By Steve Kelman
A course title – with the word NEW! emblazoned in capital letters and orange type (everything else in the brochure was blue and black) – appeared in a flyer I recently got in the mail from Federal Publications Seminars.
The flyer was advertising a four-day training conference on government contracting, and the flashy course title caught my eye. Amidst traditional-sounding training sessions, with titles such as "A Practical Guide to the Incurred Cost Submission" and "Rights in Technical Data and Computer Software," the NEW! course was called, "Behavioral Aspects of Government Contract Negotiations."
The instructor is Joe Mason, a technical guy working for a Colorado-based government contractor who also teaches government contract negotiations at a local university and proposed this course to the seminar company last year. After beta testing it last year with only six attendees, this year 29 have already signed up, with the training vendor expecting 40 attendees when the 12-hour, 2-day session is delivered in May.
This new course reflects a positive turn in how participants in government contracting – especially, hopefully, the government – think about the negotiation process, which should be a central factor. (Negotiations are critical to getting taxpayers a good deal, and also important from a job satisfaction perspective for contracting officials, because negotiating, for many, is intrinsically interesting work).
Traditionally, government thought about negotiations in a very formalistic sense. In "negotiating" over proposals that vendors gave the government, government traditionally did not actually even speak with the bidders at all (something considered to be at the heart of negotiating in the normal meaning of the word) – the government sent written communications telling bidders how they were deficient, asking them to revise their proposals, and also requesting a lower price. After the contract was signed, "negotiations" to the government often meant discussion around questions of what rights the contract terms gave the parties.
This is beginning to change, and this new course is one sign of the shift. By "behavioral" features of negotiations, Mason means teaching people to understand and "read" the personalities and agendas of the people with whom you are negotiating, and then how to use that understanding in face-to-face negotiations with others. He means providing hints about how to use one's understanding of the other party to reach a better deal for your own side -- and to develop a solution that is acceptable to all.
The new perspective in this course is, probably, only scratching the surface of a behavioral approach to negotiations. When I first saw the course blurb, I assumed the course was actually including what academics would mean by the term: an approach to negotiations that takes into account the various ways the human mind works (ways that sometimes depart from what most would consider to be rationality.) Thus, academics studying negotiations, for example, apply something called the "anchoring bias" – the fact that people tend to propose solutions around an anchor that gets established in their minds, however arbitrarily, which means that a first offer can influence a negotiation outcome.
In the classic studies of anchoring, two groups of people are asked to estimate the incidence of serious corporate fraud. They ask one group whether the incidence is more or less than 200 firms out of a thousand, and the other whether it is more or less than 20 firms out of a thousand. Although these numbers are chosen totally arbitrary, they serve as anchors in the minds of the test subjects, so that the group asked to consider 200 cases as the benchmark usually estimates a much higher incidence of fraud than the group given the lower number. Mason's course doesn't get into that level of behavioral insight.
I am very happy that courses such as Mason's are being offered now; they are a real step forward. But I also am thinking that a lot of a behavioral approach to negotiations is hardly limited to negotiating over government contracts. Perhaps a better solution, rather than having people take government-contracting unique negotiation training, is for people, including government officials (OK, I am speaking about a world in which training dollars return), to take general courses in negotiations open to the whole world, not just courses designed for the special, closed world of government contracts. Doing that would be to take an even bolder step towards improving the value the government gets from contracting.
Posted on Apr 09, 2013 at 10:08 AM3 comments
As my blog readers who own stock are probably aware, this is corporate annual report season. My mailbox has been filled with thick annual reports, 10-K statements, and notices of annual meetings. (I still get this stuff in hard copy.)
Reading one of these annual reports on a smallish-sized company that will remain nameless, I saw, buried on page 17 under the rubric "Other," the following disclosure:
"On February 7, 2013 the Board of Directors of the Company approved a change in the Company's IT software and systems strategy. The Company changed its IT... strategy from a previous project, involving an ERP reimplementation, to a project involving an ERP upgrade and some additional applications software. ... This new approach is expected to be completed by the Company, at a lower cost, in a shorter time frame, and with less overall business risk. The Company determined that continuing with the original project would result in increases in estimated costs and a significant extension in the time expected to complete the project.
"As a result of this change in IT strategy, the Company recorded a $1.8 million asset impairment charge in the quarter ended December 31, 2012. The original project costs were deemed to have no future fair value."
There are two lessons I think it is appropriate to draw from this incident, and two I don't mean to draw.
Lesson One: Many problems that agencies encounter in making IT investments work are not just problems for government. Getting returns from these investments can be challenging wherever they are undertaken. We sometimes have a tendency in government to dump on ourselves, to see only the bad side of things, and the public is seems to totally buy into a "waste, fraud, and abuse" narrative of government performance. These stories about the private sector provide a balance to the tendency to wallow in supposed, or supposedly unique, government incompetence.
Lesson Two explains why such perceptions about the government, particularly on the part of the public, develop. The fact is that problems, whether involving IT or other organizational issues, are much easier to keep from the public eye in private business than they are in government. Though there is now more investigative business reporting than before, companies are still more of a black box, with no inspectors general running around inside the organizations looking for scandal and no Freedom of Information Act that applies to companies.
It would be tempting to also conclude that this kind of problem is as prevalent in the private sector as in government. Maybe these problems happen once in a blue moon in companies (though I doubt it), and constantly in government. This one example won't answer that question. More importantly -- the second conclusion I do not want to draw -- just because failures are not limited to government doesn't mean that we should exempt ourselves from being concerned with the many federal IT implementation failures and feel a sense of urgency about increasing our success rate. The efforts at better program management, including agile development, should – urgently – continue. But let's not wallow.
P.S. The April 2 New York Times has an article on Apple's iPhone problems in China with allegations of poor warranty service, which led to an apology yesterday from Apple CEO Tim Cook. The article discusses the Chinese government television show on the topic, the controversy over cooked Chinese twitter posts by celebrities endorsing the criticism, and suggestions the attack on Apple is part of a larger political issue between the US and China – all of which I discussed in a blog post almost two weeks ago. Blog readers, you read it first here. :)
Posted on Apr 02, 2013 at 11:38 AM1 comments
A pastiche of vignettes from my latest trip to China:
1) China Daily ran a story called "Web bosses go into politics" about Internet entrepreneurs who had become delegates to recent meetings of China's legislature (the National People's Congress) and another non-legislative body that discusses various issues facing society, both of which meet for a few weeks each year. Superficially this might seem like American IT entrepreneurs becoming involved in politics either to promote an industry-related IT agenda (e.g. more visas for tech workers) or because they believe in a cause such as gay marriage. However, I'm suspecting that what's behind this entrepreneurial entry into politics is more a recognition of the need to have government connections and government blessings if one is to succeed in business, even private business. To the extent this is what is going on, it may be a pessimistic sign about the high-tech industry in China, with entrepreneurs succeeding based on connections more than the quality of what they do.
2) While in Shanghai, I wandered around a pedestrian street in the middle of town (Nanjing Road) and People's Square, which abuts it. I saw four different Starbucks outlets within perhaps a quarter-mile of one other. One was so crowded that it was actually difficult to move around. If you ever visit a Starbucks in China, check out how the menu is set up. Actual coffee (what they called an "Americano" or espresso) has a modest place in a bottom corner of the menu, which is dominated by various frappachinos and other sweetened drinks. Most Chinese don't like the actual taste of coffee, and Starbucks' success has been based on a lifestyle appeal more than anything. Chinese Starbucks prices in absolute terms -- forgetting even the lower wage levels in China -- are about 25 percent higher than prices for the same items in the United States. (By the way, next to one of the Starbucks there was a large Hershey's chocolate outlet -- which I had never seen before in China -- where Chinese could buy Reese's peanut butter cups and other delicacies.)
3) Although the Western media gives attention mostly to McDonald's, KFC, and Starbucks as western food attractions, I've been noticing a lot of pastry and sandwich outlets -- a style of cuisine not particularly closer to traditional Chinese eating habits (where the concept of a sweet dessert at the end of a meal doesn't really exist). Breadtalk, a Singapore company, is in a lot of food courts in malls, selling both French bread and lots of sweet pastries. I've been noticing more and more outlets of a company called French Baguette, which is, perhaps incongruously, Korean-owned.
4) Checking out an upscale shopping mall, I noticed an enormous disparity in relative prices of U.S. clothing and packaged food. American menswear brands were typically priced far above U.S. prices, often five times as expensive as stateside. But packaged foods (Pringles, tomato sauce, even -- somewhat bizarrely, since China doesn't lack for hot sauces -- Tabasco) are priced only slightly above American prices. Surprisingly as well, a moderate amount of the processed food is not just American brands, but actually manufactured in the United States.
5) Finally, I can report a small item in one day's English-language edition of the Global Times, which is actually published by the Communist Party and has something of a nationalistic reputation. Entitled "Panda porn helps female get in the mood for love," the article reported that "after several failed attempts to get it on, a pair of pandas in Chengdu were able to successfully mate after watching a specially tailored 'adult video' or panda porn."
Posted on Mar 27, 2013 at 6:18 AM0 comments