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Interesting piece on Chinese public sentiment following a tragic accident during the week. It’s only a vignette, but could it be an indicator of how Chinese negotiating needs may change over time?

Yue Yue, A young girl of two was run over by a car in a hit and run accident. Nobody came to help and the driver drove off without stopping to assist. The child was left injured in the road. 18 passers-by walked on and didn’t stop. It was only after she had been hit by a second car that people came to her aid. This story has prompted a period of moral reflection in China, about whether the Chinese have become so fixated with money and material progress that they have no time for morals. Lawmakers are even meeting to discuss whether they need to introduce a ‘Good Samaritan’ legislation.

This is interesting. Individual’s needs in life (and in negotiation) often go through a progression, starting with survival needs, and moving through to a need for reassurance, then respect, then belonging, and then through to achievement. Each level of needs must be satisfied in turn.

China has been on a fast-track journey of economic growth, catapulting its population through these various stages of need. Negotiations with the Chinese are often characterised as being very hard-nosed; which is consistent with levels of need such as “respect”. It is also consistent with a negotiating need to “belong” – to be taken seriously as a leading economic super-power.

However, as China’s population becomes wealthier, a new imperative for “achievement” develops. It was interesting to see in the Sunday Times that China is pre-occupied with a desire to develop its own original internet businesses rather than copying western internet […]

Negotiation and deal making is much more complex than many people think. You might be surprised to learn that with any deal there are seven different stages that the negotiation goes through, twelve possible behaviours and nine different sources of bargaining power.

An effective negotiator needs to be able to understand and practice the 3 angles of successful negotiation: Attitude (or ‘state of mind’), Process and Behaviour. For each of these angles, I will now outline 4 key points to help you manage your negotiations effectively.

Have a Positive Attitude to Negotiating

1) Know what you want – it’s important to keep your ideal outcome (or outcomes) in mind throughout a negotiation.
2) Believe you can get what you want – confidence is everything in negotiation. If you go into a negotiation lacking self-belief that will leak to the other side and your anxieties will be self-fulfilling.
3) Be interested in the needs of the other party – if you do a deal where the other side’s needs are not taken into account at all, they will seek to disrupt the deal either explicitly or covertly, even if they felt obliged to agree to it in the first place
4) Acknowledge that the use of negotiating skills is more important than the exercise of power. Again, if you force people into deals through the use of power, they will have no commitment to the bargain.

Understand the Process of a Negotiation

1) What is going on in the negotiation? – Are the 6 key ingredients in place for a negotiation to happen? Which stage are we at? Are we exploring the needs on both sides? Are we setting the appropriate climate for the deal? Are we bidding? Bargaining? Or […]

The situation in Iran grows ever more perilous. Yet there seems to be precious little desire to negotiate.

Iran is reputed to be no more than 9 months away from having nuclear weapons at its disposal. The implications of this for peace in the Middle East are rather serious. Israel is acutely anxious about permitting this state of affairs to arise. There has been a much publicised debate in the Israeli media about the timing of a pre-emptive strike on Iran. For a start this is a risky operation. Iran’s facilities are being housed deep in mountains near Qom and would be very difficult to destroy from the air, certainly without killing thousands of civilians. Even if the Israeli’s were successful, one can only imagine the dangerous consequences of a raid. Iran has plenty of conventional weapons it could unleash on Israel. It also has allies in Hamas and Hezbollah who would escalate their terrorist activities. Iran might retaliate against the West, through terrorist activity or through mining the straits of Hormuz, through which one third of the world’s oil supplies flow.

All of this suggests that a negotiation is desperately called for. Yet in the US would-be Presidential candidate Mitt Romney has promised military intervention if he is elected. Meanwhile the West has embarked on a programme of economic sanctions to underscore its disapproval. France and Germany have withdrawn their envoys and the UK has expelled Iranian diplomats in the wake of the attacks on the UK’s embassy in Tehran. As one exiting Iranian diplomat ruefully put it “remember that I am one of those who was ready to talk – even if we disagreed”.

Part of the problem is our own demonisation of Iran. Its […]

One area of negotiating research revolves around the game of “chicken”. This involves hypothecating what would happen if one car driver hurtles towards another at great speed down a single track. The first one to swerve to avoid destruction is “the loser”. Both parties in fact have an incentive to swerve to avoid the risk of mutual destruction if they both continue. However, if I swerve and you don’t I also run the risk of losing face and losing the game. This outcome is less damaging than the mutual smash which happens if neither of us blinks, but sometimes participants choose to carry on into a smash anyway. This is because swerving risks making us look like a bit of a sucker if the other person doesn’t swerve.

Does the outcome of the Rednapp/Levy discussions illustrate an extreme example of the game of “chicken”? Let’s consider the positions:

– Harry adopts the position that he will not stay unless he is offered at least two years
– Levy digs his heels in over a one year contract.

Each knows that if they don’t back down then there is a risk that the relationship ends – which is potentially bad for both of them and the club. Yet they choose to keep on their adopted path, refusing to blink in case the other side blinks first.

The result? A mutual smash. Rednapp leaves, but where does he go? There is no other top 6 club option available to him in the UK. Will he really be happy coaching in the Middle East? Possibly not, however much he is paid. Meanwhile Levy has to replace a popular manager who has been one of the most successful in Spurs’ history. This […]

Very often we have to negotiate in circumstances where a relationship has previously broken down, or breaks down during the negotiation process. This is not an easy scenario. Discussions against this backdrop may be marked by recriminations, mistrust, suspicion, mistaken presumptions about the attitude and motives of the other side, and a whole host of bad behaviours including sarcasm, contempt and aggression. This presents us with the question, how do you begin to repair a broken relationship?

Here are some options:

Recognise the problem:
Firstly, acknowledge the problem at hand rather than ignoring it. “We don’t seem to be getting on very well. What can we do to change that?”

Listen and offer an understanding:
Secondly, if you want to restore trust you then have to really listen to the other side. Active listening involves summarising and playing back to the other side feelings as well as information – “I can see you are very upset by that”…. One of best pieces of advice ever given to me as a negotiator was to “use your mouth and your ears in the proportions God gave you”. That means twice as much time should be spent listening in a negotiation as talking. This is particularly important when trust has gone astray. Listening also means acknowledging the validity of the other side’s feelings, “well, I can see why you are upset, looking at it from your point of view, even though I view it differently.”

Make positive changes:
Other tips include breaking the patterns of behaviour which have created the bad relationship. Change the venue where you usually meet. Change the make-up of the teams so as to introduce new players not affected by the same emotional baggage. If you never socialise […]

In my forthcoming book on the modern art of negotiating, “The Yes Book” I talk about a number of social trends which are combining to make skilful deal-making more important than ever.

One of these trends is “convergence”, the phenomenon by which technology melts the boundaries between different sectors and different parts of a supply chain so that everybody can compete with everybody else. In the old days there may have been a clear distinction between manufacturers, wholesalers, distributors and retailers in different sectors but technology means that is no longer the case. This means that companies have to be able to negotiate more effectively with partners – both to defend their own patch and to take advantage of the cross sector opportunities which convergence opens up.

Consider, for example, the Media sector where the impact of convergence is particularly clear. Here are some examples – notice how the opportunities all revolve around the ability to create deal partnerships which would not have been relevant prior to the current technology revolution. Good negotiation is at the centre of success or failure in responding to convergence.
(A) Advertisers are becoming content owners…

Red Bull is a good example of this.

They endorse a series of ‘extreme’ sportsmen and women and create branded content around that – viral You Tube videos, tv adverts or special one off programmes/stunts.

Whether it’s Robbie Maddison attempting to backflip across London Bridge on a motorbike (in July 2009) or Austrian daredevil Felix Baumgartner skydiving from the corner of space (24miles up) and freefalling at the speed of sound (in Oct 2012), two things are always present with the associated video content:

1) The equipment […]

The proposed deal for News Corp to buy out the other existing shareholders at BSkyB throws up some interesting scenarios in relation to the participants’ needs and how they can best be met. A quick look at the needs, bargaining power and behaviour patterns on all sides suggests that a deal will be forthcoming. But how this might be viewed in any investigation by the Competition Authorities is another matter.

Looking at the needs of Rupert Murdoch’s Newscorp it would seem that a familiar pattern is being played-out. The deal would provide a source of cash from BSkyB’s operations which are forecast to grow rapidly – by as much as 70% over the next 2 years. This would no doubt be useful to Murdoch’s media empire at a time when there is a reassurance need for cash-flow, as newspaper revenues plummet all over the world, and the jury remains out on whether this trend can be reversed through the introduction of the kind of “pay-walls” recently introduced by Murdoch for The Times newspaper.

In terms of other personal needs, there is no need to dwell long on the partial satisfaction of Murdoch’s ‘achievement’ need which this deal would also represent. The man has been executing headline-grabbing and ground-breaking media deals for 60 years, and is not likely to stop scratching that itch until he is 6 feet under, at the earliest. The deal is also another gratifying instalment in the saga of the Murdoch Dynasty, a family that loves to be seen to be commanding respect and attention.

That brings us to James Murdoch, who as CEO of BSkyB finds himself in an interesting position. It is hard to believe that Murdoch’s bid would have been […]

Tension is mounting on as China steadfastly refuses to allow its currency to rise in the way that other developed countries – especially the US – wish to see. This is driving a vast China trade surplus with the rest of the world, and the accumulation of huge currency reserves in China. It also makes it harder for Western economies and even other Asian countries to climb out of recession, as they can’t produce goods that compete with the price of Chinese imports.

Who holds the aces in this ongoing negotiation? China would seem to have plenty of cards in its hand – especially its size and market power. China also seems to bring a somewhat win/lose attitude to the negotiation table. This is presently driving some lose/lose thinking by the West and Japan. If China won’t revalue its currency upwards then maybe they will permit their own currencies to drift down in value to the Yuan? Or maybe they will reach for protectionist remedies to stop Chinese imports?

The truth is nobody ever won a negotiation by playing lose/lose, However, what would happen if the other developed countries could convince China to play win/win instead? In order to do this there needs to be a focus on what China needs from any negotiation. This is not a strategy of weakness. Rather it is a hard-nosed approach which relies on the fact that a negotiation focused on China’s needs is more likely to net a win for the West and other developed countries. The Chinese government leads a fairly precarious existence. It has managed to maintain One-party politics alongside the development of economic prosperity. Would that situation continue if that economic prosperity went away? Very […]

There is a perfectly positioned fruit stall just outside Holborn tube station. Anyone walking along High Holborn has to go straight past it and it is always beautifully arranged first thing in the morning. People frequently stop there and buy fruit for the day or for the office.

It has a lot going for it in terms of bargaining power as there is no other fresh fruit stall nearby, and the trader who runs it seems to have plenty of expertise. There’s only one problem, which is that the stall owner bellows out his offers in a way that is attention-grabbing but impossible to understand. He sounds like an Evening Standard newspaper seller bawling out the name of his paper incomprehensibly – just like the famous Morecambe and Wise sketch where Eric is selling the “Eening Stannit”.

The issue with this is that when negotiating, if you are making a bid, the other side does actually need to understand what you mean. If you are impossible to understand, then it’s less likely that people will accept your offer. I’m sure this fruit stall does pretty well, but how much better might he do if passers by actually understood the offers he was making? Then he really could be top banana…

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