Some of the most respected corporations have created fun workplace environments. Zappos, Warby Parker, Southwest Airlines, Chevron, Google have made their mark for creating a culture of fun.

With the Covid under control and the students back on the campus, the Director of an academic institution was taking a vote in the faculty council meeting to find out how many faculty members would like to take classes online and how many offline. Everybody raised hand to vote for offline mode except one. When the concerned faculty was asked by the Director as to why he did not want to take classes offline, the faculty member replied, “I don’t have trousers.” A huge laughter erupted in the room. Guess what happened after that. A very heavy, dry and dull environment suddenly became fresh and lively.

Jennifer Aaker and Naomi Bagdonas observed, “Research shows that leaders with any sense of humour are seen as 27% more motivating and admired than those who don’t joke around. Their employees are 15% more engaged, and their teams are more than twice as likely to solve a creativity challenge — all of which can translate into improved performance.

Humour works as a social lubricant to build and sustain harmonious relationships. It is much better way to raise sensitive issues. It is accepted as a socially appropriate means to express aggressive feelings or negative emotions. It helps in giving a very subtle message.

A professor in a college wanted to get an AC installed in his office because it was difficult to work during summers. He requested the principal for the same by arguing that it will help him write more research papers during summers. The principal quipped, “But Professor tell me one thing – how many research papers you write in winters?” Mary Hirsch said, “Humour is a rubber sword – it allows you to make a point without drawing blood.”

Humour relieves stress and diffuses tension. Humour has an important role in peoples’ lives by helping them to live better and to deal with day-to-day adversities. The literature on humour provides ample evidence that humour reduces stress. Michael Kerr, president of Humour at Work explains, “Humour offers a cognitive shift in how you view your stressors; an emotional response; and a physical response that relaxes you when you laugh.”

Humour just feels good. Many of us may relate to high-anxiety situations where a joke feels like a much-needed outlet. Consider a serious problem at the workplace being reported by a person to his friend in this way, “I always go the extra mile at work, but my boss always finds me and brings me back.”

Humour helps in building relationship. We want to be around people who make us smile, laugh, and overall raise our spirits. Studies show that employees who have three close friends at work are 96% more likely to be “extremely satisfied” with their lives. Humour allows both employees and managers to come together. Shared laughter accelerates a feeling of closeness and trust. It puts others at ease. Humour is a way to break through the hierarchy. Humour is a great icebreaker and removes the walls that exist between leaders and followers. When an employee asks his manager do you have a minute and the manager says, no, I have 60 seconds, you are likely to be more comfortable reaching out to such a manager.

Humour is not always good. Martin classified humour into four categories – affiliative, self-enhancing, aggressive, and self-defeating. Of these affiliative and self-enhancing styles are considered to be positive while aggressive and self-defeating as negative. Affiliative humour is used to enhance one’s relationships with others in a way that is relatively benign and self-accepting. Individuals who use affiliative humour tend to attract others, bring them together, and in doing so, reduce interpersonal and intra-group tension. Self-enhancing humour is used to enhance the self in a way that is tolerant and non-detrimental to others. Users of aggressive humour typically have little regard for the feelings of the targets of their humour; they are more concerned with getting a laugh and feeling superior. Self-defeating humour involves excessively disparaging humour or attempts to ingratiate oneself or gain the approval of others by doing or saying funny things at one’s own expense. One should make sure that you choose humour appropriately.

Some of the most respected corporations have created fun workplace environments. Zappos, Warby Parker, Southwest Airlines, Chevron, Google have made their mark for creating the culture of fun. These companies have used humour and a positive fun culture to help brand their business, attract and retain employees and to attract customers. In some of these companies a sense of humour is a way to judge the suitability of a candidate for a job. A candidate was asked a question during his interview, “What one thing one should never do at work?” The candidate replied, “Work.” A follow up question, “What one thing a candidate should always do at work?” The answer, “Keep exploring other options.” I am told that the candidate got the job.

Let us pay some attention to Oscar Wild who said, “It is a curious fact that people are never so trivial as when they take themselves seriously.” “People who take themselves overly seriously are often, ironically, taken less seriously by the people around them,” said Michael Karr.

The author, Kamal K Jain, is Professor – Organisational Behaviour and Human Resource Management at IIM Raipur. First published in ET HR World dated 7th October

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Time 9:40 pm. Day: Wednesday. Date: August 3, 2016. Henceforth any discussion on negotiation will be incomplete without mentioning the way the BJP garnered support for getting the GST bill passed in the upper house.

A story on negotiation will remain untold unless it features the Prime Minister, Mr Narendra Modi and the Finance Minister, Mr Arun Jaitley.

Orchestrating the dance of offers and counter offers will be best understood through the lens of GST. The fundamental principles of negotiation were in full play and decoding the moves of parties during this period has its merit and needs our attention.

Perseverance

The negotiation dance often tests one’s patience and requires persistence and perseverance. The so-called “three P’s (perseverance, patience and persistence)” are critical for maintaining the dance.

All good negotiators have an abundance of perseverance.  When their great idea or viewpoint is rejected they do not harden their stand.  Their approach is simple—when your proposal is rejected, ridiculed or laughed at; shape it in another way and return it to the table.

Zhou Enlai, a famous Chinese diplomat serving under Chairman Mao, once said, “If the other side resists my offer of a pizza cut in six pieces, I offer it later cut in eight.”

The GST bill which was hanging for more than a decade, because it required support from some two dozen States, many of them ruled by opposition parties; and also from more than two dozen political parties, big and small included; could not have seen the light of day if the champion for the bill, Mr Jaitley, had shown any signs of fatigue.

The fact that he had numerous meetings with several political parties was no less than a marathon. Include in this list, meetings with your arch rivals such as Anand Sharma, P A Chidambaram, Mamata Banerjee, Nitish Kumar, Chandrababu Naidu and so on, and the kind of effort that is required to build the momentum for consensus, will become obvious.

Find out ‘why’

Harvard professor, James K. Sebenius, suggests that knowing why the other party says no to a deal is important to find a solution to it. When Mr Jaitley investigated the reason some of the States were opposing the bill inspite of the fact that the Centre proposed to fully compensate the loss of revenue to States for next five years, it was discovered that it was lack of trust and the wording in the bill ‘Centre may compensate’ left scope for doubt.

The phrase was subsequently changed to ‘Centre will compensate’ and agreement became easy.

Provide face saving

Many times parties in negotiation take a stand which they later on realise was not the right stand. They may be interested to reverse their stand but the ego comes in the way. In order to satisfy the ego the party looks for a face saving. Simply put, face saving means to maintain one’s dignity.

Conversely, to lose face would mean feeling humiliated, or losing one’s reputation. It turns out that face-saving is a big issue in every negotiation.

If we try to decode the reasons the Congress party opposed a bill that was originally mooted by them in 2009 to replace all indirect taxes; it was probably to teach a lesson to the now ruling party which had then opposed such a bill.

The intention was therefore more political in nature than being grounded in reality. Having realized that the party had been isolated, it was left with no other option but to support the bill.

The problem was on what grounds should it support the bill? Only face saving available to them was to claim that it was the Congress who first introduced the bill and that the BJP does not deserve the credit for the same.

The statement that “A big decision such as the GST cannot be taken by deliberately keeping people in the dark” by Mr Anand Sharma, deputy leader of congress in Rajya Sabha, is an indication that it wanted to get the credit for being the first party to think of such kind of reforms.

He further said:

It is the right of the people of the country to know what the history of the case is.

At that time (10 years ago) there were protests. Everyone knows that those protests were purely political… Gujarat had protested a lot.

Narendra Modi himself protested against it. At that time it was said that the GST is not in favour of India, it will weaken the country.

We always wanted the GST to be implemented. So to say we oppose it is unfair.

We’re glad you have finally come around to believe in GST.

Build momentum sequentially

Negotiators seek to build momentum by eliciting support from those parties that are easy to take on board. In multi party negotiation the party that is able to form a coalition stands to gain.

This dramatically reduces the power of other major player. Thus in order to take the other major player head on, the expert negotiator builds momentum sequentially by bringing other smaller players to their fold one by one.

Considering the resistance from the biggest party in opposition, the Congress; Mr Jaitley completely isolated the said party by building a coalition among the nation’s 29 State Governments.

Once the States gave their nod, the Congress found itself on the backfoot as it did not want to be seen as the only one opposing a key reform measure that essentially was the Congress’s own baby once.” Congress’s growing isolation proved decisive in making a compromise possible.

Parties to Negotiation

Every negotiation situation demands that we choose negotiators considering the demand of the situation. The change of minister for the parliamentary affairs may also be seen as a contributory factor in seeking support from other major political parties.

Former parliamentary affairs minister, Mr Venkaiah Naidu, was seen as bit too combative. A less combative person, Mr Anant Kumar, fitted in this role.

Win-win for all

A good outcome in negotiation is the one where all the parties involved in the dispute see a victory for them. In the final analysis, in the case of GST, each party wanted to be seen as a winner. BJP took pride in saying that the passing of the GST bill is the best example of cooperative federalism.

Mamata Banerjee wanted to build a pro-industry image at the national level, more so after the ouster of the Nano project. “We have ideological differences with the BJP but we will always support on issues that are beneficial to the people,” she said.

Bihar Chief Minister, Nitish Kumar, offered JD (U)’s support by saying “We have always supported the GST. We supported it during the UPA and support it now. This is in the interest of the country and states. Our party fully supports it.” Congress took pride in saying that it was their baby and that it forced BJP to accept some of its major demands.

This was truly the climax of negotiation and democracy at its best.

The author is Professor of Organizational Behavior and Human Resource Management at Indian Institute of Management, Indore. He can be reached at kamal@iimidr.ac.in.

(First published in the Hindu Business Line on September 29, 2016. Image Courtesy: www.youtube.com))

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Do you believe you are rational when it comes to making decisions? Think again. Dr. Kamal K. Jain of IIM Indore says, cognitive biases such as ‘framing’ can influence decision making and can be exploited in negotiation.    

What would you call a person who influenced your thinking without you even noticing this? A magician? No.  A juggler? No. An illusionist? No. He/she is the one who uses a powerful behavioural technique known as framing. We may think that we are rational creatures and that we can make sound decisions based on all the available facts. But the reality is that we all have a slew of cognitive biases that can influence our thinking and one such powerful bias is known as framing.

Consider this story. An Indian King invited a famous astrologer to study his horoscope and predict his future. The learned astrologer studied the horoscope thoroughly and did his calculations. Finally, he gave his verdict. Raja,” he said. “All your relatives will die before you. You will burn their funeral pyres with your own hands.”

The King’s temper flared. He was very attached to his relatives and could not tolerate the thought of having to burn the bodies of his own family members. In a fit of fury, he pulled out his sword and struck down the astrologer dead.

A few days later another astrologer happened to visit the kingdom. He also studied the king’s horoscope and came to the same conclusions as the previous astrologer. But he said, “Raja,” “you have a very long life. All your relatives are very fortunate that you will be there to comfort and care for them in the dusk of their lives.”

This also meant that all his relatives would die, while the King was still alive and that he would have to burn their funeral pyres with his own hands. But the prediction that he would be there to look after them till the very end greatly pleased the King. The astrologer was richly rewarded.

Hersh Shefrin known for his pioneering work in behavioral finance observed, “The term frame dependence means that the way people behave depends on the way that their decision problems are framed.” It is a cognitive heuristic in which people tend to reach conclusions based on the ‘framework’ within which a situation is presented.

Framing an issue in negotiations means that you force your counterpart’s attention on a specific aspect of an issue and let him ignore other aspects of the issue.

Framing an issue in negotiations means that you force your counterpart’s attention on a specific aspect of an issue and let him ignore other aspects of the issue. In order to influence the thinking of their counterpart, negotiators often choose to exclude some aspects of an issue from the frame because these issues are irrelevant, or they might distract from the main point, or because they don’t advance negotiator’s interests. It therefore not only contains, but also constrains.

Aldert Vrij in his book ‘Detecting Lies and Deceit’ gives an interesting example on effects of framing. Participants in the experiment were shown a film of a traffic accident involving several cars. Among various questions about the accident, one particular question was differently framed for various groups.

In the question “How fast were the cars going when they contacted each other?” the verb ‘contacted’ was replaced by ‘hit’, ‘bumped’, ‘collided’ or ‘smashed’ for various groups. While the question with the verb ‘contacted’ elicited the lowest speed of 31 miles per hour, the verb ‘smashed’ got the response of highest speed of 41 miles per hour.

One week later, the participants were asked whether they had seen broken glass at the accident site. Although the correct answer was ‘no,’ 32% of the participants who got the ‘smashed’ verb in their question responded that they did see the broken glass. This shows that the framing of the question can even influence the memory of the incident.

Framing is thus a quality of communication that leads others to accept one meaning over another. The way a question is “framed” often has an influence on how people answer that question. For example, look at this classic story to see the power of framing:

Two novice monks go to meditate. While meditating one pulls up a pack of cigarettes, gets out a cigarette, lights it and starts to smoke. The other monk is in awe: “What are you doing? We are not allowed to smoke during meditation!”. “ But I am allowed. I have asked the head monk myself. And he allowed it.” Replied the smoking monk. “How is that possible? I asked him as well. And he forbid me.” Said the non-smoking monk intrigued. “What did you ask?” Inquired the smoking monk. “I asked if I could smoke when I’m meditating” Replied the monk. The smoking monk puffed his cigarette and replied with calm. “You see it all lies in how you ask the question. I asked if I could meditate while I’m smoking and the head Monk said ‘yes’.

To further understand the impact of framing, you may like to watch a recent ad of Mentos “Chintoo ke papa”.

Roger Dooley, the author of Brainfluence: 100 Ways to Persuade and Convince Consumers with Neuromarketing, wrote about the effects of using percentages versus real numbers. It’s the difference between saying: 90% of customers are satisfied with our service or saying 9 out of 10 customers are satisfied with our service. Real numbers tend to have a much stronger impact on people.

When we present “90%,” our brain is calculating, at a high speed the difference between 90 and 100, which, will be 10. Now, when we express “9 out of 10,” our brains will ‘see’ the number 1 as the final result. In this case, the “smaller” difference means “the large” majority is satisfied with our work. When you must present negative information, use percentages for a lesser impact. For example, “Only 1% of our products have a defect doesn’t sound nearly as bad as “1 out of every one hundred products have a defect”.

When you must present negative information, use percentages for a lesser impact.

Tversky and Kahneman, proponents of the Prospect Theory, argue that losses always loom larger than potential gains. The first priority is not to lose – humans are loss averse. Gains are secondary to not losing. Framing a decision in terms of possible loss motivates a person more strongly than framing it in terms of possible gain. Negotiating parties are more willing to grant concessions when an outcome is framed as a gain than when the economically identical outcome is framed as a loss.

Framing is a negotiation technique that can be used to win almost anything – a sale, a contract, an argument, extra apartment amenities or a pay raise. So next time when you go to your boss for a pay raise because you have another offer of a higher salary don’t say, advises Linda Babcock in the book ‘Women don’t ask”, “I have received an offer for Rs xxxxx more and I am going to quit if you don’t match the salary”.

Instead of using ‘quit frame’ try using a ‘stay frame’ which may look something like this, “Sir I like working for this company and I really enjoy working for you but I have an offer which is Rsxxxxx more than what I get here. I would certainly prefer to stay if you could match my salary.”

Now since you know the power of framing if you find someone using Bata pricing (Rs 999) realize that you have been framed.

Kamal K. Jain is a professor of Organizational Behaviour and Human Resource Management at Indian Institute of Management Indore. He can be reached at kamal@iimidr.ac.in

(First published in BW Business World dated 22^nd March 2016. Republished with permission of the author. Image Source: Wikimedia)

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E-commerce kick-started in India with massive discounts which was supposed to change the way Indians shop and put brick-and-mortar shops out of business. Rajnish, a seasoned retail professional examines what went wrong for the sector and how some companies in the sector still manage to woo customers.

Stuck in a traffic jam, a friend quipped, “One day we will only have e-commerce delivery people on the roads. Some will be delivering to customers but many to each other.” I knew it was just sarcasm but what caught my attention was the way he put it. He was suggesting that while customers see little value in e-commerce, e-commerce companies see a lot of value in each other.

The whole eco-system is self serving instead of being focused on solving customer problems which was really the raison d’etre for this fledgling industry.

What my friend said was not some kind of dark humor – it was a man lamenting in frustration probably remembering the good old days when parking was free and you could walk into a store, exchange greetings with the owner, walk leisurely down the aisles picking stuff that you did not really want and come out all happy.

But e-commerce came and changed everything! Shopping for grocery was a waste of time (I wonder what people do with all those extra hours) and clothes could be ordered and returned some 20 times before you finally fitted in them.

So the men with their fancy degrees decided to take advantage of this unique opportunity of a thriving middle class going online by the millions and said, “We will change the way Indian consumer shops!” 

The party began and everyone started having a great time – the customers were getting amazing discounts and superb service, the investors were watching the value of their investments soar, the entrepreneurs were exiting from one venture to jump to another earning the respectable tag of being serial entrepreneur in the process. But like all good things this too had to end.

Around mid of 2015, the whispers started. The customer who was at the core of this ridiculous game turned out to be smarter than the companies. The moment you took away the opium of discount she woke up and kicked you in the rear. New antics such as mobile only (whose idea was that?), 2-hour delivery, group ordering, freedom sale etc. were tried but no matter what you did the customer made it clear, she wanted all or nothing.

Indian e-commerce was losing its grip and forerunners of online revolution were dying every day. The internet mafia realigned their strategy – territory was defined, new money was pumped in, stakes were bought and sold but the net result – zero, back to square one. Whenever the news of another start up folding up came, people convinced each other that it won’t happen to us.

Finally, Morgan Stanley announced that it was devaluing its 1.5 % stake in Flipkart and the very next day the valuation went down by as much as 30 %. Imagine if Morgan Stanley had written off their investment!

Enough of sentimental analysis, let’s look at some fundamentals as to where it all went wrong so horribly.

1. GMV or Gross Merchandise value – This is at the core of “funding” and measurement of performance in the e-commerce business in India. And it is most seriously flawed. Because unlike the unit economics where every time you sell you are supposed to make money in this case you were loosing it. So what was being measured was in fact how much more appetite you have for making losses or how fast can you “burn” the investors’ money by literally buying the GMV. There is a thing called deal decay and the law of diminishing returns so even if you continue to fund discounts you will not get the same response after a while.

2. Profit vs. Value – You ask the vegetable vendor on the street why he is doing this business and he will tell you in one simple word – Profit. But profit did not appear in the dictionary of Indian start ups. What is that? Let’s talk value. Ok, value to the customer ? No, No, value to the investor. Valuation of the business. Now, while profit makes a business sustainable, valuation does not. It is more of a notion, a false hope which keeps going up and down with the sentiment in the market.

3. Footfalls vs. eyeballs and Customer vs. Shopper – As far as I know the Heisenberg’s uncertainty principle applies only to electrons and not to human beings. But in case of e commerce the same customer existed at the same time in the records of multiple websites. She had several windows open on her laptop and was comparing which site is giving the highest discount. In a real store this is not possible so when you measure footfall they are actual people who are physically present. And because there is a sunk cost they have an obligation to buy something or the other. But an online shopper ‘acquired” at great marketing cost can just close the laptop and walk away.

4. Competition – Ironically, in a quote, Jeff Bezos suggests that one has to be customer focused and not keep looking at the competition. But become a follower and you lose touch with what your customers want. In the musical chairs world of e commerce in India no one was really looking at innovating for the customer or what the customer would perceive as making a difference in their lives. Everyone was following everyone else jumping to offer a bigger discount at the slightest opportunity and they called it competitive strategy!

5. Brand – For those of us who smoke or drink there is no confusion as to what a brand means. As one of my Gurus told me, brand is what a customer is ready to pay above the perceived value of the product or service. Simply put, it stems from a relationship beyond the transaction itself. If the customer is not ‘loyal’ to a brand then it’s a label, not a brand. If you apply these principles to any of the e commerce business most will fall in the label category – just another address that you type on your browser or an app that you have downloaded on your mobile phone among many others (including that of competition). Would you pack five different brands of cigarettes if you smoke Gold Flake when going for an international trip? No way. But in this case, the same customer was not only shopping online from competitive websites but was even using prices comparison tools on others to get the best offer. Ironically, the investor could have invested in all three of them. A classic case of value destruction. Isn’t it?

6. People – Whether its Sam Walton or Ingvar Kamprad or Kishore Biyani -they are business men. More than anything they are passionate about merchandising and retail. This is perhaps the biggest mistake of the Indian e com story. The people who were leading the e com revolution were basically techies and coders. Many of them did not know ABC of product or merchandising. They were financial wizards, seller of ideas and dreams, technology geeks, friends with the VCs. But in the end, they just did not have what it takes. While a retailer at heart like Kishore Biyani stood the test of time, most of the newbies ran away when the going started getting tough. Even those working in the start ups were not dedicated soldiers of a disciplined army. They were mercenaries and bounty hunters moving from one troubled dotcom to the other.

I am sure having invested so much time reading this article you are looking for an ROI on your time spent. I can offer that to you in the form of my take on the whole situation. I firmly believe that the core principles of doing business or living life never change. Only those businesses which have strong fundamentals who strive to solve a problem or bring joy to the consumer will survive.

Within the Indian e commerce space those who have identified a real problem, for example, Bookmyshow.com, which lets you have a confirmed ticket for the movie of your choice at your favourite venue at a price, will thrive. My vote goes to them because they have the required scale and brand value to create a competition barrier. Also, the customer is fine with paying their fee which will make them profitable in a couple of years or even sooner.

The next big idea is not about creating a variant of restaurant delivery service or dropping groceries at home from the Kirana shop. It is about doing this profitably. There must be a “value” trade off between the business and the customer. She should not only be willing to pay you for the product or service, but be ready to recommend you to her family and friends.

The ‘gold rush‘ is over and now the rules of the game will be (re) formed. The online ventures with the might of deepest pocket may stand a chance but in the end it will really be about who has the Queen’s favour. (Image Source: mylinux)

Rajnish Kumar, along with his global team, consults for the biggest Global Fashion Brands on how to use technology. In his free time he can be seen strolling by the Ulsoor lake. He blogs at www.aahang.WordPress.com. He can be reached at rajnishkumar71@gmail.com 

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