How to negotiate abroad

We are entering an negotiating revolution, says hard-nosed negotiator Clive Rich of Rich Futures. Here's how to speak the new universal language of deal-making.

by Clive Rich
Last Updated: 10 Nov 2015

As emerging countries such as the BRICs (Brazil, Russia, India and China) and the Middle East play an ever greater role in the world economy, knowing how to do business and strike deals overseas is vital. But it can be a daunting task, and with many countries doing business in different ways, negotiating becomes a veritable minefield.

However, with the onslaught of technology and social media, country specific generalisations are starting to be minimised as globalisation brings exposure to other cultures and customs. We are entering a negotiating revolution and the old stereo-types are being cast aside for a new universal language of negotiation.

As a negotiator I'm often asked how important it is to understand and work with local cultural norms when negotiating internationally. Yes, there are many clichés about typical negotiating tactics and cultures among different nationalities. The Chinese are said to be inscrutable and very tough, but good at preparing. Indians are said to like to take their time when negotiating, placing great importance on building up trust. Saudis are supposedly reluctant to rush negotiations and operate in a bureaucratic way. The Japanese are said to be very concerned not to lose face and are apparently uncomfortable with extroverts in their business dealings and use silence commonly. Meanwhile, Russians are tough negotiators who regard compromise as a weakness - they like to do business at social occasions or over dinner.

But while I would never totally dismiss the significance of generalisations about local customs and practices in negotiation (in fact, they should always be included in your preparation), don't be driven by them. They may be completely unreliable when assessing the individual and the specific negotiation you are dealing with.

Regardless of any cultural norms, individuals the world over seem to have a very similar range of motivations when it comes to negotiation. This is very important, because most deals get done when those emotional needs are identified and then met. This will be a key factor in any negotiation you carry out, regardless of the country in which you are operating. Does the person on the other side need reassurance? Do they need respect? Do they need to feel a sense of belonging as part of the deal? Do they need to feel in control? These are universal motivations, and most deals are done on the basis of emotional payments that meet these needs rather than any other form of conventional payments.

The challenge here is that these emotional motivations rarely get discussed. Mostly the deal focuses on traditional 'content issues' like price, quantity and delivery dates. So you have to be very aware of what's going on underneath the surface. Look out for issues that make the other side anxious, relaxed, angry, or engaged. Observe their body language as the discussion unfolds. Listen carefully - people often reveal their innermost feelings through their choice of language, even if they are talking about something else.

The other issue to focus on regardless of people's nationality, is their patterns of behaviour. Some people are born optimists, others are natural pessimists. Some people love big picture thinking, others are more interested in the small details. Some people love having plenty of options, others prefer a linear process.

One of the great knacks as a negotiator is to be able to select the right behaviour for the right person. If you can communicate using patterns of behaviour which are consistent with the way in which the person on the other side interprets the world, then you are more likely to influence them. For example, one typical type of behaviour to use during the bargaining phase is 'proposing with reasons'. This kind of behaviour will work well with someone who operates from the 'head' and less well with someone who operates from the 'heart'. Equally, using 'pressures' in the bargaining phase of a negotiation will not work well with someone who likes to avoid decisions. It may paralyze them into inaction. Using 'incentives' is more likely to influence this person's behaviour. On the other hand using 'pressures' is good when dealing with people who enjoy conflict. Indeed it may be essential.

These kind of choices have nothing to do with national stereotypes. They are to do with making a careful assessment of the individual in front of you. Try these techniques out for size and let me know how you do...

Clive Rich is a lawyer, negotiator and strategic director. He is also the founder of Rich Futures

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