- Part 1: Turn Cultural Differences into Competitive Advantage when Negotiating
- Part 2: Use the “Analyze and Adjust” Method to Achieve Breakthrough International Negotiating Results
- Part 3: The Mechanics of Cross-Cultural Competitive Advantage
- Part 4: Relationships vs. Transactions: From Cultural Difference to Competitive Advantage
- Part 5: Building Strong Cross-Cultural Relationships: The Key to Better Deal Outcomes
The key to successful cross-cultural negotiation is developing relationships. Unfortunately, that is easier said than done when you are working across national boundaries and cultural gaps.
Treat relationship-building as a business task.
Don’t mix up the ideas of “relationship” with emotion or family. This is all business, and we have a good idea of the costs, stakeholders, and timetables. We have a deliverables list for cross-cultural relationship building. We want to end up with a cordial business relationship or partnership that drives a stream of profitable transactions.
We Can Add Value beyond “communicating more clearly.”
Our ultimate goal is to leverage cultural differences for better negotiations and value creation. Good negotiation is driven by innovation and creativity — and there is a whole new world of potential variables and deal points when we cross borders. Some things that would be very expensive for us to build from scratch are available to our new partners very cheaply.
But we are also seeking advantage at home against industry leaders and direct competitors. Skill at international negotiation is going to be more important as supply lines continue to be disrupted by the trade war, actual war, and whatever new frustration is warming up. Avoiding bottlenecks, shutdowns, shortages, delays, and compliance issues is going to be more of a day-to-day job requirement for regular managers. You are going to have to know how to find things, how to work around other things, how to move things. Remember “Radar O’Reilly” from MASH? If you’re involved in production or procurement in Global2, then you’re Radar. It’s not a glamorous job, but he kept the entire operation running.
Finally, your ability to build/rebuild international partnerships under the new rules of G2 may be an important competitive advantage. You don’t need every transaction to turn into a long-term relationship — but if you need a relationship then you have to know how to do it. It’s just another business skill for much of the world. Being able to build a basic relationship won’t necessarily make you a hero every time, but not understanding the basics of cross-cultural management can hurt you in the wrong situation.
5 Keys to Cross-Cultural Negotiating
- The relationships are part of the job — not a nice bonus.
- Solve problems collaboratively. Don’t decide on the problems and let them participate in the solution.
- Feedback loops. Culture ⇒ objectives, variables, styles
- Use your words. If you expect them to help you with market access or political connections, be clear about that from the beginning. Don’t assume that they can or that they will.
- Relationships are about the business — not the contract. You don’t get paid for the contract.
The Details
1. The relationship-building is part of the job. The US – Northern Europe axis still tends to look at relationships as a social nicety that one has to endure until the REAL negotiation about numbers begins. Locals in Asia, MENA, Africa, etc. consider the relationship to be part of the business. You won’t necessarily have to do this all the time, but you have to know how to build and maintain a cross-cultural relationship when necessary.
2. Solve problems collaboratively. I know that hat sounds fancy, but the meaning is simple — ask the other side about how to move forward before you start defining problems and “facilitating “a solution. Working together on a solution is a C+ response. Jointly defining the problem and road mapping a solution is the A.
3. This system is about translating cultural analysis into better negotiating and management techniques. We’re not about “communicating more transparently”. When you’re working across borders, you need a lot more detail. It’s not about talking or even listening. You need feedback loops between cultural discovery and new objectives, variables, and negotiating styles. You need a system for analyzing THEM — but then adjusting YOU. The smarter you get about their culture, the more it should show up in your objectives and variables.
4. Don’t assume that they know, care about, or can help with your long-term internal plans. I keep reading in negotiating plans that the counterparty will be instrumental in growing the partnership into a regional powerhouse. Do they know this? Have they agreed? Explicitly and definitively? Because they may not be connecting the dots between your plans and their activities. Have you discussed what they’ll be doing and how they’ll be paid? Hint — when people like me talk about “collaborative problem solving”, this is exactly the kind of issue we’re talking about.
5. Eyes on the prize is easier at home, where you understand the cultural cues and behaviors. When cross cultures, you can focus so much on little communications challenges that you can lose sight of the overall business. Don’t focus so much on getting an “international contract” signed and make sure the business plan still makes sense – now that you know so much more about the partner and market.
Bottom line:
It’s about building a business. Think of the negotiation as a way of moving backwards from the final business relationship, back before even the opening offer and all the way to the very beginning of the relationship build.
When you first meet an international counterpart, the negotiation has already begun. He is on the job, so you have to be too.