Business Negotiation March 24, 2014

Use a Mediator

In Japan, mediators play a large role in buy-sell negotiations. Mediators, usually old friends of both, introduce buyer and seller. When the seller is ready to make a proposal, the mediator assures that the seller’s price, terms, specification and scope of work for the product or service to be rendered are in line with the buyer’s needs. There are few surprises for either party when these mediators do their job well.

During the performance phase, it is the mediator who helps settle disputes. If prices must be changed because the seller is losing money, or if the buyer has reason to need a lower price, it is the mediator who harmonizes the divergent viewpoints. Disputes between buyer and seller about property rights, sharing of production improvements, quality of standards or layoffs of employees are resolved with the mediator’s help rather than by law.

Such disagreements rarely go to court in Japan, which has far fewer lawyers than the United States. Mediators are catalysts who maintain the state of harmony between Japanese suppliers and their customers. They facilitate agreement in several ways:

• They can sell new ideas to each side more easily that if the same ideas were proposed by either party alone.
• They can cause both buyer and seller to ask themselves: “What decision do I want the other side to make and what must I do to help them make that decision?”
• They can suggest realistic expectations.
• They can invite both parties to talk once more after they walk out.
• They can listen privately as each side expresses controversial ideas without angering the other.
• They can stimulate mutually beneficial win-win creative thinking.
• They can listen in private to on side expressing distaste or distrust of the other without angering the other side.
• They can suggest compromise positions that either party alone would be afraid to propose for fear of weakening its bargaining position or power.

The best mediators come from outside the buying and selling organizations, though there are occasions when a member of one or the other organization is satisfactory. A well-regarded engineer, accountant or executive could act as mediator for both sides. The important thing is that they possess the social skill, knowledge, integrity and charisma to win respect as peacemakers, and that both sides view them as trusted friends.

Mediators are not used often enough in buy-sell relationships in the United States. They should be. The next time you experience a stalemate or see one coming, try bringing a third party into the talks. If that person acts judiciously, both sides will discover a face-saving way to resolve their differences.