‘Negotiation is a science’
Stimulate unseen desire to tip balance of negotiation in your favor
IGM aims to enter 50 countries by 2020 by exporting knowledge business
By Kim Jae-kyoung
Life is filled with negotiations. They occur between spouses, parents and children, managers and staff, employers and employees, professionals and clients. No matter what you do or how old you are, you come across these situations on a daily basis.
You have to negotiate with your colleague for a lunch choice, with your boss for a budget plan and with your spouse for a vacation destination. Negotiation is a problem-solving process in which two or more people voluntarily discuss their differences and attempt to reach a compromise.
In the business world, having good negotiating skills is a must to ensure success. Depending on how well you can persuade your counterpart, the consequence can significantly vary. For this reason, business leaders always try to get the upper hand in every negotiation.
In a recent interview with Business Focus at his office in Jangchoong-dong, Seoul, Junn Sung-chul, chairman and CEO of the Institute of Global Management (IGM) stressed that what is most important in negotiating is to find the hidden interest of your counterpart.
“People have two kinds of interests. One is an interest that people express to others. The other is a hidden interest that people are not aware of. Once the unseen interest is excited, it can tip the balance in your favor,” he said.
“For example, at a price-negotiating table, you have to figure out that the person who wants to cut prices has also the desire to maintain stable prices in the long term. It is important to stimulate the unseen desire.”
The 62-year-old chief executive, who worked as a partner for Reid & Priest in New York, pointed out that it is important to understand that negotiation is regarded as a science, not a skill.
“In Korea, many believe that negotiating ability is naturally given but you have to realize that it is an ability you can acquire through education,” he said. “The reason Korean CEOs are not good at negotiating is that they did not learn it. Negotiating is a science,” he said.
“Harvard University launched the first negotiation course in the 1970s. Since then, U.S. law and business schools have introduced a wide variety of negotiation courses. However, there are few schools offering such programs in Korea. Education is key to improving negotiating ability.”
Against this backdrop the former vice chancellor of Sejong University opened a negotiation course at IGM in 2004. By January 2008, as many as 8,000 CEOs and professionals had completed the program.
Over the past few years, IGM has emerged as the nation’s number one CEO education institute, particularly for boosting negotiating skills. Founded in 2003, IGM is Korea’s most recognized management research and executive education institute.
“As a private think tank, IGM focuses on advancing the understanding and the implementation of global standards. Global standards combine Eastern and Western business practices that are critical for 21st century leaders.”
IGM’s pragmatic approach comes from the experience of expert faculty members who are committed to effectively translating knowledge into practice with programs teaching how to effectively deal with challenges that companies and leaders currently face.
Junn said IGM aims to become the world’s most respected and influential knowledge institute by 2020 by making inroads into 50 countries.
“Korea’s manufacturing companies have successfully made forays into overseas markets. However, you can hardly find a company that exports a knowledge business. IGM will play a leading role in exporting Korea’s management philosophy.”
IGM has educated over 9,000 CEO and executive graduates. Currently there are 2,000 enrolled executives, 28 percent of whom are CEOs and executives of large enterprises. It launched its Chinese arm, IGM China, in Shanghai in September. Among the alumni of IGM are POSCO Chairman Chung Joon-yang, Doosan Corp. Chairman Park Yong-maan, Hyundai Group Chairwoman Hyun Jeong-eun and Woongjin Group Chairman Yoon Seok-keum.
Junn recieved his bachelor’s degree from Seoul National University in political science, and an MBA from the University of Minnesota. He also got his Juris Doctor from the University of Minnesota as well.
The following is an excerpt from the interview.
Q: Are there any CEOs to model after as an ideal leader? For example, Steve Jobs or Jack Welch?
A: I would like to pick former GE CEO Jack Welch among foreign CEOs and Woongjin Group CEO Yoon Seok-keum among local leaders. They are the CEOs who fully understand values that are critical for the 21st century. They know how to arouse motivation among people and realize the values of the company.
In particular, Yoon is a leader equipped with both “transparency” and “creativity.” His management philosophy on transparency is well manifested in his efforts to prevent irregular activities, such as hiring family members and bribery- or rebate-related corruption, which I believe helped Woonjin weather the 1997-1998 currency crisis that drove many local corporate giants to bankruptcy.
Q: Over the past decade, Korea’s major companies, such as Samsung and LG, have emerged as world-class players by adopting a fast-follower strategy. However, many argue that it is time to shift this strategy to become an innovator like Apple to ensure business sustainability. What is your view on this?
A: Creativity can be evoked by knowledge. In other words, without knowledge, creation is impossible. Therefore, to generate creativity and innovation, a company should make efforts to encourage its members to constantly be in learning mode. Only companies investing in education can become innovative leaders.
Q: There are growing concerns that the global economy will slip back into a double dip recession. What is your outlook for the global economy?
A: I don’t think that the world economy will fall into another downturn because of the resiliency of emerging economies, such as China and India. The current situation is quite complex. The United States is running out of ammunition in policy tools. However, I expect emerging countries to support global demand, which will sustain the global economy.
Q: The 2008 global crisis has changed people’s thoughts about markets and companies. What would be the biggest lesson from the crisis?
A: The Wall Street crisis exposed the danger of derivatives. The world is now well aware that allowing excess deregulation in the financial sector can cause disastrous consequences. However, this does not mean that the crisis raises the question on the basic philosophy of free market capitalism. In order to prevent another crisis, there should be proper regulations in place in the financial industry.
Q: Do you have a personal life motto that you follow?
A: My motto is to “become a giver.” When I was young, I worked hard to return to the employers 1.5 times my salary. After I became the CEO, I have always tried to pay more to my employees than they work. It seems that giving comes as a loss in the short term but in fact, it will return as a bigger gain in the long run.