THE INSIDERS: Hard-core cross-cultural negotiating

By bne IntelliNews July 15, 2011

Charles Crawford of ADRg Ambassadors -

A typical international business negotiation tends to be, well, businesslike. The two or more parties meet because they have interests in common, above all the prospect of future financial gain achieved by cooperating. Outcomes usually can be measured in the one language all cultures understand: money. "If we agree to this, on a worst case scenario we can expect to earn and share X - on a best-case scenario we'll get Y and do really well."

One of my own favourite diplomatic/business negotiation moments came in Warsaw a few years ago. I was British Ambassador to Poland, joining a private dinner with senior Polish and international business experts to explore a possible Polish telecommunications privatisation.

At one point, the clever assistant of the senior British commercial negotiator raised what he said was an important point, not hitherto covered in the discussion. His boss's arm made a dramatic sweeping gesture, as if to brush such trivial issues far away: "Detail!"

This example shows a key part of any negotiation: distinguishing What's Important from What Matters. Senior people are paid to focus on what matters, leaving what's important to clever members of their team to sort out. And the higher you go in any organisation, especially government, the more "what matters" becomes less about specific positions and more about strategic instincts: Is the other side basically trustworthy on this one, or not?

Which in good part explains why the Eurozone is in such a wobbly state now - too many senior European leaders allowed their strategic hopes and instincts to run away with them, and ignored crucial points of operational detail.

Cultured negotiations

Many other negotiations, particularly those where cultural rivalries are at stake, are a lot less clear and rational. The Russian approach to diplomatic negotiations is far removed from the usual world-weary cost-benefit pragmatism of British diplomacy. Russia wants to project psychological ascendancy - Russia's very greatness - as an end in itself. The vocabulary of Russian diplomacy still has Soviet-era phrases conveying brooding inexorable depersonalised doom: "Negative consequences for your interests cannot be excluded."

A nice example of Russian negotiating vocabulary came in June, when Russia and Belarus were having yet another spat over Russia's energy supplies. Russian Foreign Minister Sergei Lavrov sent a blunt message to Minsk: "It is in our interests that emotional outbursts be removed from the public sphere - I have repeatedly talked about this with my Belarusian counterpart." Translated into normal language this means: "OK, the game's up, Minsk. Time to pay your electricity bills - and public squawking won't help you this time round..."

Key to Russian negotiating technique is showing invincible strength by heading off would-be "pressure." Russian negotiators in effect insist that "we can withstand more pressure than you can possibly exert, or even imagine. Oh, and whatever you do to hurt us, we will do something far worse to hurt you."

All this can be countered, of course, by being tough in response. Some of it is bluff, and Russian diplomacy can be as inept as everyone else's. But the very fact that the Russians set about their business in this way helps frame issues and likely outcomes on their terms. It projects ruthlessness/determination. A handy way to start. And from the Russian point of view, a good way to finish, as BP and other major companies investing in Russia have learned the hard way.

Balkan bluster

Things are different in the former Yugoslavia. There too psychological games are played, but often with a different underlying rationale. Namely inat.

Inat refers to a self-evidently counter-productive action done precisely because it is self-evidently counter-productive - a loud show of pride and defiance, intended to demonstrate an existential freedom from mundane considerations. This takes a negotiation on to a different psychological plane, again as an end in itself.

One of my own crashing encounters with inat came in 1996, when as UK Ambassador to Sarajevo I was trying to persuade the Bosnian Serb leadership to attend a major international conference hosted in London to support the new Bosnia and Herzegovina constitution. The Serb side refused to sit behind a nameplate on the table saying "Bosnia and Herzegovina".

I went to meet the Bosnian Serb foreign minister, Aleksa Buha. I told him that 60 foreign ministers would be attending this event - the leadership of the Bosnian Serb Republic (Republika Srpska) and even indicted war criminal Radovan Karadzic's own SDS party could at last emerge from isolation to present their case to the world. But there had to be one new Bosnia and Herzegovina delegation. Buha insisted that without the nameplate being changed, the Republika Srpska delegation would not go.

We wrangled for some three hours. Finally I forced the issue: "Look, do you agree that it is in your interests to go?" "Yes," he replied.

"So are you going to go?"


"In that case your position is stupid."

"Serbs are stupid."

One other local ploy has startled Western diplomatic negotiators in that part of the world. Whereas Russians typically argue tenaciously over every jot and title of a contract, but then insist on each word being implemented, in former Yugoslavia the signing of a contract can have much less significance. Western negotiators believe that signing a contract ends a negotiation. Balkan negotiators can see a signing ceremony as merely one signal that negotiations are getting more serious, with most issues still "open."

Back in 1997, High Representative Carl Bildt saw one amazing example of Bosnian negotiating trickery. After weeks of haggling, a disposition of ministerial responsibilities was agreed among Bosnia's Bosniak, Croat and Serb leaders. The document recording which ethnic community got which jobs was duly signed. Bildt kept the top copy.

Months later a disagreement erupted over the Bosnian airspace portfolio. The Bosniak side produced a copy of the signed agreement showing that they had this job. Bildt felt that something was not quite right. He dug out the original document, which gave that portfolio to the Serbs. The Bosniaks had hoped to gain an advantage with a trivial forgery!

I pressed Bildt to publicise this outlandish manoeuvre. "What's the point?" he replied. "Everyone on all sides would just laugh and say 'Nice try!'"

Time bandits

One aspect of dealing with especially difficult negotiations - especially in those involving pronounced cultural differences or acutely difficult hostage negotiations - is thinking differently about managing time.

This is part of a wider philosophical question for all negotiators. Is it better to create complexity for your opponent, to give pause for thought, to generate a sense of uncertainty as to what the best outcome is? Or rather, should you aim to create simplicity - "let's face it, it all boils down to this" - to strip away all that "detail" and instead try to focus both sides on what you think "really" matters? Quicker - but not necessarily wiser?

Sometimes it is wise to deliberately slow things down: to try to de-dramatise the situation and "reframe" the other side's demands in much less threatening terms, to try to engage with them on a different psychological level where some unexpected common ground might be found. The deal might take a lot longer to reach, but would be all the better for it.

In real life people are impatient. Better a quick "good enough" outcome to get things moving. This sense of extreme time pressure propelled in late 1995 the Dayton Peace Accords aimed at ending the crisis in Bosnia. Years (and billions of dollars of assistance) later, Bosnia is still dysfunctional in key respects. Too many key issues were glossed over or fudged to "get the result" needed to help Bill Clinton get re-elected.

One way or the other, it does not follow that being bloody-minded or even threatening force will deliver a game-changer. So much depends on context - on how far one's bloody-mindedness is credible to the other side, and how the other side balances its own ability to withstand pain with what it sees as your own willingness to deliver it.

Take Libya. Gaddafi's willingness to tolerate Nato bombing seems to exceed Nato's willingness to be ruthless enough to finish the job quickly. If, that is, Nato knows what finishing the job actually entails.

Moral: if you don't know what you really want from a negotiation, don't be surprised if you don't get it.

Charles Crawford CMG was British Ambassador in Sarajevo, Belgrade and Warsaw. In 2010 he was a founder member of ADRg Ambassadors, a new partnership of former senior diplomats offering corporate diplomacy consultancy, problem-solving and training. Find them here.

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