Are negotiators in the Western world stupid?
My recent blog on the current approach to negotiation reported that 70% of business-to-business negotiators never meet their counter-party. Still worse is the fact that email is the most frequently used mechanism to support those negotiations. Working with my friend and expert Keld Jensen, we will shortly issue a much more comprehensive report on our findings and their implications.
Such an approach is alien to Asian culture, where evaluating the integrity of a potential partner and building a relationship with them is seen as being of paramount importance. “How can you know someone you never meet?” was one of the questions thrown at me in conversation with a cross-cultural expert. “Social and behavioral cues are fundamental to a negotiated agreement. Email is acknowledged as just about the worst medium you can use”.
As IACCM’s research showed, in a high proportion of negotiations there is not in fact any intention to negotiate. The interaction is positional and power-based, seeking to impose ‘compliant’ terms on the counter-party. Many negotiations in the Western world are formulaic and process driven. There is little or no effort to understand the counter-party, to seek sources of added-value or to build a relationship. Indeed, until recently, many procurement groups have been trained in such thinking, to ensure their laser focus on savings and compliance.
For many in Asia, such an approach is a mystery. How can you do business with someone you don’t understand and where communication is so limited? Isn’t it obvious that this will result in disappointing results, missed opportunities, Increased disagreements? Hence, if it is obvious, it is a stupid thing to do; and if it isn’t obvious, perhaps it’s the negotiator who is stupid.
While such a conclusion may be rather extreme, it is certainly worth questioning the impact of today’s negotiating methods. There are better, more intelligent ways – and that will be the focus of our imminent report.
Great article. To go further, there are purchasing departments that regard relationships as inherently bad and change buyers every few years to avoid them.
Also, I think there’s a variation within Europe. To generalize, more northern countries don’t see the importance of relationships. southern countries do.
Dick