“Hey, You Talking To ME?” — A Negotiating Test And An Ethics Lesson…

A prologue to this story…

The story I’m telling here is a sequel to a story I told a few weeks ago. I called that story: “Hey, I’m talking to YOU!”… It was about a difficult ethical choice a client had to make.

What has always intrigued me about that story was how the client used the choice he made. He used it to make an unspoken statement about ethics—a statement about what he expected of them.  

The gift of that story was about choices. It was also about unspoken statements…

Now, the same factual backdrop offers me the opportunity to tell another story that will offer others gifts—gifts that I’ve found invaluable to this very day…

choices have consequences

The factual backdrop to this story…

In case you don’t feel like reading my earlier story, here’s the factual backdrop to my latest story. It’s a short summary of the “I’m Talking To YOU!” story—

My client had developed a military vehicle for Special Forces use. The Singapore government had issued a tender for bids for this very type of vehicle.

In responding to the tender, my client had assembled an extraordinary international team. It included the then largest Australian defense manufacturer; a Singapore company that would help with local red tape; and an Israeli group that consisted of iconic Israeli Special Forces veterans who could respond on behalf of my client to any operational and technical questions from the Singapore Special Forces—the users.

Meanwhile, its internal team was equally extraordinary. It included a retired 4-star general who was a Special Forces icon highly regarded in the murky, macho and secretive world-wide Special Forces brotherhood. It also included an executive who was regarded as one of the fathers of Humvee; an engineer who had designed the wing for the space shuttle; and a former Under-Secretary of Defense in the Reagan administration.

One potential stumbling block was a provision in the contract that the Singapore government submitted:

The contract required a warranty and representation that every part of the vehicle to be submitted was new and was not a second-hand part. It was made quite clear warning that failure to provide this particular warranty and representation would disqualify the tenderer from being awarded the contract.

We were required to respond in writing to each particular contractual provision. In doing so, my client decided to disclose that a small and quite insignificant part of our vehicle was indeed a second-hand part..

Finally, the process involved all tenderers having to submit their vehicles for a grueling field test. Only those surviving that test would be invited to attend contractual negotiations in Singapore…

And this, gentle readers, is the factual backdrop to this latest story…

The “Gift” my new blog offers…

What this new blog offers is a gift about the negotiation process—and about the hidden value of ethics.

Here’s a clue to my first gift…

the word listen

Incidentally, over the years, whenever I’ve been asked to talk about some of the most valuable lessons I’ve learned, I’ve suggested that the greatest teacher I’ve ever come across is something we all have living with us—experience…

experience

Back to the story…

That field test…

After we had submitted a mountain of documents in response to the Singapore tender, my client sent its vehicle for field tests…

Of the 7-8 vehicles submitted by tenderers for the field test, our vehicle was the only vehicle left standing at the end of the test. In fact, it was even called upon to tow a few of the other vehicles that had broken down during the test.

We were therefore the only tenderer invited to attend contractual negotiations in Singapore.

As part of that invitation, we were required to bring with us our entire team of technical, manufacturing, financial and military specialists. If my memory serves me correctly, our team in Singapore consisted of more than twenty experts.

The first negotiating session…

We decided to keep our negotiating team relatively small. We would have only four members—each with special expertise to offer…

Leading our team was the chairman and founder of my client. A senior executive from the Australian defense manufacturer would respond to any manufacturing questions. Our technical guru would respond to any technical questions. And then there was me: a member of the lawyer sub-human group who everyone loves to hate…

As we entered the conference room, we saw a small table with the four chairs we had requested. Facing us was a long table with thirteen chairs. All but one were occupied. This was for the Singapore negotiating team…

We were told the vacant chair in the middle of their table was for the madam chairperson of the Singapore team. I must admit that I was mildly disconcerted that it was vacant…

The six chairs to our immediate left were filled by the Singapore procurement team. These were the guys responsible for making sure that all manufacturing, technical and contractual requirements for the vehicle were met. They were responsible for dotting the “i’s” and crossing the “t’s”… Their leader sat in the chair on the extreme left.

The six chairs  to our immediate right were filled by the users—the Singapore Special Forces team. These were the guys who would be using the vehicle. They were responsible for being sure that the vehicle would meet any of their prospective mission requirements. They were all quite friendly and quite jovial. Indeed, after seeing our vehicle perform in the trial, we all knew they wanted our vehicle in the worst way possible—and immediately. This was their toy. And they wanted it—badly… The leader of their team introduced himself with a broad grin. I felt he and his team should have been sitting with us…

Again, I was concerned about the chairperson’s absence? WHY wasn’t she there??? I was thinking the worst…

The negotiations begin…

The negotiations began with the leader of the procurement team on the far left of the table taking the initiative. After apologizing for the absence of the chair person, he assured us that she would be with us soon.

As he began the session, his body language seemed to change quite dramatically. The only way I can describe it is to think of a spider. He started to lean towards us quite dramatically with his head and chin almost dipping onto his chest with his shoulders hunched. His head seemed to be below his shoulders. Like a spider, his long arms were sometimes gesticulating high above his head. His eye contact with us was nervous and sporadic. It was weird… He focused on my clients founder and chairman. It was as if they were the only people in the room. He absolutely and completely  ignored the rest of us…

What follows is a very brief example of the exchange between the two of them. It must have lasted more than an hour—a very long hour…

Spiderman began quite harshly. Without even the slightest hint of cordiality or warmth, he launched into what became a tirade of anger and hostility delivered with a thick accent—

“We very much regret, gentlemen, we cannot award you the contract. No way. Its just not going to happen, It can’t happen…”

As he dramatically and ostentatiously closed his files and seemed to be getting ready to leave the room, we cringed. What followed could only be described as a deafening silence you could have cut with a knife.

Spiderman continued with a smug sneer—

“We notice that you’ve admitted to having a second-hand part in the vehicle. Because you can obviously all read, you must have known that this would AUTOMATICALLY disqualify you from being awarded the contract. So, you are disqualified…”

More silence. My client did not respond to the insult. Spiderman continued…

“What exactly DIDN’T you understand when you read this disqualification language in the contract? You appear to believe we were not serious. This is VERY disappointing. We ARE serious, which you now no doubt now know…”

Again, my client didn’t respond. Frustrated, Spiderman repeated his question. This time, however, my client responded—

“No, sir, I do apologize if we have conveyed the impression that we don’t think you are serious… This was never our intention. Your contract was quite clear. Would you like me to explain why this particular part of the vehicle is a used part and why it won’t impair the performance of the vehicle in any way?”

Spiderman said no explanation was necessary. He decided to pour more salt into the now open wound—

“This is not negotiable, gentlemen. Given the used part, we have no discretion. We can’t ignore this. We are quite disappointed, though. Your vehicle is obviously very special. We actually like it very much, but we can’t under any circumstances award you the contract. I hope you understand that this is now out of my hands…”

My client’s calm and smiling response…

My client’s calm and almost serene smiling response nearly had me falling out of my chair. He spoke so softly, I was surprised Spiderman even heard him, but he clearly did—

“Sir, I would like to say this: I ABSOLUTELY respect you—and TOTALLY understand your position. Indeed, in your place, I would ABSOLUTELY take EXACTLY your position… Again, if you’d like me to explain why the sused part will in no way affect the vehicle’s performance or durability, I’d be happy to do so.”

Spiderman responded—

“No… This is unnecessary… Our position clear… This is not negotiable.”

Then, for the next 20 minutes, he repeated his position yet again and again and again… That he continued to harangue us in such excruciating detail was weird. It seemed like overkill. Now, almost an hour later, he was continuing to make exactly the same point ad nauseam. I couldn’t help but notice the users side of the table were rolling their eyes. Was I seeing just the hint of a grin on each of their faces?

Anyway, my client decided it was time… He would finally end the impasse by saying this—

“May I make this suggestion, sir? Why don’t we take a short break? When we reconvene, we can discuss any OTHER outstanding issues you may have. Of course, with respect to the particular issue of the used part, we can always return to this issue when the chairperson joins us. Would this be OK with you?”

Without blinking or hesitating for even a moment, Spiderman said this was fine. He added that he thought this was a good and constructive suggestion…

Our team then slipped out of the conference room. We soon found ourselves a quiet corner of a room in which we were alone. There was coffee waiting for us on the small table…

Our huddle…

As we huddled over coffee and waited to resume the discussions, the mood of at least three of us was quite bleak.

Our technical guru was the first to speak. As he did, he unsmilingly summed up exactly what my Australian colleague and I were feeling. As he spoke, he looked directly at our esteemed smiling leader, the chairman—

“Man, we’re screwed. We’re dead in the water. I’ve never felt more depressed or dejected. And after all the work we’ve done… And after us being the only vehicle that survived the trial… WHAT THE HELL HAS JUST HAPPENED?’ he asked.

I just don’t think we now have anything to lose… I think we’re gonna have to make a much more vigorous case for why the used part shouldn’t be an issue… We gotta get more aggressive… And what’s with the chair person not being there???”

When he finally came up for air, the smile never left our esteemed leader’s face. He just quietly turned to me and said—

“Tell them, Michael… Tell them what’s just happened this last hour.”

Mainly because I didn’t have a clue what had just happened, I thought I finessed the question superbly—

“Nah, esteemed leader, this is your game… Why don’t YOU tell them?”

So, here is a test for you…

Do YOU know what had just happened?

And here’s the answer …

This is how our esteemed leader answered our technical guru. And this is also the gift of this story—

“Guys, from the very beginning, understand this: Spiderman wasn’t talking to us… He was talking to his own  guys on the other side of the table… He was talking to the users… He was telling them that he was doing his job… So, why on earth would I ever even consider getting in his way?” he asked…

He continued…

“This was Spiderman’s time. Because he wasn’t talking to us, I didn’t wanna get in his way… End of story…

Oh, and why wasn’t the chair person there for this pantomime? It was because she knew it would be a pantomime and why should she waste her time listening to this?

And, guys, you can take this to the bank: I will bet you anything you like that this issue won’t come up again.”

And he was right… The chair person joined us and the used parts issue was never raised again…

Postscript—and a gift about ethics is revealed…

After the contact was awarded to us, we heard something through the grapevine…

We were told that the Singapore government was enormously impressed that we had disclosed the existence of the used part that they knew they would otherwise never have discovered. They were convinced we were honest and were people of integrity. And they wanted to be dealing with people like us…

Seems like there was a lesson about wisdom, integrity and ethics there, n’est pas?

wisdom and integrity