The G20 taught us an important lesson about cross-border negotiation. Was it about building consensus and presenting powerful, persuasive argument? About dovetailing different positions and finding news ways to add more value to the discussion? About power tactics for seizing the high-priority deal points? No. We learned about the importance of good photo ops and great post-event spin efforts.
I am not being sarcastic or belittling at all. I think that the G20 was a huge success. All you have to do for a moment is to consider what the possible downsides could have been – nationalistic acrimony, suspicion, protectionist pandering and trade war. Almost as bad as conflict would have been an attempt by world leaders to reach substantive agreements on complex, international financial matters by themselves.
No, our guys did EXACTLY what they needed to do: Say whatever you need to say to save face and be friends – and then argue about the real stuff later. They agreed to big picture, goal-oriented, win-win promises. It all sounded great – and nothing is binding. But we all feel better about it. Markets are optimistic, everyone feels better and the gloom seems a bit more distant. Good effort guys.
The Lessons for US-China Dealmakers
Why is it so important to know that? Because Obama, Hu, Brown & the rest of the G20 leaders avoided the mistakes many of us make in day-to-day cross-border negotiating. When western negotiators find themselves in tough spots, they sometimes piss off the people across the table – and that’s a pretty poor outcome. While the smiling photo-op may be only a small step towards a distant goal – an upsetting loss-of-face will be a HUGE step in eradicating all of your hard work. That’s what we’re hoping to avoid – at all costs.
So your BATNA (Best Alternative To No Agreement) had better include, “maintaining cordial relations with today’s counter-party, regardless of the outcome of our conversation. Many western come to China on a very tight schedule, and as they jump from meeting to meeting over the course of a few days – it can get pretty hectic and stressful.
Timing is everything – in more ways than one
This is an important thing to remember about negotiating overseas. To you its like speed-dating. You’ve got a very limited window to work with. For the home team, it’s one or two meetings. They’ve got forever, and they’ll try their best to use that imbalance to their advantage. As the clock ticks down and you get anxious and stressed-out, they know you’re more likely to make mistakes – including losing your temper or agreeing to last minute changes just to get something done. Learn from the pros – big-picture understandings and technical details are separate negotiating tracks. If you are in town for relationship-building and goal-setting, keep your cool at all times. Any mistakes you make in the early stages is going to cost you dearly when the experts and technicians start haggling of the details.