International Business: Management Processes and Practices. Unit - Negotiations in International Business

 

https://egyankosh.ac.in/

Power Dynamics – Sitting Strategically at the Conference Table

Alpha or Beta? Which seat you choose in the meeting reveals a lot about your character and your role in the Company.

Have you ever heard of “strategic sitting”? This surprisingly important phenomenon can help you find the best place for yourself in meetings, and the most efficient place for those in the office. 

In the course of your life you will sit often and in many different places: on the couch, at the dinner table, at the movie theater, etc. Have you ever stopped to think about the impact of the seat you choose? Perhaps in these situations it doesn’t matter much, but in the conference room and even on a plane for a business trip, these seemingly small decisions speak volumes about your character, reputation and perceived level of power.

In the conference room

Imagine the following: you walk into the conference room for a meeting, and are greeted by a rectangular table. The managing director sits either at the head of the table or in the middle of the table facing the door. In both cases he can observe who is arriving late and who is leaving early – clearly this is a position of power. On the left and right of the boss are his most trusted colleagues.

One might initially think this arrangement is mere coincidence, or habit-motivated, however American psychologist Sharon Livingston would say this is no coincidence. Livingston has surveyed more than 40,000 bosses and employees in their “conference seat behavior”, and found that there was a clear, though unspoken, order to the seats chosen in meetings. “This is a meaningful picture of the respective power structure”, says Livingston, “that every employee should keep in mind.” Executive and professional coach, Dr. Richard Winters, breaks down the best place to sit for how you’d like to be perceived in a given meeting.

On a business trip

Seating arrangements are not only important in the office, but also during business travel. Where, for example, should you sit as a power-conscious executive on a plane? Naturally as far forward as possible, states Livingston, “near the pilot, the head of the plane”. And it doesn’t stop there, what is the optimal place of power in a taxi? According to Livingston the optimal position is on the right hand side in the rear of the car. At this position, you can fully enjoy more space while still commanding authority.

Seating arrangements in large offices

n recent years more and more offices are moving to an open floor plan, with management moving out of their “corner offices” and having constant interaction with subordinates. Some companies are even taking it a step further – determining who sits next to whom in an effort to get the most from their employees.

A study by Cornerstone OnDemand¹ claims that there are three groups sitting in any particular room: quality workers, who tend to work slower but have better quality, generalists, who are mid-range producers, and productive workers, who tend to produce more at a lower quality. According to the study, the best results are achieved when the generalists are grouped together, since they operate on a similar wavelength, and the quality and productive workers sit together. Though the quality and productive workers think and produce differently, their talents are complementary and they can influence and rely on one another

The result: In a study taking place over a two-year period, and in a company of 2,000 workers, this type of arrangement resulted in a 13% increase in productivity, and a 17% increase in effectiveness.

Sitting – Standing – Sitting – Standing

As important as where you sit is how you sit. Prolonged sitting is not healthy, however neither is prolonged standing. What’s the solution? A mixture of the two. Experts at the Federal Institute for the Occupational Safety and Health recommend a “standing-sitting dynamism”. In other words, a mixture of sitting and standing throughout the workday is the ideal. Convertible standing desks can certainly ensure that you are making the transition from sitting to standing often enough. Maintaining optimal health in the workplace will ensure that you keep your positon of power for many years to come.

¹https://www.cornerstoneondemand.com/rework/rearrange-desks-increase-revenue-study-finds-seating-charts-impact-performance

Getting to Si, Ja, Oui, Hai, and Da

Artwork: Jack Sutherland, Gleam, acrylic on canvas and wood; Take, acrylic on canvas and wood. Courtesy of saatchiart.com

Erin Meyer

Summary.   

To be effective, a negotiator must take stock of the subtle messages being passed around the table. In international negotiations, however, you may not know how to interpret your counterpart’s communication accurately, especially when it takes the form of unspoken signals. The author identifies five rules of thumb for negotiating in other cultures:

Adapt the way you express disagreement.

In some cultures, it’s OK to say “I totally disagree.” In others, that would provoke anger and possibly an irreconcilable breakdown of the relationship.

Know when to bottle it up or let it all pour out.

Raising your voice when excited, laughing passionately, even putting a friendly arm around your counterpart—these are common behaviors in some cultures but may signal a lack of professionalism in others.

Learn how the other culture builds trust.

Negotiators in some countries build trust according to the confidence they feel in someone’s accomplishments, skills, and reliability. For others, trust arises from emotional closeness, empathy, or friendship.

Avoid yes-or-no questions.

Instead of asking “Will you do this?” try “How long would it take you to get this done?”

Be careful about putting it in writing.

Tim Carr, an American working for a defense company based in the midwestern United States, was about to enter a sensitive bargaining session with a high-level Saudi Arabian customer, but he wasn’t particularly concerned. Carr was an experienced negotiator and was well-trained in basic principles: Separate the people from the problem. Define your BATNA (best alternative to a negotiated agreement) up front. Focus on interests, not positions. He’d been there, read that, and done the training.

The lengthy phone call to Saudi Arabia proceeded according to plan. Carr carefully steered the would-be customer to accept the deal, and it seemed he had reached his goal. “So let me just review,” he said. “You’ve agreed that you will provide the supplies for next year’s project and contact your counterpart at the energy office to get his approval. I will then send a letter….Next you’ve said that you will….” But when Carr finished his detailed description of who had agreed to what, he was greeted with silence. Finally a soft but firm voice said, “I told you I would do it. You think I don’t keep my promises? That I’m not good on my word?”

That was the end of the discussion—and of the deal.

The many theories about negotiation may work perfectly when you’re doing a deal with a company in your own country. But in today’s globalized economy you could be negotiating a joint venture in China, an outsourcing agreement in India, or a supplier contract in Sweden. If so, you might find yourself working with very different norms of communication. What gets you to “yes” in one culture gets you to “no” in another. To be effective, a negotiator must have a sense of how his counterpart is reacting. Does she want to cooperate? Is she eager, frustrated, doubtful? If you take stock of subtle messages, you can adjust your own behavior accordingly. In an international negotiation, however, you may not have the contextual understanding to interpret your counterpart’s communication—especially unspoken signals—accurately. In my work and research, I find that when managers from different parts of the world negotiate, they frequently misread such signals, reach erroneous conclusions, and act, as Tim Carr did, in ways that thwart their ultimate goals.

In this article, I draw on my work on cross-cultural management to identify five rules of thumb for negotiating with someone whose cultural style of communication differs from yours. The trick, as we will see, is to be aware of key negotiation signals and to adjust both your perceptions and your actions in order to get the best results.

1. Adapt the Way You Express Disagreement

In some cultures it’s appropriate to say “I totally disagree” or to tell the other party he’s wrong. This is seen as part of a normal, healthy discussion. A Russian student of mine told me, “In Russia we enter the negotiation ready for a great big debate. If your Russian counterpart tells you passionately that he completely disagrees with every point you have made, it’s not a sign that things are starting poorly. On the contrary, it’s an invitation to a lively discussion.”

Open disagreement may be seen as positive if it’s expressed calmly and factually.

In other cultures the same behavior would provoke anger and possibly an irreconcilable breakdown of the relationship. An American manager named Sean Green, who had spent years negotiating partnerships in Mexico, told me that he quickly learned that if he wanted to make progress toward a deal, he needed to say things like “I do not quite understand your point” and “Please explain more why you think that.” If he said, “I disagree with that,” the discussions might shut down completely.

The key is to listen for verbal cues—specifically, what linguistics experts call “upgraders” and “downgraders.” Upgraders are words you might use to strengthen your disagreement, such as “totally,” “completely,” “absolutely.” Downgraders—such as “partially,” “a little bit,” “maybe”—soften the disagreement. Russians, the French, Germans, Israelis, and the Dutch use a lot of upgraders with disagreement. Mexicans, Thai, the Japanese, Peruvians, and Ghanaians use a lot of downgraders.

Try to understand upgraders and downgraders within their own cultural context. If a Peruvian you’re negotiating with says he “disagrees a little,” a serious problem may well be brewing. But if your German counterpart says he “completely disagrees,” you may be on the verge of a highly enjoyable debate.

2. Know When to Bottle It Up or Let It All Pour Out

In some cultures it’s common—and entirely appropriate—during negotiations to raise your voice when excited, laugh passionately, touch your counterpart on the arm, or even put a friendly arm around him. In other cultures such self-expression not only feels intrusive or surprising but may even demonstrate a lack of professionalism.

What makes international negotiations interesting (and complicated) is that people from some very emotionally expressive cultures—such as Brazil, Mexico, and Saudi Arabia—may also avoid open disagreement. (See the exhibit “Preparing to Face Your Counterpart.”) Mexicans tend to disagree softly yet express emotions openly. As a Mexican manager, Pedro Alvarez, says, “In Mexico we perceive emotional expressiveness as a sign of honesty. Yet we are highly sensitive to negative comments and offended easily. If you disagree with me too strongly, I would read that as a signal that you don’t like me.”

In other cultures—such as Denmark, Germany, and the Netherlands—open disagreement is seen as positive as long as it is expressed calmly and factually. A German negotiator, Dirk Firnhaber, explains that the German word Sachlichkeit, most closely translated in English as “objectivity,” refers to separating opinions from the person expressing them. If he says, “I totally disagree,” he means to debate the opinions, not disapprove of the individual.

People from cultures like these may view emotional expressiveness as a lack of maturity or professionalism in a business context. Firnhaber tells a story about one deal he negotiated with a French company. It began calmly enough, but as the discussion continued, the French managers grew animated: “The more we discussed, the more our French colleagues became emotional—with voices raised, arms waving, ears turning red…the whole thing.” Firnhaber was increasingly uncomfortable with the conversation and at times thought the deal would fall apart. To his surprise, the French took a very different view: “When the discussion was over, they seemed delighted with the meeting, and we all went out for a great dinner.”

So the second rule of international negotiations is to recognize what an emotional outpouring (whether yours or theirs) signifies in the culture you are negotiating with, and to adapt your reaction accordingly. Was it a bad sign that the Swedish negotiators sat calmly across the table from you, never entered into open debate, and showed little passion during the discussion? Not at all. But if you encountered the same behavior while negotiating in Israel, it might be a sign that the deal was about to die an early death.

3. Learn How the Other Culture Builds Trust

During a negotiation, both parties are explicitly considering whether the deal will benefit their own business and implicitly trying to assess whether they can trust each other. Here cultural differences hit us hard. How we come to trust someone varies dramatically from one part of the world to another.

Consider this story from John Katz, an Australian negotiating a joint venture in China. Initially, he felt he was struggling to get the information his side needed, so he asked his company’s China consultant for advice. The consultant suggested that Katz was going at the deal too quickly and should spend more time building trust. When Katz said he’d been working hard to do just that by supplying a lot of information from his side and answering all questions transparently, the consultant replied, “The problem is that you need to approach them from a relationship perspective, not a business perspective. You won’t get what you want unless you develop trust differently.”

Research in this area divides trust into two categories: cognitive and affective.Cognitive trust is based on the confidence you feel in someone’s accomplishments, skills, and reliability. This trust comes from the head. In a negotiation it builds through the business interaction: You know your stuff. You are reliable, pleasant, and consistent. You demonstrate that your product or service is of high quality. I trust you. Affective trust arises from feelings of emotional closeness, empathy, or friendship. It comes from the heart. We laugh together, relax together, and see each other on a personal level, so I feel affection or empathy for you. I trust you.

In a business setting, the dominant type of trust varies dramatically from one part of the world to another. In one research project, Professor Roy Chua, of Singapore Management University, surveyed Chinese and American executives from a wide range of industries, asking them to list up to 24 important members of their professional networks. He then asked them to indicate the extent to which they felt comfortable sharing their personal problems and dreams with each of those contacts. “These items showed an affective-based willingness to depend on and be vulnerable to the other person,” Chua explains. Finally, participants were asked to indicate how reliable, competent, and knowledgeable each contact was. These assessments showed a more cognitive-based willingness to depend on the other person.

The survey revealed that in negotiations (and business in general) Americans draw a sharp line between cognitive and affective trust. American culture has a long tradition of separating the emotional from the practical. Mixing the two risks conflict of interest and is viewed as unprofessional. Chinese managers, however, connect the two, and the interplay between cognitive and affective trust is much stronger. They are quite likely to develop personal bonds where they have financial or business ties.

In most emerging or newly emerged markets, from BRIC to Southeast Asia and Africa, negotiators are unlikely to trust their counterparts until an affective connection has been made. The same is true for most Middle Eastern and Mediterranean cultures. That may make negotiations challenging for task-oriented Americans, Australians, Brits, or Germans. Ricardo Bartolome, a Spanish manager, told me that he finds Americans to be very friendly on the surface, sometimes surprisingly so, but difficult to get to know at a deeper level. “During a negotiation they are so politically correct and careful not to show negative emotion,” he said. “It makes it hard for us to trust them.”

So in certain cultures you need to build an affective bond or emotional connection as early as possible. Invest time in meals and drinks (or tea, karaoke, golf, whatever it may be), and don’t talk about the deal during these activities. Let your guard down and show your human side, including your weaknesses. Demonstrate genuine interest in the other party and make a friend. Be patient: In China, for example, this type of bond may take a long time to build. Eventually, you won’t have just a friend; you’ll have a deal.

4. Avoid Yes-or-No Questions

At some point during your negotiation you’ll need to put a proposal on the table—and at that moment you will expect to hear whether or not the other side accepts. One of the most confounding aspects of international negotiations is that in some cultures the word “yes” may be used when the real meaning is no. In other cultures “no” is the most frequent knee-jerk response, but it often means “Let’s discuss further.” In either case, misunderstanding the message can lead to a waste of time or a muddled setback.

A recent negotiation between a Danish company and its Indonesian supplier provides a case in point. One of the Danish executives wanted reassurance that the Indonesians could meet the desired deadline, so he asked them directly if the date was feasible. To his face they replied that it was, but a few days later they informed the company by e-mail that it was not. The Danish executive was aggrieved. “We’d already wasted weeks,” he says. “Why didn’t they tell us transparently during the meeting? We felt they had lied to us point-blank.”

After hearing this story, I asked an Indonesian manager to explain what had happened. He told me that from an Indonesian perspective, it is rude to look someone you respect and like in the eye and say no to a request. “Instead we try to show ‘no’ with our body language or voice tone,” he said. “Or perhaps we say, ‘We will try our best.’” Signals like these are a way of saying “We would like to do what you want, but it is not possible.” The interlocutor assumes that his counterpart will get the message and that both parties can then move on.

The problem can work the other way. The Indonesian manager went on to describe his experience negotiating with a French company for the first time: “When I asked them if they could kindly do something, the word ‘no’ flew out of their mouths—and not just once but often more like a ‘no-no-no-no,’ which feels to us like we are being slapped repeatedly.” He found out later that the French were actually happy to accede to his request; they had just wanted to debate it a bit before final agreement.

Look for Cultural Bridges

There’s no substitute for learning all you can about the culture you will be negotiating with. But taking a cultural bridge—someone who is from the other culture, has a foot in both cultures, or, at the very least, knows the other culture intimately—to the negotiating table will give you a head start.

Of course, if one party doesn’t speak English well, it’s common to have the help of a translator; but a cultural bridge can make a huge impact even if no linguistic divide exists. During breaks in the negotiation, for example, you can ask this person to interpret what’s going on between the lines.

The British executive Sarah Stevens was leading a U.S. team negotiating a deal in Japan. The Japanese parties all spoke English well, but three hours into the negotiation Stevens realized that her team was doing 90% of the talking, which worried her. She asked a colleague from her company’s Japan office for advice. He explained that the Japanese often pause to think before speaking—and that they don’t find silence uncomfortable the way Americans or the British do. He advised Stevens to adopt the Japanese approach: After asking a question, wait patiently and quietly for an answer. He also told her that the Japanese often make decisions in groups, so they might need to confer before giving an answer. If after a period of silence no clear answer had been given, Stevens might suggest a short break so that they could have a sidebar.

In Japan, he said, it is common to iron out a lot of potential conflicts in one-on-one informal discussions before the formal group meeting, which is seen more as a place to put a stamp on decisions already made. This particular nugget came too late for that trip, but Stevens made sure the next time to enable informal discussions in advance. Thanks to her cultural bridge, she got the deal she had hoped for.

If your team has no obvious candidate for this role, look elsewhere in your company. But don’t make the common mistake of thinking that someone who speaks the language and has a parent from the culture will necessarily make a good cultural bridge.

Consider this British manager of Korean origin: He looked Korean, had a Korean name, and spoke Korean with no accent, but he’d never lived or worked in Korea; his parents had moved to Britain as teenagers. His company asked him to help with an important negotiation in Korea, but once there, he quickly realized that his team would have been better off without him. Because he spoke the language so well, the Koreans assumed that he would behave like a Korean, so they took offense when he spoke to the wrong person in the room and when he confronted them too directly. As he observes, “If I hadn’t looked or sounded Korean, they would have forgiven me for behaving badly.”

When you need to know whether your counterpart is willing to do something, but his answer to every question leaves you more confused than before, remember the fourth rule of cross-cultural negotiations: If possible, avoid posing a yes-or-no question. Rather than “Will you do this?” try “How long would it take you to get this done?” And when you do ask a yes-or-no question in Southeast Asia, Japan, or Korea (perhaps also in India or Latin America), engage all your senses and emotional antennae. Even if the response is affirmative, something may feel like no: an extra beat of silence, a strong sucking in of the breath, a muttered “I will try, but it will be difficult.” If so, the deal is probably not sealed. You may well have more negotiations in front of you.

5. Be Careful About Putting It in Writing

American managers learn early on to repeat key messages frequently and recap a meeting in writing. “Tell them what you’re going to tell them, tell them, and then tell them what you’ve told them” is one of the first communication lessons taught in the United States. In Northern Europe, too, clarity and repetition are the basis of effective negotiation.

But this good practice can all too often sour during negotiations in Africa or Asia. A woman from Burundi who was working for a Dutch company says, “In my culture, if we have a discussion on the phone and come to a verbal agreement, that would be enough for me. If you get off the phone and send me a written recap of the discussion, that would be a clear signal that you don’t trust me.” This, she says, repeatedly caused difficulty for her company’s negotiators, who recapped each discussion in writing as a matter of both habit and principle.

In emerging markets, everything is dynamic; no deal is ever really 100% final.

The difference in approach can make it difficult to write a contract. Americans rely heavily on written contracts—more so than any other culture in the world. As soon as two parties have agreed on the price and details, long documents outlining what will happen if the deal is not kept, and requiring signatures, are exchanged. In the U.S. these contracts are legally binding and make it easy to do business with people we otherwise have no reason to trust.

But in countries where the legal system is traditionally less reliable, and relationships carry more weight in business, written contracts are less frequent. In these countries they are often a commitment to do business but may not be legally binding. Therefore they’re less detailed and less important. As one Nigerian manager explains, “If the moment we come to an agreement, you pull out the contract and hand me a pen, I start to worry. Do you think I won’t follow through? Are you trying to trap me?”

In Nigeria and many other high-growth markets where the business environment is rapidly evolving, such as China and Indonesia, successful businesspeople must be much more flexible than is necessary (or desirable) in the West. In these cultures, a contract marks the beginning of a relationship, but it is understood that as the situation changes, the details of the agreement will also change.

Consider the experience of John Wagner, an American who had been working out a deal with a Chinese supplier. After several days of tough negotiations, his team and its legal department drafted a contract that the Chinese seemed happy to sign. But about six weeks later they reopened discussion on points that the Americans thought had been set in stone. Wagner observes, “I see now that we appeared irrationally inflexible to them. But at the time, we were hitting our heads against our desks.” For the Americans, the contract had closed the negotiation phase, and implementation would follow. But for the Chinese, signing the contract was just one step in the dance.

So the fifth and final rule for negotiating internationally is to proceed cautiously with the contract. Ask your counterparts to draft the first version so that you can discern how much detail they are planning to commit to before you plunk down a 20-page document for them to sign. And be ready to revisit. When negotiating in emerging markets, remember that everything in these countries is dynamic, and no deal is ever really 100% final.

Finally, don’t forget the universal rules: When you are negotiating a deal, you need to persuade and react, to convince and finesse, pushing your points while working carefully toward an agreement. In the heat of the discussion, what is spoken is important. But the trust you have built, the subtle messages you have understood, your ability to adapt your demeanor to the context at hand, will ultimately make the difference between success and failure—for Americans, for Chinese, for Brazilians, for everybody.

How To Negotiate Cars To Satisfaction

Elinor Stutz

Most people fear negotiation. But by putting a different face on the traditional thought toward the topic, you will find negotiating as simple as asking a friend to go to a movie with you!

Questions to Ponder

If you could see negotiating in this light, would you ask for more, more frequently?  What would this do for your business or career?

These are questions worth contemplating to find the well-deserved answers.

As you become willing to exchange hard core tactic negotiation for the friendly ask style, it becomes very easy to negotiate just about anything you desire. This is particularly true during the holidays and surprisingly applies to negotiating cars!  Relying on your friendly smile and inquisitive nature, you will open up the conversation to additional possibilities never before thought possible.

Sales Wisdom: To consider your negotiation a success, the conclusion of the transaction should be satisfying for all.

Sales Negotiation Strategies

Most people fear purchasing or negotiating cars because it is incorrectly believed that the salespeople“have you” the minute you step into the showroom. After all, why would a salesperson consider negotiating a lower price than first offered knowing that you wish to satisfy a loved one at holiday time with a particular model?

The art of any negotiation, or sale, is to begin from the other person’s perspective.  Therefore, turn the question around.

What might be on the salesperson’s personal agenda?

Most likely, he-she needs to sell enough cars to make quota. Understand that during the year, sales are in short supply and income is minimal. They, too, are trying to satisfy loved ones during the holiday.  Next, bonuses are available only when the sales numbers achieved are higher than the quota set for selling the required number of cars.  It’s also true that the salesperson will earn an extra bonus selling at the initial offer price due to extra margin built into that price.

Is it your obligation to help the salesperson earn their bonus?  The answer is, only if you have extra money to spend!

Sales Knowledge: Anyone has the right to say, “yes” or “no” to an offer so there is NO Obligation on either side of the negotiating table. Walking away is always a viable solution for either party.

Before You Enter A Showroom

Know your budget, do your research on value-cost, and most importantly, leave all emotion at home.  Enter the showroom with a smile and demonstrate calm.  When you see exactly what you do want, hide emotion by remaining calm, analytical, and be cognizant of what you promised yourself.

Thoughtfully ask questions important to you, test drive the car, and then begin the friendly ask for what you are willing to pay.

The Sales Game

No matter what you offer, it is highly likely the salesperson will return with, “I can’t match that.” Acknowledge the difficulty and then suggest perhaps the Manager has more leeway in finding a satisfactory price point.

Buying a car is a time-consuming process, so bring a phone or book to occupy your time, and to avoid looking desperate during the, “I need to ask my manager” phase of the negotiation. A continued smile, calm reaction, and having something to occupy your attention does wonders as it appears you are there for the long haul to figure the deal out to satisfaction.

Make It Easy for Decision Makers to Approve Your Deal

by Paul V. Weinstein

Imagine you’ve been offered a way to purchase $1 lottery tickets for a penny each. How many would you buy? If you were operating based on rational self-interest one could argue that you would buy as many tickets as possible. How could you refuse an opportunity with so much upside and so little downside? Similarly, the role of the dealmaker is to find a way to drive the “cost” of the deal down to as close to zero as possible — so the decision maker can’t possibly refuse to buy that ticket.

It’s harder than it sounds. In order to make it happen, you need to understand the dynamics of the cost of the deal. In my experience, this is where people go wrong — they misinterpret the nature of the cost to the person sitting across the table. Getting to yes requires knowledge about the decision maker, but it’s not necessarily the knowledge you’d think.

In the first of now four pieces I’ve done for HBR, I outlined the stakeholder types you will encounter in the effort to close a big deal. Next, I went through a more detailed examination of the motivations of two of those stakeholders, thechampion and the blocker. Now, I’d like to close the loop and talk about thedecision maker, the final gatekeeper in the triumvirate. Based on many years as a business founder, executive, and advisor, I would argue that getting the deal closed requires an appreciation for one key principle about decision makers that many of us get wrong.

It’s as simple as this: Getting the green light on a deal is more about mitigating professional risk for the decision maker than it is about accentuating the business benefits of what you are offering. In other words, addressing the downside is more important than touting the upside.

Our understanding of how organizations think and act doesn’t always make this distinction between the interests of the enterprise and its managers. For example, The Wall Street Journal might typically report something like the following: “Exxon Corporation has announced that it is moving forward with development of oil fields in Kazakhstan in order to meet the world’s demand for oil.” Fair enough: Exxon does want to find and sell more oil. But the statement also seems to imply that Exxon is a “person” that makes such decisions purely rationally in its interests. News flash: There is no Exxon-level decision maker, there are only the people running Exxon and making the decisions based on their professional interests.  Corporations don’t make decisions, people make decisions.

When you or I decide (or even a billionaire decides) to make a personal investment, the thought process is very focused on the desired return. Will I get good value for my money? In a corporate decision, however, the decision maker is playing with the house’s money, not his or her own, so the financial and/or opportunity cost is almost irrelevant. The risk that looms largest is not about losing money; it’s about losing your job or shedding prestige.

So how do you reduce professional risk for the decision maker and get your deal done? By understanding three different levels of deciders and what motivates each of them at a personal level.

CEO, President, COO (Top Dogs):  These highest order decision makers are the big picture thinkers. They care about pleasing boards and shareholders. Public perception and legacy are what is important to them. In order to reduce a Top Dog’s risk profile, think about the individuals to whom they turn for advice and validation. These include:

Advisors—Top Dogs rarely know much about the details of the deal, so they rely on their lieutenants for counsel. Getting these individuals, who attend to the Top Dog, on your side is a crucial step one. Cooperate with them, show them respect, and give them the ammunition they need to look good to the big boss.

Shareholders—External credibility and public recognition is what helps Top Dogs shine around investors and customers. If a close competitor is doing a similar deal, for example, or others in the industry are aligned with the strategy or direction, it will help Top Dogs bring shareholders on board.

Board members—In the end, this is who Top Dogs really aim to please. If the deal goes south, the questions the board will always ask is: Did you do your due diligence? Two things: First, create a story or narrative that will help Top Dog’s position the deal and feel good about public perception. Second, create a strong case that will enable them and their lieutenants to say yes to the deal. (Remember it’s not about eliminating the risk of failure, it’s about providing a strong narrative for the Top Dog so that if something goes wrong, their decision can be defended.)

CSO, CFO, CIO, IT, Ops (Practice Leaders): Typically, these decision makers run cost centers as opposed to generating revenue. Practice Leaders care about avoiding mistakes, looking smart within their domain, and maintaining internal credibility. These are the people who have been hired to make sure things don’t go wrong. In general, they tend to be the most conservative and apt to say no to deals. How do you reduce downside risk for a group so attuned to potential loss? Provide them with voluminous documentation to make sure that they have a protective paper trail behind them. Your job is to think of everything that could go wrong and create solutions to address each of those scenarios. As with Top Dogs, Practice Leaders have lieutenants with deep domain expertise. These domain experts are where you should be cultivating your champions — get them on your side and not only will they advocate for you, but they will also help insulate the Practice Leader should the deal go wrong.

Sales, Marketing, GMs, Product (Business Leaders):  These decision makers are directly involved in generating revenue and they are judged based on the numbers. One the one hand, meeting budget projections is make-or-break for Business Leaders because it impacts their compensation and upward mobility. On the other hand, they have the latitude to fly below the radar and experiment. Timing is what dealmakers need to think about when they sit across the table from Business Leaders. Most Business Leaders have P&L goals that were established in the prior year — and anything that puts those projections at risk is a tough sell. If things are going well for the business leader, then he/she may be inclined to take a risk. Sometimes Business Leaders need to do a deal in order to make their year look better, other times they are out scouting for a new venture to help them start their new fiscal year off right. As long as the decision is contained within their fiefdom, business leaders are the easiest group to convince. They are always looking for ways to break out from the pack and become the next Top Dog.

Whether you are dealing with a Top Dog, Practice Leader, or Business Leader, getting a decision maker to say yes is all about building a platform of credibility that minimizes their professional risk and allows them to feel good about the deal. It is not necessarily that the platform improves the deal’s potential for success (although that is certainly part of it), but it gives them something to point to in case things go south. Remember, for a person in a position of power, it is more about protecting them from what can go wrong than it is about what can go right.