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4.24.2012

On the Spot or Well in Advance - Different Approaches to Decision Making by Leaders in the East vs West

"Let's have a closed session of just CEOs so that we can deliberate (on politically sensitive topics without those who may have their own vested interests in the outcomes) candidly and take decisions that is mutually beneficial" invited one western CEO to a room full of his colleagues - half of them Asian and the other half western.

Much to his disappointment, many of the Asian CEOs opted to have their aides present at the said "closed session" while he locked his men from the trenches out of the room.

This may not just be an East vs West thing, dependent on the decision-making style of the individual leader, but in general, since nemawashi is now a common word in some political circles outside of Japan, but originally a Japanese word, many Asian leaders seem to prefer to know at least the questions well in advance before being asked them, especially when they are deliberating in a foreign language even if they have simultaneous interpreters with them.

In my personal experience in international negotiations, more western leaders have their aides saying,
"I am not quite sure what my CEO's final decision will be, but given his comments to date..."
while more of their Asian counterparts seem to take time for pre-negotiation briefing sessions with their aides so that much "below the radar" negotiations and ground work can be carried out by those in the trenches leading up to a negotiation session.

In the opening example, I observed that the Asian companies all formed their official positions before they got to the meeting.

In particular, I observed my Japanese colleagues create a very detailed "position and decision" paper that was thoroughly reviewed by not just the CEO, but the entire team working on the project. This way, no matter who represented that organization, everyone belonging to it said exactly the same things, using the exact same words. It is a typical and traditional Japanese approach to negotiation and decision-making. And this way, when that decision is officialized, it cascades down the corporate ladder quickly, minimizing resistance from the ranks as well as the time it takes for that decision and its subsequent actions to be understood and executed.

However, some western businessmen feel that such an approach negates the significance of the CEOs meeting together; that it makes the occasion more ceremonial than actual negotiation and deliberation. They also say that the longer lead time required for such decisions to be made disable the leader from making decisions that respond to the rapidly changing market in a timely manner.

There is always two sides to a coin, and I am not saying that one way is better than the other or that one way is right and the other is wrong. They are not mutually exclusive - they just require anyone that may be caught in the middle of these differences to take note, be aware, and adjust their expectations and actions accordingly.

Who can say that the Asian CEO has less power than his western part because he does not seemingly make decisions on the spot? Or that he lacks the decision-making skills? The different styles means that the CEO makes the decision in a different time-space sequence to his western counterpart. That is all.

I also observe that by knowing the CEO's position in advance, his subordinates seldom voice their personal views - especially if it somehow goes against his superior's position or is not exactly the same - in public. They sing from the "party song book" and present a unified front when wearing their public personas.

If one wants to get past that and find out what a particular individual in the trenches really thinks about that topic, that is when the after hours drinks or lunch or coffee break comes in handy.

We all know that the real negotiation happens when no one is taking minutes.

And if one wants to find a way around the official position, or negotiate priorities among multiple action points, then it is really at this time, off the record, and with the actual people that do the work that the negotiation should happen.

So do not despair and get frustrated over the different decision-making styles. Focus on the goal - the outcome, the actual actions you want done - and make sure you know who to talk to and when.

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