more interested in the fact that the seniority
level of the American team was way below that of the Mexican
minister and his senior officials. And so, from the Mexicans’
perspective, there was no way the negotiation could be conducted
on equal terms. To show the kind of respect the Mexicans expected,
the American team should have been led by a board member, at
the very least. And as the minister himself was involved in
the proceedings, a president, chairman or CEO would have been
more appropriate, especially for the initial exchanges.
Another mistake the Americans made was to include lawyers on
the team. America is a famously litigious society. Firms will
often include lawyers in their negotiating team if only to ensure
that the contracts might pose no future threat to them. This,
of course, rests on the principle that, if things go wrong,
the first stop will be the law courts.
For Mexicans, and indeed for business people from many other
countries that enjoy warm climates and value warm relationships,
business is very personal. You would as soon bring your lawyer
during the courting period of a business relationship as you
would during the opening exchanges of a new romance. Frequently
the business relationship flows from a good personal relationship,
which is rather different from the attitude prevalent in countries
such as Germany or the US, where business life and personal
life are seen as things that need to be kept relatively separate.
Saying to someone you love ‘you’re fired, darling’
might make sense in an American context but would be pretty
incomprehensible to people in countries where personal relationships
often come before business relationships.
Yet another problem this story highlights is the different attitudes
the two sides have towards time.
Of course, the Mexican attitude towards time has been stigmatised
in the concept of mañana: the idea that it doesn’t
matter if things happen ‘tomorrow’ rather than today.
In fact, this is unfair on the Mexican business environment:
the excellent and imposing buildings of Mexico City today were
not built by people who did everything mañana.
But all the same, there are differences in how American business
people and their Mexican counterparts are likely to regard time.
It’s probably fair to say that for Mexicans, precise punctuality
is less important than cultivating a good atmosphere. For Americans,
and indeed for most corners of the Germanic and Anglo-Saxon
business community, punctuality is extremely important and no-one
can really expect more than a few moments of grace before tempers
start to fray. It’s the time itself, rather than the timing,
which is of value.
In a short article like this it would be impossible to look
at all the potent cross cultural cocktails in international
negotiating – what happens when the Germans meet the Jordanians,
or the Uruguayans meet the Ukrainians. But you can avoid many
of the pitfalls awaiting you simply by asking yourself a few
of the questions below.
But perhaps the most important piece of guidance might be this:
Take the trouble to identify the preferences of the people with
whom you are negotiating and be aware not only of the factors
that most condition and affect their business thinking, but
also of the factors that most condition yours. That is to say,
think hard about what they are likely to find weird or unusual
about the way you ‘normally’ do business, and try
to take a step or two towards their ‘normal’ approach.
If you think about it, doing this is only a common courtesy,
but how few people take the trouble to do it? If you want to
negotiate successfully with anyone you had better take the trouble
to get to know them and what they care about. It’s common
sense; the more different their outlook is from yours the more
likely there are to be pitfalls.
The good news is that because so few business people who are
negotiating internationally really do take the trouble to find
out what factors affect the thinking of their counterparts,
if you do take the trouble to do that you are likely to enjoy
a significant advantage over people who don’t.
What are likely
to be the key areas of difference between your own preferences
for how business works and those of your counterparts from
different cultures?
Here are some of the most important:
Individual or group orientation: In the US, for
example, the individual’s chief responsibility is widely
seen as towards himself. In Japan, the expectation is that
the individual will prioritise the group’s interest
above his own.
Flat or vertical hierarchies: Some countries - such as Scandinavia,
Australia, Germany and Switzerland - have fairly flat hierarchies,
where bosses are likely to consult widely. Other countries
- such as in France, Spain, Latin America, India and China
bosses tend to hold, rather than share, power.
Acquired or given status: Countries differ on the extent to
which they put a premium upon status achieved through merit
or through seniority or family connections.
Functional or personal business relationships: Countries and
cultures differ according to how soon people want to ‘get
down to business’ rather than making small talk. This
often reflects whether or not people see meetings as two people
forming a relationship, or of two job functions meeting to
join forces.
Physical proximity: Cultures differ in their willingness to
be physically close when negotiating or to keep more of a
physical distance. Walking around his HQ hand in hand with
your Arab counterpart might seem unusual, and uncomfortable,
for you, but refuse the hand and you are sending a rather
hostile signal to him.
Communication: We all agree that business communication can
be delicate, and that it needs to be handled carefully. But
different cultures deal with this in rather different ways.
Some – Americans and Germans, for example – elect
to cope with this by being clear, explicit, and direct. Others,
like the Japanese or the British, prefer to cope with the
delicate nature of business communication by being implicit,
diplomatic and indirect. When two cultures with such opposing
preferences meet, it is often a recipe for communicative disaster.
Time: Is time your slave or your master? Do you prefer to
worry about getting the timing of an event right, or is your
priority to make sure it runs ‘on time’? These
questions affect the pace of a negotiation. Set the wrong
pace, whether too fast or too slow for your counterparts,
and you will destabilise them.
Chris Fox is a senior consultant with the international business
communication consultancy, Canning. He can be contacted on
tel. 020 7370 1055, chris.fox@canning.co.uk.
-ends-
For further information, please contact:
James Essinger / Helen Wylie
Da Vinci Public Relations
43 Nunnery Fields, Canterbury
Kent, CT1 3JT
Tel. 01227 472 874
Mobile 07768 165 340 (Helen Wylie)
h.wylie@davincipr.com
Mobile 07831 259 889 (James Essinger)
jamesessinger@davincipr.com
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