Tag Archives: Ethics

The Art of Negotiation and Learning from Failures

Negotiation has been defined in a variety of ways like the ‘art of resolving conflict’ or a ‘conversation to reach an agreement’ or a cliched term called as ‘win-win for both the parties’. Four major negotiation agreements are discussed which are:

Budapest Agreement signed in 1994 between Russia and Ukraine
Oslo Accords between Israel and Palestine 1993-95
Camp David Accord between Egypt and Israel in 1978 &
The Treaty of Versailles between Germany and the Allied Powers after the First World War – 1919

1.Budapest Agreement between Russia & Ukraine: 1994

Ukraine during the erstwhile USSR had nuclear warheads. It was expected by the US, UK and Russia that Ukraine signs up the Nuclear Non-Proliferation Treaty (NPT) and give up the nuclear arsenal. Bill Clinton, Boris Yeltsin and Kravchuk, the president of Ukraine were the signatories of the Trilateral agreement signed on 14^th January 1994 in Moscow. Ukraine demanded security guarantee in exchange of denuclearization. What did Ukraine receive apart from the compensation for the Uranium that was returned? Maintaining nuclear equipment was also difficult after the Chernobyl disaster and the economic hardship the country was going through.

The terms of the agreement were: . 1.Respect the independence and the sovereignty of the signatories within the existing boundaries. 2. Refrain from threat or use of force against the territorial integrity or political independence of the signatories.

With Russia’s attack on Ukraine in February 2024, Boris Tarayuk the lead negotiator of the Budapest agreement said , “not only did Russia violate its commitment as the guarantor of Ukraine’s national security but other signatories like US and the UK failed to fulfil their commitment under this agreement.” (1) Four years and no end in sight Ukraine is on the verge of collapse as it is used as a pawn by all other nations.

2. Oslo Accords between Israel and Palestine: 1993-95

The Oslo Accord was signed in December 1993 at Washington DC between Israel and Palestine Liberation Organization (PLO) represented by Yitzhak Rabin and Yasser Arafat and brokered by Bill Clinton. It included limited self-governance for the Palestinians in West Bank and Gaza strip by creating the Palestinian Authority(PA). It included the following clauses:

Israel’s right to exist.
PLO as the representative of the Palestinians
Transfer of Authority to PA for education, health, social welfare, taxation and tourism. However the issue of Jerusalem was not resolved

Oslo II accord was signed in Taba, Egypt in 1995

Yitzak Rabin, Shimon Peres and Yasser Arafat were the stakeholders in the Oslo 2 accord. The negotiation focussed on issues like Jerusalem refugees, settlement and border and was to be implemented latest by May 1996. However, in November 1995, Yitzak Rabin was assassinated by a Jewish extremist and Benjamin Netanyahu came to power. Even though discussion went on, there was distrust and tension between the two parties. The issue became complicated by Ariel Sharon who made a provocative visit to Temple mount which led to anger among the Palestinians. (2)

3. Camp David Accord between Egypt and Israel : 1978

Camp David Accord was signed between Anwar Sadat of Egypt and Menachem Begin of Israel in 1978 and the deal was brokered by Jimmy Carter. The award failed because it was perceived as a unilateral peace initiative and did not include the interest of the establishment of Palestine. The Arab interests were also not given due respect. The negotiation lasted for 13 days from 5^th to 17^th September 1978.

4. The Treaty of Versailles: 1919

The first World War was fought between the Central Powers represented by Germany and the Ottoman Empire and the Allied Powers which included France, Britain and Russia.

The Istanbul Agreement allowed Russia the control of Istanbul, France got the control of Syria and Great Britain with Cyprus, Egypt, Haifa and Acre. Palestine came under the British regime. Palestine is a place considered sacred by Jews, Muslims and Christians.

Treaty of Versailles was a peace document signed at the end of World War I by the Allied and associated powers and by Germany in the Hall of Mirrors in the Palace of Versailles, France, on June 28, 1919; it took force on January 10, 1920.

The conference was dominated by the national leaders known as the “Big Four”—David Lloyd George, the prime minister of the United Kingdom; Georges Clemenceau, the prime minister of France; Woodrow Wilson, the president of the United States and Vittorio Orlando, the prime minister of Italy. None of the defeated nations had any say in shaping the treaty, and even the associated Allied powers played only a minor role. Some of the conditions were:

Territory of Germany to be reduced by 10%
Compensation by Germany for all damages done to the civilian population of the allies and their property by the aggressors ( Germany) by Land, Sea and Air
War Guilt Clause
Losses estimated to be $33 Billion
German army reduced to 100,000
Manufacturing of armoured cars, Submarines and aeroplanes was forbidden (3)

The German delegates were presented with a fait accompli. They were shocked at the severity of the terms and protested the contradictions between the assurances made when the armistice was negotiated and the actual treaty. Accepting the “war guilt” clause and the reparation terms was especially odious to them.

What was the outcome of such a harsh and unilateral impositions of clauses? Did the execution happen as per the agreement? Harsh Treaty and Lax enforcement paved the way for German Militarism. When Hitler militarized Rhineland, the Allies did nothing. To a greater extent the rise of Hitler and the seeds of the second world war were sowed in the Treaty of Versailles marked by harsh unilateral negotiation and poor execution.

The negotiators included eminent leaders like Clinton, Carter, Wilson, Yeltsin, Anwar Sadat among others. Even then, why did the negotiations fail? Was it the lack of positive intent among the parties, the trust deficit or force majeure conditions? Roger Fisher and William Ury from the Harvard Business School say that in integrative negotiation, ‘people should focus on interest and not position’. Easier said than done.

Neil Rackham has made an interesting observation about the characteristics of a Skillful Negotiator who:

Is rated effective by both the parties
Has a track record of significant success.
Has a low incidence of implementation failures. (4)

Most of the leaders discussed above have passed into oblivion. If they were to think of leaving a legacy behind; of the long-term consequences taking precedence over the short-term glory, would the history be different? Dr. Manmohan Singh made a prophetic statement after the incessant criticism of him during the final years of his prime ministerial tenure, “history will be kinder to me.”

I am reminded of the concluding couplet from Alexander Pope’s satirical masterpiece, the Dunciad.

Thy hand great anarch, lets the curtain fall, universal darkness buries all.

Ref: 1. Through a Diplomat’s Lens – Capturing Momentous Times: Sudhir T. Devare

2. Encyclopaedia Britannica

3. Wikipedia

4. Behaviour of Successful Negotiators – Neil Rackham

Use These Masks with Discretion!

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“Will you be giving us a certificate for the Stress Management program?” I was perplexed by this question from several participants, more so when it was to be a two-hour online session. To one of them, a lecturer, I asked “Why are you so keen on having a certificate? Do you think it will help you manage your stress?” She replied, “It looks good on my CV.”

I have been attending the 10-day Vipassana and Satipatthana courses since 1986 and till date neither the participants have asked for, nor has the Vipassana International Academy felt like giving away the certificates; the Vipassana program had a greater impact on my life than my formal education, that too without any certification. Mark Twain said, “I did not prevent my school from getting me educated.”

The conventional masks, the N95 and its variants are used as a prevention against COVID-19… and then there are credential masks comprising of academic credentials and professional achievements.

Credentials, certifications etc. have their validity and relevance to set benchmarks, SOPs, etc. and need to be adhered to while selecting a candidate or a vendor. Essential in professional life, they may indicate a person’s potential, not necessarily his accomplishments. There is a problem with too much emphasis on credentials.

There are two types of errors people tend to make either about themselves or of others.

With a degree or certification from the right type of institute, one feels competent. People also tend to judge others’competence with the same type of masks. The media also adds to the credential mask hype by taking out the rating surveys. I wonder whether it is for the potential customers (the students) or for the vendors (the institutes). It may be for both.

Quite often we tend to equate a person with the credential mask one wears and it may lead to errors like the examples below:

Vinod Mehta was one of India’s most influential editors with publications like The Sunday Observer, The Indian Post and Outlook. He barely scraped through with a third-class degree in B.A. He said while recruiting a copy editor, “I always make it a point not to recruit a copy editor based on his/her marks in English literature as I myself did not score good marks in English at any level.”

The problem with the masks is that after some time we fall in love with the masks which are our credentials, be it the degree, the CTC, the designation or our possessions. It starts in childhood with marks and without awareness the ‘r’ in marks gets transformed into an ‘s,’ other alphabets remaining the same. As Nirad Chaudhary says, “Marks are a stark reminder of India’s slavish colonial past and a pointer to being an academically third-class country.” (Nirad C Chaudhary – Thy Hand Great Anarch, 1987)

Prasanta Chandra Mahalanobis – The father of Indian Statistics told Pandit Nehru that if the marks based evaluation on the legacy of Macaulay system were not to be scrapped, India would degenerate into a world of toppers sans any skills to survive in a competitive world.

Credentials are certainly important in professional life but what happens if they are applied at a personal level too? Shweta, 28, with an MBA Finance working in a bank is looking for an alliance. As her CTC is Rs. 12 lakhs, her expectation is that of a groom, (apart from a PG degree) with a minimum CTC of Rs. 15 lakhs. Now if a candidate is switching from a job of Rs. 12 lakhs to Rs. 15 lakhs that is fine, but can the same yardstick be applied to one’s personal life? What happens if the husband were to lose his job after marriage or if he were to start his business with uncertain income for the first few years?

Imagine a scenario where the guy, a Software Engineer from a MNC gets engaged to a lady, a Program Manager working in a local company. Based on his higher CTC, he tells his fiancée: “Based on your performance you will be promoted to the position of a wife in six months,” to which she responds: “Your people skills are under review. Post-marriage you shall undergo training for 2 years and based on your performance, your eligibility for fatherhood shall be considered.”

Can a conventional yardstick of evaluating a person on his credentials lead to an error in judgement? Rahul Sankritayan, considered as the Father of Indian Travelogue literature, was never considered fit to teach at any Indian University as he did not even finish matriculation. The University of Leningrad appointed him as a Professor of Indology and neighbouring Sri Lanka appointed him as a Professor Emeritus at Colombo University and permanent head of faculty of Buddhism Studies and Pali. It was Nehru who intervened and bent the rules for this polyglot and polymath genius.

Quite often our perceptions create our reality. Having attended a week-long program at Harvard or IIM, some executives put that in prominence on their LinkedIn profile creating a perception of a full-time program. (After all marketing, advertising and branding are nothing but creating perceptions and illusions!) As long as we are aware that it is the requirement of a role and that prevarication of the truth is the same as a lie – that is fine.

When you go for a job interview or a sales call meeting with your client, you need to be well dressed, focus on your strength, and say the best things about yourself, the company and your product range. Sometime during job interview when you are asked about your weaknesses, executives project them in such a way that they are perceived as strengths. Some candidates tell me, “One of my weaknesses is that I work too hard and am not able to devote time to my family,” or “I am a taskmaster focussed on numbers all the time and not being able to focus on my hobbies.” The irony is you can see the real person beneath such masks.

But can these masks really help us when we go through tough times or an existential crisis? A well-dressed successful CEO once visited a Zen master to address his personal anguish and frustration. He started his corporate jargon focussing on his strengths. The Zen Master asked him whether he is ready for a cup of tea. As the Zen master was pouring tea in the cup, the CEO went on sharing his success stories ad infinitum and ad nauseam. The Zen master went on urging him to talk more. The CEO being in his element, never realized that the cup was full, still the master continued pouring; and tea overflowing in the saucer. The CEO could take it no longer when he saw tea dripping on the ground. Unable to control his irritation, the CEO said, “Master, this is terrible. If you cannot pour tea into the cup properly, how can you solve my problems?” The master replied, “You are like this overflowing cup with your achievements and miseries. Unless you empty your cup and let go of your mask, there is no possibility of a profound change.”

A N95 or Credential mask is essential when we are away from home and interacting with strangers, customers, vendors or colleagues. It is easier to take off a regular mask when we are back home. With Work from Home (WFH) becoming the new normal, several executives find it difficult to let go of the credential mask in a personal capacity. An emotionally intelligent person is the one who takes his work seriously but not himself.

So just let go off the baggage, the credential mask… neatly summed up by this poem.

Guy In the Glass

When you get what you want and you struggle for pelf

and the world makes you king for a day,

then go to the mirror and look at yourself

and see what that guy has to say.

For it isn’t your mother, your father or wife

whose judgment upon you must pass,

but the man, whose verdict counts most in your life

is the one staring back from the glass

He’s the fellow to be pleased

never mind all the rest.

For he’s with you right to the end,

and you’ve passed your most difficult test

if the guy in the glass is your friend.

You may be like Jack Horner and “chisel” a plum,

and think you’re a wonderful guy,

but the guy in the glass says you’re only a bum

if you can’t look him straight in the eye.

You can fool the whole world,

down the highway of years,

and take pats on the back as you pass.

But your final reward will be heartache and tears

if you’ve cheated the guy in the glass.

– Anonymous

Never judge a book by its cover or a person by his mask!

Inspiring Leadership

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My first interaction with Deepak Parab, the CEO of Metrohm India Private Limited (a leading company in Analytical Instruments and Solutions) happened around two years ago when he called me from his Chennai HQ and said that he would like me to conduct a ‘Managerial Effectiveness’ program for his pan-India team of service managers. “Rajan, I shall ask my National Service Manager, Vinod Salunkhe to get in touch with you to discuss the further modalities.” The call hardly lasted five minutes; a client taking a quick decision in finalizing a 2-day training program was a rarity in my training career of 25 years. I could not help recollecting a MNC client who took approximately six months with more than a dozen meetings to finalize a 1-hour keynote address. (See my earlier blog titled ‘A Tale of Two Key Note Addresses’ – https://rajanparulekar.in/2018/03/29/a-tale-of-two-key-note-addresses/ )

More than the ability to take the right decisions, the leadership traits I admired in Deepak were:

Focus on results: After he took over as CEO and Managing Director, Metrohm India has progressed very well under him and results have been great. They have been able to capture and maintain major market share for their products and increase the turnover and profitability multi-fold. Today, Metrohm India owns all its offices across India and these were bought in the last ten years.
Retaining Talent: His core team of 30 senior managers including the COO, Branch Managers, Service Managers, Application Laboratory Manager and Product Managers are with the company for the last 20 years. The core team has remained the same for the past two decades.
Creating Value through Service: Peter Drucker said that the purpose of business is to attract and retain a customer, which can be restated by the formulae below:

a. Vc > Vp where Vc is the value perceived by the customer and Vp is the value inside your product or service. You get a customer only when the perceived value is more (short and/or long term) than what the customer pays for.

b. Vc = (Q+U+S)/P where Q is the Quality, U the Utility, S the Service and P is the price. Remember that QUS is not what the salesman claims but what the customer perceives. The four ways to increase the perceived value is either to increase the QUS or to reduce the P. Quite often desperate salespeople reduce price to create value which in turn affects profitability.

Deepak took a different approach to create value. To command a premium, he focussed on the numerator (QUS) rather than the denominator (P). Service was given prominence vis-à-vis sales. In a team of 135 executives for each sales person there are 3 service executives. Normally one service engineer is deployed for 100 instruments, with an equal share of warranty and AMC (annual maintenance contract). Today Metrohm India has 12 Offices and 12 Home Offices from where Service is provided. The home office concept for service was used to extend the reach. For example for clients in Goa, service engineers used to travel every week from Mumbai to Goa. With 250 instruments, 2 service engineers were deputed to Goa, which created value in the following ways:

The travel fatigue for service engineers was considerably reduced.
Improved work-life balance for the Service Engineers who were back to their home in the evening.
Cost of resident engineers was lower than with the travel and related costs.
Delighted Customers due to an improved response time and a lower down-time. Customer confidence in Metrohm also increased due to the now closer proximity of the Service Engineer.

Having created value for the customer in terms of QUS, Metrohm was now able to command a premium vis-à-vis the competition. There is a general tendency for companies to club sales and service to control costs, especially in the case of executives operating from home offices. However, Deepak resisted this temptation, as with dual responsibilities, executives tend to focus more on sales and ignore service. Now, dedicated service engineers in turn enhanced the perceived value!

Delegation with empowerment: Ganesha Chaturthi is a major festival in Maharashtra. Deepak belongs to a small village called Hiwale in Sindhudurg District from the Konkan region. For this important festival, Deepak used to take leave for 10 days every year. However as a CEO designate, when he applied for leave now, his boss questioned the logic, considering his elevation to the new role with additional responsibilities. The major concern apart from the leave, was in Deepak being incommunicado due to poor network connectivity at his village. Deepak’s thought process was quite clear. He said, “I shall prepare my team in such a way that my help is not needed in those 10 days.” His communication to his team members went on the following lines:

– “Please take decisions. I am not going to blame you for the consequences, if found negative in posterity.”

– “Please think of the worst–case scenario. The company is not going to sink from any such decisions.”

– “All of you can learn from your mistakes and a wrong decision and its consequence can be termed as the cost of learning.”

– “If in spite of all the above, you still need my advice, please drop me a SMS. In case I go to the village market (which has a better connectivity), I shall respond.”

The discounts and pricing are controlled by the respective Managers and all are empowered to take decisions. As a normal practice at Metrohm India the senior management team does not have any extra power to give additional discounts.

5. Genuine Concern for Employees: Even though a nationwide lockdown was announced on 24 March 2020, Deepak took the call on 20^th March to shut down the company’s offices across the country. Most of his team members who were at different locations then, had enough time to go back home.(Contrast this with the 4 hour time frame given by the PM which affected not only the general populace but also the millions of migrant workers!) He announced categorically that there would be no salary deduction, nor would anyone be forced to go on leave. The salary for the full month of March which normally gets paid on the last day of the month was credited on 24^th

6.Creative Problem Solving: Every year the company used to invite its Pan-India sales and service team in May to the Chennai HQ for training. The month-long exercise for a team of 130 executives used to cost around ₹ 70-80 lakhs; the quarterly reviews used to be around ₹ 5-6 lakhs each. During the lockdown, the time was used for online trainings and reviews thereby saving a big cost for the organisation, while at the same time keeping the employees engaged. They also ensured that all employees are engaged and connecting with the customers, so that they feel like they are doing their routine work and no health issues crop up due to no work. In the earlier phases of lockdown, the instruments which needed attention were diagnosed remotely, thereby reducing the down time. For the Pharmaceutical industry which is a major customer (as well as the sector doing well during the pandemic), Metrohm’s service support was crucial. In a few cases, even the installation was carried out with the help of the customer along with support via a video call by the Service Engineer. Digital Platforms have been used by the organisation extensively to connect its employees and customers.

7. Effective Decision Making: Be it a minor decision of a trainer selection or major ones like shutdown or salary disbursals, an effective leader does not shy away from taking decisions.

8. Strong Ethics: Deepak shared that a strong sense of ethics and moral values are a sine qua non for effective leadership. Deepak spent his childhood in the IIT Bombay campus. His father, Raghunath Parab was a governing member of the Co-Operative Society and was entrusted the job of supervising the IIT Staff Canteen operated by the IIT Staff Co-Operative Society. As a principle, his father did not prefer his children to visit the canteen; lest it be perceived that they were availing food free. Some years down the line, when Deepak entered the canteen and when his father admonished him, he told him, “Dad, now I am working as a Technical Assistant in the Department of Chemistry and I have come here as an employee and not as your son.” Caesar’s wife must indeed be above suspicion.

Since 1982, Metrohm AG, with HQ in Switzerland is a full subsidiary of Metrohm Foundation, as the only shareholder. With neither a specific owner nor any other shareholders, part of its profits are earmarked towards charity and R&D. Being a zero-debt company, the obsessive pressure for quarterly results is absent.

rajan@paraadigm-info.com, http://www.paradigm-info.com

Azim Premji – Integrity Personified

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Shri Azim Premji has completed 50 years in business and I would like to share an important facet of his personality. The one thing he never compromised was integrity. Wipro Fluid Power (now Wipro Infrastructure Engineering ) was set up in Peenya Bangalore in 1992 for the manufacturing of hydraulic cylinders Continue reading →

Who is more ethical ? Sex-Workers or Corporates?

Rajan Parulekar

Think Beyond the Obvious