Stuart Diamond is the president of Global Strategy Group that advises governments and companies on negotiations and strategy. His course on negotiations at the Wharton Business School has remained the most popular class among students of the leading business school for the past 15 years. He was formerly a journalist and is a Pulitzer-prize winner. Since his career shift, he has lectured on the challenges and opportunities in emerging markets and how to conduct successful negotiations. His latest book, Getting More, was first published in December 2010 and emerged as a New York Times Bestseller in 2011.
Mr. Diamond was recently in Pakistan to lecture members of the Pakistan chapter of the Young Presidents Organisation which is a global peer network of chief executives and business leaders. BR Research met up with him on the sidelines of this event. The following text is based on excerpts from that conversation.
BR Research: Kindly elaborate on the key highlights of the model for negotiations that you have developed.
Stuart Diamond: The model that I have developed states that the conventional ways of human interaction; which is power, leverage and logic, don't work. If you look at the world around us, you can see how much they don't work. They cause people to have a lack of trust and recoil from other people that are trying to exert power over them. What I have found in researching communications and negotiations over the past quarter century, is that newer tools on psychology, emotional intelligence, cultural diversity, perceptions cause people to make much better connections. These connections lead to much more valuable transactions.
Pakistan is a country that has large amounts of conflicts; 80 percent of the people in Pakistan do not trust each other according to research collated by the World Bank, the Organisation for Economic Co-ordination and Development (OECD) and the PEW Foundation. That is about the same number of people that do not trust each other in France and in various countries in the Middle East.
What this means is that this country is wasting five percent of its gross domestic product (GDP) from people that are pushing each other when they could be collaborating. That five percent is twice the amount of money spent on education in this country. It is twice the healthcare budget and is equal to about $14 billion a year and is more than all the money spent on exports of the ten largest commodities of Pakistan. That is a lot of value that is being wasted. And the biggest thing that Pakistan's government and its businesses can do for the people of this country is to try to be more collaborative in everyday interactions.
Secondly, I have found that making connections with individuals based on how they are and where they get their identities from is much more important than any kind of stereotypes. People get their identities from the micro-cultures that they think they are in. I could be the parent of a child, or a cricket fan or a supporter of performing arts. This means that there are many Pakistanis that are closer in sensibilities to people in India than they are to each other. Therefore, the stereotypes are not valid in individual communications.
BRR: Businesses often encounter challenges given the negative perceptions about the security situation in Pakistan. How may a negotiator address such perceptions without sounding dismissive of the other party's concerns?
SD: At first I want to acknowledge and value the perceptions of the people that I am talking to. If somebody feels that Pakistan is a place with terrorists, I want to acknowledge their fears; that gets them to listen to me. Arguing with them is not going to get them to listen to me. I want to first acknowledge their concerns. However, my next question is; somebody is making money in Pakistan, what are they doing differently? Are there any ways to minimise the perceived risks? Pakistan makes billions of dollars producing and selling things. There are lawyers, bankers and foreign investors operating here. How are they doing business here? So maybe we can look more specifically what you are nervous about and work together to maximise benefit and minimise risk.
I am long on Pakistan. I went to a Dialog Conference in Belgrade recently, which is like the Davos for entrepreneurs. At that event, participants were asked to name the country they are long on, and the country they are short on. I said I am short on China and long on Pakistan. I am short on China because they are not very innovative and I didn't feel that the entrepreneurs in China know how to solve problems in a changing environment. On the other hand, Pakistan not only has a highly educated entrepreneurial class, a lot of them have also gone to schools in the US where they have learnt technology, software, etc and they have come back and they have opened up entrepreneurial businesses. There is also a lot of opportunity in Pakistan, to build up the technology infrastructure that this region needs like cellphones, computer companies and so forth; which is why I believe there are plenty of reasons to go long on Pakistan.
I was here last year and met with an IT company providing solutions to companies and governments in the Middle East. So my sense is that a lot of smart money is going to be running towards Pakistan. Opportunities are extensive, there a hundred million people who understand English here. I think this is a place where a lot of money can be made and a lot of value can be unlocked. There is a very good business class here which values growth, although it is not often recognised.
BRR: In your experience, what are some of the key challenges faced by businesses in Pakistan?
SD: The biggest problem faced by people that I have interacted with in Pakistan, is dealing with the bureaucracy in their own companies. Pakistan is ready to be given over to a new generation of entrepreneurs and there is a tension between the people who have founded the companies and the people who are preparing to take the reins of these businesses.
So before this country worries about exports, it needs to focus on making its own organisations more efficient. In my view, one of the ways for businesses here to become more competitive in international markets is to become more internally effective. The old ego-driven bureaucracy is an obstacle. Although the government may be perceived as a hindrance, businesses should focus internally to become more efficient at what they do.
Then in terms of the curriculum, in my conversations with some of the local universities I have learnt that there is no negotiations course taught at the business schools in Pakistan. It is absolutely necessary for business professionals to learn about negotiation methods because as I have mentioned elsewhere, being right is not enough.
BRR: What are the low hanging fruits?
SD: First of all there has to be a realisation that there is a need for a change. Secondly, take small steps towards betterment. Start by being a little more sensitive towards other people. Try to inculcate a culture of collaboration wherever possible. Look for better solutions which expand the pie.
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