What's your approach to negotiations?
Have your cake and eat it? Or are you happy if everyone gets a slice?
You see, the way people across the world negotiate differs - and a lot of this comes down to their culture.
Every culture comes with certain values and expectations around how to do business, including how to persuade, convince and hammer out a deal.
If you're involved in negotiations and are looking for some insights, then you're in the right place!
A Case Study in Negotiating Across Cultures
Bill Bloggs [who does not exist but is based on a real life character], a successful senior negotiator with International Packaging Services [again who do not exist but are based on a real company], who regularly won upper percentile bonuses due to his skilled negotiation approach.
IPS thought Bill was the bees’ knees and they relocate him to a new set up in India.
Unfortunately, however, everything starts to unravel for Bill. He no longer wins the deals he used to win and becomes apathetic and despondent in his new role. As his experience in India grows however, he comes to realise that he has been playing by a completely different set of rules. He realises that the negotiation strategies that worked well in the UK, do not translate to an Indian business environment.
When Bill realises the rules are very different, it becomes clear that his approach and strategies need to change too.
Let’s end this story on a positive note - following online Indian cultural training and input, Bill once again finds his mojo and starts establishing positive relationships with his Indian counterparts and winning lucrative deals.
Both Bill and IPS are now happy.
Why is this story important?
Those who assume that they can merely approach opportunities in other countries without first making all efforts to understand the cultural requirements in that area are likely to learn the hard way – just like Bill and IPS.
It is not uncommon for businesses to lose money through trial and error when approaching international expansion for the first time.
Indeed, even the best international negotiators may call upon the expertise of local negotiators at times to help trouble shoot a challenging part of the negotiation.
3 Tips on Successfully Negotiating Across Cultures
#1 Know your Audience
Like all good negotiation processes, it’s essential that you know your audience.
When engaging in this process internationally however, you will need to dedicate a great deal more time getting to know your audience. This will involve, to a large degree, also gaining an understanding of the cultural business practices of the audience with whom you are negotiating.
In our experience, one of the key reasons western businesses fail to capture deals in areas such as the Middle East and Asia, is due to their need to ‘get down to business’. In many cultures, business discussions come much, much later and the counterpart will not even consider discussing business in the absence of a personal relationship. They will want to take the time to get to know you and establish trust and rapport. Only once this has happened will they embark upon the negotiation process.
The concept of ‘face’ is also important in many other cultures. If you attend an international negotiation and are openly critical in any way of those on the counterpart team, you risk losing the deal altogether. Causing them to ‘lose face’ is not always a forgivable error.
#2 Understand the Negotiation Styles of your Audience
It can be argued that no single homogeneous cultural entity will exhibit exactly the same behaviours; members of the group with whom you are negotiating may be seasoned international professionals who are adept at amending their behaviour for example.
However, it is important that you do some research and try to understand the basic rules, strategies, cycles and priorities. This will go a long way to securing an advantage for you at the negotiation table and reduce potential cultural offence or misunderstanding.
Where your familiarity with the target culture is very low and where you have been unable to acquire sufficient knowledge, we strongly suggest that you either appoint an appropriately skilled and knowledgeable negotiator to represent you or, that you consider professional training or support.
#3 Understand Culturally Appropriate Ways to ‘Close the Deal’
Closing the deal is rarely straightforward in international negotiations.
In the West, individuals tend to be more direct in their communication – for example, they say what they mean. However, in other cultures, the individuals with whom you are negotiating may be ‘indirect’ communicators and, as such, you will need to look for non-verbal signals to appreciate the willingness of the counterpart team.
In cultures such as the Chinese culture, you may find your negotiation counterpart nodding their head. To a Westerner this may be perceived as approval, or even acceptance. However, your negotiation counterpart may not actually agree at all and may instead be making an effort to avoid confrontation and protect goodwill.
So, while you think you’re at the point of reaching agreement and closing, you are in fact still a way off.
These three examples are intended purely to give you an example of the intricacies of international negotiation.
This subject is vast and skilled international negotiators have typically spent years building their negotiation competence.
Our concluding advice would be to BE PREPARED - do some reading, take a course, spend time with seasoned international negotiators and find out as much as your can about the other side.
1. Ensure you understand and establish a culturally responsive approach
2. Do not assume that your way is the ‘only way’ or the ‘right’ way
3. Be perceptive – look for body signals and non-verbal cues
4. Do not take offence if your negotiation counterpart behaves in a way that you don’t understand or that seems rude
5. To advance your position, try and adapt your behaviour, where necessary / possible, to build trust and rapport with your counterpart