Business Negotiation is Warfare in a Suit

Imam Abu Hamid Muhammad ibn Muhammad al-Ghazali, the Persian philosopher and theologian, once observed that before we speak of a cup, it is important to know what a cup is.  I have always begun with definitions for the same reason.  Even when two parties share a language, misunderstanding remains entirely possible.  Everyone arrives at a conversation carrying the baggage of their own experience, viewing the exchange through a prism shaped by history, education, and whatever role they occupy in the relationship.

“Negotiation” refers here to any discussion undertaken with the intent of reaching an agreement.  The word entered English in the late fifteenth century, denoting the act of dealing with another person, derived from the Latin “negotiation”, itself from the verb “negotiari”.

“Culture” entered English somewhat later, in the mid-nineteenth century, from the Latin “cultura”, meaning tillage.  Culture was originally tied to the practices of people working the land.  Today it refers to the ideas, customs, and social behaviour of a society, encompassing its arts, its intellectual achievements, and its shared history, gathered under a specific label.  That label might be national, such as Singaporean or American.  It might be ethnic, such as Malay or Chinese.  It might be religious, such as Muslim or Christian.  The difficulty is that these lines blur constantly.  Every person carries multiple labels and identities, emphasised differently depending on context.  In that sense, almost every negotiation is, in fact, cross-cultural, whether the parties recognise it or not.

The Persona

Nobody arrives at the table as themselves.  We all wear masks, facades constructed for the occasion.  William Shakespeare wrote, in As You Like It, Act II, Scene VII:

“All the world’s a stage,

And all the men and women merely players;

They have their exits and their entrances,

And one man in his time plays many parts …”

Before reaching that table, real or virtual, every party must understand precisely which role they are playing, and which role every member of their own team is playing.  Negotiation, in most circumstances, is a team sport.  Someone plays the good cop, to a degree.  Someone else plays the bad cop, to a degree.  The team creates the impression that certain points are non-negotiable, while quietly searching for the compromise that actually matters elsewhere.  The briefing before the meeting frequently matters more than the meeting itself.

To operate effectively, a negotiator needs a clear picture of the people they represent, the people they face, and the role each plays within the wider project.  That clarity prevents overstepping, prevents the kind of mistake that diminishes credibility, and prevents inadvertently showing one’s hand.  This is chess.  This is poker.  Every move should matter.

In practice, my team builds a dossier on every significant counterparty ahead of major projects.  We construct the most complete picture available of the people we are about to negotiate with, and the people they answer to.  This includes the obvious, such as favourite child and marital stability, and the less comfortable, such as ongoing investigations and marital infidelity.  We acquire every advantage available to close the deal on favourable terms.

At the table itself, we wear what I call the speaker persona: a mask constructed from every rhetorical and psychological tool available, designed to shorten the distance between the other side and us.  Executed well, it convinces the counterparty that we sit beside them, understanding their perspective from the inside.  That is the actual power of rhetoric.

Rhetoric

The primary instrument of negotiation is rhetoric: the art of constructing a cogent, coherent argument, for or against a position, to move people.  Rhetoric is as old as civilisation itself.  The moment one person first convinced others to follow him, to believe what he said, to move together toward common action, society began, and human history commenced its long, uneven march of progress.  Anyone wishing to excel at negotiation must, by necessity, excel at speaking.

The art of rhetoric divides into three disciplines: the ability to listen carefully, the ability to discern the message beneath the words, and the ability to dissect that message and construct a response.  Negotiation should never be treated as a zero-sum contest, because reputation matters, and the other side’s network may well be worth doing business with again.

Some ruthlessness is required to secure a winning position, but that advantage must never be pressed home too brutally.  The other side must leave the table feeling they gained something, however modest.  Paradoxically, generosity that feels unearned generates suspicion rather than gratitude.  Everyone carries an ego, a measure of pride.  Excessive magnanimity, offered too freely, breeds resentment rather than goodwill, because nobody wishes to feel small.  Absolute ruthlessness is a card reserved for the moment bridges are meant to burn, for making an example of someone.  That is the domain of international diplomacy, or hostage negotiation with terrorists.  It has no place in ordinary international business.

Misconceptions

Several misconceptions about effective speaking deserve correcting outright.  The first: excellent command of language is not, in fact, required.  Effective communication requires only the ability to convey a point succinctly and simply.  Were mere facility with flowery language the actual requirement, poets and language teachers would run the world’s negotiating tables, and they emphatically do not.  Command of language, in the sense that matters here, means the ability to convey what one intends the other side to understand, and to discern accurately what the other side is conveying in return.

Mastery of grammar is similarly unnecessary.  The ability to write an essay on the morphology of words and the relationship between tenses does not make anyone a competent negotiator.  It is entirely possible to become lost in the surface meaning of a conversation while missing the message underneath entirely.

An expansive vocabulary is not required either, beyond the technical terms relevant to the subject matter at hand, whether shipping, finance, or otherwise.  The average reasonably fluent person uses between 16,000 and 20,000 words.  In a business exchange, that figure drops to roughly half, because tension pushes people toward the most familiar vocabulary, and sentences become utilitarian.  The actual skill lies in using the words the other party already uses, shortening the psychological distance between one’s own speaker persona and their listener persona.

The Stage

To paraphrase Sun Tzu, in the third chapter of The Art of War: “Know your enemy, know yourself; your victory is certain.  Know heaven, know earth; your victory is complete.”  Sun Tzu described nine varieties of ground: dispersive ground, weak ground, strategic ground, open ground, intersecting ground, serious ground, difficult ground, deadly ground, and desperate ground.  Identifying which ground one occupies is not optional.

Dispersive ground sits near home base, where soldiers, aware of a safe retreat, lack full resolve under pressure.  In negotiation, this is the opening phase, where the client one represents may fold at the first sign of resistance, absent an actual resolution.  This is addressed through briefing before the meeting, preparing the client for the other side’s feigned retreats, and pre-emptively rejecting apparent compromises that carry hidden costs.  A supplier offering a lower unit price while quietly altering payment terms is a textbook example.  Payment terms frequently affect a credit line far more than the headline price ever will.

Strategic, or contentious, ground carries value for both sides.  These are the primary points of contention, where each side seeks advantage while remaining convinced the other has also won something.  In an acquisition, the number of shares often matters less than the voting power those shares carry.  Control of a company does not require a majority stake.  Every party, every group, carries a psychological blind spot capable of exploitation.

Open ground offers both sides room to manoeuvre.  These are the open-ended contractual clauses that eventually become points of contention.  This is where rapport gets built, where small concessions accumulate into a bank of goodwill for later use.

Intersecting ground adjoins other ground, facilitating movement and communication.  Its strategic value lies not in what it contains, but in where it sits.  Real estate agents call this location, location, location.  In negotiation, it is the position that leads toward what is actually wanted.  Securing a term sometimes requires first securing the circumstances that produce it.  Consider an investment into Japan, where withholding tax runs close to 40%, and Japanese interests must hold at least 50% of any special purpose vehicle.  In such cases, structuring the investment through a trust or company elsewhere, which then loans funds to the Japanese vehicle, avoids the withholding tax entirely, because loan repayments are not subject to it.

Serious ground describes an army that has penetrated hostile territory without securing its rear, leaving it exposed to a multi-front assault or encirclement, its supply chain insecure.  In negotiation, this appears when a negotiator fixates on one issue, price above all else, while ignoring delivery schedules, payment timelines, tax liability, and currency exposure, every one of which will ultimately shape the real price paid.

Difficult ground resists manoeuvre.  A project spanning multiple stakeholders, several legal jurisdictions, and heavy political exposure qualifies.  The correct response is not to become entangled in it.  This demands considerable preparatory work: clearing contractual ambiguity, moving up the broker chain, and identifying the actual decision-makers.

Deadly ground is difficult terrain riddled with choke points.  Here, arriving early and preparing the ambush, rather than walking into one, is the only sound strategy.  Research and preparation before entering the room matter enormously.  Carrying oneself with decorum, dignity, and honesty is admirable.  Assuming the same of everyone else is foolish.  People come to the table to win.

Desperate ground is ground from which only immediate action can prevent destruction.  This ground is best avoided altogether.  When new developments, shifts in the wider world affecting price or availability, changes in legislation or management, catch a negotiator off guard mid-process, the correct response is recognition and retreat.  Returning another day beats being outmanoeuvred and losing outright.

Throughout all of this, knowing who attends the meeting matters, as does identifying who stands in a state of need and how that need might be created.  Above all, remember the question every party silently asks: what is in this for me?  Everyone wants something.  Effective negotiation appeals directly to that want.

The Performance

Three points of influence govern the performance itself: ethos, pathos, logos.  A fourth, kairos, completes the set.  Mastering all four properly is the work of a Toastmaster, which lies outside the scope of this piece.  Instead, consider the finer points that can be applied immediately.

George Bernard Shaw, the Irish playwright, observed that the United States and Great Britain are two countries separated by a common language.  The greatest negotiating challenges frequently arise with people who speak the same language as us, precisely because shared vocabulary breeds a complacency that produces expensive mistakes.  This returns directly to the earlier point about definitions.

Every conversation carries a distance between speaker and listener.  Closing that distance requires every rhetorical and psychological device available, convincing the other party that we walk in their shoes and think as they think.

Finally, people wish to be aggrandised, elevated, recognised.  The purpose of negotiation is fulfilling one’s mandate and securing the desired outcome.  Achieving that requires opening the hearts of the other side, and with them, their mouths, and occasionally, their wallets.

Further Considerations

Understanding the language a party thinks in matters, because that language shapes their thought process directly.  Some languages are more visual, others more linear.  This shapes how the negotiation itself will unfold.  Negotiations with the Japanese, or East Asians more broadly, proceed according to hierarchy, given the subtlety embedded in those languages.  The decision-maker is almost always the most senior figure present, though rarely the person one actually wants to address directly, and sometimes the reverse holds.

Power dynamics matter most visibly in a Western context, where establishing credibility demands extra time up front.  It remains impolitic to say so plainly, but post-colonial tensions still sit beneath the surface of many such meetings.  Where East Asians favour subtlety, Germanic peoples favour directness, Anglo-Saxons favour aggression, and Arabs favour fluidity of discourse.  These cultural distinctions require careful attention before anyone sits down.

Tip One: Play the Competent Fool

Negotiation, however personal it may feel, is never about ego.  It is about winning.  Being first to take charge in the room also makes one the first head offered up when blame needs distributing.  There is always someone at the table who wants to be seen as master of it.  Let him be, provided he sits on the other side, since roles on one’s own team have already been assigned.  That person will play his cards, and likely reveal considerably more than he intends.  Praise him, elevate him, and he will bloom like a flower, spilling exactly what is needed.

Claiming a position slightly lower in the hierarchy also helps, high enough to carry a say, not so high as to absorb the ultimate blame.  At an impasse, this allows an appeal to management, to a director, to a board, buying time to regroup and return with a revised strategy.  Flexibility matters.

Tip Two: Misdirect

Considerable time can be spent discussing matters that are not, in fact, the true objective, allowing the other team to prepare a position while leaving the actual target undefended.  In a recent biomass power plant project, worth US$250 million, a specific concession on the insurance coupon was the actual objective.  Over an hour was spent reviewing the finer contractual points, with full awareness that the other side faced a time constraint.  With fewer than fifteen minutes remaining, the conversation pivoted directly to the real objective, and secured it.  Time itself is a weapon.

Tip Three: The Power of Saying Less

Explicit statements of intent are sometimes necessary, but more often, saying less than required lets the other side talk themselves into a corner.  Most communication is non-verbal.  Very little of what people say is meant literally.  Allusion, allegory, and idiom saturate daily conversation, built on cultural assumptions that can work for or against a negotiator depending on whether both parties share them.

Idioms and cultural assumptions are, by nature, culture-specific.  Assuming the other side understands them, or that we understand theirs, is a mistake, particularly across cultures.  In an Anglo-Saxon context, “letting the cat out of the bag” means indiscretion, a secret revealed.  Someone unfamiliar with the idiom might reasonably assume cats are habitually kept in bags, and recoil accordingly.

Deliberately saying less exploits the same principle.  The average person cannot tolerate silence.  Silence produces discomfort, which people instinctively fill with conversation and nervous smiles.  Sustained quiet, paired with an attentive gaze, draws most people into revealing considerably more than they intended.

Tip Four: Reputation is Everything

Every person plays a part, and credibility is the sum of one’s reputation, requiring active cultivation and protection.  Eventually, reputation alone closes a deal, or reputation alone loses it.  Reputation also depends on network, on association, which is why ruthless pruning of one’s connections and careful selection of one’s team is necessary rather than optional.

Anyone lacking cultivated credibility must borrow it.  The simplest method involves anchoring a point to a quotation from a recognised authority, a worthy sound bite from a known name in the field.  Credibility can also be borrowed through association, a consideration worth weighing carefully when assembling a negotiating team.

Reputation alone occasionally swings a meeting before a word is spoken.  That effect rests on an actual body of work.  My own team carries a combined 120 years of experience, built not merely from curricula vitae, but from decades of accumulated network.  Frequently, who one knows matters more than what one knows.

Tip Five: Appeal to Self-Interest

Appeals should target self-interest, never altruism, never benevolence, never pity.  Appealing to pity, or invoking past favours, may succeed once.  It will not succeed twice.  It creates resentment through an imbalance in the power dynamic, since nobody enjoys being reminded of an obligation, however small.  People want to feel empowered, and effective negotiation cultivates precisely that feeling.  Appeals to someone’s higher self are a lottery, and no business can be run on chance.  Certainty is required, and vanity, greed, and self-interest are as certain as anything gets.

The Benjamin Franklin Effect describes a proposed psychological phenomenon, a form of cognitive dissonance, in which a person who does someone a favour becomes more inclined to think well of them.  It might seem intuitive that people do favours because they already like us.  In business, the causation frequently runs the other way: people come to like us because of the favours we induce them to perform.  The effect takes its name from Benjamin Franklin, who wrote in his autobiography, “He that has once done you a kindness will be more ready to do you another, than he whom you yourself have obliged.”  Franklin illustrated this with an account of a rival legislator in the eighteenth-century Pennsylvania legislature: “Having heard that he had in his library a certain very scarce and curious book, I wrote a note to him, expressing my desire of perusing that book, and requesting he would do me the favour of lending it to me for a few days.  He sent it immediately, and I returned it in about a week with another note, expressing my sense of the favour strongly.  When we next met in the House, he spoke to me (which he had never done before), and with great civility; and he ever after manifested a readiness to serve me on all occasions, so that we became great friends, and our friendship continued to his death.”

The same dynamic appears among smokers borrowing a light from strangers.  A shared, trivial favour produces a cognitive bias suggesting mutual liking, which explains why smoking areas host conversations between people who have never otherwise met.  In a physical meeting, this is straightforward to replicate.  I habitually ask counterparts to fetch me coffee, which is nothing more than this same principle in practice.  In an online meeting, the same effect is harder to reproduce, though small talk touching on restaurant recommendations or local logistics achieves a diminished version of it.

Tip Six: Make Everything a Group Decision

At every milestone, securing something in writing, with as many signatures and as much buy-in as possible, matters considerably.  This makes retreat costly for any side, since reputational damage follows any unilateral withdrawal.  A bad decision reached collectively cannot result in an entire management team being dismissed.  Blame, when it lands, rarely distributes evenly, but enough spreads that everyone ends up smelling roughly the same.

This is precisely why organisations hold annual general meetings and similar events: the illusion of buy-in from every major stakeholder serves not just moral authority but a form of insurance against future criticism.  Once everyone has assented, nobody can credibly claim opposition, or work at cross purposes, without risking their own credibility in the process.

The same instinct applies at the negotiating table, regardless of who sits across it.  The moment agreement is reached, document it and record it.  Pausing the conversation at each milestone, and confirming accord on that specific point, creates a waymarker for the stage that follows.

Tip Seven: The Power Behind the Throne

Considerable business intelligence goes toward identifying who actually makes the decision.  It might be the managing director.  It might be his girlfriend.  Everyone has a pressure point.  I once attended a meeting at a hotel, negotiating the sale of an entire hotel chain, still new to the business and part of the team rather than leading it.  Everyone else arrived in expensive Italian or English-cut suits, wearing ties that cost more than most people’s monthly rent.  The billionaire arrived dressed like the gardener.  That is what real power looks like.  Enough money renders convention optional.

This concept extends beyond the decision-maker himself to whoever holds his softest spot.  In one negotiation, I discerned that a client’s youngest daughter was, without question, his favourite.  Steering the conversation toward her approval secured the sale.

Tip Eight: Check the Wind before Taking a Leak

Working as a deck cadet on a container vessel, using the toilet was not always practical, particularly at the forecastle, three hundred metres from the accommodation block.  The first lesson learnt was to check which way the wind blew before relieving oneself over the side, or face the consequences directly.  The same principle applies in negotiation: understand which way the wind blows before committing to a strategy.  No plan survives first contact.

In one project, discussing a potential investment in a neighbouring country’s port development, the other side kept trying to raise the cost rather than lower it, which was immediately suspicious.  It emerged they intended to have our side bid artificially high, then split the excess with them, effectively defrauding the state.  That is not how business gets done, and we walked away from the table entirely.

On a related note, anyone can claim to be honest.  Very few claims survive genuine testing.  Everyone has a price.  Most people have never actually been tempted to the limit of theirs.  Nobody can honestly claim incorruptibility without having walked away from millions offered purely on principle.  Reputation, career, health, even life itself, can be taken by others.  Only we can sell our own souls.  The task is ensuring the price for that sale sits so high nobody can afford it.

Conclusion

Every point above converges on a single purpose: negotiation exists to create the conditions for a sale.  That “sale” is whatever outcome was set out to be achieved from the outset.  What gets sold is rarely a product or a service in the narrow sense.  It is a solution.  A genuinely good solution leaves everyone at the table satisfied, convinced they were part of something momentous, whether or not that conviction survives contact with the fine print later.

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Terence Nunis | Executive Chairman, Equinox Zenith | Author, The 1% Playbook: The Billionaire Cheat Code