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Looking Good

Published: May 21 , 2015
Author: Stephen White


A recent article
in the New York Times has some food for thought for wise negotiators. The authors pose this question – How do you motivate people to do the right thing when the ‘market’ doesn’t work?

Their context is the chronic shortage of water in California. This has now become so bad that new mandatory water-reduction regulations came into effect on April 1st. Most of these appear to concern communal water usage such as sprinklers on golf courses and cemeteries, and the replacement of community lawns with grasses which are more resistant to drought conditions. Private citizens are encouraged to improve water retention methods through a rebate scheme on new garden watering equipment, and new homes are subject to stricter regulations.

However the plan also encourages private homeowners to play their part and voluntarily water their gardens less often. This part is failing; typical Californian home owners are not motivated to do this. The classic way to encourage them would be to increase the price of water and make it financially attractive to obey the request, but the gardening fraternity in the Sunshine State are stubbornly proud of their lawns, and the few extra dollars each month just doesn’t motivate them to be more careful with water usage.

One innovative idea which is being considered to remedy this problem is very cheap, but very appealing – a lawn sign distributed free which says ‘My lawn is yellow because I took a pledge to help California’. Of course, home owners could only display it if their lawns reallywereyellow!

When I read this I was struck by the similarity to an incident affecting Thomas Cook, the well know travel agency. Nine years ago two children tragically died from carbon monoxide poisoning whilst on a Thomas Cook holiday in Corfu. The independently owned hotel was held to be responsible in a trial in Corfu in 2010, and subsequently damages were paid to the family (about £700,000) for the loss of the children and to Thomas Cook (about £3,500,000) for their loss of profits, and costs. However, at the inquest of the two children held over the past few weeks in the UK the jury found  Thomas Cook had breached their duty of care by relying on safety assurances given by hotel management at the time rather than checking the (decrepit and dangerous) water heating facilities for themselves.

The pay-outs 5 years ago were not a secret, and if it had any social conscience Thomas Cook would have recognised the injustice in the amounts and further compensated the parents from the payment they received. But it didn’t, and there were no market forces which could make them.

That is, until people power came into play. As a result of the appalling publicity and a resulting slump in their share price Thomas Cook were shamed into making a late and half hearted apology to the parents and a charitable donation of £1.5 million to UNICEF.

In both cases the motive factor is the basic human instinct to ‘look good’ in the eyes of our neighbours and peers. This may be for reasons of vanity, feelings of self-worth, or commercial necessity, but it does seem to work.

And the lesson for negotiators? If you have a customer who regularly fails to pay invoices on time, notwithstanding late payment interest built into your contracts, or a supplier who regularly fails to honour delivery promises, notwithstanding that this could be an expensive breach of contract, think outside the box. If the money cost doesn’t change their behaviour, can you activate their need to ‘look good’ to stop their bad behaviour?

Stephen White

 


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About the author:

Stephen White
My background is sales and marketing. I read Law at University and worked for 2 major packaging companies for 13 years in sales and sales management. I joined John McMillan and Scotwork in 1984. For the next 25 years together with our colleagues we delivered training and consulting, built the global business and developed the Scotwork product portfolio.

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Qualifications

“When it comes to the qualifications we demand of our president, to start with, we need someone who will take the job seriously.” Michelle Obama. Don’t stop reading - this blog is not about Donald Trump. In the run up to the election of a new Labour Party Leader 4 years ago, the four candidates were invited by LBC radio to quiz each other. You can see the questions to Jeremy Corbyn here. There are two points of note. Firstly, when asked if he wants to be Prime Minister he ducks the question several times, instead referring to the ideological changes he wants to make within the Labour Party. Secondly when asked about his qualifications and experience to be leader of a major political party his answer is objectively underwhelming – before being an MP, he says, he had been a local councillor for 10 years. I don’t think it is difficult to relate those answers in 2015 to the current divided state of the Labour Party.

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