Key Insights for Successful Negotiations with Ulrike Schaede
From strategic silence to cultural intelligence, Japanese business expert Ulrike Schaede shares critical insights on mastering high-stakes negotiations in today’s complex global business landscape.
Picture this scenario: In a dimly lit Tokyo boardroom, executives from a major Western tech company wait in growing discomfort as their Japanese counterparts sit in prolonged silence. Minutes pass. The Western team, eager to close a vital partnership deal, begins nervously filling the void with additional concessions. What they don’t realize is that this silence – a sophisticated negotiation tactic deeply embedded in Japanese business culture – is methodically revealing their hand.
Negotiation is key to strategic value creation in today’s business landscape. With global M&A deals exceeding $3.8 trillion in 2023 and cross-border partnerships becoming increasingly critical to innovation, mastery of negotiation has never been more vital.
While some negotiators may possess natural talent, the path to mastery is increasingly well-documented through empirical research and cross-cultural studies. Professor Ulrike Schaede, an acclaimed expert on Japanese business strategy and recipient of the Masayoshi Ohira Memorial Prize for her 2020 book The Business Reinvention of Japan: How to Make Sense of the New Japan and Why It Matters, has distilled decades of observation into actionable insights for today’s global business leaders.
“If you spend more time negotiating than preparing, you are making a mistake,” emphasizes Schaede, highlighting a fundamental principle often overlooked in our fast-paced business culture.
Here is what Schaede has to say about negotiating – and why you need to master the delicate balance of patience, preparation, and human connection in an age obsessed with speed, zero-sum games and virtual meetings:
Ask, listen, and look for a win-win scenario
“Some people are born negotiators, but most of us are not. The good news is that there is a toolbox we can study and acquire that will make us solid negotiators,” Schaede explains.
Careful preparation and deep strategic planning can make a good negotiator out of a novice, she notes. To start with, read up on negotiation by brushing up on the literature – textbooks, case studies and tell-alls. Don’t be afraid to look for inspiration from unlikely sources: negotiation is as much a part of a businessperson’s life as it is for a poker player, or even an FBI agent.
Schaede’s research reveals several critical principles that differentiate exceptional negotiators from their peers. First, successful negotiations aren’t merely about reaching agreements – they’re sophisticated exercises in information gathering. So how do you get more information during a negotiation? “Ask questions and listen carefully” emphasizes Schaede.
Asking questions is not a substitute for doing your research beforehand, but a critical part of negotiation. “Realize that we negotiate to get more information. Unlike what most people think, most negotiations are not zero sum. There is almost always some room to create a win-win. But to find that space, you need more information. Again, ask questions!” she urges.
The BATNA blueprint
At the heart of successful negotiation lies a clear strategic framework. “Never go into a negotiation unprepared,” Schaede insists. She outlines two critical first steps: “Know your BATNA (best alternative to a negotiated agreement). Estimate the other side’s BATNA.”
But having a walkaway point isn’t enough – you need to constantly evaluate the quality of your information. “Assess the quality of your information – how confident can you be?” Schaede advises. This ongoing assessment shapes your strategy and helps identify potential areas for mutual benefit.
Don’t make it an email (or Zoom call)
Despite widespread digital transformation, Schaede’s teaching experience suggests that virtual negotiations consistently underperform. “One hundred percent of my students report back that negotiating on Zoom just does not work,” she asserts.
Her recommendation is unequivocal: “Don’t do it! Go see people, look eye-to-eye, get more information, find a win-win.” The only possible exception? Simple, zero-sum price negotiations for items like spare parts might be done on a Zoom call – but even then, she advises against it.
Use silence deliberately
Japanese negotiators have long understood what Western executives often miss: silence can be a powerful tool for information gathering. “If I had only one word to describe Japanese negotiation style, I would pick ‘patient’,” Schaede notes, adding, “There is a lot of quiet”.
However, an active silence differs from a passive one, risking the possibility of losing control of the room. “Japanese negotiators are mostly passive; they rarely set the agenda,” Schaede notes.
While this approach risks missing opportunities, it often yields crucial insights as counterparts feel compelled to fill the silence with additional information – or concessions. However, if you have useful information that could drive the conversation, then it is advantageous to use it.
Cultural intelligence as strategic asset
Cross-cultural negotiations demand a more nuanced understanding than simple stereotypes suggest. Rather than entering a negotiation with an assumption – for example, the notion that Japanese businesses follow hierarchies more stringently than others – it is important to treat each negotiation as a unique case, and to respect the other side’s preferences in advance.
“The challenge in global business is to adapt to each place separately, and not make assumptions,” Schaede observes.
Her solution? Start negotiations with an explicit discussion about cultural preferences and decision-making styles. “One thing I teach in my negotiation class is that it is often helpful to begin the negotiation with an exchange about process and preferences,” she notes. “Once everyone agrees on the process by which agreements can be forged, you can start talking about numbers. Discussing the process first can be a powerful strategy.”
Cultural intelligence is an ally to emotional intelligence – don’t let your emotions get in the way. Drawing from the classic negotiation text Getting to Yes, Schaede emphasizes a crucial principle: “Separate the issue from the people.” This means maintaining professional composure even in tense situations. “Don’t get angry at the other side, they may just be the messenger. Even if they are not, it does not help you if they get angry.”
Building trust in a fast-paced world
Traditional Japanese business emphasizes relationship building through multiple iterations of “gifts, office visits, dinners, deals, and so forth.” While these fundamentals remain important, methods are adapting to modern constraints. “That’s not to say that these norms no longer matter; rather, they are agreed upon perhaps in a different, and maybe faster, fashion,” Schaede notes.
She challenges the assumption that traditional relationship-building approaches are outdated: “What’s wrong with trust and agreement? Those are powerful ways to cement business relations. Why remove that?”
Looking ahead
As global business continues to evolve, certain principles remain constant. “Negotiation requires a strategy, and strategy-making comes with tradeoffs. Japan’s generally quieter, patient approach comes with its own costs and benefits,” Schaede notes.
“Perhaps the most important thing is to try to connect with the negotiation partner at a human level, before the business talk begins,” she concludes, noting that Japanese businesspersons have always been good at this.
This emphasis on human connection, combined with thorough preparation and strategic patience, forms the foundation of successful negotiation in any context.
For leaders navigating today’s complex business landscape, the message is clear: slow down, prepare thoroughly, and invest in human relationships. In an age of artificial intelligence and digital transformation, these fundamental human skills may well be your most powerful competitive advantage.