Showing posts with label Business Negotiation. Show all posts
Showing posts with label Business Negotiation. Show all posts

20090712

Eclipse of Reason



“He who fights with monsters might take care lest he thereby become a monster. And if you gaze for long into an abyss, the abyss gazes also into you.

Friedrich Nietzsche

Exiting the office I pull open the door to the hall to find a solitary butterfly frantically seeking a familiar environment as its wings beat furiously against the stale air of corridor with no ventilation. Mesmerized I watch unable to decide what to do, captivated by the poetic movement I watch the dieing moment of something remarkable and beautiful. The hall is devoid of any recognizable refuse in which each of us can seek comfort. Graceful pirouettes are silhouetted against the battleship grey drab interior of the hallway as panic increases in the frightened winged insect. Concerned that I might injury this fragile butterfly I decide to ignore its plight after staring listlessly for an extended period as pity swallows me. As helpless as the trapped butterfly, I turn my back retreating into the false sanctuary of my office. The image continues to haunt me as I wonder if the butterfly was able to escape the confines of the barren cold hall, while knowing that its fate was sealed the moment I turned my back on it. As the door snaps shut with a deliberate finality my mind recites a phase buried in the subconscious since childhood “There But for the Grace of God go I”.

This simple witness of desperation in the reality of hopelessness was the perfect idiom to one of the most disheartening personal repudiations I have endured in over thirty years of business. The residual effect won’t be understood for many years to come, as I restructure my views of the world that surrounds me. The sense of disbelief is debilitating as I find it hard to accept, so let me try to explain. We have a client that I have worked on and off for in excess of thirty years, always attempting to bring value to our relationship. In considering the needs of the client we saw and opportunity to expand their mission by understanding of how sustainability could be implemented in their business model. Recognizing that they did not have the resources to invest in the future we voluntary donated our time and effort to create the vision and the consensus to adopt this very forward plan of environmental leadership. Our personal investment was in the thousands of dollars because it was the right thing to do. After presentations to the board, president and complete acceptance of the direction, we identified a funding program unknown to the owner. We then invested more of our time at modest cost to them to write a grant in which they received almost a million dollars to implement the program we devised.

Elated at our success we were informed that according to procurement policy they where required to request public bids for the implementation of the grant program. Somewhat disappointed we understood the process and responded to their request for proposals which required another substantial investment of time. Being short-listed with three other firms for the project we prepared for an interview investing more of time and energy. To our surprise we received a call from the procurement officer notifying us that the selection committee was unable to make a decision and requested that we provide our best and lowest offer by 9:00 the following morning. Ignoring the fact that the process they requested is know in the industry as bid shopping which is illegal in many states, we worked late into the night trying to option out as much of the services we were providing as possible without negatively impacting the quality of the product we were attempting to deliver. Throwing caution to the wind we pared our original proposal to the bare minimum and reduced our fee basis by thirty percent.

Four days later we received a call that we were not selected for the project because we were still a couple of thousand dollars higher than the other firm on a one million dollar project. So after spending thousands and thousands of dollars on their behalf to create a project, have it approved, find the funding source, and acquire the grant funding, we were not selected because of a cost spread of a couple of thousand dollars. This single act of betrayal by a client is by far the most brutal disregard to value I have ever experienced in over thirty years of professional service and it will forever change my naive approach based on the inherent morality of public institutions being able to understand the value proposition. The most disheartening concept is that this action is not unique, but is a common business practice of our new economy, a false belief that a few dollars stripped from a thoughtful planning process will benefit the greater good. In reality short sighted planning ends up costing the institution hundreds of thousands if not millions of dollars in the long run, but it is impossibility for bureaucrats to conceive the relative value of money over time. As a society we are removing the basis underpinning of our economy, when we will forego value for economic decisions purely based on cost. Why not concede that the greatest economic force in the world is not longer willing to invest in its future. Is there any question why China and India are manufacturing empires as we continue to fool ourselves into believing that our nation in not past its pinnacle of greatness and is on the verge of eminent collapse.

My cynical opinion of society’s inability to act toward a collective good has been bolstered today and is becoming a repeating theme of my alienation from society. I was trying to determine a title to this blog post and stumbled on the title “Eclipse of Reason”. Just to kill some time I queried the title on the internet and was riveted by what came up on the screen and how relevant is was to my understanding of what is happening in this new economy or with society in general, although I had a difficult time placing my sentiments into words.

In 1946, Max Horkheimer wrote a book called “Eclipse of Reason” which was influenced by Nazi power in Germany. He was outlining how the Nazis were able to make their agenda appear "reasonable", but was also issuing a warning against this happening again. Horkheimer believed that the ills of modern society are caused by the misuse and misunderstanding of reason. If people use true reason to critique their societies, they will be able to identify and solve their problems.

“Eclipse of Reason deals with the concept of "reason" within the history of Western philosophy. Horkheimer defines true reason as rationality. He details the difference between objective and subjective reason and states that we have moved from objective to subjective. Objective reason deals with universal truths that dictate that an action is either right or wrong. Subjective reason takes into account the situation and social norms. Actions that produce the best situation for the individual are "reasonable" according to subjective reason. The movement from one type of reason to the other occurred when thought could no longer accommodate these objective truths or when it judged them to be delusions. Under subjective reason, concepts lose their meaning. All concepts must be strictly functional to be reasonable. Because subjective reason rules, the ideals of a society, for example democratic ideals, become dependent on the "interests" of the people instead of being dependent on objective truths.”

In order to understand Horkheimer’s premise we need to define both Objective and Subjective reasoning. “Objective Reasoning - Of or pertaining to an object; contained in, or having the nature or position of, an object; outward; external; extrinsic; -- an epithet applied to whatever is exterior to the mind, or which is simply an object of thought or feeling, and opposed to subjective. Objective means that which belongs to, or proceeds from, the object known, and not from the subject knowing, and thus denotes what is real, in opposition to that which is ideal -- what exists in nature, in contrast to what exists merely in the thought of the individual.” As explained by Sir. W. Hamilton. In other words Objective Reasoning is Objective is something that deals with or is learned because of another object, not your own experience.

On the other hand, “Subjective Reasoning – is defined as especially, pertaining to, or derived from, one's own consciousness, in distinction from external observation; relating to the mind, or intellectual world, in distinction from the outward or material excessively occupied with, or brooding over, one's own internal states.” Or in simple terms Subjective Reasoning is something that deals with or is learned by your own experience because you are the subject. Society has clearly shifted from objective to subjective reasoning and this is an ominous turn when subjective reason is dependent on the "interests" of the people instead of being dependent on objective truths. In terms of my experience the committee selected the other firm on the subjective belief that they would save some money as opposed to the objective truth that such a decision is going to cost much more in the long term. This decision was made with little regard to the fact that the other firm had no investment in the project which equates to less commitment to success, has little understanding of the project program which requires the owner to pay the other firm to get up to speed on the background information and has rewarded the concept of less critical thought toward solving the technical issues which always increases operational costs.

In this new economy the “interests” of the people are distilled to an over simplistic policy of least cost as professed by the financial accountants which run everything into long term failure though quarterly accounting which is devoid of projecting long term value. Think of the stupidity of this philosophy in practical application. Why change the oil in your car, when you can save $19.99 this week. Why take your high blood pressure medication, when you can save $2.50 today. Somehow we have decided that screwing everyone out of a few dollars will benefit us, when in reality we are undermining the value of loyalty in business relationships. Our next contact with this owner will be devoid of added value and will focus on the only principal they understand which is screwing them out of money at every possible opportunity. It is a truly sad testament to how far our once powerful business model has fallen. More concerning is how hard a landing society is going to receive unless we change our direction. Just try to compete with $2.00 a day labor from Indonesia especially if we discount quality. We can cry and bitch all we want about the trade deficit but don’t ask the individual to change their spending habits and buy American made goods what cost more.

Society has entered a new economy in which it values only the bottom line at the complete disregard for cost-benefit or added value. Honestly this mentality will destroy this nation and forever change the balance of commerce overseas. It is sad how quickly the world has declined and how acceptable this practice of lowest expectations has become. This post may be construed as sour grapes or a bruised ego, which has incited this negative rant, but look around and see the ideals that once were held so dearly now lie bleeding in the street.

I found an affinity with that small butterfly desperately confined by a reality larger than itself, in its attempts to seek a solution in an impenetrable situation. Unwilling to recognize the brutality of a sparse future in which nothing you can do will alter the outcome. Today both the butterfly and I toil in obscurity against a system than does not care and will not morn our passing. For an entire life I have held the fervent belief that if enough people screamed loud enough society would hear. It has become apparent that humanity is deaf, dumb and blind, unable to lift itself above the rising tide of benign apathy which will soon drown us all. As the old customer service joke goes “Today is not your day, and tomorrow doesn’t look good either.”


"To predict the behavior of ordinary people in advance, you only have to assume that they will always try to escape a disagreeable situation with the smallest possible expenditure of intelligence."

Friedrich Nietzsche

20061027

Shift of Fortune


Fortune is not on the side of the faint-hearted.”
Sophocles (c.496 B.C.–406 B.C.)

A cold rain falls as I stand on the runway waiting to board a small regional jet back home. The sound of a 737 is deafening as it slowly creeps by in the darkness like a coal black leviathan. The flat expanse of the tarmac is glistening blue, green and red of the runway lights reflecting off the wet asphalt creating a surreal wonderland. The cool rain is a welcome relief from the hours spent in the stale overcrowded cramped terminal. Closing my eyes I tilt me head back allowing the rain to caress my forehead. It has been the only moment in the past two days where I have been able to relax and take a deep breath of the cool moist air. The scent of fall is in the air as the white dome of the capitol peers from behind the Washington Memorial in the distance. Where as the summer gone? In a brief flash the summer has left without even saying goodbye. Waiting begins all over again until summer returns an eternity from now.

Scanning the darkened figures standing in the rain I look for a familiar face but secretly not really wanting to find anyone I would be required to carry on a discussion with. The angry sullen faces in the gentle rain are upset with the two hour delay from gate 35. My old nemesis gate 35 has not disappointed me with its brutal ritual of chaos and routine bone numbing apathy, but I have conditioned my mind to ignore the tempting opportunity to struggle with its domination of the angry souls within its grasp. Silently I watch an overweight 30 year old with a shave bald head dressed completely in black like an Italian grandmother in mourning. It is oblivious that he is extremely proud of the carefully crafted persona he projects, but to me he appears to be a self-absorbed egocentric nobody. He is pacing back and forth screaming, shaking his fist, pointing at some invisible person he is talking to at the end of his cell phone which is the newest piece of technology available to only to those that find it important to change phones every couple of months. A large black electronic cockroach with a small red light hangs from his ear allowing him to fling both of his pudgy limbs in this public rant he is engaged in. There is little visual evidence to inform you that he not totally stark raving mad talking to the demons tormenting his soul. Watching his circular movements he reminds me of the insane street people in New York I remember as a child. I shake my head thinking that of all the places in the world this “tool” could be going, it just happens to be on my flight.

About the time I decided that I’ve wasted enough energy watching this idiot, I hear him argue with him imaginary friend stating that he has worked to hard for too long and everyone around him wasn’t doing their job. He emphatically closed the accusation with the worn old excuse “it’s not my job and I’m not going to do it myself”. Then he proceeded to asked for the dismissal of his coworkers. What a way to build a team by climbing over the bodies of coworkers to position yourself for a better seat in the cubical farm. There was a time when worked to hard for too long meant twenty years of dedicated service, not a couple months of waltzing in at nine and leaving at five. I’m not sure the world will survive the next generation of self-absorbed egos. The concept of entitlement without real investment is a cancer eating away the foundation of the nation. I’m staring at the pudgy poster boy for the end of the world as we know it. Needing to look away before I succumb to the urge to slap the living crap out of this snot nosed brat, I look at the white dome of the capitol again. Is this really what the founding fathers of this nation were hoping for?

I decide to refocus my attitude on something more positive and begin to reflect on the past two days of meetings and business calls. It has been a long dry spell for securing significant new work for the office for some unexplainable reason. It has eroded my enthusiasm as each failed interview piled on top of each other. Each debriefing providing little insight as to why we were not selected, other than we liked the color of the suit the other team wore or your proposal didn’t have little dividers like the others. I think this is the start of the 30 years olds gaining influence in the decision making process with no understanding of what is of real value in professional relationship.

Business always has a horizon which cannot be seen past, I call it the “cliff”. The cliff is the point past where businesses can no longer project future revenues. The cliff usually resides five to seven months into the future for most of my professional career, but during downturns the cliff slowly creeps closer and closer. At some point where you can begin to see over the edge of the cliff, the abyss of uncertainty becomes evident. Over the years I have come to understand that divine intervention appears to save you from the cliff about the time you are standing on the edge of your desk with a noose around your neck. The repeated salvation allows me to ignore the fear of being eternally stalked by the cliff. About the time I begin to consider what a new career might look like things dramatically change. This recent two day trip was that dramatic change completely reordering the future allowing me to postpone my new career search until sometime in the future.

I was able to arrange three meetings as a result of a recent speaking engagement in the area. The message of the lecture apparently struck an accord with the group, because we immediately received three requests for meetings to discuss proposals. The first meeting was with a county agency which wanted to include our expertise in a series of projects. Going into the meeting I assumed it was two projects which were already designed in which we would provide some construction oversight. We would be added as a specialty consultant under their on-call consultant agreement. As we talked in a small cramped conference room at the end of a dank basement hallway, the magnitude of the project was revealed. It’s not two projects but as many a twenty over the next five years. It’s not just construction oversight, but its full design services with an opportunity to assist on dozens of other projects which fall into our realm of expertise. It is the type of project which a business can forecast staff growth with by providing a predictable revenue stream over the course of five years.

A business negotiation is a lot like playing poker, there are times where the expression of surprise places you into an inferior position. It is imperative that you provide the owner the comfort of knowing that the conversation is completely ordinary and what they are proposing is a matter of standard operations. Executives will only hire your services if you can make them believe that you don’t need the work. It’s a subtle game of courtship, being too eager equates to desperation and desperation can be seen as a fatal disease detectable from miles away. The county’s schedule was impossibly constrained and not realistic, but we promised to deliver because there is no other acceptable answer. Anything is possible; no task is too great during the courtship. Over the years I have learned that schedules work themselves into a predictable rhythm that can seldom be hurried. Our job is to coach the client along the way as complexity of the process reveals the true implementation schedule. Leaving the musty office, we were giddy as schoolgirls envisioning the long potential business relationship.

Our next stop was a private foundation which wanted us to manage a 2.5 million dollar project on an existing facility. Our meeting with the executive director secured the commission which again was on an impossible schedule. As we concluded our meeting and were preparing to leave, we were informed of two additional phases of the work which we were in position to secure. Finally in passing the executive director indicated we should expect some calls from two or three local school districts which she had referred them to us. As it turns out she is also a board member of a state committee which advises school districts from around the metropolitan area. She had been so impressed with our work that she had been recommending us to anyone she came in contact with. If we were giddy after ending the first meeting we were outright ecstatic leaving the second meeting. I recall thinking to myself we are on a roll, we could to run the table.

On the way to the third meeting I fielded a phone call which turned out to be a significant university master plan project for an architect we work for on occasion. The world was becoming a blur as I attempted to write down the information I needed to get to the architect by the end of the day. The architect already had the project and was looking for someone to fill out the team. He informed us that they were exploring a very detailed process with the university as a trial for a much larger master plan process scheduled for the following year. Participating in this study would place us in position to maintain a valued role for future work. I no longer got off the phone and we arrived at our third meeting.

Brimming with confidence, we secured our security passes at the front desk and were led to a conference room on the fourth floor. The meeting was to be informal when I suggested we could stop by just to introduce ourselves. I assumed we would answer a couple of questions and head to the airport. As I turned the corner of the conference room I was surprised to find a dozen officials from various departments representing two separate counties waiting to talk to us. After a brief round of introductions which occurred so quickly that I was unable to write down all the names, they all jumped in with questions simultaneously. I tried to organize the responses of the highly divergent topics. The crowd was focused and energetic leading me to believe there was an underlying purpose to the barrage of inquires. It was oblivious by the questions that one county was further advanced in their thinking and had come to develop a consensus.

The manager of the meeting finally decided to structure the dialogue by explaining what they were up to. Each county had two projects each funded and they had never undertaken a project of this nature revealing their in house expertise was limited. They were interested in hiring us to design and manage all four projects. These projects would be considered test projects in each county. It was anticipated that three to five of these projects could be funded for the next five years under this program and if we were successful we could be in position to assist on all of them. Another long term relationship was being forged. Once again I managed not to reveal my surprise at the magnitude of their request. For the fourth time in a row we agreed to an impossible schedule, shook hands and departed for the airport.

How can months of work and travel yield so little and then in the course of a single 48 hours I secure the possibly years of contracts? What have I said differently that struck such an accord with this particular group? Is it pure the circumstance of being in the right place at the right time? I have a hard time isolating the origin of the shift of fortune from the daily chaos of the moment. The months of marketing meetings and strategic planning seem to have little relevance as the tide shifts. I am beginning to realize that the world is bipolar and is run by the pudgy poster boy for the end of the world that stood in front of me getting on the plane. We just opened the door when the need was right and waltzed into a gold mine. However, there is a single underlying fear caged in the back of my mind, the fear that I will at some point I will tell the world what I really think. Until then I will grit my teeth and smile at the bald headed tool sitting in front of me waiting for the cliff to return.