Bridging business etiquette between east and west

10 January 2013 | Tim Phillips


Memo to Westerners doing business in Asia: shut up. “If you can’t remember when to bow, how to give a business card or how to give a toast, or what colour paper to wrap gifts in,“ says David Iwinski Jr., managing director of Blue Water Growth and 24-year veteran of East-West negotiation, “I have one word of advice: listen.”

“On the American side we are very anxious to display our prowess,” he explains, “Sometimes it shows our insecurity, sometimes a feeling of superiority. In either case, we talk too much too soon. Let the client share their ideas. If [American negotiators] are quiet for an hour and thoughtfully listen to the client, then they get a better negotiation, because they learn how best to approach the deal.”

This problem is compounded when the Asian negotiators respond to the pitch by asking a basic question – for example on price or capacity - and the Western negotiators, unwilling to commit, avoid giving a straight answer. This standard (though occasionally irritating) feature of negotiations may inadvertently imply a disrespectful lack of trust in China, Iwinski warns.

“As long as there is a feeling of sincerity and goodwill, a Chinese negotiator will usually be pretty tolerant. If they perceive you are trying to cheat them, even if you are not, then it is ‘meeting over’ for ever. If it was an innocent question, something you should have known off the top of your head, they are thinking, what other things might you be hiding?”

Since his first day out of law school, when Daimler Benz packed him off to a negotiation in Singapore (“I’d never been out of Pittsburgh before”), Iwinski has specialised in setting up joint ventures, investments and other successful contract negotiations between East and West, often for telecoms clients. Having lived and worked for many years in both China and India, he specialises in bridging the cultural gaps that spoil negotiation.

Iwinski will coach an American client before the important meeting, sit in on the negotiation and, if things go awry, administer a pep talk. For example, a recent client was smart, but too smart for its own good: the senior executives underestimated how difficult it would be to avoid reverting to their normal behaviour under pressure.

“They made every mistake known to man in the first meetings. They were culturally inappropriate, their body language was terrible, they were even so foolish as to assume that all the other people on the other side didn’t speak English, and so they would make disparaging comments out loud. Incredibly dumb.”

Fortunately, Iwinski had arranged for them to arrive early. He had scheduled unimportant meetings first, in case this happened. The deal wasn’t done until Thursday, by which time they had learned from their mistakes on Monday, Tuesday and Wednesday: “We are often too anxious to get to the big meeting. We need to get out and fall over a few times in ways that are not serious,” he counsels. It’s often a mutual falling over. Chinese companies worry to him afterwards that they forgot their coaching too.

Compared to the early days of globalisation, there are fewer bad falls. While Iwinski doesn’t expect the cultural problems around negotiation to disappear in his lifetime, there is now more mutual understanding. “In 1988, there were many Americans who negotiated John Wayne-style. They were the new Sheriffs in town. Most Americans have a come a long way from that. In 1988, they wanted the work but maybe didn’t need it; now they need it too.”

The hardest problems to fix? Perhaps the western habit of thinking that a good negotiator is someone who gets everything that he or she wants, and then holds the “partner” to the terms of a lopsided agreement using legal muscle. It is normal in Asia to return to the negotiating table if a contract is proving difficult to fulfil at the agreed price, Iwinski says, so don’t be surprised if the new business partner comes back to tell you that it’s a harder problem to solve than they thought. What is sometimes interpreted as a trick to extract better terms may simply be a cry for help.

Renegotiation rather than blame allocation may be the best route forward, he says, because you’re avoiding a contract that can only be fulfilled by that supplier secretly cutting corners. “Don't be offended: they are being sincere, because they want to try to find a solution. These are the things that friends do for friends.”

Tim Phillips can be contacted at: tim@timphillips.co.uk