An American negotiator we know in China thought he was being a smart, heads-up negotiator. He directed his Shanghai team to put a buy-back clause in a recent purchase order to their local supplier, giving his company some downside protection. When his company purchased material XYZ last year, the seller was required to buy back an unsold percentage of the order at the same price. This American then told his boss they are bullet proof. All good.
Nine months later, the warehouses in California are busting, but the Chinese supplier is still sending over boatloads of the stuff. Our American friend stops new shipments. Twelve months later, they are still swimming in XYZ. Our guy wants to pull the trigger on the repurchase agreement, and send back 33 percent of 2012’s order.
China Staff Has Split Loyalties
He gets huge resistance – from his own Shanghai office. His team. His boys. His own crew is telling him that it is impossible. It is suicide. That it will kill their China business. That they will lose face. Now he has got to fly out to China to persuade and mend fences – with his own people.
Do not try to solve Chinese problems with NY solutions. You have got to negotiate with your own team — first at home, then in your own China office, and finally with your Chinese counterparty.
The China Team Knows You Can’t Win
If your China office is siding with the other guy in your dispute, then you have lost even if you win. And you will not win. Your China office already knows this.
American negotiators are often considered the problem – not part of a solution – by their own China teams.
Present a Common Front in China:
1. Better communication . When they pause and look away, it does not mean you have a great idea. Get real consensus – not forlorn capitulation from your front-line. In China, silence does not indicate agreement.
2. Incremental solutions. Americans like trigger points and definitive resolutions. We like checking off the boxes and moving to the next item on the To Do list. Chinese managers are happier with partial solutions that keep a lot of balls in the air. It may drive American managers nuts – but this is their preferred management style.
3. When it is us against them in China, you are almost always part of “them”. If you want to take the time and effort to really integrate your Chinese team into your organization then that’s great – but most Americans simply are not willing to take the time and trouble until it is too late. Building one big happy cross-cultural family is a noble goal – but you have to face up to the fact that your China people are there for the paycheck. They are unlikely to permanently burn their local networks to enforce a contract or clear a bottleneck that you will forget about next week.
4. Do not be the problem guy. If the only time you talk to your Chinese team is when you want them to help you fix a problem, then their main mission in life will be to minimize their contact with you. The means being slow to respond to your requests, withholding information and not volunteering information that could really solve your long-term problem.
5. Get their input about a solution. Chinese staffers have come to expect two things from Western managers – they cause new problems and they make existing problems worse with terrible, ill-conceived and clumsy solutions. The only thing worse than being the problem guy who only calls when something goes wrong is being the oaf who tries fixing a sticky doorbell with a cannon. Your China team has ideas about how to set things right, but they may be terrified to volunteer any information.
By Andrew Hupert, founder of ChinaSolved.com, an online platform that helps the international business community achieve greater success when doing business in China. He also writes ChineseNegotiation.com. He can be reached at [email protected].