China Business Training -- Sources of Power in Chinese Negotiation
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Doing business in China is easier if you have power -- but that's a real challenge for Western negotiators. ChinaSolved shows you how to identify your natural sources of power and how to leverage them for greater success in your interactions - both with external counter-parties and your colleagues & staff. Sign up for the ChinaSolved eNewsletter -- http://visitor.r20.constantcontact.com/d.jsp?llr=hswc8jnab&p=oi&m=1113800661575
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China Business Training -- Sources of Power in Chinese Negotiation
- 1. Sources of Power in Chinese Negotiation Property of ChinaSolved. All Rights Reserved. Copyright @2013 Maximize Your Influence With Chinese Counter-Parties
- 2. About Andrew Hupert • 10+ years in China, – 3 in Taiwan & HK • Director of ChinaSolved – China Business Training for International Professionals – Negotiation specialist • Publisher of ChinaSolved.com and ChineseNegotiation.com • Author – Guanxi for the Busy American and The Fragile Bridge Full list of publications and slideshows available on www.AndrewHupert.com Property of ChinaSolved. All Rights Reserved. Copyright 2013
- 3. Do you fear that you aren’t getting the whole picture or lack sufficient influence when you negotiate in China? Property of ChinaSolved. All Rights Reserved. Copyright @2013
- 4. The Problem If you negotiate like an American you may sign contracts - but never really implement the business. Property of ChinaSolved. All Rights Reserved. Copyright @2013
- 5. The Other Problem If you negotiate like a Chinese you get relationships – while giving up lots of IP and assets – but no transactions. Property of ChinaSolved. All Rights Reserved. Copyright @2013
- 6. The Solution • Build your influence by identifying and leveraging your natural sources of power. • Negotiate like an American who understands China. Property of ChinaSolved. All Rights Reserved. Copyright @2013
- 7. Your Sources of Power 1. Business Intelligence 2. HR Strategy 3. Alternate Counter-Parties 4. Business & Deal Structure 5. Technology & IP (Sometimes) Property of ChinaSolved. All Rights Reserved. Copyright @2013
- 8. Business Intelligence • It all starts with you building your own sources and methods of business intelligence. • In China, knowledge is a superpower. • Relying on your counterparty or colleague is surrendering your power. Property of ChinaSolved. All Rights Reserved. Copyright @2013 The ChinaSolved Pinteterst Board is a great source of business intelligence sources.
- 9. HR Strategy • #1 Challenge for ALL managers in China – Western and local alike. • Select, train and retain. • You can’t outsource or delegate 100% of your HR function. Property of ChinaSolved. All Rights Reserved. Copyright @2013
- 10. Alternate Counterparties • This is your main source of power. • Ideal scenario: multiple Chinese firms competing for your partnership. • Different networks. Property of ChinaSolved. All Rights Reserved. Copyright @2013
- 11. Business & Deal Structure • Choose your business structure wisely. • WFOE, Rep Office, Partnership, or other options. • Beware of exclusivity. Property of ChinaSolved. All Rights Reserved. Copyright @2013
- 12. What about Tech and IP? • Is your technology, IP, brand and other “creative capital” a Source of Power? • Your IP is not a weapon or shield – it is more like a child. Someday it will take care of you, but for now it needs protection • IP is a source of power IF you can use it to attract new suitors, partners and HR assets. Property of ChinaSolved. All Rights Reserved. Copyright @2013
- 13. Sources of Power • Use your SoP to build strategic relationships with Chinese partners, counter-parties and colleagues. • In China you will have to negotiate a much wider range of variables than you would in the US. • Assume nothing, and always make sure you are protecting your assets and furthering your interests. Property of ChinaSolved. All Rights Reserved. Copyright @2013
- 14. Property of ChinaSolved. All Rights Reserved. Copyright @2013 China Negotiation and Business Training by ChinaSolved. Check out our course on Udemy.com . “Negotiate Successfully in China”
- 15. Guanxi for the Busy American • A professional’s guide to building relationships in China. • Written for the Western negotiator who needs to transact and execute. • Available on Kindle, iBook and all major e- formats. Property of ChinaSolved. All Rights Reserved. Copyright 2013
- 16. The Fragile Bridge • Conflict Management in Chinese Business. • Building relationships is easy – maintaining them is hard. Learn to do it right. • Available on Kindle, iBook and all major e- formats. Property of ChinaSolved. All Rights Reserved. Copyright 2013
- 17. Thank You All Rights Reserved. Copyright @2013. Property of ChinaSolved
Editor's Notes
- Hi, I’m Andrew Hupert – founder of ChinaSolved – a professional skills training and coaching company committed to showing international professionals how to be more successful in China. Today I’m going to introduce you to one of our central concepts. Americans can learn to leverage their existing strength, experience and best practices to apply to negotiating with Chinese counterparties – if you go about it the right way. Let’s take a look.
- You need control, clarity and influence when you negotiate -- but you can’t achieve it in China the same way you do in the US.
- Aggressive, type A, focus on the business/ Americans will go home with a signed contract – but without the right type of relationship they never actually start the business. Good time to remind you that you have to negotiate internally – with staff and colleagues. One of the difference between
- This is the cross-culture path that Chinese managers and consultants will often lead you down. They don’t mean to damage your interests—necessarily – but that can be the real result. You’ll spend all your time and energy building relationships and working on your network of guanxi contacts. That means that you’ll be talking, toasting, and touring – visiting offices, factories, and showrooms – and all the while you are sharing technical and commercial information. This really is a great way to build relationships – but converting those friendly connections into real business is a whole new challenge.
- China Solved shows you how to leverage your existing strengths to build relationships that focus on real business. You can still be yourself, but just learn to emphasize and organize your negotiating so that you are staying in control of your own IP while building a strategic network of new contacts.Unlock your inner Chinese negotiator.You already have the ability – you just aren’t using them the right way… yet.
- Number 1 – business intelligence. Too many westerners rely on their counterparties for basic business information. You need good, independent and systematic access to good information – and by that I mean current strategic news and data that you can use to make forward-looking business decisions. There was a time when it was hard to get solid objective data about Chinese markets and the economy, but now there are plenty of great sources that are free or low cost. You don’t have to know all the answers – but you need to know what the right questions are, and you need some framework for assessing the answers and advice you get from Chinese partners, counterparties and colleagues. If you try learning everything about your industry a couple of days before your negotiating trip, then you will certainly have trouble. But if you build a system for scanning the headlines every morning, you’ll stay on top on everything you need to know.
- HR is the single biggest challenge facing managers in China – and that includes local Chinese as well as foreigners. You have 3 big challenges – finding the right people, training, developing and motivating them to do what you need them to do – and then holding on to them once they know all about your business and technology. Far too many Western management teams end up training their own competition do to bad HR strategy.HR is different in China. In the US, managers expect everyone to be grateful for any kind of job and live in perpetual fear fo being fired or laid off. In China, it is just the opposite. No matter what their skill level, Chinese white-collar workers always feel that you are lucky to have them – and that there is always a better opportunity waiting for them. Don’t fight it – learn to manage this trend. You can’t outsource it 100% to your own in-house HR department, either. This concentrates far too much power in the hands of people you probably don’t even know. You have to take an active role in the strategic aspects of HR management – particulalry the slection, retention and motivatation processes. This gives you more control and over your own operation .
- A Taiwanese businessmen who did very well in China during the early days told me that the key to success is “many girlfriends, no wives”. Remember – the Chinese are only afraid of you walking away if you are walking TO a Chinese competitor. That’s the only thing they are afraid of. Just make sure that your different candidates are from different networks. If they know each other, then they will work together against your interests.
- China is a highly bureaucratic place, but you still have lots of options about how you structure your business. Make informed decisions about whether you want an independent China operation, a strategic partnership or some other option – such as working through distributors, sourcers and consultants. As your business interests in China grow, your strategic needs will change. The good news is that you have a lot of options available to you. The bad news? You may have to live with your decisions a long time, as Chinese business formations can be very cumbersome and difficult to change. Start thinking about this early, and get advice from lawyers, professionals and industry experts.Beware of giving away long term options and opportunities for short-term convenience – Chinese partners will often maneuver for exclusive arrangements early in the relationships while offering little in exchange. Beware.
- IP and technology isn’t a defense. It is more like a target – attracting predators and bringing out the worst behavior in potential partners and colleagues. Think of IP and technology as your priceless offspring – one day it will grow and develop, and be a source of stability and prosperity for your company. For now, however, it makes you vulnerable. There are ways of changing that – but only if you develop the previous 4 sources of power. Good tech can help you attract lots of eager suitors and top talent, but you need a good plan for making that interest work in your favor. Remember – you have to protect your IP and technology in China before you start talking to potential partners.
- The key to developing and leveraging your sources of power in China, you need to have a sensible plan in place. Don’t try to figure out what your sources of power are in advance. In China, your counter-parts have to want you to succeed. That is different from liking you.
- If you are interested in China Business Training, please take a look at the online ChinaSolved course, “Negotiate Successfully in China” available on Udemy.com. Go to Udemy and search for “Negotiate Successfully in China”