‘No’ big deal
Marcos Lutz ’01, the CEO of Cosan Limited, one of Brazil’s largest firms, recalled the two years it took to finalize a $12 billion biofuel venture between his company and Royal Dutch Shell. The deal resulted in what both companies called the world’s largest sugar-based ethanol producer.
“It was a really long negotiation. I don’t see many deals that take that long to be concluded,” Lutz said.
The layers of decision-making at Shell added to the complexities of negotiating the massive deal, Lutz said, explaining that Shell’s team strived for consensus among its ranks rather than the top-down approach favored by American companies.
On the other hand, Brazilians aren’t as direct as Americans either. Brazilians are apt to look for diplomatic ways of declining, instead of saying no. As a result, Lutz said, it sometimes requires outsiders to “read between the lines to understand what is really the message.
“For an American, it’s fine to say no. But for a Brazilian, I don’t want to give bad news to a guy I don’t even really know.”
While cultural nuances might influence the way negotiations are conducted, business-minded people, regardless of where they hail from, will work toward mutually beneficial outcomes.
Align incentives and build trustNazar Yasin ’06, the managing partner of San Francisco-based investment firm Rise Capital, has specialized in developing opportunities in emerging markets across the globe.
“It’s about developing that personal relationship that is really necessary in so many parts of the world — before you can get down to the details of negotiating an optimal agreement.”
“For us, we like to keep it simple. What I’ve found in my career is that aligning incentives is the single most powerful negotiating tool in the universe,” Yasin said. “It transcends borders, languages and cultures and if — when you are doing a transaction — you are able to align incentives, everything else takes care of itself.”
Negotiating global deals seemed natural for Yasin, who was born in Greece, is part Libyan and whose wife is Mexican. “I’m cross-cultural by definition, and I’m fortunate to have a pretty multicultural family life.”
While at Kellogg, he said, he saw opportunities in making money abroad, particularly in technology. “I realized that 80 percent of the world lives in emerging markets, while approximately zero percent of the technology companies were based in those emerging markets. I wanted to get out ahead in those places, and fortunately it paid off.”
After Kellogg, Yasin joined Goldman Sachs in London and specialized in the Internet sector. He later joined Forticom as CEO, which he grew to become the largest social networking company in the Commonwealth of Independent States, Russia and Eastern Europe. He sold that business to a consortium made up of Mail.ru in Russia, Tencent in China and Naspers in South Africa, and then joined Tiger Global, where he led more than a dozen investments for the firm in China, Africa, Latin America and Russia.
In 2013, he founded Rise Capital, which has invested in a number of Internet-related ventures in emerging markets, including what he said is Southeast Asia’s largest online grocery company, the leading online children’s retailing firm in India, the largest online insurance broker in Latin America, as well as a Netflix-like content provider in sub-Saharan Africa.
There are always cultural considerations — whether a deal is being negotiated in New York or elsewhere, Yasin said.
“Things are just more pronounced when you’re dealing with international issues. What I’ve noticed is that people around the world have a lot of similarities,” he said. “It’s how you engage with them and how you get from point A to point B.”
And no matter where you’re striking a deal, the key ingredient is trust.
“Trust takes time to build. You can’t just build it in a year or a week. It takes time to earn that trust, and you can lose that in an instant,” he said.
“It really boils down to making sure incentives are aligned.”
