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