Negotiation Lessons from the Chen Guangcheng Incident

Negotiation Lessons from the Chen Guangcheng Incident

What are the takeaways from the unfolding Chen Guangcheng incident, and what can US managers in China learn?

1. Focus on deal deliverables. American negotiators are too quick to declare “done deal, mission accomplished”.  We think that negotiations begin and end at finite times – and that a signed deal ends the discussion and locks everyone into place. Chinese negotiators don’t believe that. To them signed agreements are just milestones in a never-ending journey. Your gain today just drives them to work harder to find new ways to even things out next time. This will be over when Chen Guangcheng is in NY– but the cameras have already started turning towards some other more gawk-worthy event. Maybe GCG’s pleas to ride on the same plane with Sec of State Clinton weren’t so naïve after all. The takeaway for managers is that you have to maintain your focus — and include your HQ in the process — well after the documents are signed. Prep your people back home for a long post-agreement negotiation, and make sure they understand that the signed contract means little more than an acknowledgement of the latest iteration of the agreement. A China deal is never done until the money is in the bank (or the dissident is on US soil).

2. Build good goals that make sense in China – not just at HQ. Your strategy has to be logical and workable in China, and have some relevance to on-the-ground reality. The US State Dept. doesn’t issue a single statement on China without talking about the importance of human rights, the need to protect human rights, the sanctity of human rights. Why, then, didn’t the embassy have any kind of contingency plan in place just in case someone actually took them up on it? Corporate managers might think that’s funny – until someone asks them to put up or shut up on their “people are our number one resource” or “we are partners forever” pledge. Chinese can flatter the paint off a battleship without actually promising one single specific thing. It is a skill that American negotiators would do well to emulate. Don’t say it if you don’t mean it.

3. Have a plan. This is different from a goal. Americans are notorious for flying by the seat of their pants, and making things up as they go along in China. It’s not funny anymore. Have none of the State Dept. people ever heard of risk management or decision trees? If we do Action A, what will the other guy do? The Chinese side promised that CGC would not be hurt if he left the embassy. “We have their word.” Great – but these are the same people who swore to you that he was never mistreated in the first place. What were your negotiating variables? What were you using to verify compliance? What was the back-up plan?

The Chen saga unfolded just as the annual Strategic and Economic Dialogue talks were being set up across town. The Americans doing the day-to-day Chen handling were probably lower-middle tier of managers who could be spared from the truly high-level debates about which delegate would enter which door first when the Supers arrived. The Chen incident had all the hallmarks of the kind of over-delegation that undermines so many deals in China.  At the point Chen left the embassy, there was no agreement, no plan, and no meeting of the minds between US and Chinese counterparties. It looks like the US side caved on threats and allowed Chen to make a bad decision – just so that the embassy staff could wash their hands of the whole scary matter without any serious thought as to what could happen next.

4. Know what a win looks like. Plan for success. What if things actually work? What if people believe you? This is true for the embassy negotiation on two levels. First — what if you do actually win hearts and minds, and people look to you for answers? State seems so accustomed to Xinhua editorials and diplo-speak that they were caught completely off-guard by a regular human being that actually took them seriously. Even if you don’t want dissidents, protestors, or abused victims showing up on your embassy doorstep, surely there should be some kind of protocol in place.   The second challenge is knowing how to chart a successful course to your own goal.  Once you are already in the soup and you find yourself the guardian of a blind and injured victim of another government – what is your definition of an acceptable outcome? Shoving him out the door and hoping for the best doesn’t pass muster. Our negotiators didn’t know what a win looked like, so a positive outcome relied on luck and the kindness of strangers. American negotiators in China tend to plan for failure — we lead with the lawyers, include penalty clauses in thick contract documents and prepare for all kinds of negative contingencies. Too often we are caught off-guard by success and the faith of those we most need.

5. Ask what can go wrong? – and then act on the answer and prepare. Plan for success, but prepare for failure. Giving the bum’s rush to a blind, injured, hunted, human rights hero was one of the most humiliating moments for America since Abu Ghraib. It was a lucky accident and the courage of others that snatched victory from the jaws of defeat – so far. Hopefully whoever pushed this beautiful bumpkin out into the cold is already on a plane for a long, long posting in Angola or the Bering Straits. But if things had gone badly for Chen (and they still might), it will negate all the good work the State Dept. in particular and the US in general have worked so hard to accomplish. US managers have learned the hard way how quickly events and perceptions can spin out of control in China. Contingency planning isn’t an option here – it’s a high-priority requirement at every level of your organization.

6. Negotiation with China starts at home. US policy in China can be summed up as Clinton vs. Geithner. Sec of State Clinton is our voice on human rights, US values, and the spokesman for those who can’t speak for themselves. Sec of Treasury Geithner speaks for US commercial and economic interests. Neither is bad, but they don’t coexist naturally or organically. Many US companies have similar internal conflicts within their HQ, and that’s not a bad thing. But decisions have to be worked out BEFORE you start negotiating with the other side. Any competent Chinese negotiator knows how to play one side against the other. When our embassy staff took the path of expediency in allowing Chen to leave the safety of the embassy, it gave all the appearance of a bad compromise being made at the highest levels of the US decision- making chain. On-the-ground international managers in China often find themselves victims of the same process and forced to make a bad compromise that will push an ugly conflict under the rug right now — even while they know it will certainly rise as a much bigger, more threatening crisis later.

7. It ain’t over ’til it’s over. Don’t call victory after the first handshake deal (I’m looking at you State Dept.) and don’t hit the panic button at the first bump in the road (R-Money, Fox Team — you know who you are). In retrospect, almost no one is coming out of this looking dignified or competent. (Mr. Chen — we love you but Hillary Clinton is the Secretary of State of the United States- not your neighbor’s hot mom. Decorum, man. Decorum.) Chinese negotiations hardly ever end when you want them to, and never when you need them to.

Bottom line — the good guys got lucky this time. Chen Guangcheng’s escape is still not a sure thing — and the execution of this operation was more Three Stooges than Mission Impossible. Entrepreneurs and managers doing business in China should learn from the mistakes of others and walk into Chinese negotiations with a plan, a unified front, and a viable exit strategy. Hoping you’ll get lucky works once in a while, but it’s a losing strategy over the long run.

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