American weddings have a charming custom of not letting the intended groom see the bride until the ceremony is well under way. Chinese negotiators have a similar custom – though it’s a good deal less charming. In many companies, the real decision-maker never takes part in the actual face-to-face negotiation. Instead you deal with a subordinate – who may have a great title and seem to be in a position of authority. But he doesn’t have the power to say YES — only NO. Someone behind the scenes is calling all the shots, and the person sitting across from you is just following instructions. He will seem to have a lot of authority when he is trying to get you to make concessions, but every time you ask him to reciprocate he tells you that the company has a policy against this.
How do you deal with this?
1) Make the initial negotiation about information. Find out who makes the decision, what they care about, who your competition is, and what their boss’ goal is. Your negotiating partner may be willing to give you lots of useful facts and figures. I’ve had people tell me exactly how I should structure my proposal so it had a better chance of success. But you should also expect to run into your share of tight-lipped, anally retentive jerks as well. There are 1.3 billion Chinese people, and every single one is different. Take your shot at building a rapport, but don’t count on it.
2) You are may be dealing with a low-status person who can’t make any important decisions. Accept it, and act accordingly. Either use him as a conduit to the hidden decision maker, or call it a day and go home. Don’t waste your time arguing, cajoling and getting worked up. It’s not his fault – he would probably love to engage in a genuine negotiation with you if he could.
3) Gather as much information as possible and face the facts that you will probably be walking away from this one. There’s a reason Chinese companies use this strategy, and it’s not so that they can raise your comfort level and build long term, win-win relationships. They do it because it’s an effective way to gain a one-off advantage and evade responsibility. The customer service and quality at these places probably isn’t that great – and they are a real pain to try to collect from if you are the seller. Good thing you found out early.
4) In the end, your only leverage may be making the counter-party lose face. They don’t care about profit or deal terms – they care about what their boss says. If they have to tell the boss that the Great White Whale has gotten away, it’s going to make them look terrible. This is not a great option if the person sitting across from you is a decent person, but your not here to make friends.
5) Have multiple counter-parties. Don’t let one uncooperative counter-party control your schedule. Take your time and find acceptable alternative partners. The person you are trying to negotiate with may not be helping you get the deal with HIS company, but he may help you get the deal with someone else. He will explain to you what the market is like, what quality levels you can expect, what general price levels you can expect and what your baseline deal terms are.
Many of my more successful negotiations have taken place while I had one foot out the door. You don’t have to make it personal. Practices this phrase until you know it by heart and can say it while faking a smile, “Unfortunately we wont’ be able to do business this time, but maybe at some point in the future our situations will be different.” Then start walking.
The key to successful negotiating in China is to gather as much information as possible. Don’t get emotionally involved with a deal by feeling that you have already invested so much time and energy to get as far as you did that you become unwilling to walk away. Remember – no one in China gets more cooperative after the money changes hands.