Episode #53: Negotiating Is A Skill With A Simple Process Behind it

“Winning is not a sometime thing. You don’t do things right once in a while…you do them right all of the time”. This is a great quote from the famous American football coach Vince Lombardi and we can apply this idea directly to negotiations. Any business undertaking does better when there is a structure, a process that is capable of creating consistent outcomes.

There are many tactics, strategies, feints, bombast, illusions, delusions, egomania, tricks and skullduggery associated with negotiating. Our recommendation is to play the long game. Don’t win the battle to only lose the final outcome. We are looking for a sustained business career and that means our reputation in the market is like gold.

Always fair is always fair, whether a transactional one night stand or otherwise. Being a known entity gives others confidence to deal with you – we are all trying to reduce risk and look for people we can trust. Japan is a highly risk averse culture and business environment and they always prefer the devil they know to the angel they don’t.

Part of being consistent is value driven and another big component is how we organise ourselves for the negotiation.

There are four stages of the negotiation we should prepare for:

Analysis

We need to identify possible alternatives available to us in reaching an agreement.

We need to see the negotiation from the point of view of our counterparty. For this we need information and perspective before we even get to the negotiating table. Getting good information and intelligence is that bit harder in Japan, but if you have a good network that can help a lot to short circuit the research process.

We need to reframe the conversation to avoid confrontation. This means we are looking for words and deeds that speak to a win-win outcome.

Presentation

We should rehearse the other side’s presentation, as well as our own. By actually doing a dry run of their presentation, as we imagine it, we throw up insights and ideas which are very helpful for ourselves.

For our presentation, we should frame it in the language of the interests and needs of the counterparty. Talking about what we want doesn’t move us toward an agreement. Speaking their language, contemplating solutions to their issues positions us all on the same side of the negotiating table and leads to better outcomes, much faster than otherwise.

Bargaining

We must clearly fix our BATNA (best alternative to a negotiated agreement) at the start. This is our fall back or even walk away position. It should be realistic and as close to the ideal outcome as we can manage.

We should always be prepared to take a break from the negotiating process if we feel we are becoming too emotional.

In our presentation we have tried to make it easy to agree to our proposal and hard to disagree. We shouldn’t make the other party work hard to reach an agreement.

It is hard to make a good deal with bad guys and why would we want to work with bad guys in the first place? Life is short.

Agreement

We should make certain we specify all points that are agreed. Things which need to be fixed at the point of signing, should not be left floating around. This is the time to fix them.

There will be milestones for execution of the agreement and these need to be specified. There will be a schedule for fulfillment of the agreement and this needs to be detailed in scope.

A signed agreement in Japan is a lot more flexible than in the West. The Japanese view is that while there is good will on the part of each side and the conditions for success still apply, then the deal makes sense. If that is no longer the case or if the situation has changed substantially since the agreement signing, then the deal doesn’t make sense anymore and should be voluntarily terminated.

From a Japanese viewpoint the relationship is the key point and the one deal is just the one deal. They want to keep the relationship, but don’t want to suffer under the terms of the agreement, if the situation has changed so much that is no longer works for them. The deal ends, but the door is open to future deals.

Does everyone in Japan play by these quid pro quo rules? No, of course not.

Are they as flexible with you as they expect you to be with them? Not necessarily.

One thing about Japan though, everyone is very good at keeping well maintained records about who you can’t trust and who you should never deal with. They share this information amongst their circles.

Negotiations in Japan will have their own flavor and we have to be cognisant of the different expectations which apply. Regardless, we do better when we have a framework to guide us and this simple four step process will assist us in preparing for the discussion with the counterparty. We don’t need to complicate things, but we do need to have a structure to help us break down the complications into bite size pieces we can tackle when they arise.