This is the fifth post in a series entitled: The Principles of International Negotiation: Finding Universal Value in a Complex World
Employing this principle begins with a clear-eyed assessment of your negotiation team’s weaknesses. Be brutally honest with yourself in evaluating how critical factors like tight deadlines, lack of patience, insufficient alternatives, lack of understanding of the customer, poor cash flow, or product credibility issues might affect your position. Poor teamwork is another weakness, making a team susceptible to divide-and-conquer tactics by the other side. Teamwork is so important that it is the subject of our third principle of negotiation. We will discuss that in detail in our next post.
When assessing a negotiation team’s strengths, the three most important considerations should be:
- The lead negotiator and his/her skills
- The negotiation team and its capabilities
- The team’s preparation
There are strong culturally-based norms about making decisions in public (in a meeting) versus in-private, hierarchical decision-making versus consensus (team decision-making). There are also norms about “trading” issues versus treating all issues as standalone. A recent example of the consequences of misunderstanding these types of sensitivities occurred in a negotiation in sales between an American seller and a Japanese buyer. The buyer threatened to break off negotiations if the seller resorted to “sales tactics,” such as discounts which are only available if the buyer makes the decision before end of the quarter. When the seller offered an “incentive” for the buyer to close by end of the year, the buyer became upset and refused to return the seller’s calls. If you are unaware of these types of sensitivities, you will lose effectiveness (and time and money).
Additionally, difficult negotiation conditions can arise when one side doesn’t or won’t reveal their criteria for making decisions. Sometimes it is employed as a tactic, sometimes it is a cultural predisposition. This deprives a negotiating team of the ability to articulate value and build on their strengths. If you don’t know the decision criteria, your leverage to affect a positive outcome will be limited and you are likely to be in a defensive position throughout the negotiation. This can result in your having to defend your weaknesses at the negotiation table. In many cases a team can make educated guesses about decision criteria, putting their proposal on the table and explaining what assumptions were made and why. This transparent approach can lead to a fruitful discussion about the true negotiation outcomes needed.
To be an effective negotiator, aggressive research of each side’s business weaknesses is necessary, as is contacting as many people as possible who may yield intelligence about the other side’s values. In many respects this process is a positive one for both sides. Your ability to entice the other side to make a better deal is highly dependent on your ability to strengthen their business by, for example, understanding their competitive weaknesses and helping them become more competitive through partnering with you. For international negotiations, this includes learning something about how the other team’s culture may impact their approach to business. For example, we know of a number of situations where failing business operations would have meant that a manufacturer would need to close facilities and lay off workers. In places like Germany, France and Japan, layoffs are considered to be socially and economically repugnant. In this environment, a business partner’s approach that allows for the outsourcing of those facilities and the repurposing of labor to other activities can be more valuable than the pure financial deal that the outsourcer might offer.
If the other side values your strengths, then you can have confidence that the weaknesses can be overcome. Likewise, if you understand the other side’s weaknesses, it provides you opportunities to deliver value and get a better return for your company.