Japanese Lessons In Negotiating Leadership Style

Different styles come with different advantages and disadvantages
Different styles come with different advantages and disadvantages
Image Credit: Donald Clark

One of the most important things that any negotiator brings to their next negotiation is their particular leadership style. It can be autocratic, it can be decisive, etc. The big question that we all have to be asking ourselves before we enter into our next negotiation is just exactly what style of leadership is going to be required in order to have the best chance of being able to reach a deal with the other side?

What Is Your Leadership Style?

I think that we can all agree that the advantages and disadvantages of leadership styles are not always readily apparent during a negotiation. However, one thing is certain – being decisive while avoiding autocratic leadership tactics is necessary for successful negotiators. Navigating these treacherous waters can be extraordinarily challenging for us to do successfully, but it can also give rise to creative decisions that help resolve disagreements that we encounter in unexpected ways. Few people balance these potential risks and rewards more than political leaders. There is a lot that we can observe about their leadership styles.

A good example of leadership styles is given to us by Japanese Prime Minister Shinzo Abe. He was called on to intervene in a dispute between business leaders and workers in ways that can be of interest to anyone who hopes to manage disputes between parties without causing more trouble than good. Abe was re-elected as Prime Minister of Japan in 2012 on the promise of reviving Japan’s long-stagnant economy. Abe took the opportunity to implement a new 3% tax on consumer purchases. That’s when everything fell apart for him. The consumer tax revealed that decades of stagnant wage growth had brought many Japanese workers to the brink of financial ruin. Very quickly consumer spending fell precipitously. Even as the economy quickly slipped into the red, large corporations continued to turn profits on a combination of exports and government support. Meanwhile, the workers who were being newly taxed turned to the Prime Minister for answers.

To save the day, Abe turned to a Japanese spring negotiation ritual called Shunto. In the decades following World War II, Shunto signaled the start of yearly salary talks between business and labor leaders. The Japanese economic boom of the 1980s turned things around, however, and in recent decades the declining influence of unions reduced Shunto to a mere formality. Abe signaled that this year would be different. Hoping to boost public spending, Abe made it clear that the year’s Shunto should lead to measurable increases in spending on wages. Abe succeeded in getting a handful of major corporations to commit to increased wages. Within two months, his choice to join the Shunto did prove to bear fruit for everyone.

How To Expand Value When Faced With A Challenging Negotiation

Negotiators need to understand that they don’t have to reinvent the wheel. In Japan Shunto may have lost some vigor over the years, but it had long-standing cultural value for workers and businesses alike. Rather than inventing a new process, it can be beneficial for negotiators to rely on existing ones and the pre-existing understandings they create.

We need to identify our audience. In the case of Japan, Abe wanted businesses to thrive, but also needed the support of all his citizens. Picking the right forum to back workers shaped the negotiations and signaled an awareness of shared valued to a larger constituency.

We need to set reasonable expectations. Abe saw the need to join this year’s Shunto, but he will lose the support of businesses if he does it every year. Instead, the Prime Minister’s representatives took special pains to emphasize the fact that they won’t be showing up to Shunto in the years to come, and got more value out of their negotiation by doing so.

Make sure that you get concessions that can lead to concessions. In Japan, the largest stakeholder to commit to raising wages was Toyota. Outside observers saw the car giant’s concession as a watershed moment that led many other companies to follow suit. In a complex negotiation with many stakeholders, getting a leader on the other side to make a concession can enhance the chances of a deal by strengthening coalitions and lessening fear.

We need to let the parties define their own concessions. Abe would have been met with accusations of autocratic leadership if he had demanded compliance with specific wages. Instead, he encouraged concessions, but avoided too making too many specifics, allowing individual companies the opportunity to negotiate a range of issues with their workers.

Finally, make sure to keep your celebrations to yourself. A hard-fought win in a negotiation can seem like just cause for a victory lap to just about everyone. In any business, the chances are high that you will find yourself negotiating with a former adversary some time down the road. There is also the likelihood that you’ll need a counterpart’s support away from the table. Yes, a win should feel good, but make sure that you don’t delight publicly in the other side’s loss.

What All Of This Means For You

Our ability to reach a deal with the other side in a negotiation often rests on our leadership style. There are many different styles that we can choose from; however the key is to pick the one that will work with the other side and allow us to reach the deal that both sides want. A good example of using your leadership style to get what you want can be seen in the Japanese Prime Minister Shinzo Abe.

Abe was reelected based on his promise to restart the Japanese economy. One of the things that he did to make this happen was to impose a 3% tax on all consumer purchases. This ended up revealing that Japanese workers were not making enough money to support a new tax. In order to resolve this problem Abe had to start negotiations with Japanese businesses in order to get them to give their workers raises. He used the Japanese spring negotiation ritual called Shunto to accomplish this. His actions showed the value of using your leadership style to get what you want in a negotiation.

Negotiators need to understand that they have to take the time to realize who they are negotiating with. If they can find common ground for their negotiations, then they can make things happen easier. Abe was able to take a challenging negotiating situation and get the deal that he wanted. If we study how he made this happen, we can make the same thing happen in our next negotiation.

– Dr. Jim Anderson Blue Elephant Consulting –
Your Source For Real World Negotiating Skills™

Question For You: What’s the best way to set expectations that will be reasonable?

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What We’ll Be Talking About Next Time

Most negotiators go into a negotiation like a warrior goes into battle. We are ready to take on the other side. We want to believe that we are stronger, better prepared, and will eventually emerge from the negotiation with a better deal than the other side will be able to get. However, what we might be missing is that the other side is not showing up unprepared. They’ve done their homework. They know what we want. What this means is that we are going to have to make a decision. What are we going to be willing to share with the other side in order to get the deal that we’re looking for?