Tuesday, January 14, 2014

The pros and cons of insulting your integrity to get the business

Many years ago, when I worked for a company that sold licensed Kris Kross products, we had to make a decision between two competing vendors. I made the comment that it was like choosing between Daddy Mack and Mack Daddy.

Back in 2005, a purchaser faced a similar problem when choosing between two vendors - and came up with a novel way to solve the problem.

Takashi Hashiyama, president of Maspro Denkoh Corp., which owned the art work, had asked Sotheby's and Christie's to each choose a weapon — rock, paper or scissors — because he could not decide which auction house to use for the sale.

"I sometimes use such methods when I cannot make a decision," Hashiyama told The New York Times in an April 29 story. "As both companies were equally good and I just could not choose one, I asked them to please decide between themselves and suggested to use such methods as rock paper scissors."

So after making a number of concrete arguments about why one company was better than the other, the entire sales decision rested on chance.

As you can imagine, proposal professionals - who are always keen to emphasize the advantages of their company's products over competitors, and who do not want to reduce a decision to a commodity price decision - can be horrified by this. Jon Williams of The Proposal Guys commented:

And does anyone else rather hope that if their sales director was asked to settle a bid in such a ridiculous way, they’d have the pride, integrity and confidence to walk away?!

Yes, in a sense this IS a matter of integrity. If you truly believe in what your company is doing, you do not want to leave the whole thing to chance.

Or perhaps you do.

For one thing, if you are in a two-person contest and are asked to play a game of rock, paper, scissors to decide a winner, agreeing to play the game only provides you with a 50% chance of winning. But if you don't play the game, you have a 0% chance of winning.

Second, the USA Today article on the Hashiyama case made an interesting point:

Using a game of chance to make a decision is not unusual in Japan.

Now perhaps Jon Williams, who generally competes for contracts in the United Kingdom, or I, who generally competes for contracts in the United States, aren't used to such decision tactics. And, in addition, we are used to making relatively quick decisions. In Japan, people generally do not have all of the information, or authority, to make a decision quickly.

The decision-making process of Japanese firms has its roots in Japan’s feudal period, when a large proportion of the Japanese population lived in rice farming villages. Due to its economies of scale, rice farming is not something that it makes sense to do on ones own. It’s much easier to band together, so whole communities would pool their labor and work all their fields together as a group. Decisions were made collectively as well, with the elders of the village playing an important role.

When you look at it from that perspective, Takashi Hasiyama's trusting to chance makes sense. After all, from his perspective, he did not have all of the information necessary to make the decision. So why not leave it to a rock, paper, scissors game?

Oh, and for those who must know - Christie's chose scissors. Sotheby's chose paper. Scissors cut paper.
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