Competency In Management

Larry Price
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Wednesday - December 10, 2008
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There has been a lot of talk about how tough it is to do business nowadays. That may be true, but it doesn’t appear that it’s going to get any easier in the future.

Thomas Jefferson once said, “I predict future happiness for Americans if they can prevent the government from wasting the labors of the people under the pretense of taking care of them.”

It seems that’s where we are today - government leaders pontificating about how they are going to take care of everything that’s ailing our economy. The Wall Street power brokers have been affecting the global economy instead of the economy affecting the stock market.

Naturally, there are no easy answers. There is, however, an abundance of evidence that our economy would be a lot better if the ability to negotiate was viewed as a core management competency rather than over-inflated egos dressed in expensive attire, transported by private jets and expensive memberships in exclusive country clubs.


One example sticks out in my memory about how affluence can create unreasonable situations. About the time I started studying managerial negotiations and influence strategies, a dramatic labor dispute was blossoming on the national scene. In 1998, the National Basketball Association owners initiated a 202-day lockout of players, resulting in a loss of about $1 billion for the owners and about half a billion dollars in forgone salaries for basketball players. Fans were furious and disenchanted, and supporters and advertisers lost millions in revenue.

Negotiations at any level are not easy.

Recently the leaders of the automobile industry were in Washington, D.C., begging the U.S. Congress to lend them billions of dollars in taxpayer money. Predictably, they showed up in their expensive suits, private jets and entourage of assistants with their tales of woe. They were advised, and rightfully so, to go back home and come up with a better business plan and leave the fancy private jets home.

Another example sticks out in the literature about decisions made by incompetent leaders. In 1999, the members of the World Trade Organization met in Seattle for a much-ballyhooed meeting to lower trade barriers. To the amazement of the business world, members of the organization could not even agree on an agenda, and the meeting was an utter failure - more evidence that negotiating at any level, in any arena, is not easy.

Negotiation, in the managerial sense, is an important skill for executives, leaders and managers in the business world. It makes no sense to blame the auto workers for the financial plight of Detroit’s auto industry. By definition, negotiation is an interpersonal decision-making process by which two or more people agree how to allocate resources. The very dynamic nature of any business means executives must negotiate and renegotiate during their tenure. It is incumbent upon business executives to recognize their product must be competitive both within the industry and globally. It demands they be in a constant mode of negotiating opportunities.

Simply put, if they are building cars that don’t sell and they are paying their workers too much, then they have to answer to their shareholders.

Let’s face it, these kinds of financial problems are not always announced in advance. We are entering a period where there will be a greater premium on interdependence between people within organizations. Example: The state Board of Education has suggested a list of managerial decisions to somehow balance the budget cuts mandated by the governor. They released their recommendations and warned that the union protecting the state’s 13,000-member teaching force would have to agree with the recommendations to make the budget adjustments a reality. It’s the way of the future and a reality of the absolute need for strategic alliances during tough economic times. In Hawaii, the problem of competent negotiators is even more critical because of the diversity inherent in our state.

If you are wondering why many executives lack negotiating competency, which in turn leads to disastrous consequences, you are wrong if you think it is a lack of intelligence or motivation. The primary cause, according to experts, is something called egocentrism. Egocentrism is a tendency for executives or leaders to view their experiences in a way that is flattering or fulfilling for themselves. The telltale indicator of egocentrism is when a company falters, the executives blame their work force and unfair competition.

Does egocentrism sound more familiar now?

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