Friends don’t ask friends for discounts…

I have noted in previous posts a strong uptick in my cross cultural training courses in recent months which has primed me to pick up on some interesting ways that cultural filters show up time and again in business. One of the things we always talk about is how western cultures (particularly the US and countries like Germany) are heavily influenced by criteria decision making while in China things are influenced by relationships. The average tourist in China who was gone off the grid and gone shopping in a market where haggling and fake goods are predominant has undoubtedly run into one of the most common business manifestations of this cultural filter, “the friend discount.”

In 2001 I came back to China for the first time since 1997 (which in turn was the first time since 1989) and spent a fair bit more time sight seeing on my own than I had in previous trips. One of the more exciting places I ran into (and would go back to frequently until moving to Guangzhou in 2005) was the Xiang Yang Market. For those of you who missed out on this experience the Market was THE PLACE to get fake goods ranging from CK underwear, to Columbia Gore-Tex, to CDs and DVDs. This was a great place to learn your numbers and your haggling skills in Chinese because no price was really fixed and if you tried hard enough you could get some “really good deals” on practically anything.

Xiang Yang Market Circa 2004

In 2001 one of the things that most impressed me about the shop keepers was that they all seemed to know some key English and overwhelmingly they new how to give me a “friend discount.” To my understanding all these years later friends will try there hardest to knock at least 10% off of whatever price they would give to just any sucker walking by. Friends would also continue with some protesting to come down on that price and additional 10-70% depending on what you were buying. But to really get you into the shop and get you to “taste the goods” so to speak they would throw that friendship discount out early and fast to let you know they were reasonable. There might be a vague hint to some criteria based haggling (“look how well this underwear is made”) but the underlying theme was deals were being made because they liked you and only because the shop keepers were willing to sacrifice to keep our relationship in good standing were they willing to keep bringing the price down.

Good hagglers knew how to play off this dynamic. Failed bargainers would point out defects in quality and demand a discount, skillful bargainers would point out how their friend over in stall 35 had such and such rate and since you were good friends you were sure they had the best deal, this put the onus on your haggling partner to prove what kind of a good friend they were. Of course the longer you stay in this kind of culture the worse you would feel if you didn’t take some of the deals your new “friends” were offering.

In business dealings the friend discount is still alive and well even in business to business negotiations. Recently I began working with Siemens again had made an initial offer to Siemens Management Institute based on an existing friendship and had concluded that the friend rate was already given and all hunk-dory vis-a-vis relationship based negotiations. Not only was I wrong I actually adopted the e-mail that came in between workshop 2 and 3 asking for a discount as a case study for future cross cultural training as address to points in business negotiations: 1. discounts are never asked for at the beginning of the letter 2. the friend discount is alive and well.

So I now take it upon myself to quote a little higher with Siemens on anything. The reason? So that I can afford to give a friend discount when it comes up. I recently introduced a colleague to them to deliver an intensive business writing course and central piece of advice. Charge them at least 1,000 RMB more so that you can give that 1,000 RMB away as a friendly gesture when they ask about it. You might say, “John, does this mean that you just charge more to anyone because you’ll just give them a discount later?” This answer is, “It depends.”

Depends on what? Well here is where it gets interesting. A few months ago during a TTT we held here with Dr. Greenaway we tried out an activity called “have you ever?” and the question was had a business negotiation in China. We then split off into quadrants of those who had or hadn’t and by whether you did or didn’t like the experience. A fair number of us (including some of our clients) wound up in the have and don’t like it side of things. When asked why we said none of us liked running the risk of damaging a friendly relationship. So what does it mean? Let’s try and wrap our heads around this a minute…

When you have someone who is effectively just a cog in the machine or a vendor friend discounts are pretty common. As you begin to build up friendships with decision makers you will find those friend discounts slowly decreasing. Why? Because it is seen as risking the friendship to ask for a discount particularly if the rate seems fair. So the paradox here is that friends give strangers “friend discounts” but friends, for the sake of the friendship, don’t give discounts. I do however give freebies frequently. Why? Because it shows a commitment to the friendship and if I have the time and interest then all the better.

Anthropology 101 introduced the notion of reciprocity. China business 101 ought to put serious business negotiations and reciprocity hand in hand.

Underpants Gnomes Ahead!

A few years ago I got to catch up with a friend of mine from high school who served in the initial invasion of Iraq as an Army Ranger. He told me that the term for the invasion as dubbed by the rangers he served with was Operation Underpants Gnomes. For those of you who didn’t watch South Park in the late 90’s you might have missed this particular cultural nugget. To summarize the boys from South Park meet a group on entrepreneurial gnomes with a simple business equation 1. Collect Underpants 2. ? 3. Profit/We all get rich.

What the rangers in the Iraq invasion were saying was that step 1 = Invade Iraq, step 2 = ?, step 3 = Freedom in the Middle East. Clearly 8 years later we are still in the “?” phase that the rangers had identified on the ground in very short order. From my experience though Underpants Gnomes Thinking is a danger that falls into a lot of our lives ranging from business decisions to personal matters. I see no shortage of people with a clear step 1 of “let’s set up production in China” leading to step 3 “then we get rich.” Not a lot of step thinking happens until they get on the ground and have to actually implement step 1.

I work in a highly labour intensive field and it is real tendency to watch companies in my industry look for a silver bullet. Or in underpants Gnome thinking a really good step 1. Luckily we don’t see many people trying to actually steal underwear, but we do get a lot of “If we can get one great idea,” or one great event, or be the first to be licensed to distribute such and such product. I see a lot of people believe that a strong e-mail database, a good flier, and good idea equal a must win marketing strategy. Eg instant sales through e-mail or web hits to the homepage. They miss the middle step of making phone calls and knocking on doors and spreading word of mouth. I’ve been thinking about this as I wrap up a marketing drive for an open workshop next week. I think I might have been succumbing a bit to Underpants Gnome thinking. The result is that the past couple of weeks I have been sucked into a lot of last minute hard sales and negotiations I should have already done more than a month or two ago.

Does this look like anyone you work with?

It’s worth sitting down with your team to analyze what constitutes a well formed step 2 and what qualifies as part of step 1. Ask yourself bluntly do you have a step 2 that constitutes a plan on the ground that will save stress and headaches later or our you just sending in your troops hoping for best results with sheer numbers? As the underpants Gnomes can attest having a great step 1 can only get you so far.

“Roads? Where we’re going we don’t need roads…”

I have been thinking a bit about how we measure success. I’ll write more about that in a later post, but the train of thought got me started thinking about why I chose to work and live in China instead of back home. After all it isn’t what a lot of people chose to do, it is taking the path less traveled. Actually though I realize I know a lot of people who fall under the entrepreneur label here in China and the reality is that we left the roads most people take a long time ago.

Doc Brown was a lone nut, but a lone nut with a flux capacitator...

I think about what if I had done something simpler and “stayed home” at times like these, times that are punctuated with a lot more of the grunt work. Recently my key client had their funds reduced and a number of clients have pushed their projects back to the second half of the year and I am suddenly filling my days trying to refill my calendar. It is times like these that I wonder, “what if I had stayed home to do something like this?”

That’s when I check what a “principal consultant” in the US at a firm that does the organizational cultural work and leadership development should have on their résumé. One firm in California had their JD showing I would need at least two to four years more of school and preferably another couple years of work experience before they would even look at my résumé much less put me on the short list of hires.

So stand back folks I am going to be working hard at stringing together some base hits and grinding out a couple of tough months of hard work to get to the “second half of the year” that shines on the horizon. In light of the recent Labor Day holiday the hard work seems acceptable and I think I’ll stick with Doc Brown’s famous line about roads while I continue to do things on my own terms.

Let’s get “Mediapathic”

If you google “Mediapathic” or run it through Dictionary.com you’ll at best get a web handle or twitter name. So let’s give credit where credit is due “mediapathic” as I know and use it comes from the Neal Stephenson book Zodiac and it is his term not mine. In Zodiac he uses the term to refer to creating images and situations that register across the evening news and creating a lasting impact with viewers, usually creating a positive impact for your side and a negative impact for your adversary. As the key protagonist is an environmental activist his idea of “mediapathic” imagery makes industrial polluters look like villains and environmentalists look like heroes. In real life it is like getting someone like former BP top-executive Tony Hayward to say, “I want my life back” in front of the whole world.

You can see Mr. Hayward here: http://www.huffingtonpost.com/2010/06/01/bp-ceo-tony-hayward-video_n_595906.html (If you’re in China you’ll need VPN access)

We now live in a time that being mediapathic is a business hard skill that is going to set apart the have and have-nots. If you’re in business for yourself and/or growing a small and medium sized business being mediapathic is what gets people to find your product, see your services, buy your books, download your music and make sure that you have money in the bank. I want to share a few stories and a few links through this post to give you an idea about what I am suggesting.

There are a couple of events last week that got me running down this track. The first is a chat with my friend and former colleague Jesse Covner in Suzhou. Jesse left the consulting business to take a director role at a company that produces role-playing games. You can check out the kind of games they produce over at their web-site they sound fairly creative and certainly have their demographic of gamers. Jesse is enrolling himself in the world of facebook in order to start promoting the company and their products after having registered a VPN and swallowed his distaste for social media. I suspect he will be on twitter soon enough. Arguably if you are doing business where your primary target group is in the US it is a must to be visible there.

Beyond being visible though there is a growing need to be mediapathic. When I talked to Jesse he had just come back from Las Vegas after attending a massive role-playing convention for people who make games. The story he shared that struck me as being most interesting was that at one point he sat in on a panel about manufacturing role-playing games in the US and ended up in a debate with the CEO of the group that produces “The Settlers of Catan” on two sides of the debate about producing abroad (particularly China) or in the US. It seems that Klaus Teuber actually all but called Jesse out as being “unAmerican” producing in China. Jesse of course represents the little guys not a multi-million dollar gaming company with the profit margins to produce in the US.

I sincerely wish that Jesse had been able to record it and have it on youtube, shared on facebook, and tweeted in the moment. How mediapathic would it have been to be David standing up for the little businesses trying to make it by standing up to the giant Goliath asking little businesses to slash any profits they have and effectively slash their wrists at the same time. Mr. Teuber’s point would be mediapathic tackling Wizards of the Coast but against Jesse and small business looks and sounds like bullying. It also makes Jesse a champion for the little guy and the perosn you want in your corner standing up for your product.

Let’s summarize for a minute. Do you have a small business or work in the field of helping other small businesses like game designers. Use the new media of the internet and social marketing to get your message out there to as many people as possible. Be on youtube (or in China youku), be on facebook and gathering fans and likes and be on twitter collecting followers. Be in their face. But also choose your message carefully and keep it balanced to get your followers.

I have been promoting a couple of open courses in the early part of this year. To mixed results at this point. I am trying to find the way to create the most mediapathic impact in my industry. One standard though is to create a flyer introducing your course and a good flyer should have good images. A picture says a thousand words and having access to good pictures makes a big differences if you can get people to see your flyer. You can see the flyer I designed for a reviewing course up at Roger’s website for reviewing. You’ll notice the pictures are pictures of people I have trained doing reviews but not of Roger in action. This is not for trying. If you look around the web for pictures of Roger that are mediapathic you’ll come up short. Not because Roger isn’t in actuality one of the worlds great trainers (he is) or that he isn’t the world’s foremost expert on reviewing (he is that too) but because Roger hasn’t developed this part of his brand. To be fair Roger is an established brand in the training world and won’t lose any business for this oversight. His website is, btw, a great trainer resource but highly un-mediapathic.

Take in comparison the website my friend and former colleague Andy Anderson put together. Andy, if you haven’t met him, is a great trainer and an all around great guy. His website www.imandyanderson.com is stellar example of being mediapathic. The photos are top class and the lay out is both intuitive and interesting. It makes me want to make a knock off site, that’s how cool it is. If I was looking for pictures to promote Andy in a flier I would immediately have access to resources to do so and the material would be noteworthy. To be fair Andy is a graduate of the ClarkMorgan system and in the China training world they made some of the biggest inroads into being mediapathic. Which is part of the reason Andy has some outstanding images there.

If you want to learn from Andy here, don’t count on images of you that are mediapathic happening without fore-thought. Have the sense to have a talented person nearby with a camera or recording device at times that you will stand out. I have tried working with numerous accidental photos taken during training events and inevitably people who didn’t know better had highly un-mediapathic images as a result. You can’t use photos of your great training session when people look bored. It only takes one bored person to make an otherwise mediapathic image a disaster.

I noticed last week when I put up Ayawawa’s picture I got a couple readers who just wanted to know who the Asian girl was touching her hair. It appealed to a certain demographic. Last year we worked with a German (now Japanese) company in Zhuhai to create a local corporate culture. Their CEO pointed out that working with an American was interesting because Americans inevitably have a sense of marketing that Germans seem to lack. I pointed out over dinner this weekend that Germans know how to market to other Germans. They created a set of interesting visuals promoting their “corporate values” internally and needed to target two groups with mediapathic images. The local Chinese needed pictures of people they knew to resonate, for the Germans at the plant the CEO hand picked images that would resonate on the English language posters. Talking with the Germans they all strongly responded to the picture taken for the Honesty poster. Below are a couple of examples:

This young women is reminding employees about Honesty on this poster

Chosen for being the contrasting image to Honesty this picture resonates

The CEO said he picked the English language picture after carefully reviewing which employee looked the least Honest of the bunch. As a result the expat team took notice of the picture and started modelling Honesty as a value more frequently. It was a clever choice of a mediapathic image to drive for results with a target group. That would be the final point I would make about being mediapathic, you can’t expect everyone to register your image the same way but you have to appeal a certain group and that group is who matters.

Seth Godin, noted blogger, author, and business thinker, suggests that anyone wanting to be in business for themselves needs about 20,000 people to be in their “tribes” circle of influence to live comfortably. If we think about our friend Jesse if he has 20,000 people following his products and snatching up the latest product he and his company will be doing fairly well. That doesn’t mean Jesse needs to reach everyone on facebook or twitter only a core group or maybe two. In his case he wants to appeal to game developers who want his access to cheaper methods of production, his publishing networking and to the game buyers who trust in his opinion about what is both a fun and interesting game to invest their money in. In other words Jesse needs a tribe of about 20,000 role-players who want to buy his materials for any given product line that he puts out. He then needs to craft a mediapathic image for those 20,000 people and get it out to them.

Here are a few questions to think about in creating your mediapathic (and highly necessary) message:
1. Is their an outlet for your message? Literally what media are you using to get people to fall in love with your message?
2. Have you created an image that will register an impact? Have you gotten someone with talent to be there at the right time to choose the right image to move through your media?
3. Have you considered your audience for the image. Your targeting a select group or just scattering your message to whoever might show a passing interest?

Standardization versus Repitition

I wrote last time that I felt that it was important for anyone who wants to create a brand identity based around themselves to go through a process of education and developing skills as a journeyman/woman.  Let’s be clear though there is a HUGE difference between 9 years of experience and doing the same 1 year of experience nine times.  There is a fundamental difference between being very good at doing the basics and understanding how to cover the basics from a business perspective.

I know some people who can make phenomenal slide shows.  Other folks can write a particular strong of code better and faster than other designers.  I also know some gurus of spread sheet making who can do things with Excel that I can’t even fathom.  I have seen people run software that crunches statistical data in new and creative ways.  All of these skills overlap into my business field, but the danger that we face is finding ourselves sealed away in a cubicle mastering the tricks in our Office software and applying them over and over again without ever going out and bringing the outside in.  We become experts, valuable cogs in a factory model, but we miss making the step to see the whole picture and understand our true value to the market.

Did Ben Franklin drink the Kool-Aid, this historical rendering seems to indicate he did...

Ben Franklin is attributed with saying, “the definition of insanity is doing the same thing but expecting different results.”  I would go one step forward and say that it is even more insane to think that just because we know how to do one thing well and we have been doing it for years that we think the right new thing to do is to take that thing and keep doing just independently like we did in our old factory lifestyle.  In fact in this day and age the Factory model of thinking would very much look like insanity to Mr. Franklin.

Before you break away to be the Master of Your Destiny, and believe me I think you should, ask yourself these questions?

  1. Have I brought the outside in?  Do I have a complete picture for how to apply this skill to meet my clients’ needs rather than my employers’?
  2. Have I been doing the same thing over and over?  Do I have experience in doing business with my craft or am I experienced in only one aspect of my craft and not the business?
  3. Will I feel satisfied with my life and work ten years from now, or will it become routine?  Will I try to replicate a factory approach to what makes me special?

Let’s be clear factories are not inherently bad, but a factory lifestyle and way of thinking is.  A factory makes stuff, and stuff is not inherently bad.  Taking the people factor out creating or the creativity out of creativity though is what traditional factory thinking has mastered.  It creates repetition.  It asks us to stop looking for newer better ways.  It teaches us that change is bad and that adaptability is not an essential aspect of work.  People with factory thinking will always be left behind by people with an entrepreneurial mindset.  To quote Ricky Bobby, “It’s the fastest who get paid.” and agility and speed are not part of a factory mindset.

But anyone who wants to be great will tell you that Eli Whitney had a good idea when he brought about a revolution based on interchangeable mass produced parts.  He created a mind set of efficiency that was later co-opted by factory thinkers.  Be efficient, standardize the methods of production and practices that drive your economic engine to promote speed and adaptability.  Don’t stick your thinking in a cubicle and demand repetition that is the definition of insanity.

This came out of writing a training report today.  The definition of repetition and boredom in my job.  I like the direction my reports have gone over the years.  For a core leadership program I can generate a standard 1 page report in about 5-6 hours.  A lot of this is through standardization.  My reports or some of the best (to toot my own horn the best) I have seen in the China market, but one of the challenges was to figure out how to simplify the process while customizing the result.  The same with workbook creation.  Excellent results, highly flexible, almost fun to do.  The break through was understanding why reports mattered to a client and not just knowing how a report should look and feeling good about the product I give to my client…