Recently I had an interesting experience in a role play during a negotiation workshop. Role plays are a great way for people to explore different options, allowing them to try out different behaviours in an environment sufficiently realistic to make it meaningful, yet fictional enough for them to explore their boundaries.
In this case we played out the roles involved in a negotiation between two sides well known to the attendees. On one side was one of the last manufacturers of hi-fi systems, Bang&Olufsen, while the other side represented in the role play was the billionaire Qi Jianhong. Bang & Olufsen, usually known by their initials as B&O, are well known for their very high end hi-fi systems and have a strong niche position in the luxury market.
This makes them an interesting target for Qi Jianhong, who is the largest shareholder in the Sparkle Roll Group. This group is a distributor of luxury goods, they are not a manufacturer, and so the reasons behind their interest in B&O are obvious. It was recently revealed by Bloomberg Business that Qi Jianhong has been negotiating the private ownership of B&O. With two strong parties on each side, and a lot to win or lose in the negotiation, this made a perfect example for a negotiation role play, and we all learned a lot during the experience.
Bloomberg reported B&O’s chairman as saying that the company is too small to stay independent and needed to either scale back business areas or seek partners. The impact of this information on the negotiations and how and the conditioning that took place on each side as well as the role of other niche players like U.K.-based Naim Audio Ltd. and Cambridge Audio, were also discussed by both teams.
The negotiation teams tested out their assumptions about each other and set their objectives including BATNA and walk aways. In putting together their negotiation plans, the workshop teams explored cultural (Danish/Chinese) aspects & corporate culture (B&O est.1925) and how these would influence the objectives of both parties.
The outcome of the role play was…unexpected and taught me that a useful learning experience doesn’t always have to reflect reality!
B&O has been a target of takeover speculation in the past, making any new takeover bid less of a surprise. Pair that with the fact so many people use their smartphones and tablets more than hi-fi systems these days, and you will see why snapping up B&O for a great price would be seen as a wise move for a larger company who wanted to add these products (and well-loved brand) to their portfolio.
Looking in from the outside, a takeover bid can be seen as party A wanting to pay party B to take over their business. If party B is happy with the amount party A is offering, then the takeover happens. If not, negotiations continue until some kind of conclusion is reached on both sides.
Discussing fictional (or ‘what if’) company takeovers can be more interesting than it might sound. It’s not as clear cut as the party A and party B example above, especially when you have the potential for some huge cultural and corporate culture clashes!
Our scenario featured Denmark and China for a reason. What would this combination bring up? Well, we have West meets East, the traditional B&O (90 years and counting) corporate culture alongside the comparatively modern, quick-moving world of modern, high-end luxuries, and also 2 companies who might or might not want the same things, but need to work out quickly how to play the situation to their advantage.
You can’t put all businesses across Asia under one umbrella, the same as you shouldn’t categorise every business or indeed country around the world as being retty much the same.
Of course, most of us tend to generalize about the different ways of doing business. You might have an American frustrated with a deal that should take 2 hours taking 2 months because that is simply what happens in the particular Asian country he is working with. Or perhaps a puzzled Chinese wondering why his Danish counterpart is wearing jeans and an open-neck shirt when he is wearing his best 3-piece suit because that is respectful ‘business dress’ in some countries in Asia.
These cultural differences shouldn’t make a lot of different to trade but they do, so it’s always worth learning about them! Inadvertently offending someone you are doing business with is never a good idea and something that seems barely relevant to one side might be a big deal to the other.
Back to the discussion and this particular simulated takeover though, and what stays with me is how, when you get a group of people together with their own thoughts and ideas, you can come up with so many different possibilities.
With Bang&Olufsen and the Sparkle Roll Group, anything could happen, and it can be fascinating to see where your mind takes you and what the others think as well. Discussed in a group and with ideas pooled, there is certainly a lot to consider and no end of possible outcomes to talk about!