Sunday, November 11, 2001

Trans-Asian Road Delay

This week, I came across an article online via UOPHX’s library search from “The Vietnam Investment Review” describing delays in the building of the trans-Asian roadway project. The goal in completing the project is to “help build an effective, harmonized and advanced transport network between Asian member countries … to promote economic linkage and development in the region.”

However, after completing a little more than 50% of the project, a determination has been made that upon 100% completion, the project’s finish date will have slipped by nearly one year and the required investment capital will have almost doubled to near $60 million.

The discussions as to the reason for the delay and cost over-runs seem to center around poor design issues related to the actual road and bridges required as well as poor advance knowledge as to soil conditions that might be encountered. The current vendors complain that design instructions were referenced but missing from the original bid packages and the soil information was not even mentioned in the bid packages.

From the article, one might conclude that at stake is a public affairs project for which the public’s instigators did not do their preparation work adequately. On the other hand, I would question the vendor as well given that they received a bid package seemingly without adequate instructional detail or environmental information, and yet they chose to ignore those shortcomings and file a bid response anyway. So to a large extent both party’s planning and preparation facilities are responsible for this situation.

On a related note, I would also probe into why and how the project got past the halfway point before these trouble spots came to light. Was there something unique to the situation as in the sections lacking instructional detail and possessing the poor soil conditions were help until the second half or was the vendor “valiantly” struggling along without informing project management of the pitfalls until they deemed they were far enough along to assure their request for increased cost and time over-runs. (However, this view may simply be the cynic in me!)

How it gets resolved to the public’s benefit remains to be seen.


Reference:

The Vietnam Investment Review (October 1, 2001). Trans-Asian road project delayed by inefficient designs. [Online].
Available: http://ehostvgw12.epnet.com/ehost.asp?key=204.179.122.129_8000_-669879019&site=ehost&return=n&profile=ft.

Monday, November 05, 2001

Virtual Project Teams

At first glance, virtual project teams might seem to strike at the very heart of the modern, Internet driven way of doing things. The very idea that work will continue around the clock 24 hours a day and seven days a week as project team members log in at time driven by their local time zone to contribute their part seems a model of efficiency.

In such a scenario, one can quickly visualize increases in speed toward a project’s goal, lower personnel and office space overhead charges, increased adaptability and flexibility in dealing with required changes along the way, and even improved quality of life for all participants.

The idea of virtual project teams holds the promise of leveraging the very best of resources, wherever they are located, to drive toward the project’s goal. Such leverage however, comes with its own price tag and this price must be understood and accounted for ahead of time.

Some drawbacks of virtual project teams.

One of the very first frustrations likely to be noticed in a virtual project team is the lack of immediate body language and facial expression feedback in team meetings. In spite of the humorous promise that “on the Net, no one knows you’re a dog” the challenge of being deprived of so many of the visual clues one might be used to can be disorienting at first.

One of the keys to making any team work to its potential, whether virtual or not, is the level of trust amongst the various members. Developing trust levels in a virtual environment can be tougher than in a real world scenario as the exchanges can be much more limiting. And while technology continues to afford us tools at which to chip away at the veil of virtual-ness, seeing someone face to face and seeing them over an electronic medium require adjustments of the doubting Thomases amongst us. What’s more, the time/place distance inherent in virtual teams also means that the offline opportunities to develop that trust are not so readily available.

While finding ways to develop the level of trust amongst virtual team members can chip away at many of the above noted drawbacks, the reality of differing time zones and the need to smoothly hand-off informational updates and such means that some members of the virtual team will undoubtedly being working late or early to accommodate the time zone differences involved. At times, working across the coast within the USA’s difference of just three hours can be difficult. However, doing the same halfway around the globe can be a true challenge, especially if the virtual team involves multiple time zone locations as in members in Europe, Asia, and the USA.

My personal experience with virtual project teams.

By the definition of my current role, I’m involved in virtual teams on an almost daily basis. The business development team in our division consists of six members with five member located on the East coast (including the team leader) and myself in San Diego. Though there is good reason for the split, I find I’m constantly working against being the odd-man out or lone appendage of the group. Beyond my own departmental team, I also regularly work with technology teams on the East coast and related teams in Tokyo to advance our various new business efforts.

Beyond the work-a-day world, I must admit I’m enthralled with the concept of creating a virtual team company and I continue to strive toward the proper combination to hit success. My first attempt fizzled after about nine months but I believe it was due to the underlying business driver (too narrowly limited to a single potential scenario) and not because of issues with the team itself. The three person team that assembled (located in MI, IL, & NJ) worked well in that we were able to maintain a critical focus, we met on a regular basis, and because of various prior experiences together, we had a core level of trust to see us through.

In spite of that initial “failure” however, my theory continues to be that if one can stitch together an appropriate team, an enjoyable business should be available for the making to the benefit of all. Thus, I’ve made list after list of team possibilities and idea possibilities yet haven’t had the opportunity or simple fortitude to make one work yet. Perhaps a proper project plan is what has been missing? J


Reference:

Kiser, K. (1999, March). Working on world time. [Online]. Available: http://www.virtualteams.com/company/press/world_time.htm

Tuesday, May 22, 2001

Negotiation Lesson Maker

When I set out to formulate my response to this week’s challenge, I had in mind an international negotiation that I was asked to bring in for my former company. However, it was a negotiation at which I failed miserably. As I tried to clearly recreate the circumstances and my maneuvers, I came across more and more interesting research material such that I felt compelled to recap the work here as my official response to this assignment.

To set the stage, this particular negotiation involved trying to collect on several million dollars in past due invoices owed to the company I was working for by a Saudi Arabian distributor. In several years of successful and ever-larger business dealings with this particular distributor, my company had made a decision to ship a $2 million dollar order on open account as opposed to the typical letter of credit or prepayment basis. A slowing market situation and a company need to book revenue even given the higher collectible risk, drove the decision.

At any rate, the goods were shipped on a Net 30 day basis from the date of arrival in Dubai in the United Arab Emirates. After 120 days, the $2 million was 90 days past due and repeated generic promises of payment had come and gone. As a relatively new member of the team, I was handed a book entitled “The Arab Mind” and a plane ticket to Dubai with the idea that I would meet the distributor and reach a payment agreement.

In retrospect, I might just as easily been handed a mission impossible tape! However, I choreographed what I could by attempting to create a strategy in advance.

First, I asked to meet with the mid-level business team to understand the exact condition of the local market the goods were supposedly meant for sale into. Secondly, I asked for a meeting with the son of the owner to discuss general relationship potentials. Lastly, I asked for a meeting with the father and proprietor to recap my findings and secure a workout plan.

I carefully requested neutral meeting places for each of these meetings and made sure to allow two to three times the clock time I thought necessary so that I would not have to worry about timing. I even decided to arrive in country two days ahead of time to assure I’d be rested and at the last moment even opted to go to the meetings without my watch so I wouldn’t be tempted to watch the clock. I reminded myself to utilize the interpreter but to focus on the key individual and to seek a holistic versus my own preferred sequential range of possible solutions.

Sadly, my best-laid and intended plans simply weren’t built upon a solid enough foundation to successfully meet what those several days of negotiations dealt me! I had the silly idea of being the “master of my destiny” while my Arab counterparts deferred to Allah’s will to the point of “paying us very soon, Allah willing.”

Through the course of the several days the discussions required, I came to learn first hand how the Arab language reflects both a “stylistic elaborateness and a stylistic exaggeration.” For instance, in Arabic, the US translation for “thank you” equates to “May Allah increase your well being.” And the well wish, phrased as “speedy recovery” translates to “May there be upon you nothing but health if Allah wills.” Only some time later did I learn that in the Arabic culture, “the general rule is that every phrase of courtesy must be returned by a more elaborate phrase, with interest as it were.” My mother’s admonition to “say something nice or say nothing at all” did little to prepare me for the Arabic language requirements; requirements expected of even a non-Arabic speaking bill collector.

I also came to learn of the Arab habit of polarization though it was not until later that I understood what had happened. Arabs are prone to see things as either black or white, good or bad with little room for an in-between position. (This much I had read on my flight over.) However, I mistakenly thought that this would work in my favor as there was in my mind, no in-between about this case; we were owed the money and prior promises of payment had not been adhered to.) What I’ve since come to understand is that by not having a gray space to go to as an in-between position, I was required to place my customer in either the good guy space or the bad guy space. Since I wanted to somehow continue to do business with this distributor in the future and they wanted to continue with us, neither they nor I could put them in a bad guy box and so by default, the Arabs continued to hold themselves fully in the good guy position.

Years later, after the incident had been resolved and business resumed, though at a lesser level, it was explained to me by the distributor’s interpreter himself upon leaving that company that the particular Arab distributor I was doing business with prided himself in coming from a centuries long line of merchant traders (negotiators) and hence a former farm boy from Ohio was nowhere near being considered a match to his honor no matter what the business card said or what the business case might conclude.

All of this set me to pondering other Arab related negotiations and what I might have learned to be better prepared for the future.

First I wish I’d have known former President Richard Nixon’s words “an adversary is not necessarily an enemy.” Perhaps that would have helped be better understand the Arab habit of polarization. It also may have led to a strategic decision to have someone else negotiate on our behalf as a dis-interested Arabic speaking party, though that may have damaged the relationship even further.

Next, I wish I’d know of Steven Cohen’s advice in The Deals People Make that “if in an Arab soukh (market) you give a merchant his or her first asking price, you’ve ruined their day” such is the love of a negotiation. According to Cohen, “you’re supposed to be outraged by the price they are asking, and they are supposed to be outraged by the first price you’re offering.”

This has to be countered however with David Evans words in a paper entitled Is Iraq or the US more boxed in? “despite our president’s [Clinton] self-indulgent shooting from the lip about Saddam being strategically worse off” what happened in reality is that Saddam earned the opportunity to prove the Arabic definition of courage; the ability to “stand physical pain or emotional strain with such self-control that no sound or facial expression betrays the trial one is undergoing.” This would have been good learning in any Arabic negotiation.

Or has pointed out in a summary by Tanya Glaser of Louis Kriesberg’s The Negotiation of Agreements, “external conditions are often dominant factors in the failure or success of negotiations.” This was clearly the case as I subsequently learned that the real reason we were not being paid the $2 million owed was that most of the product had yet to sell through in the market. To admit that product purchased had not sold as anticipated would have been an insult to the Arab’s honor as a smart businessman and thus a detail that didn’t surface as a reason for his non “timely” payment to us.

My personal lesson learned in this case has been that in all negotiations, “tactics alone rarely determine the success or failure of negotiations. Effective strategy can compensate for difficult background conditions but strategic choices probably play the largest part in determining whether or not negotiations conclude with agreements.” Further, as Kriesberg writes, “the key to effective strategy is matching the choice of issues, parties and inducements to the background conditions” so as to keep negotiations running smoothly, speedily and successfully.

Sources:*

J. Johnston. “The Deals People Make.” Boston Globe. September 2, 1996
www.negotiationskills.com

L. Kriesberg. “The Negotiation of Agreements.” 1998. Summary by T. Glaser
crc@colorado.edu

D. Evans. “Is Iraq or the US, More Boxed In?.” September 10, 1996

R. Patai. “The Arab Mind.” Macmillan Publishing Company. 1983

P. Cateora, J. Graham. "International Marketing." Irwin McGraw-Hill. 1999.

Monday, May 07, 2001

Trapped in the Past

In an article entitled “Trapped in the Past” author Jim Rogers underscores what our text points out regarding the need for looking at all sorts of data and then looking again first hand!

Roger’s opening hypothesis, which he shares in the article, was his long held belief that “India might give China a run for its money as the next great economic superpower.”

He details the research that supports this including:

India’s population stands at more than 1 billion people
In India, “for the past seven years, gross domestic product has risen 6% to 7% annually”
India’s participation in the Information Technology industry has risen from an export value of $50 million to $6.3 billion in the past 7 years
India is home of some of the world’s “most fertile soil” making the area for “ideal for agriculture”
The Himalayas, the Taj Mahal, and the Kovalam beach resorts make for a potentially strong “tourism industry.”

Of course, he weighs in with the less favorable research as well:

Roughly 50% of India’s population is illiterate
400 million of India’s population live on less than $1 per day
India’s “archaic laws obstruct the creation of farms larger than 18 acres thereby locking in much of the potential of that rich soil
The Indian government subsidies “amounted to 14% of GDP” to back up the government’s strong belief in self-reliance and their subsidization of nearly every form of required industry.
24 languages spoken by more than 1 million people each with at least 1,600 dialects

Faced with plans to invest in India’s high-tech industries and believing that the positives would outweigh the negatives, Rogers decided to travel to India for some first hand research of his own before making any such investments.

What Rogers found, as he traveled the country, was that in spite of India’s high-tech superpower reputation:

He had trouble placing a phone call from most anywhere.
The “country’s crumbling freeways are a tangle of traffic jams.”
He “often had trouble finding running water.”
What’s more “power shortages result in frequent brownouts and black outs.” (Yes, I know it sounds like California but in India it’s estimated that) such “shortages reduce India’s GDP by 2.5% annually.”

Lastly, Rogers recounts how ENRON, the Texas-based energy MNC, has spent most of its time since it entered India in 1992 “fighting the government, trying to get paid” for work the Indian government had previously encouraged.

What’s more, he then uncovered that since 1991, “India has managed to attract a total of only $23.7 billion in foreign direct investment [while] China attracts that much in less than six months.

As you might have guessed by now, Rogers’s conclusion was to decide against investing in India’s high-tech business at this time. Instead, and surprising to himself, he decided to buy shares in Indian Hotels, a company poised to take advantage of the increasing travel mobility of India’s 250 million plus middle class citizens by buying up inexpensive, quality hotels throughout the country.

All of which brought to mind a minor but similar experience I enjoyed many years ago while working for a fellow in Dayton, Ohio. (You knew I’d get in a personal story, right? J)

The fellow I was working for at the time decided he wanted to retire (at a relatively young age) to North Carolina. His main motivators were weather, a low cost of living, and a belief that he could duplicate his electronics superstore concept (a fairly novel idea back in the early 1980’s) in the “less competitive” but still supportive North Carolina he perceived.

To that end, I scoped out basic demographic data on each of the major cities in North Carolina. With that data in hand, he suggested a field trip to see first hand what a recommended plan of action might be. Accordingly, an associate and myself were sent on a mission to discover the ideal location for his retirement retail electronics operation.

After a week of touring the state from end to end, taking photos, doing interviews, compiling dealer lists from local phone books and countless miles of windshield time, we returned to Dayton late on a Sunday night with our conclusion firmly in mind.

At Monday morning’s debriefing, our boss asked what we had found to serve as the best electronics retail business opportunity in all of North Carolina. With a perfectly straight face, we both recommended that he forget about the electronics store idea and open a chain of bars instead. (Yes, you heard right.) J

You see, at the end of every evening, after such exhaustive (I can assure you!) work my associate and I always had difficulty in finding an establishment of relaxation that might serve a little alcohol. What we had discovered was that the South’s concept of private, membership-only clubs as the only viable way to enjoy a little beverage was standing between us with all that road dust and a more relaxing few hours. Along the way, we also learned that the state and local governments were slowly waking up to reducing their alcohol related restrictions.

Of course, we had also seriously looked at the electronic retail business as was our mission and our conclusion in that regard was that the seeds had already been sown in North Carolina. Between the existing independents and the chain operations which had just started to eye the market we had concluded that North Carolina was well on its way to emerging as a truly competitive electronics retail market. Further, our employer would have to contend with these unexpected forces if he continued with the idea of retailing in North Carolina.

Needless to say, we made quite a stir. However, we did remain gainfully employed and our employer decided against the move to North Carolina and to this day still operates his electronic related (but now non-retail) business in Dayton, Ohio.

You see, there is research and then there is research!



Sources:


Worth, May, 2001 p 36-40.Title: Trapped in the Past
Author: Jim Rogers


P. Cateora, J. Graham. "International Marketing." Irwin McGraw-Hill. 1999.

Monday, April 30, 2001

And the New Economy Winner Is Europe

“The European Union is emerging as a formidable competitor among world economies, thanks to an aptitude for cross-border management and an ease with cultural diversity.” With a sub-head like that how could I not pick this article for the Week 2 assignment? J

Stuart Crainer’s article entitled, “And the New Economy Winner Is Europe” in the current edition of Strategy+Business magazine (online at www.strategy-business.com) delves into the popular American myths that paint Europe as a fractured market flawed via multiple languages, laws, and cultures to conclude that those flaws are actually the basis for Europe’s strength in the new economy.

He anchors his work on conclusions drawn from The Global Competitiveness Report 2000 by Oxford University Press, which indicates that seven of the top eight countries ranked are European. The United States is ranked number two by this measure while Finland ranked number one in global competitiveness. To salve your curiosity, Germany, Netherlands, Switzerland, Denmark, Sweden and the UK were ranked third through eighth while Singapore and Australia checked into ranks nine and ten.

Crainer points out “at its best, new European management is founded on the embrace of the ‘single market’ concept, an aptitude for cross-border management, an ease with cultural diversity, and a belief that business is founded on relationships.” This makes sense to me as points of strength as I’ve always envied compatriots whom were able to move from one language and cultural orientation with ease while their US counterparts were often frozen like deer caught in the headlights.

Having been responsible for a sales office in Holland for a few years, I always marveled at the fact that while I was most easily able to relate in American-like terms to the team there, they could very readily switch gears to assist in addressing the needs of Germany, the UK, France, Spain and Egypt in that sometimes seemed the opposite of an approach they had worked just moments before. This chameleon-like reality was perhaps most evident at large trade shows where one moment you might find yourself being hugged by an Arabic customer and chatting about life in general while in the next instance you’d shift to rattling off specifications to a German customer in crisp, dry notes with nary a casual beat.

Crainer’s belief is that rather than being “hidebound by a combination of culture, history, and habit” Europe is poised to leverage its (historically) US perceived weaknesses into a strength capable of flourishing in the new economy. Europe clearly has a sensitivity to other cultures and the ability to work in teams that surpasses the US’s cultural individualism and hero worship approach within the global economy.

As Crainer writes, “the New Economy demands more consensual and culture-based management skills. It is built on relationship-dependent initiatives like cooperative strategies and strategic alliances, for which European managers appear well equipped.”

So, while Europe struggles with its multiple voices, regulations, and sense of self-confidence in the New Economy, its struggles could lead to a huge gain in business success at the exact time when the US must learn more about other cultures.

For as choice appears in the global economy, just being boisterous, fast, and good starts being weighed against the long held-social values within Europe. My own suspicion is that those long held values will make it tougher to choose US business if the European pace of reincarnation continues.


Source:

Strategy+Business, 2nd Quarter, 2001 p 40-47.Title: And the New Economy Winner Is Europe
Author: Stuart Crainer


P. Cateora, J. Graham. "International Marketing." Irwin McGraw-Hill. 1999.

Monday, April 23, 2001

Living in A Material World

I came across this article in the current edition (April 16, 2001) of FORTUNE magazine and thought it the perfect way to kick off an International Marketing discussion!

Geoffrey Colvin, in his article entitled “Living in A Material World” places the real issue of marketing right in front of your face, “the reality is that customer are not cyborgs but human beings, who haven’t evolved significantly in 20,000 years.”

To me this quote strikes at the very heart of the marketing conundrum, especially on an international basis, that is: the need to remember at all times that there is a human being on the receiving end of all marketing actions and to be successful, one must speak in a marketing dialect that matches that consumer.

The text talks about the obstacles created by “Self-Reference Criterion” and how such SRC can filter decision-making via “an unconscious reference to one’s own culture values, experiences, and knowledge as a basis” for those decisions. While sometimes SRC driven marketing can deliver success, Colvin notes that Ted Turner has “made himself a billionaire on the belief that most people are a lot like him” the simple truth is that even when we can “all see where we’re going” … “as human beings, we’re not there yet.”

I remember when I was just starting out in sales; I believed my job was to tell every customer everything I knew about the equipment they were considering. In this manner they would be making informed decisions and I would be doing my job to the fullest. Lucky for me, sheer enthusiasm (passion for the product) carried the day otherwise my commission checks wouldn’t have paid any bills. Eventually, I discovered that if I attempted to learn about where the customer was coming from, my presentations could be much more succinct and effective which when combined with passion made for great sales performances.

The key to marketing then is a true understanding, in terms used by the end consumer, of the needs and desires that a given product may or may not fill. From that understanding a bridge can be built to connect to the consumer and deliver the sale.

In spite of how many times we might be tempted to skip this vital understanding step in the belief that the whole world is changing and the whole world gets it (sound dot.com’y enough for you?) as Colvin writes, “major shifts in how we live never happen instantly or completely.” Marketing has more to do with the basics of being human than most any other organizational function (yes, even more than HR ;-)) certainly more than for which marketing is normally given credit.

Source:

Fortune, Apr 16, 2001 p80.Title: Living in a material world.
Author: Geoffrey Colvin


P. Cateora, J. Graham. "International Marketing." Irwin McGraw-Hill. 1999.

Saturday, April 07, 2001

German Shoppers Get Coupons

In an article by D. Wessel in the 4/5 WSJ entitled CAPITAL: German Shoppers Get Coupons, I learned of the Free Gift Act and Discount Law both on the books from the Nazi era just now being repealed which wreaked havoc with retail efforts.

Did you know that half-price happy hours are (were) illegal because half-price is an illegally large discount? The Discount law enforced a maximum discount of 3% from list. Imagine trying to figure out a 3% discount two drinks into a happy hour. ;-)

Did you know that you can’t (couldn’t) advertise a percentage of all charges on a charge card going to fund AIDS research? German law said you are allowed to advertise your product, “but may not exploit the emotions of customers.” Hello?

American Express’ popular Members Reward program that lets you earn points on purchases just like a frequent flyer program is legal but can’t be advertised because it “creates the impression that they are offering something attractive yet the customer does not know what exactly – if anything – they will receive.”

Now you might say, but Greg they are repealing those laws so give them a break. However, the article explicitly states that the only reason is (not common sense) rather the Internet and Globalization and the way they are forcing economic change!

BTW, other laws limit clearance sales to twice a year plus the day of a business’ birth in years divisible by 25. Aaach!

How do we count for these issues in our country risk assessments? ;-)

At least the closing paragraph of the article made sense. Simply stated, “only by continuing to unshackle its muscular, yet rule bound economy can the world’s third largest economy realize its potential for its 80 million consumers.”