Monday, September 08, 2003

What an awful day. It started when Lucky awoke, feeling sick due to a lack of sleep, and stiff from spending the weekend lost on an Italian glacier, not having done any readings because, well, because sometimes you have to make decisions, and this was mine. The consequence is that when you talk in class, you are not well informed.  This is not recommended. Another consequence is that you don't think too quickly.  While this is something that is not so serious on a daily basis (this is business school, after all), there are times when you really, really want to be sharp.  Especially when you are attending a combined two-class lecture by a guest professor (Jonathan Golub, who was excellent).  And you never, ever want to be slow when cold-called in front of 150 of your peers, and you know the answer, but think to yourself, "No way I'm saying that in front of everyone." "So, Lucky, why does Germany contribute the lion's share of the EU structural adjustment and transfer payments?" Ten minutes later, it finally came to me what I should have said. "Nothing says 'I'm sorry' better than a big fat check." Later in the day, in Managerial Negotiation, I had a chance to negotiate with a someone in an integrative bargaining exercise.  It was quite fun, but I got the feeling that my partner was not sharing information with me about the size of a potential market.  Push came to shove, and I asked her point blank: "So, I'm offering to take 50% of the profits, one year from now, instead of a $3.5 million license fee today, which you profess is 50% of the predicted profit.  This deal is better for you; you have better cash flow and less risk.  I can think of only one reason that you would want to give me a cash payment now instead of a profit share later..." You all see where this was going, right?  We came to an impasse and returned to the classroom, where we saw that all other 25 pairs (save one) had come to agreement.  Once everyone sat down, the prof asked me what happened. "Well, I offered her a deal that would have been better for her, but she turned it down, and that's when I knew that she was lying about the size of the market." If you are going to lie in a negotiation, you should think long and hard about the implications.  Lying in a negotiation was strongly discouraged by Ingemar Dierickx, and I think I agree with his rationale.  There are too many elegant ways to present truth; lying is unnecessary in addition to being wrong on principle.   10:16:03 PM    comment []

Quotes of the day from Olivier Cadot's course "Industrial Policy and International Competitiveness" "Theories cannot be proven.  They can only fail to be disproven." "I don't know whether this story is true or not but I'm going to tell it anyway, it's so symbolic..." [He proceeds to tell a story about a charter bus on its way to an anti-globalization rally; half of the bus was filled with Indian farmers who had been sponsored by an unknown benefactor, the other half was filled with Austrian skinheads.  One half of the bus gets drunk and beats up the other half.  No points awarded for guessing which side did what.] "Also, there's the fact that anti-foreigner ideology is the easiest to sell..." [describing the differences between the European Commission and the European Council]  "The European Council, on the other hand, is a great big fair where lots of horses are traded." [quoting a French newspaper's description of Jacques Chirac's disastrous decision to dissolve parliament in 1997 under advice from Dominique de Villepin, who is now French Foreign Minister]  "There was a gas leak in the apartment and Chirac lit a match to see what was going on..."   9:44:29 PM    comment []

Quotes of the day from Professor Karel Cool's course "Industry & Competitive Analysis" "Just like on exams: if I don't know what he's asking, I'll just write what I know!" [this is not a quote, just a reporting that we learned about "time-compression diseconomies", a term that I find hysterical.] [on maintaining competitive advantage vis-à-vis the replacement rate of your market] "Lots of countries have magazines like 'Seventeen' or '21'.  How long are you in the market for a magazine called 'Seventeen'?!" 9:34:31 PM    comment []

Quotes from Marco Giordani, CFO of Gruppo Mediaset, who graciously came to Insead to address Professor Annet Aris' class "Value-creating Management of Media Companies".  I am not making up that course title. [responding to a question about daytime talk shows, and how to deliver better value] "I mean, five dancers to four dancers, does the audience change?  Maybe they should be better looking, or not, does it matter?" [addressing a charge that the success of Gruppo Mediaset television in particular and Italian media in general is due to strong sexual content] "Don't forget that the Pope and the Church are watching us!" [explaining why Gruppo Mediaset had invested in Albacom] "Look, it was 1996.  Convergence was very popular."   9:28:40 PM    comment []

Drivers in France are quite well-behaved.  Trucks stay in the right lane, and other drivers stay in the middle of three-lane highways.  Only people who are actually passing use the leftmost lane, and when someone comes up behind you, you move over immediately.  This is discipline, and it is wonderful to see in operation. Un petit conseille: if you drive up behind a car that is doing 135km/h in the leftmost lane (which, from the above passage, you would surmise is a rare sight indeed), and you flash your lights and it doesn't pull over, don't try to pass it on its right, in the middle lane.  You'll flash past and see two men with funny hats grinning as a spinning blue siren light puts funny shadows on their faces.  All the cars behind you will laugh because you didn't realize that it was the French equivalent of an unmarked car. At least I can identify the special license plate now. 9:09:09 PM    comment []