Yesterday I was hosting a so called “Peer Lab Session” in Gothenburg. The essence of a Peer Lab session is that professionals bring in cases they have difficulty with at work, and get useful input on how to handle these cases from peers. I facilitate the process, and ensure maximum learning is gained from the sessions.
One person brought in a case about negotiation: a supplier of a big chemical processing plant was not living up to his service commitments. Materials for big machinery had been delivered, but the associated service to install everything was not provided. This situation lasted already for more than a year. This stopped the production lines, and the company was now in a critical situation with it’s end customers, who were waiting for deliveries.
Our analysis was straightforward and our solution consisted of 3 key steps:
- get the contract and detail out the service commitments that had been agreed
- involve the lawyers, and prepare a case
- escalate the situation to the highest level in the supplier company.
This should do the trick.
Only much later we all realized we had been wrong. The supplier was a Middle East company, and the company involved was a Western industrial. We realized that our Western perspective would most likely only make things worse.
The Western style of negotiation is confrontational. There is a dispute (conflicting interests) that needs to be resolved, and the full focus is on the transaction at hand. The written contract for Westerners is the holy grail, detailing out exactly what should and should not be done. And not living up to a contract is unacceptable, and usually leads to disputes in court. An independent party – with the law in hand – decides on a ‘black-and-white’, right-or-wrong’-basis who wins the case, and who loses.
The Middle Eastern perspective however is very different: negotiations are held in the spirit of common interests, looking for proof that the relationship between the parties is solid enough to avoid contracts and legal obligations. A common interest – rather than a dispute – forms the connection between the parties. And a contract is there to underline intentions, while both parties know that if circumstances change, you can call upon the other party for help. In that case the contract is of not much value anymore.
Using this perspective to the above case, we came to three different steps to be taken:
- Get back to understanding the common interests. Do not over-analyze the past, but find out in the present what the other party is after, and what you are after in this stage of the process. Interests may have changed, so find out what both parties commonly strive for today.
- Understand the behavior of the other party. Given their interests – that you found out in step 1 – find out why they behave the way they do. Assume they are acting with good intentions and that they also want to be successful in their market, what makes them do what they do? We often tend to describe the behavior of others as unfair and irrational. But assuming they act in a fair way and with good intentions, what drives their behavior?
- Get back in touch. Do not communicate with angry e-mails and through lawyers, but communicate face-to-face and directly. Involve the proper hierarchical levels, visit the other company and ensure you talk again about common interests and shared objectives. Do not accuse: speak about intentions and interests. Do not emphasize the contract too much: in their view this contract became outdated when the circumstances changed.
Interesting exercise for me. Reflecting on the case later in the plane, I realized that initially I was very much in the mindset of win-lose. Sue them, enforce living up to the contract and involve the lawyers. This would have resulted however in years of legal fights, a complete escalation of the project and even further reduced trust between the parties.
In this case, it was needed to first step back from the case and look in the mirror: what am I doing that causes the other party to behave the way they do? Then understand the other party: given their culture, why do they act the way they do? And third, deciding on the right course of action (which quite likely is different from what your heart told you to do). This three-step approach is the basis for any intercultural negotiation, as I describe in my book Managing Through a Mirror.
Is this the right approach in this case? I’m confident, but we’ll know the result in a few months only!