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There's no such thing as a free lunch

10/27/2018

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Actually, I think there is, and I am not sure this phrase attributed to the American economist Milton Friedman is right any more. In my local town is a supermarket with a car park. It used to be free and you could park there, go to the town and then if you wanted, visit the supermarket. Then they changed it all so unless you went to the supermarket you could not park there. By contrast in a smaller town 10 minutes away is a Waitrose with a big car park and, as long as you stay no more than one and a half hours, no restrictions. I often park there, go somewhere else and then invariably buy something in the supermarket.  I have never been back to the more local store.
 
The same applies to an extent in the context of professional services. If you are prepared to provide some advice and counsel without charge as a prelude to receiving a large instruction, you are far more likely to get the major work in the first place. If a regular client wants some general free advice over lunch, perhaps about the strategic direction they want to take their business in, or how to structure a major acquisition or contract, then providing this not only cements the relationship but opens the door to being instructed on the resulting major corporate or commercial deal.
 
And any way nowadays as technology advances free services are a matter of fact in a world of “freeconomics”. Here is a great article in Wired Magazine titled FREE! WHY $0.00 IS THE FUTURE OF BUSINESS which explores this phenomena  from giving away free Gillette razors in the early 1900’s (for which of course you then had to buy blades) to this freaky land of free namely the Web, commenting Once a marketing gimmick, free has emerged as a full-fledged economy and observing that this is driven by the underlying technologies that power the Internet as the cost of bandwidth and storage continually drops.
 
I also like this blog The Power of Free which cites the Wired article and suggests that the trick to doing Free or Freemium business models right is to ensure that the product/service that you are giving away free is of very high value to the customer.
 
Of course there are limits as discussed in this Forbes article Ten Things A Professional Never Does For Free and there will always be clients or customers who seek to take advantage. And maybe as Albert Einstein said Sometimes one pays most for the things one gets for nothing.
 
But I still think an element of free services or products is very powerful as a business development model particularly as we proceed post haste further and further into the digital age. 
 
Let me return if I may if I may to the Wired article for a final thought From Freecycle (free secondhand goods for anyone who will take them away) to Wikipedia, we are discovering that money isn't the only motivator. Altruism has always existed, but the Web gives it a platform where the actions of individuals can have global impact.

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Nightmare Negotiations

10/20/2018

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We’ve probably all been there. You work hard with your team to develop and present your proposal to a customer or supplier. Then you turn up for the first meeting only to receive an arrogant and dismissive reception. You find that instead of a reasonable or at least rational set of people on the other side of the table, there is either a customer that seems intent on making its bidders suffer and accept ridiculous levels of risk, or maybe a supplier so confident in its technology that it refuses to accept anything other than very limited changes to its standard terms.
 
I have been fortunate not to be in this position for a few years, but I do vividly remember one such occasion. I was acting as a lawyer for a supplier and we travelled somewhere up north for an initial negotiation meeting on a major full outsourcing contract with a large customer that had its offices in grand parklands with every facility you can imagine. Except it was not a negotiation. There was no attempt at a meeting of minds. Instead we were told what the customer’s position was on everything and our views were seemingly irrelevant and apparently, if their city lawyers’ attitude was anything to go by, we were really impertinent, almost impudent for daring to question their, extremely, one sided contract.
 
We eventually dropped out of the bidding. My client’s senior management had seen enough and simply did not want to contract with such an intransigent and difficult business. The approach and attitude foretold a disastrous relationship and failed contract. Ironically, I learnt some years later in a very roundabout way that this particular customer had eventually contracted for these services at a cut price with an offshore supplier which I assume accepted all of the one-sided terms – and then could not deliver. The last I heard this blue-chip company had had to pay another very reputable and expensive UK supplier a lot of money to dig themselves out of this catastrophic contract. 
 
Such renegotiations are complex and difficult and best avoided in the first place. Here is a Harvard Law School article on How to Renegotiate a Bad Deal which cites as an example a 75 year parking deal in the City of Chicago that went seriously wrong. This blog also addresses the difficulties of negotiating with people who will not budge commenting Unfortunately, the ‘no change’ approach is sometimes stubbornly stuck to even when you’ve pushed. The answer to this is that you, equally, have to be stubborn about this approach being unreasonable.
 
It may help to work out whether you are really dealing with an intransigent organisation or with difficult people – or maybe with one set of difficult people say the lawyers or procurement advisers. If that is the case, there are ways of managing the situation and keeping the deal afloat. See, for example, this Forbes article A Guide to Dealing with Difficult People.
 
This can all relate to extremely serious commercial situations, and there is nothing wrong with establishing a strong position in order to negotiate. Winston Churchill said in the 1930’s I do not hold that we should rearm in order to fight. I hold that we should rearm in order to parley.
 
But at the end of the day if one side won’t negotiate the other side should seriously consider pulling out of what is almost certainly going to prove to be a disastrous relationship. As John F Kennedy said in a radio and television address to the American people on the Berlin crisis in 1961 We cannot negotiate with people who say what's mine is mine and what's yours is negotiable.
 

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Discovering New Depths

10/13/2018

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I was on holiday recently staying near Saint-Tropez in the South of France, a town I have visited many times before. We were watching the incredible display of old and new sailing yachts in Les Voiles de Saint-Tropez regatta from the hill behind the town when as we walked back into the port we discovered a completely new (to us) part of Saint-Tropez right on the sea front just outside the main town with its shops and harbour.
 
This is the benefit of returning somewhere a number of times – you find out new things you never suspected. It’s the same in professional work where drilling down more into a topic or document can reveal hidden depths of meaning which are easily missed at first glance and are vital to understanding and decision making. 
 
This sort of careful and detailed analysis prior to taking any decision or action will enable a far more profound conclusion. As Albert Einstein said “If I were given one hour to save the planet, I would spend 59 minutes defining the problem and one minute resolving it.”
 
There even seems to be a Drill Down Technique in the context of management processes where  When you are facing a large and complex problem with significant potential ramifications, one of the best things you can do is break that problem down into its various components until you have it solved.
 
This is also linked to other techniques like root cause analysis designed to get to the bottom of, for example, a complex IT failure or medical problem. This article on the subject and Tracing a Problem to its Origins comments But what do you do when you have a problem at work? Do you jump straight in and treat the symptoms, or do you stop to consider whether there's actually a deeper problem that needs your attention? If you only fix the symptoms – what you see on the surface – the problem will almost certainly return, and need fixing over, and over again.
 
However, these techniques or approaches are only any good if they are utilised in the first place. In the crazy modern work environment where we are flooded with information and expected to make snap judgements, taking time for a more thorough analysis is almost counter cultural. This Harvard Business School Article on What It Takes to Think Deeply About Complex Problems articulates this dilemma well suggesting that Simple answers make us feel safer, especially in disruptive and tumultuous times. But rather than certainty, modern leaders need to consciously cultivate the capacity to see more — to deepen, widen, and lengthen their perspectives.
 
And if that means finding a bit more time to understand the issues and reach a more robust conclusion – or in my case discover another part of an historic old town - then so be it. As Abraham Lincoln said “Nothing valuable can be lost by taking time.” 
 

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