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business negotiation in China

Podcast transcript #34: Essential skills for business negotiation in China

Find here the full China paradigm episode 34. Learn more about Nicolas Clement’s story and business negotiation in China and find all the details and additional links below.

Full transcript below:

Matthieu David: Hello, everyone. I am Matthieu David, the founder of Daxue consulting and its podcast China marketing podcast, China Paradigm. Today I am with Nicolas Clement, who is the founder of Nego Asia, the authority of negotiation. Two years ago, you founded Nego Asia and represented at the same time Halifax Consulting, which is one of the leading companies in the training area in Europe. You are focusing on training negotiation after spending 12 years in the Chinese market basically, working in the real estate industry, working for a company in touch with industrial companies, a very big one. And the reason why we named this podcast China paradigm is that we believe every company now has a Chinese paradigm, whether it’s small, medium or big, there is a Chinese paradigm. The economy is different.

The way things work in China is really different. And China has 20-25% of the world population and certainly in the coming decade, will become the first economic power. It’s also different in terms of negotiation.

Another thing I like to go in depth with you is how different it is and whatnegotiation skills you need to succeed in China. Thank you very much, Nicolas, for being with us. The first question will be – I hope I didn’t say anything incorrect, so please feel free to correct me if I did – what is the size of your business now? How many clients have you served? How many deals have you worked on? Could you please give us a bit of an idea of where you are in terms of development now?

Nicolas Clement: Thank you very much, Matthieu. Hi everyone. Indeed, I spent 12 years in China and I spent more than 30 years negotiating in various markets. Last year, I trained about 400 people in my first year of activity, half of whom were Chinese. All of them, except three or four, were in China. More recently, I trained 70 people with one of my colleagues of Halifax Consulting in Kuala Lumpur for a CAC40 company.

I coach as well, and I consult with a lot of entrepreneurs for their shareholder agreements, either with their shareholders or with their VC’s. I was fortunate enough last year to animate a panel with XNode (and LaFrenchTech Shanghai), which was a role-play of entrepreneurs / VC negotiation, two weeks down the road, I will animate a panel with French Founders and next month with the EUCCC , which is a sign that negotiation is a central topic for everybody, as it should have for many many years, and as it was, as you mentioned, for some ancient philosophers and authors. It has been around for centuries, but it’s now becoming a very hot topic.

There have been four phases in the negotiation paradigm, to take the same vocabulary like yours, and I like to talk about Negotiation 4.0. I think you had negotiation 101, which was win-lose, how to make the most of any deal, whatever the outcome for the other party, you might call that the used-car salesman negotiation. Then there was the age of win-win. I win, you win, and in the beginning, that worked well, I mean in the 80s. It was a great idea because it was for rational actors and it came from the perspective to have the responsibility of the outcome for the other party as well. Then there was, as you mentioned, ‘Start With No’ which was coined by one of my mentors, Jim Camp.

Matthieu David:   Just to interrupt you. You are referring to a talk we had before the recording, so people who are listening to us don’t know we talked about ancient negotiators like Sun Tzu and Niccolò Machiavelli, but I’d like to ask these questions later on, and about someone, I am finding the quote, that’s the one you are talking about Jim Camp, author of ‘Start with No.’ I think it is the best seller. I saw it in some online libraries telling about you that “Nicolas is one of those rare individuals who not only masters various disciplines but continues to build upon them delivering a top 1% performance level,” from someone who is recognized as a master of negotiation who is Jim Camp.

Nicolas Clement: That is very nice of you. Yes, Jim was my coach for five years. Unfortunately, he passed away several years ago, but his teachings are still with me. I would call it Negotiation 3.0. and now the world needs Negotiation 4.0, which means for me co-construction of a better future with conversations between real people. Meaning: emotions must be there, respect for the other person must be there, but in the meantime, neurosciences have proven that it is impossible to make a 100% rational decision. So, you have to take that into account.

Matthieu David:   When you’re talking about the different stages of negotiation, I am interested to know If you identify those stages because the society is changing or because the science of negotiation has advanced. I feel by what you just said now is because the science of negotiation has advanced with neuroscience. But on the other way, you talk about the 80’s when players are rational, which is also a change in a society or maybe it’s both who have changed.

Nicolas Clement: That’s a very good question. Actually, it’s a little bit of both, because of a lot of the valid principles that I use to coach, consult, and teach in negotiation have been around for 2000 years. And you can find them in the ancient philosophers like asking a lot of questions instead of trying to persuade. This has been around for ages. You asked a question about the number of negotiations I have coached. It’s difficult to say; I can tell you that the largest one last year was several hundred million Euros.

Matthieu David:   Wow. That’s the thing I wanted to ask you. You talked about helping negotiations for getting investment, venture capitals and so on, but this sounds like a very big deal, several hundred million. I want to be very pragmatic and ask you, how do you charge? Because it’s very different businesses, to help an entrepreneur who needs to raise money and to help a business with a several-hundred-million deal, how do you work on this? Do you take equity from the entrepreneur, or would you take a commission from the deal? How do you work? How do you charge?

Nicolas Clement: That’s also an excellent question, and I will right away use the ‘Start with No’ philosophy by telling you that I am not prepared to answer this in a lot of detail. However, what I can tell you is that what is of paramount importance is to establish an alignment of interests with the people who I am working with. So, depending on the situation, this can totally vary along with several fee structures.

Matthieu David:   Understood. So, you mentioned in the conversation we got previously about ancient philosophers and thinkers about negotiation. There is one who is famous in China, Sun Tzu, who has been a master of war strategy, not exactly negotiation. But one of thing I remember from the book is to say that you need to win before you fight, which is all about negotiation. Don’t fight. Don’t go to this very, very hard battlefield and lose the blood of your army. You need to win before even you go for a fight. What do you take from ancient philosophers of negotiation like Sun Tzu, Machiavelli, and certainly all those I don’t even know?

Nicolas Clement: Okay, excellent. Actually, there is a problem with the paradigm of negotiation as war. Because if you think war, you think exactly as you mentioned, you mean winning over somebody or over a territory, which is detrimental to the long-term success of negotiation. About Sun Tzu, what I would say is that, of course, you quote a famous quote from the movie ‘Wall Street’  as well: “Every battle is won before it’s ever fought.” However, in Sun Tzu, I prefer another one that is totally applicable to the negotiation, which is “in ancient times, great warriors started by making themselves invincible then waited for the enemy to be vulnerable”.

So, ‘enemy’ is not the right word you could say ‘adversary’, ‘adversary’ meaning the people who are on the other side. Originally, ‘adversary’ means ‘on the other side of the river’, and that’s it in the beginning of the negotiation. So, I am more into the importance of preparation than in the fact that you have to win over the adversary. You have to co-construct a better future, even in tough negotiations. And it is all the more important that the negotiation is critical. As for Machiavelli, I think it is totally different because he was more an author regarding power, political power, and I would say that this is not 100% relevant to the realm of negotiation.

Matthieu David:   It’s more about maintaining power and dividing to reign. It’s a very different situation, I understand. What have all the thinkers from the past initiated this thinking of negotiations? I have two levels of questions first generally speaking and second, more China-specific.

Nicolas Clement: What do you say about the two levels of questions?

Matthieu David:   So, thinkers, like we talked about Sun Tzu, you talk about Socrates, do you have other thinkers of negotiation who were not from the 20th century, who you think have helped shape what is negotiation skill and what is negotiation teaching?

Nicolas Clement: Okay. First of all, what do you think of Socrates?

Matthieu David:   Myself?

Nicolas Clement: Yes.

Matthieu David:  I learned that Socrates was asking a lot of questions, so it’s about asking a lot of questions, through what we call in French “maieutique’ , it’s about asking a lot of questions to emerge some truth because we all have truths inside ourselves. Is it negotiation? I wouldn’t have said that it’s about negotiation myself. I would have said it’s more to reach the truth . But maybe you highlight something here.

Nicolas Clement: I don’t know. I think the truth is in the eyes of the beholder, especially in negotiation. However, would you prefer someone to try and persuade you to do something or someone who asks you questions to elicit what is more important to you?

Matthieu David:  I feel the question is about sophistic and the sophists, and Socrates was more looking for the truth, and sophists were more looking for persuading and not convincing people. So, I prefer to be convinced than persuaded.

Nicolas Clement: Interesting. So, you see what just happened, I asked you a couple of questions and I learned a lot about you. And this is the essence of asking questions in negotiation. If you don’t ask questions, you don’t know what the other party really wants. That’s why questions are so important and speaking about authors of old, not necessarily ancient, I love Ralph Waldo Emerson, who is a 19th-century American author and essayist because he has said a number of things, which are totally relevant to negotiation and for me things that capture the essence of negotiation.

Actually, what is funny is that Emerson, I am not sure if he was exposed to the Tao Te Ching by Laozi, but I find that his writings are very close to it. I even own a book called “the Tao of Emerson”, which is a confirmation of this. Inside, he wrote one very interesting thing, which is, ‘What will you have? Pay for it and take it.’ I find it extraordinary, because if you read it carefully, what does it mean? It means that you have to know what you want (‘what will you have?’).

‘Pay for it and take it’, what does that mean? It means that you have to pay to get what you want, not only by means of money but also by means of the pain which is requested to carefully negotiate with the other to be sure that what you get is what you wanted. Because if you get what you want without paying the price, meaning the energy, the time, the money, the emotion, the pain to know the other party better, then you get the appearance of what you wanted. You get something else. And the problem is that the other party also gets something else. And the problem is that at the implementation stage, then this creates a lot of problems, which compound down the road, which sometimes, makes lawyers very rich… So, Emerson is really an author that I love in negotiation.

Matthieu David:  Okay. So you say that part of negotiation skills, the negotiation work, is to understand the opposite side and that at the implementation stage, there is also a very operational goal. Things are going to go a bit more smoothly than if you hadn’t done this homework of negotiating. It’s also to learn from each other, isn’t it?

Nicolas Clement: Yes, it’s also to avoid any shortcut, because shortcuts get you the appearance of the deal, the noise of negotiation, but it’s not a real negotiation. And it’s not the deal you were looking for.

Matthieu David:  Okay. Because we are talking about China and we are in China paradigm, with all the knowledge you have got from the Carnegie Institute, from the books you read, ‘Start with No’  and so on, how much is it applicable within the Chinese market, with Chinese people, with Chinese companies? Have you had to change, to amend some of the knowledge you got?

Nicolas Clement: Well, at the risk of shocking you, all this knowledge is bunk.

Because the knowledge is nothing without the human dimension that you bring to this knowledge to make agreements come forth. Which means, yes, of course, you have to adapt everything to every situation. Now you are asking me, is it different to negotiate with the Chinese? I don’t know because I don’t know them all.

However, I mentioned Laozi, and there is a lot of Yin and Yang in negotiation. Because you have to have empathy, you have to start with the picture in the mind of the other party, whether it is an individual mind or collective mind. But at the same time, you also have needs and wants, and you have the need to assert them. So, you have to start from the perspective that it is all right for everybody to have their own needs. And then the role of negotiations is to find ways to transform, let’s say individual preferences, which are generally not aligned in the beginning, into one collective preference, which is the outcome of the agreement.

Matthieu David:   So, your answer would be, principles are the same, but whatever the country, the city, whatever the situation, you have to adapt anyway and in China, you need to adapt because you always need to adapt to the situation. That’s what you are saying.

Nicolas Clement: I would say that that’s what you are saying. However, if I want to be a little bit more precise, for instance, there is a paradigm, I come back to your vocabulary again, which is that in commercial negotiations, because there are a lot of negotiations that are not commercial – like partnerships, things like that – but in buyer-seller negotiations, there is one big paradigm: client is God. So how are you going to say no, if the client is not happy with your price? You have to have a paradigm shift.

Matthieu David:  Okay, I understand what you are saying but why are you talking about that right now, after I talked about the fact that negotiations are based on principles, then you need to adapt based on the situation, like in China and US you always need to adapt. Is it linked to…?

Nicolas Clement: Because for me the most pervasive paradigm, which kind of gets in the way of successful negotiations, because even when the buyer asks you for a discount, it doesn’t mean that it is exactly what they want. And this is a paramount principle.

For instance, if I were in France, maybe I would ask ‘how you are going to implement over the next three years seamlessly’ because that would be my concern. But here, if I am in China and I am going to consult with Chinese salespeople, and I have been training Chinese salespeople in my previous company, it’s : how do you make sure that you get your point across in a way that is face saving for both parties?

So yes, face is important, maybe more than in the U.S., or at least more than in Texas, where they are very direct. There are other states in the U.S., where an indirect approach could work very well, but face-saving is of paramount importance. So, you have to show your respect you have to show your understanding, you have to respect the rituals, but you still have interests, and you have interests which, if they are not met, you are not going to be able to bring about the outcomes that the other party is looking for. Which is why you have to learn to be assertive.

Matthieu David:   I see. So you say that face-saving, to respect rituals, and also, basically, as a principle of every negotiation, to understand the interests of the opposite side, and to be assertive for that. Talking about the rituals, my own experience about China, is that as a foreigner, I’m considered as a foreigner. And I am not asked to be a Chinese. What would you say to those who think that as a foreigner you don’t have to comply to the Chinese rules, that it will put you in a weaker situation because you use the rules and ways of behaving which are not your own way of behaving and it’s better to be true to yourself.

Nicolas Clement: Actually, I would say that we are guests, instead of foreigners. We are guests. So, imagine you are a guest, you come to someone’s house, wouldn’t you try to know a little about who they are, where they come from, their habits, what they like, what they don’t like, before you ring the bell at the door?

Matthieu David:   Sounds logical. The question is, do you need to use the same game? That’s my question. You may keep actually your own way of behavior, even if you go to someone else’s house, your own character and not change it, But I feel that some people are conveying the message that you need to change everything when you go to China.

Nicolas Clement: First of all, is negotiation a game? Because in a game, someone wins and the other side, if someone wins, the other side what do they do?

Matthieu David:   They do lose, right?

Nicolas Clement: Right. So, is it really a game? That’s a question. But, with that said, be yourself, everybody else is taken. But you can be the polite version of yourself. The interested-in-others version of yourself, right? For me, that is of paramount importance.

There are other Asian cultures where when you try to learn more about the culture and express that at the table, they hate it and they close the door. But what I have found in China which is wonderful. If you make an effort to learn a few sentences or to learn a few four-words idioms, which shows your interest in the culture, there is a good-enough factor that will make you a welcome guest. And as a foreigner, you are a guest. Will you be a good guest or a bad guest? That’s entirely up to you. My advice is to be a good guest.

Matthieu David: I’d like to be a bit more technical. I saw on your website you were talking about BATNA, the best alternative to a negotiated agreement. Could you tell us more about what it is and why you have written this concept on your website?

Nicolas Clement: So BATNA, the best alternative to a negotiated agreement, was coined by Fisher and Ury in their book ‘Getting to Yes’, which was seminal to the win-win system. It’s actually what you do instead of the deal when you don’t have a deal. So, for thirty years, it has been considered a big element of negotiating power. But actually, the problem is that, maybe out of laziness, a lot of people think that BATNA is power, and that is absolutely not the case. You may have no BATNA and an extraordinary amount of power in negotiation. And you may have a great BATNA and no power in negotiation. And actually in my training sessions, I have my coachees or my trainees make a negotiation simulation, and most of the time – when I say most of the time it is almost 100%, it really rocks their world, because this concept of BATNA is turned upside down.

Matthieu David:  Could you give a concrete example for people to project in the BATNA, in the situation?

Nicolas Clement: Let’s say that you are buying a company. You are trying to capture the market right now. And if you buy this company, through various studies, you know that the value of your company will be increased by, I don’t know, 100 million, so you are prepared to pay up to 80-90 million to make a deal. You know that the seller has no BATNA, but the seller knows that if you don’t buy his company, you will have to build a factory, you will have to recruit the people – It’s a process that can last 12-24 months. The estimated cost is 70-80 million but could go through the roof. So, you have a BATNA, yes. But the cost of no deal to you is huge. So that’s another way to look at this element of power in the negotiation.

Matthieu David:  I understand. You are working both in shareholder agreement and commercial negotiation, also in negotiations for buying companies. Do you have a framework for those three different types of negotiations, or they go through a very similar process?

Nicolas Clement: I have a framework for the fundamentals of negotiation, and then a lot of the work I do with my clients individually is tailor-made. But I still have a framework.

Matthieu David:   Let’s talk specifically about shareholder agreement. You may have any investment, and you need to negotiate the terms with investors. What are the parameters to take into account? I know it’s a bit general because every company is different and each investor is different, but what would you advise an entrepreneur who is listening to us, in terms of parameters to have in mind and to consider?

Nicolas Clement: First of all, again, negotiation is a human performance event, so you have to be sure you get along with the people, because they are in for the long term. Even the short-term ones, they are in for 3 to 5 years. Second, you have to be sure, as you mentioned earlier – every battle is won before its ever fought – you have to be sure that in front of you, you have the right kind of investor, Angel investors, Series A investors, last round investors. You really have to know whether you have landed in the right category, right? After that, so it’s laying the groundwork, there is an important element, which is: do you want an investor which will buy shares which maximize the value of the company or maximize the cash that you will receive? Because it’s not the same.

Matthieu David:  You need to be clear about your objective, your own objective, your personal objective.

Nicolas Clement: Yes. Emerson: ‘What will you have? Pay for it and take it’. Then you have to lay the groundwork for the negotiation, in a lot of negotiations with VC’s, Entrepreneurs sometimes make a mistake to have the VC’s sign 10 NDAs  beforehand when the VC’s in China don’t have the time to do that and will never anyway enter the entrepreneur’s business. So, you also have to show some goodwill by yourself if you don’t want to close the door before you can even have a little look at what the VC can bring to you. You have to know whether the VC knows your industry, whether they have already brought startups like yours to success, stuff like that. And after that, you know, term sheets are so long that it’s impossible to give a general rule. But you have to think about what will happen in the other rounds down the road. That is very important.

Matthieu David:   I think what you are saying is that, even if investment should be a rational decision, because at the end of the day, the people who put the money they’re looking for the ROI, which is very, very rational, it’s about numbers, but when dealing with your investors, I think it’s much more about the alignment, that the people are connecting well, that you agree on your personal purpose, and so on. So, is it that part of your job is also to make both parties understand what they want clearly? Now I begin to understand why you mentioned Socrates. Is it a big part of your work?

Nicolas Clement: It’s better if both parties are professionally prepared, because contrary to what people think if you are extremely well prepared and the other side is not, you have a problem. They will say no to everything. You will scare them. So yes, you have to help them see what you see, and you have to try hard to help them see the value of explaining to you what they are after. And I’m not talking only about young entrepreneurs. Sometimes there is the same issue with listed companies.

Another thing is, you ask me about need. Actually, need, and neediness, are a big problem in negotiation. Because if I ask you to close your eyes and imagine you are an entrepreneur in China, you have a great product, a great idea, but your burn rate is terrible, and you need these 8 million or else. Now imagine the need for this 8 million within one month and try not to think about what would happen if you don’t get them. Now you feel the emotions associated with the fear of no deal. A lot of negotiators are trained to exacerbate this fear to get the most out of you. Because sometimes they are not after the same thing as you are. So they could disguise the willingness for a long-term deal, but the real thing is they want a short-term deal.

Matthieu David:   I see. I think that the fear of no deal is a concept that you’re emphasizing in your training, isn’t it?

Nicolas Clement: Yes. The problem of no deal is that fear generally gets you the thing that you fear. So, we are in Asia, it’s good to empty your mind. You prepare a lot but then, a little bit like the actor on the stage, you forget about stage fright and you go at it as if it were going to work.

Matthieu David:   Okay, so, going back to concept, so the art of no deal, I understand. You talked about the concept of four stages, the last stage being Negotiating 4.0. It’s about co-creation of a better future, I’m reading my notes, when you were talking, I took some notes. It seems beautiful, it seems nice, but isn’t it wishful thinking? Isn’t it very politically correct to say we’re going to build a better future together and I am going to take my part and you’ll take your part? What do you really mean by this concept?

Nicolas Clement: Okay, I fully agree with you that the things you added after what I said, is wishful thinking and that’s exactly what I think. So actually, what you just said after that would be, “Okay let’s discover America! Okay, let’s go.” So yes, that would be wishful thinking.

However, you have to start somewhere. And you have to start with a mission and purpose in negotiation, and this is really Camp vocabulary. Mission and purpose. It actually brings you back to the definition of negotiation. So, when in my seminars, workshops, master classes, conferences, I ask: what is negotiation? I never get two people to give the same answer. It has never happened. So, the first thing is, how are you going to negotiate if you are not playing the same game, if it is a game, and it is not even a game, right? That’s one thing and it’s very important. So, you have to have a higher purpose, a shared higher purpose, and you have to know what you want and you have to know what they want.

You have to get them to tell you as much of what they want as is appropriate for them to tell you. And then, it’s actually tri-dimensional, because, in the negotiation, you have your perspective. You try to get the perspective of the other side and you try to have a third perspective, which would be the perspective of an observer. So, it’s tri-dimensional, and there are techniques from a lot of different disciplines, which were not readily available 10 years ago, 20 years ago, 30 years ago, which make it possible today to construct negotiations differently than how they were constructed before. It is difficult to summarize it in a podcast right now, because it could take one week to explain! But the picture is, today you can have different approaches, which maximize the chances to do a good deal.

Matthieu David:   I understand. Would you be able to share more specifically some techniques for negotiation, or even one technique you’d like to share? Something practical that people who are listening to us could be able to use in the coming months, even in a daily situation.

Nicolas Clement: Hmmm! I think the problem with technique or tactics is that it’s meant to exploit  a weakness in the other side, but I think that if you see negotiation as a problem-solving technique or problem-solving toolbox, right? then one important thing could be to ask yourself – I go back to Socrates – what is my problem? What is their problem? What is one approach I can find to solve both with one negotiation? If you’re able to ask yourself this question, even to try to have 5% off on a loaf of bread at Pierre Gagnaire (and I’m not sure that it will work!), it’s already a great start. You have to try to find non risky situations to try this.

Matthieu David:   Interesting, okay. Non-risky situations.

Nicolas Clement: Don’t practice in front of the client, or don’t practice in front of the VC, don’t practice in front of the shareholder. Practice before.

Business negotiation in China

Matthieu David:   What do you think about the plays, because what you are describing is, we need to play some roles before, maybe be on one side and the other side before entering , I wanted to say, the game, but let’s say before entering the negotiation to be a little bit more neutral than ‘the game’. You have techniques, right? to train, with those roles playing and so on.

Nicolas Clement: Yes, we do. Actually, what we do is we try to emulate the best practices which work in the real world. That’s one thing. And then, there is this wonderful book by Anders Ericsson called ‘Peak’, which explains how to emulate the best to maximize the value of trainings. This book talks about deliberate practice, which is used by tennis people, golfers, alpinists… They discovered one point that they really want to master among one hundred other points, and this is the thing they are going to work on repeatedly again and again and again until it becomes second nature. So there is the old saying ‘practice makes perfect’. It is actually not true. It’s perfect practice which makes perfect.

So you really have to emulate, and that’s what we do in our consulting, coaching, and trainings, we transpose best practices combined and tested with the best of academic expertise – I completed two years ago a professional certificate in Strategic Decisions & Risk Management from Stanford University, where I got 97% at the negotiation exam – so you have to check if the academy is okay, but if they are not, I would then say that the real truth lies with the best practices in the real world.

Matthieu David:   Let’s talk about practice then.

Nicolas Clement: There is an ‘X factor’ that may have been overlooked by faculty.

Matthieu David:   Understood. Let’s talk about practice. Would you be able to name a case, maybe a case you have worked, maybe a case you have not worked on, or a famous case about a negotiation, which is specifically inspiring for you, something which really happened on a large scale in the economy, in business?

Nicolas Clement: You mean in the business right now?

Matthieu David:   Could be business right now, when I think about negotiation, and a case, I’m thinking about Cuba and the weapons in Cuba with Kennedy negotiating. This is a very typical negotiation case. Would you have a more recent case that you have worked on, that you would be able to share about the negotiation, a bit more in depth? without giving the names and without making it possible for us to guess, or a case which is known in the press in terms of negotiation, which has been inspiring and interesting for you?

Nicolas Clement: That’s going to be very difficult, because, you mention Cuban missile crisis and for me that’s one of the richest examples of how you can negotiate in an absolutely fearsome context of negotiation, where the outcome of the negotiation can mean the end of the world or whether the world is going to go on. Actually, there is a fantastic movie called ‘Thirteen Days’  about the Cuban missile crisis. I mentioned this film to one of my mentors in negotiation, and it became required viewing for all the top management of the group.

Because this is an example of, I wrote in an article recently on LinkedIn ‘how are you going to negotiate if you don’t speak the same language’, not necessarily Mandarin or English, but even if you speak English and there is not the same reality behind the worlds. But here, in this movie, you see it because one of the militaries doesn’t understand that actually, Kennedy and Khrushchev are inventing a new negotiation language. So that’s one of the best examples.

Matthieu David:   How do you define the new language they’ve created?

Nicolas Clement: Ah I would advise you to watch the movie!

Matthieu David:  Okay.

Nicolas Clement: Because it was very specific to that movie, actually, to the Cuban missile crisis. But in the current times, you can talk about a big negotiation, which is going on in the retail industry. And you can ask yourself did both sides see the same thing? Did both sides, I’m sure you know which one I’m referring to, I don’t want to name it, did both sides have aligned interests? And did everybody see what could happen on the longer term? And the longer term became very short for one of the sides. Yes, you have lessons to be learned everywhere.

There is a big lesson in the takeover by Coca Cola about 10 years ago of a Chinese company. And, they didn’t understand the concept of Yin Yang. They bragged about the great deal that they had done. And the deal was done actually. o their Yang became far too high and it triggered the Yin of a negative reaction from the authorities. And the deal was forbidden by the authorities. If the Coca Cola negotiators had said, ‘Well, it was a very tough deal, and I’m not sure what will come out of it, and for sure our counterparts really had a great victory,’ then the deal would have come through.

Matthieu David:   Okay, interesting. You talked about books. I’d like to know if you have other books to recommend about negotiation and I’d like to have your opinion about one book because the guy is famous and everyone is watching him, ‘The Art of the Deal’. I’m sure you have an opinion on it. Is it a good book on negotiation?

Nicolas Clement: Yes, so,  The Art of the Deal was a good book when it was published, because it had an element of novelty, people didn’t know how corporate real estate deals were made in New York City at the time, and there was some value to it. At the end of the book, there was also a look at the authors’ daily agenda, so it was called ‘a day in the life’. So, there was some value to it, but it has to be replaced in the context of the early ’80s when it was written.

Matthieu David:  Interesting. So, you mean that this book is very specific to real estate and also in the way it was written gives a lot of transparency like one day in the life of the author. It was very new. This is what you’re saying?

Nicolas Clement: Yes.

Matthieu David:   Okay, then my broader question about books is, you mentioned 3 to 5, maybe actually a bit more, books so far, would you have 2 or 3 other books you would recommend reading if someone is interested in negotiation?

Nicolas Clement: I think the first book to read would be ‘Never split the difference’ by Chris Voss’. The reason is, first of all, that Chris was also inspired somehow by Jim Camp and has developed ideas that work in the real world. So, that’s a good book about negotiation. I love one book, which is called ‘The Power of Nice’ written by a professor called Ron Shapiro, and one book that I like very much which is somehow bridging the gap between the mathematically-correct aspects of negotiation – of negotiating rationally – and the more hands-on real world hard look at how it works, would be a book by Margaret Neale, a Stanford professor, and the title of the book is ‘Getting more of what you want’.

Matthieu David:   How come, do you think, that most of the literature on negotiation is American?

Nicolas Clement: We don’t know that for a fact. There may be a lot of Chinese books that I don’t know of! So, we don’t know that for a fact.

Matthieu David:   I see. Nicolas, thank you very much for the time you took with us, I am sure that everyone who is listening to us will look into one of those books and learn about what you said and I’m sure some of them will attend some of your classes and training including – I know you are very active in the French Chamber of Commerce and Industry in China, and you are doing some training in the chamber.

Nicolas Clement: Yes, thank you very much, it was really an honor for me to be one of your guests, I hope I have made the necessary efforts to be a welcome guest and a good guest, and I thank you very, very much for inviting me.

Matthieu David:   Thanks to Nicolas. Bye – bye everyone.

Nicolas Clement: Take good care.

China paradigm is a China business podcast sponsored by Daxue Consulting where we interview successful entrepreneurs about their businesses in China. You can access all available episodes from the China paradigm Youtube page.

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