While talking to business associates taking the plunge into global markets for the first time, I was struck by how their initial enthusiasm for making international deals had faded into frustration.
Partly, the early-stage energy and adrenaline that comes with new adventure and opportunity had been dealt a blow by long nights of handling issues in far-off time zones. Also, they saw the rapid pace enjoyed in first days grinding to a crawl.
Cutting deals in America tends to be a contact sport — the parties and their legal surrogates battle but reduce the crux of a deal to a few critical issues as quickly as possible. In Asia, however, it’s less a game of impact and more a matter of testing patience, determination and stamina.
To keep your deal from hitting a wall:
Don’t be surprised by anything
The opening response may be an outright rejection or an absurd counter-offer. Don’t be rattled by this. Simply listen, absorb and ask clarifying questions.
Such an aggressive technique may be a misunderstanding or a deliberate move to have your team unsettled at the start. In either case, the best course is a calm, measured and methodical response.
No unilateral concessions
In any deal, there will be give and take but in global deals, perhaps the worst unforced error is making concessions without a trade in other terms or in the scope of effort. This suggests your initial offer was merely a ruse to see if the other party would accept a one-sided offer.
No matter how they respond to your first offer, make your adjustments a matter of trading elements of the deal, not just dropping price.
Move in small steps, but always move
The second worst error is refusing any motion, just sitting and forcing the other side to a decision. This is often memorialized with the infamous “best and final offer.” Once you close off alternatives and force a showdown, ego and loss of face can kill an otherwise workable deal.
Options are better than ultimatums
When the first (or fifth) offer has been rejected, rather than an outright concession, offer a range of options. Present multiple trade-offs covering things from payment terms and price to adjustments in volume, delivery and service levels.
The more options on the table, the more ways your potential partner can play with the pieces of the puzzle to find a mutually satisfying arrangement.
Close the door if you must, but don’t nail it shut
After a difficult negotiation, sometimes you can’t suggest enough alternatives to keep the discussion alive and the requested changes can’t be accommodated.
In those cases, walk away but always do so with respect and with an open invitation to talk again. Circumstances may change and deals can be revisited if the ending is positive, dignified and gracious.
Americans love to push and “get down to brass tacks.” Our impatience and eagerness can be a great strength, but in the international arena it must be tempered and seldom given voice. Overseas the better negotiators play chess, not football.
David Iwinski Jr. is the managing director at Blue Water Growth. A global business consulting firm with extensive experience and expertise in Asia, Blue Water Growth services include merger and acquisition guidance, private capital solutions, product distribution, production outsourcing and a wide variety of business advisory services for its Western and Asian clients.
