Category Archives: Negotiations

Novice Negotiators – Your Counterparts Will Use Your Emotions Against You

As per this recent article over on eSide Supply Management on “Using ‘Micro Expressions’ to Your Negotiation Advantage”, negotiators who can read body language often have an advantage. And if you are emotional, they are sure to pick up on your unfiltered emotional actions and use those against you.

In particular, as per the article, they will be looking for signs of these universal emotions to use to their advantage:

  • Anger
  • Disgust
  • Fear
  • Sadness
  • Happiness
  • Surprise
  • Contempt

In particular, they will be looking for signs of Fear, since that means they can strong-arm you, Surprise, since that means they can pull a fast one while your mind is otherwise occupied, and Happiness, since that means that they don’t have to sweeten the deal any further to get you to sign.

That’s why, no matter what happens, you should always be cool, calm, and collected against an experienced pro. Don’t take it personally. It’s business, and, more importantly, it’s the organization’s business. No matter what happens, look at it from a neutral, outsider’s perspective. Pretend you’re a third party arbitrator and it’s your job to find a fair resolution to an argument. You might still be out-negotiated, but your counterpart will have less of an advantage.

That’s the reason that good negotiators have a Poker Face.

Six Red Flags In Any Relationship, Not Just Outsourcing

A recent article over on the Outsourcing Center, an Alsbridge Company, highlighted “six red flags to help avoid a bad outsourcing relationship from ever starting” that is a good read for anyone negotiating any kind of deal with a product or service provider, including a deal for (supply management) software and associated services.

The following six soft characteristic red flags are indicative of a provider that is likely to bring with it a dysfunctional and damaging relationship.

  1. Selling, Not Solving
    Is the provider listening and offering what you need, or selling what they have, whether or not it solves your problem.
  2. Telling, Not Listening
    Does the provider assault you with the triple digit PowerPoint presentation rapid-fire, without letting you get a word in edgewise, or let you drive the conversation, breaking out slides only as needed.
  3. Homogeneous, Not Diversified
    Is the provider diverse enough to understand your cultural nuances, or only aware of his or her own company’s culture.
  4. Complicating, Not Simplified
    Is the sales process, and proposed solution, overly complex, or is it simple and straight-forward, addressing the problems you have now, not the problems you may have in five years. While it’s important that the provider can grow with you, it’s not important that they dive into details of problems you don’t have today, or sell you solutions before you need them.
  5. Far, Not Near
    Relationships and decision making should be as close to you as possible, not half a world away.
  6. Arrogant, Not Supplicant
    The provider should be confident, but not arrogant. The provider should be willing to listen and understand your problem before proclaiming that they have solved it before. That’s confidence. And that is what you want.

While the lack of these red flags will not guarantee a good relationship, as a nearby supplicant solution-driven diversified provider that listens and simplifies can still be incompetent, at least there’s a good chance that the relationship can work. And any odds of success are much better than virtually guaranteed failure.

Boilerplate Blasphemy

A recent article over on the eSide that explained why you need to “Focus on the Fine Print”, while a little simplistic, did a great job of pointing out the most important thing you need to remember when you are in contract negotiations:

The advantage always goes to the drafting party.

Always. Why? Because the drafting party always takes home-court advantage. While it is theoretically possible to prepare a contract to the advantage of the other party, I’ve never seen it happen. Even the fairest contract I’ve ever seen gave home-court advantage to the drafting party in the section on Governing Law.

Thus, if you are given a choice as to whether you should start with your paper or their paper, start with yours. And then remember that:

The fairer the contract is, the faster the negotiations will go.

You should only take the advantage where you absolutely need it. If you try to take it in every clause, the other party will likely be insulted at your lack of willingness to at least offer a few concessions and negotiations will not go well.

Remember that the point of a good contract is to build a framework for a problem-free working relationship. Keep that in mind, and drafting will go easier.

Are You a Contract Hypocrite?

Tim Cummins penned a great article for the newly relaunched Negotiator Magazine site on how “Hypocrisy in Contracting Leads to Wasted Negotiation” since ridiculous demands just lead to repetitive, predictable negotiations that bring little or no value to either party. And this happens more often than not since most large companies would never sign their own contracts, which are diametrically different from those they demand when buying, which is just ridiculous.

Not only do we have to ask what happened to our ethics (that most professional associations insist upon), but we have to ask why we are risking failure for the sake of assigning blame should things go wrong instead of working together to insure that failure never happens. Especially when research is demonstrating that creativity and innovation are closely linked with greater mutuality in key terms which creates a joint responsibility to ensure success.

It’s not hard to harmonize buy-side and sell-side contracts, and it’s not hard to put together a contract you’d actually sign with fair, bi-lateral terms and conditions that share risks and rewards and protect both parties. (the doctor is just an engineer, his paper works that way, and he didn’t need an arrogant overpriced lawyer to create it — in fact, he didn’t need a lawyer at all!) So why can’t we move forward on this issue?

The Impact of Culture on Transnational Interactions

The newly relaunched Negotiator Magazine has a great article by Charles Craver on “the impact of culture on transnational interactions” that is a great read for anyone looking to improve their CQ (Cultural Quotient). It’s a great companion article to SI’s 2009 series on Overcoming Cultural Differences in International Trade and SI’s 2010 series on Cultural Intelligence (which were both edited by SI’s resident expert on Global Trade, Dick Locke).

In SI’s classic series on overcoming cultural differences, we introduced you to Dick Locke’s eight key factors that govern the differences between your culture and that of your potential business partner (supplier, service provider, customer, etc.), which were:

    • power distance
    • uncertainty avoidance
    • individualism
    • polychronic vs monochronic time
    • personal/impersonal
    • buyer/seller rank
    • importance of harmony
    • importance of face

Charles reviews the common cultural differences of time (and punctuality), personal/impersonal (including the exchange of gifts), the importance of face and harmony, and individualism (and the difference between the approaches taken to negotiations by individualistic cultures and group cultures) as well as the importance of distance (as some cultures will need at least two feet, while others will want to be in your face), respect (including the exchange of business cards in some cultures), social events and cultural exchange (and the need for some cultures to build a rapport through bonding activitis before beginning negotiations), and wealth (and the need for the wealthier party to bring quick benefits to the poorer party) and provides some unique insights that not all Global Sourcing professionals are aware of.

In addition to explaining some key cultural differences that newly minted global supply management professionals may not be aware of, such as:

  • how it is unusual for people in Latin American or Middle Eastern countries to show up on time (as delays of thirty or forty minutes are acceptable)
  • how people from Middle Eastern countries want to be less than one foot away from you when they talk
  • how people from cultures that place great importance on saving face find displays of power to be crude and inappropriate and will hesitiate to initiate law suits or break off negotiations

the article makes a point of noting that a negotiator who speaks the language isn’t enough. The organization needs someone who also understands the culture and the nuances of the language. For example, when the Japanese say that “it would be difficult”, they are really saying they can’t do it. Since they can’t say no and save face, which is important in their culture, they have to convince you that what you are asking is difficult and hope that you will ask for something else instead.

The article also makes a great point of emphasizing the Preliminary Stage where the participants first work to establish a rapport with each other. In this stage, the participants should engage in non-controversial small talk to get to know each other and take advantage of any opportunities presented by the host to explore the city, history, and culture of the country they are visiting. This helps to dispel negative preconceptions and stereotypes on both sides of the table and increases the chances of a mutually beneficial relationship.