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CHAPTER 1

Negotiating in Any Language: How Negotiations Work

"Have more than thou showest, speak less than thou knowest."—SHAKESPEARE, KING LEAR

Negotiating Defined

The Importance of Win-Win, or Interest-Based, Negotiations

The Stages of Negotiation

Planning Your Negotiation

What It Takes to Close a Deal

The subject of negotiations is both timely and timeless. It is timely because almost everything about our society in general, and our workplace in particular, is increasingly complicated. Today there is more litigation, more cultural diversity, more regulation, more technology, and—in line with the focus of this book—more globalization among businesses. The subject is timeless because life is a series of endless negotiations.

Moses, for example, was more than an Old Testament prophet. He was an ace negotiator. He had been up on the mountain for forty days negotiating the Ten Commandments with the Supreme Other Side. His buddies asked, "Hey Mo, how'd it go up there?" "It was really rough up there," Moses answered, quite exhausted. "The good news is, I finally got Him down to ten. The bad news is, adultery's still in there!"

Certain fundamentals of negotiations apply whether you are negotiating in Toronto, Brussels, New York, Buenos Aires, Istanbul, Shanghai, or Dubai. It is important to understand these fundamentals: They are the foundation on which you will later build your international negotiating strengths. These fundamentals include understanding the concept of negotiation, appreciating the importance of the win-win approach, understanding the stages of negotiation, being able to plan your negotiation, and knowing what it takes to close a deal.

In many ways, the negotiating skills we seek to master are those you practiced as a child but forgot as you became older and more sophisticated. Anyone with a six-year-old is reminded of this on a daily basis. Children are excellent negotiators:

• They are persistent.

• They don't know the meaning of the word no. They know that when we say no, we often mean maybe.

• They are never embarrassed.

• They often read us better than we read them.

Let's begin relearning these skills by defining our subject.

Negotiating Defined

Negotiating is the process of communicating back and forth for the purpose of reaching a joint agreement about differing needs or ideas. Negotiating has to do with persuasion rather than the use of crude power. What's more, negotiating has to do with the other side feeling good about the outcome of the negotiation. As such, negotiating is a collection of behaviors that involves communications, sales, marketing, psychology, sociology, assertiveness, and conflict resolution. Above all, it has to do with the clear understanding of our own motivations and those of the other side as we try to persuade them to do what we want them to do.

A negotiator may be a buyer or seller, a customer or supplier, a boss or employee, a business partner, a diplomat, or a civil servant. On a more personal level, a negotiator may be your spouse, friend, parent, or child. In all these cases, your negotiating skill strongly influences your ability to get ahead in both your organizational life and in your other interpersonal relationships.

Some negotiations involve business counterparts outside your organization, while others involve those within your organization, such as the boss, top management, attorneys, accountants, and other technocrats. With both internal and external situations, the main objective of a negotiation is to help you get what you want.

Since the focus of this book is international business negotiations, we refer to our counterpart from a foreign culture as TOS (The Other Side). TOS can be a negotiating counterpart in a foreign country (or host country) where the negotiation is taking place or a negotiator visiting your country to do business with you.

What Can You Negotiate About?

Although the details of business negotiations can be quite complex, there are really only nine subjects about which you can negotiate. Everything else is a variation on these themes:

1. Price

2. Terms (e.g., how and when payment will be made)

3. Delivery

4. Quality

5. Service

6. Training

7. Resources (people, money, materials)

8. Scope

9. Process (who is going to do what to whom)

Many negotiations are centered on price. Negotiations that involve the other eight items relate to the return on investment, or the value added.

The Importance of Win-Win, or Interest-Based, Negotiations

Almost any book about negotiating written in the past couple of decades includes great tributes to the virtues of win-win, or interest-based, negotiations. This means that both you and The Other Side (TOS) win in the negotiation. After having conducted seminars on negotiating with thousands of participants around the world, I can tell you that virtually every individual is quick to agree publicly with the idea of win-win negotiations. Yet in real-life—particularly in the United States—negotiations are often conducted with an "I win, you lose" type of behavior. Intellectually, we know that the cool, even-handed, interest-based approach is appropriate, but this is sometimes difficult to remember when the heat is on.

You might ask, "What's so bad about win-lose negotiations, as long as I make sure that I'm not the loser? I mean, I'm under a lot of pressure, so if the other person bleeds a little, this is not one of my life's great problems. It's nothing personal, but I'm not in the charity business." Using that rationale, we put our foot right on the other person's neck and proceed with the negotiation.

The problem with win-lose negotiations is this. The loser usually behaves quite predictably and tries to get even. The loser's thinking goes something like this: "I'm going to get you. It may not be today. It may not be tomorrow, but I will get you. You will bleed and not even know it." Losers usually wind up pouring much of their energy into all kinds of dysfunctional behavior, aimed at getting out of the losing position. Sometimes the result is even lose-lose.

You can see much evidence of win-lose problems on the geopolitical level. The conflicts that have been sustained for decades, or sometimes even centuries, are really unresolved conflicts from previous win-lose situations. The Middle East antagonisms are a good example—a series of situations where the various parties have sought to win, only at the expense of TOS.

Interest-based negotiation is critical, not for you to be a wonderful, kind human being, but because it is the practical thing to do. It will help you get more of what you want. And how is this achieved? In two key ways:

1. Meet the needs of TOS. Switch to the frequency that others can tune in to, which is known as WIIFT (what's in it for them). The idea here is that in helping others, we can often help ourselves.

2. Focus on interests and not positions. Positions are almost always irresolvable: "Our position is that we don't really need your product," is a dead end. Finding out interests, by contrast, helps you access the real needs of TOS: "Let's see what we can do to make this deal good for you and good for us," opens the door to fuller conversation.

It is sometimes difficult to establish an interest-based framework, even in a domestic business negotiation, and even when one has honorable intentions. Your counterpart may doubt your sincerity, or the condition under which you are negotiating may not lend itself to a feeling of collaboration and mutual trust. Achieving an interest-based outcome can be especially difficult, however, in global business negotiations. The different cultural backgrounds of negotiators may cause them to bring different expectations to the bargaining sessions, create stereotypes of TOS, and develop a climate of suspicion or distrust.

Thousands of such examples abound in international business negotiations. Achieving interest-based negotiations, and tuning in to WIIFT, takes an enormous amount of empathy, understanding, listening, patience—and skill. A California-based distributor of computer software relates the frustration she felt during her first trip to the Pacific Rim. "I left California for ten days to accomplish some fairly routine business in Japan and more complicated business in Singapore. I knew that business takes longer in Japan than in the United States, but I had no idea it would take several days to really get down to business in Tokyo. The tone of the negotiation was very bad, because I really felt they were dragging their feet." The situation changed in Singapore. "I was equally surprised to find that in Singapore I was in and out of there in no time. Things got off to a bad start because I felt I should make small talk—I'd been doing it for five days in Japan—and I think the Singaporeans felt I was being evasive and not really wanting to move ahead on the deal. I finally convinced them that we had the same objectives. I had scheduled five days there, but I needed only a morning. The Singaporean buyers wanted to talk business as much as I did. After a nice lunch with them, I headed for the airport, mission accomplished."

WIIFT for the Japanese negotiators in this case was patience on the U.S. negotiator's part—patience that indicated interest and respect for the long-term relationship. WIIFT for the Singaporeans was different. They were looking for the U.S. negotiator to demonstrate interest by moving along crisply in the business deal.