How to Succeed in Cross-Cultural Negotiations
The four rules to avoid offending your counterpart and succeed in cross-cultural negotiations.
How to Negotiate: Cross-cultural Negotiation
In this third part of the three-part How to Negotiate series, we'll be covering cross-cultural negotiation. If you missed last week's article on negotiation strategy, I highly recommend reading it first. If this is your first foray into negotiation, I highly recommend you start with the first article, the fundamentals of negotiation. Reading these articles first is important to make sure you understand this article.
Thus far, we've focused mainly on negotiation preparation and negotiation strategy and the execution of said negotiation strategy. This week however, we'll be leaving the world of strategy and focusing on the human component of negotiation.
At the end of day, negotiation is about two (or more) parties communicating with each other in order to get what they want. Consequently, it is important to grasp the human touch of negotiation. To quote Peter Drucker,
Culture eats strategy for breakfast
How does this relate to negotiation?
You can have the best negotiation strategy in the world, however, if you offend the other party and they walk away from the negotiation table, it's game over.
Whenever you negotiate (and especially across cultures) it's crucial that you adapt to the other party's negotiation style. If you don't they will close off immediately and you are much less likely to achieve a favorable outcome. If you commit a faux pas and come off as offensive the other party is much less likely to stay at the negotiation table and be willing to work towards a solution.
Whenever you are faced with someone from the same culture as yourself, these differences in negotiation styles may arise from differences in personality. Identifying someone's personality prior to negotiating can be extremely tough and is something that can only really be determined in the heat of the moment.
As such, we will focus on cross-cultural negotiation. Whenever you about to enter a cross-cultural negotiation, there are four rules you must follow when negotiating with someone from a different culture than yours.
Know how to express yourself
Learn how the other culture builds trust
Avoid yes or no questions
Be careful about putting it in writing
1. Know how to express yourself
Knowing how to express yourself in front of a different culture is a key component of succeeding in cross-cultural negotiation. Habits and ticks that you may have developed (and that are completely normal in your culture) may be offensive to others. For example, avoid giving thumbs up in the Middle East - it's their equivalent of the middle finger.
On a more serious note, knowing how to adapt the way you express yourself is a crucial component of ensuring success in cross-cultural negotiation. In some cultures, it's common - and entirely appropriate - during negotiations to raise your voice, get excited, use hand gestures, etc. Other cultures may see this as childish and unprofessional. Thus, you need to understand how you can (and should!) express yourself.
There are two main axes on which cultures differ in their ways of communicating and negotiating:
As such, the first rule of international negotiation is to know how you can express yourself and adapt your way of doing accordingly. Is it a bad sign that your Japanese counterpart sat calmly and showed little passion? Probably not. However, if your French counterpart behaved that way, your negotiation likely won't go very far.
2. Learn how the other culture builds trust
Building trust is one of the most important steps in any negotiation. Research splits trust in two categories: cognitive and affective. That is, cognitive trust represents how much confidence you have in somebody's skills and achievements. Do you believe that they will do their work and do it well? Do you trust the quality of their work?
Affective trust on the other hand comes from how emotionally "close" you feel to them. Beyond the business transaction, would you consider them to be a friend? Would you invite them to your home?
The results from research shows that different cultures can have very different approaches to building trust. In the U.S.A for example, there is a sharp line between cognitive and affective trust. You may trust your colleague's work, but you do not trust them as a friend. American culture tends to strictly separate the emotional from the rational. In China however, research shows that Chinese managers have a much stronger interplay between cognitive and affective trust. In most cases, they go hand-in-hand. Similarly, in most emerging countries, BRIC, Southeast Asia, Africa as well as Middle Eastern and Mediterranean cultures, individuals are unlikely to trust their counterparts until affective trust has been made. This is in sharp contrast to the task-oriented Americans, Brits or Germans.
What does this mean? This signifies that, depending on the person you are negotiating with, you may have to invest time in non-business activities (discussions, meals, sports, etc.) in order to build affective trust. Ignore the business deal and focus only on building a friendly relation with the other person. Once enough trust has been built, the deal will arise.
3. Avoid yes or no questions
"Yes" and "no" are very powerful words. In some cultures, people say no even though they mean yes, whereas other cultures consider no a strong statement completely shutting down all future negotiations.
In France for example, we have a tendency to say "oui, non, oui" (yes, no, yes) when we mean yes. Similarly, we say "alors non, oui, non" (so no, yes, no) when we want to say no. We also tend to repeat no quite a few times, essentially saying "no-no-no-no" quite quickly instead of a simple no. This is not shutting the door in the face of the counterpart, on the contrary, it's simply stating disagreement — but negotiations should continue.
However, other cultures may not have such a loose tongue with the words yes and no. For some, outright saying no can be considered as quite rude. Similarly, a simple yes may be difficult for other cultures to pronounce.
To avoid offending the other, it's best to avoid yes or no questions. Instead of asking a yes-or-no question, re-phrase the question such that you can ask an open-ended question. For example, instead asking "Do you think you can do this?", ask, "By when would you be able to complete this?".
4. Be careful about putting in writing
Before you rush to put a deal in writing, take some time to reflect whether your counterpart's culture values receiving a written recap of a discussion. In North America and Europe, repeating and synthesising key messages both during and after a negotiation is the basis of negotiation. In Africa and Asia however, immediately sending a written recap of a discussion can be a sign that you do not trust the other party.
The United States relies heavily on written contracts. As soon as you negotiate something with an American, you will likely receive a long series of documents outlining the specifics of the contract, as well as what will happen if you do not abide by the contract. The reason for this is because contracts in the U.S. are legally binding and therefore build trust among individuals who may otherwise have no reason to trust each other.
However, in countries where the legal system is traditionally less reliable, relationship capital is worth more than a written agreement. In such countries, the spoken agreement you land at may be the basis of your negotiation - asking immediately for a written version may suggest to your counterpart that you do not trust them to hold up their end.
Additionally, in countries like the United States the signature of contract often represent the "end of negotiations". However, this is not universally true: contracts can be re-formed, in some cultures see signing the first contract as just the first step in a much longer negotiation process.
As such, it is important to remember not to jump immediately to signing a contract. If you want to be one the safe side, ask the other side to draft the first version. This allows you to gauge how much detail will be written on the contract — and be ready to revisit, in case they slip something in.
Lastly, always remember the golden rule of negotiation:
Be as hard as you can on the problem but as soft as possible on the person.
It's important to remember that the person in front of you is merely a representation of the deal. They themselves are not it. Remember that at the end of the day, everyone is human; and humans are emotional creatures. They may get offended, mad, distrustful, etc. Always remember to treat your counterpart with respect and care, but don't let it get in the way of you succeeding in your negotiation.