Readers are undoubtedly aware of the importance of professionalizing the art of negotiations both in Public and Private sectors. While the private sector is wholly focused on cutting costs to enhance profits,the public sector is oblivious of targets to be met within reasonable time frames. Consequently, opportunity costs incurred by the Government due to inordinate delays in concluding contracts is indeed mind boggling. The advanced jet trainer(AJT) for instance, took two decades to negotiate. The cost per aircraft continued to rise,modifications and modernization was a parallel process which also contributed to the spiraling costs. More than anything, we lost precious lives of trainee pilots since we did not have a suitable trainer to prepare them to man front line combat squadrons.
My earlier blog in Oct 2011 covered the deficiencies in hostage negotiations. During my recent visit to Australia a report from their Defence Material Organization(DMO) caught my attention.Let me quote,"Defence Force mandarins are calling for private sector help after admitting the organisation lacks the skills and 'general business acumen' to prudently negotiate billion-dollar contracts with America's military-industrial complex".
The Australians who have had dealings with the USA for decades have at least accepted the need to have professionally competent negotiators to bring value to their own acquisition programmes.
Since independence India has had to face strategic and tactical negotiation for settling cross border disputes,acquiring nuclear power plants,oil, military equipment and platforms costing billions of dollars and much more.
Yet there is no records of these proceedings for analysis or for teaching the art of negotiations. This is equally true of the private sector where record keeping for posterity is conspicuous by its absence. Personalities are trusted to negotiate, very often with least preparations and with minimum skills for it. When a deal is struck with a more proficient supplier, much is made of a win-win formula, the value of which is never substantiated over time.
The answer lies in introducing negotiations in all business school curricula, sending serving bureaucrats,men in uniform and private sector managers for courses in reputed institutions overseas or in India. We need to create a cadre of well trained negotiators in selected areas where continuity is of significance. SALT treaties between the erstwhile Soviet Union and USA were negotiated by the same group of people who met for decades.More importantly, given that equipment worth over a 100 Billion $ are on the cards for acquisition in the Ministry of defence alone, it is imperative that we form joint teams from public and private sectors to provide level playing fields to counter the very experienced commercial negotiators who are bound to descend on us.
A word of caution, some of our well known academic institutions which claim to teach this subject have none or only a few with hands on experience of live negotiations,leave alone case studies of value.
This is a good time to clean up.
My earlier blog in Oct 2011 covered the deficiencies in hostage negotiations. During my recent visit to Australia a report from their Defence Material Organization(DMO) caught my attention.Let me quote,"Defence Force mandarins are calling for private sector help after admitting the organisation lacks the skills and 'general business acumen' to prudently negotiate billion-dollar contracts with America's military-industrial complex".
The Australians who have had dealings with the USA for decades have at least accepted the need to have professionally competent negotiators to bring value to their own acquisition programmes.
Since independence India has had to face strategic and tactical negotiation for settling cross border disputes,acquiring nuclear power plants,oil, military equipment and platforms costing billions of dollars and much more.
Yet there is no records of these proceedings for analysis or for teaching the art of negotiations. This is equally true of the private sector where record keeping for posterity is conspicuous by its absence. Personalities are trusted to negotiate, very often with least preparations and with minimum skills for it. When a deal is struck with a more proficient supplier, much is made of a win-win formula, the value of which is never substantiated over time.
The answer lies in introducing negotiations in all business school curricula, sending serving bureaucrats,men in uniform and private sector managers for courses in reputed institutions overseas or in India. We need to create a cadre of well trained negotiators in selected areas where continuity is of significance. SALT treaties between the erstwhile Soviet Union and USA were negotiated by the same group of people who met for decades.More importantly, given that equipment worth over a 100 Billion $ are on the cards for acquisition in the Ministry of defence alone, it is imperative that we form joint teams from public and private sectors to provide level playing fields to counter the very experienced commercial negotiators who are bound to descend on us.
A word of caution, some of our well known academic institutions which claim to teach this subject have none or only a few with hands on experience of live negotiations,leave alone case studies of value.
This is a good time to clean up.
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