Negotiating in China — Avoid Setting Arbitrary Deadlines

    American negotiators in China are often tempted to set arbitrary deadlines in an effort to put pressure on their Chinese counterparties. Tread carefully – once you start blowing deadlines in China it can be hard to stop.

President Obama’s health care plan seems to be running into trouble and it may be reflected in his wavering popularity. How do we know that the plan is having problems? Because the Obama camp blew out its own self-imposed deadline. They set the terms of success when they announced, “a passed vote before the summer recess”. It was everything you want from a SMART goal – Specific, Measurable, Actionable, Realistic (to them) and Time-bound. The problem the Obama people face now is that now they have failed on their own terms and it makes them look weak, bumbling and vulnerable.

This brings us to the subject of the China Timetable. Setting a deadline for project or negotiation seems like a good idea while you are sitting across the table but the problems occur later when that first deadline gets missed. And there’s a very good chance it will be.

Now you’re faced with a choice. You can retreat quietly and shift to a more flexible, fluid time management approach – often preferred by the Chinese side. Or you can redouble your efforts to enforce a schedule that your Chinese counterparty may perceive as arbitrary. This option is tricky because you’ve already failed in a very public manner. Not only do they know HOW and WHEN to slow you down, but now they have a great answer to WHY – because it will undermine your entire post-deal negotiating position.

When setting timetables in China, keep these ideas in mind:

    1. Don’t tip your hand unnecessarily.
    Deadlines tell people a lot about your business – and a lot about you. If you are visiting China to negotiate a deal, don’t tie deadlines to when you are going home. If you tell the counter-party that you need to finalize an agreement before your plane leaves at 4:00 on Friday, you won’t really start negotiating until Friday lunch – no matter when you arrive.

    2. Have a reason for the date that doesn’t make you sound like an arbitrary martinet.
    Be careful to include plenty of slack time if you have time pressure. Be familiar with the Chinese calendar, and know when the national holidays are (MUCH trickier than it should be, because they seem to vary the length of holidays with the state of the economy).

    3. Use an INCENTIVE based compensation program that reinforces your timetable.
    Don’t dump all your money on the table at the start of your project and expect things to get done on time – once your counter-party has the money, your relative power in the relationship plummets. Tie pay-outs to measurable business milestones. Don’t try punishing with fines or penalties for missed deadlines – it makes you look like a jerk and defines your relationship forever. You are better off with cash bonuses or other rewards for hitting targets.

    4. Consider giving the Chinese side visibility into your own operation to explain timetables.
    This is a tricky one, because you might be scrambling to keep your guy from knowing anything about your business. Use your judgment, but if you are building a strategic relationship and your counterparty has already seen you naked, then consider spending a little time talking about WHY you need a specific timetable.

    5. Have a Plan B.
    Time is the killer variable for Americans coming to China. You are fast, they are slow – and for some reason you still think that gives you an advantage. It doesn’t. Have back up sources and build slack into your schedules. Project management is more important in China than in the West – and that’s precisely why it is more difficult. Make sure you have options at every turn.

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