Marco Germani has been guest writing for Influence PEOPLE for four years. He’s written his own book on persuasion and applies the principles of influence daily as he travels the world selling wine. I encourage you to reach out to Marco on Facebookand LinkedIn.
Brian Ahearn, CMCT® Chief Influence Officer influencePEOPLE Helping You Learn to Hear “Yes”.Three Keys to Consider when Negotiating with the ChineseA few years ago I attended an influence workshop put on by Robert Cialdini, Ph.D., where the last part of the seminar was dedicated to applying the principles of persuasion to different cultures around the world. My understanding was the principles were immutable and universally accepted all over the planet but in fact Dr. Cialdini explained that in different cultures some principles are much more effective than others. As an export manager in the wine business, spending over 70% of my time traveling around the world and making deals, I started to pay attention to this aspect and I realized that Dr. Cialdini was absolutely right! What works in Italy is sometimes less effective in Germany or in South Korea, and the best way to carry out negotiations in the United States could be totally ineffective in Japan.
In this week’s post I would like to focus on China, a country which I’ve had the chance to visit many times over the past seven years and which can be considered one of a kind in many aspects, including the way Chinese negotiate and persuade. This subject could be very vast but I would like to point out three main differences in the Chinese way of negotiating because this understanding can make a big difference if you ever find yourself doing business in China.1. The concept of “face” (Mian Zi)“Losing face” is considered one of the worst things that can happen to a Chinese person. Being diminished or worse, ridiculed, in front of others, is the ultimate humiliation in China and this must always be taken into account when negotiating. If yielding to your conditions could even remotely generate the feeling that your counterpart was wrong, proposed something inconsistent, or that makes him clearly “lose the game” when negotiating, the deal simply will not happen. This extension of the principle of social proof is a very sensitive subject in Asia and Chinese people in particular seem to care about it even more.A Chinese boss would never criticize or admonish a subordinate in front of others, as this would cause him to lose face. When bargaining in a street market a Chinese vendor would prefer to lose the sale rather than accept your first price. Taking this into account means always giving a way out to your counterpart in order to help him “save face.” It is surprising how many Westerns ignore this point and have trouble negotiating with the Chinese. If the negotiation is seen as a battle, in which a party wins and the other loses, in China the two parties are almost always bound to lose simultaneously. The “win-win” concept introduced by the late Stephen Covey in his best seller The Seven Habits of Highly Effective People is more relevant in China than elsewhere. It can be the deal maker or deal breaker, whether in a business or personal negotiation with a Chinese individual.2. The concept of relationship (Guan-xi)Business IS all about relationships and everybody knows it. In the newest edition of The Pyramid of Sale by Brian Tracy and other renowned sales trainers contend that the pyramid base is building relationships and trust with the customers, whereas in the past it was the presentation of the product. In China this concept goes even further. The nearly untranslatable word “guan-xi” literally means “network of relationships” but it has a deeper meaning, including how well you are perceived by influential people in your network and how you are able to help your business counterparts network with the influential people you know.When starting to negotiate with a Chinese person, the fact that you have common friends, or the fact that you have relationships with relevant people who might turn out to be useful to your counterpart, can give you a huge advantage. I consider this an extension of the principle of liking even though it has a deeper and subtler meaning.The skilled negotiator, when entering into a discussion with a Chinese person, will take care to inform the other of the influential people he knows or has business relationships with, letting the other understand that, if the deal between the two of them is made, this influential network will be put at his disposal as a natural consequence of starting a partnership. The problem with this attitude, which is widely used by Chinese people when negotiating with Westerns, is this; the information shared is seldom accurate and often purely instrumental to get a vantage point in the discussion. Let’s pretend I am trying to sell wine to a dealer in China. He might state that, if I accept his conditions and start a partnership with him, that he would introduce me to his best friend, the buyer of the largest Chinese retail chain, whom, thanks to his introduction, will seriously consider doing business with me as well. This is obviously just a negotiation technique, which appeals to the greediness of Western business people and in part to their ingenuity.3. The concept of circular thinking The last crucial information to know about when negotiating with the Chinese is the difference between the Western “linear” thinking and Eastern “circular” thinking. A few years ago I was involved in a long negotiation with a Chinese buyer of frozen pizza, produced by an Italian factory and to be distributed in several regions of China. This was going to generate a considerable amount of business for the seller. The negotiation went on for weeks and it seemed like we never reach an agreement. Every time there was a new issue popping out: exclusivity, special recipe for the Chinese market, color of the label on the package, selling price, payment terms, etc. In the end, and after several meetings with the owner of the company in China, a contract was finally written and it seemed to suit both partners. We celebrated together in one of those infamous Chinese banquets for more than five hours with alcohol flowing freely.A couple of days later, when the Italian CEO had already left China, I was incredulous when the Chinese buyer called me and he said he would like to meet me to again discuss several points of the contract. It seemed like all of the past efforts were useless and we were back to point zero. This was because I did not understand at the time the concept of “circular thinking.” For Western businessman reviewing an already signed contract means there’s something wrong with it which needs to be changed but for a Chinese businessman this might only mean they really would like to review the points and have them restated, not necessarily that they don’t agree with them or they want to change them. It is part of their culture and the process makes them feel safer and reassured. This must always be taken into account when negotiating with the Chinese. Reviewing over and over already established points is not a bad sign or a waste of time, it is just part of the natural process of negotiation in China!As said, the subject is much wider than this and I have treated it extensively in my eBook Business con la Cina (Bruno Editore – 2010, only available in Italian at the moment but maybe one day I’ll have it translated into English). For those who speak Italian, you can find it here www.autostima.net.
Marco Cialdini “Influence” Series! Would you like to learn more about influence from the experts? Check out the Cialdini “Influence” Series featuring Cialdini Method Certified Trainers from around the world.