Jan 29 2008
“win-win” in negotiations
DiligenceChina (hereafter “Diligence”) has not been updating its blog much recently, but I was catching up after the Holidays when I noticed the post discussing negotiation styles with Chinese older and younger generations. I didn’t find much practical application out of the posting, but I did want to highlight some parts.
First Diligence asserts that negotiating is different between people who are 35-40+ and mid-30′s or younger:
The younger generation who had a lot more exposure to international deal-making, and have witnessed the march of the MNCs into Shanghai and Shenzhen (and Beijing, Tianjin, Guangzhou etc.) are coming of age professionally. These guys are technocrats who probably don’t have much in the way of family or political connections.
Whether or not they have connections, it’s true that they are more accustomed to western style business. Diligence then states:
The older guys are still calling the shots using the old playbook. Fine people, and they mean well. Great with kids. But they don’t know from cooperation or long term business with strangers. This demographic is slicker and sound better than they did in the old days — and it is possible to do significant business with them. But these men were a transitional management team that operated between the opening of China’s economy and the development of a mature market system (ie: now). They grew up in the old system – where they were taught and trained by pre-reform appointees.
If you approach this older generation with the ‘win-win, let’s all work together to make the pie bigger’ line, you are going to encounter serious trust issues. The expensive, bad kind of trust issues. You have to make sure that you are building serious controls and feedback loops into the contract and the formal operating plan. (Yes, you need a formal operating plan.) That includes HR and Finance. And Sales. You get the idea.
And this is where I agree. Partially. I agree that win-win doesn’t work with the older generation. However, I don’t think win-win works with that many people unless there really are solutions where its possible that the two sides are “getting to yes”. Otherwise, I think win-win makes most people suspicious. And being westernized Chinese, younger than mid-30′s myself, even I am skeptical of win-win. (I took negotiation in law school and thought that the theories were pretty lame)
My take? Try win-win at the beginning, but don’t be surprised if the other side has trust issues no matter what the age or sophistication. This applies in China or anywhere else for that matter.
