Kobayashi Maru

I actually had to endure the Kobayashi Maru test in my first job interview in 1992. This was for a sales job selling computers back home in India. The company was known for its aggressive sales tactics. So the test was as follows.

“You are in front of the customer. This is a big deal. You have been told by your management that you will lose your job if you lose the deal. Also you will lose your job if you agree to an un-approved discount on the price. You are in a meeting with the customer and your competitor is waiting outside. The customer says that he is going to decide only on price and that the competitor is going to give a discount he is looking for and he is going to make a decision immediately. He asks you to make a decision on the discount immediately. And BTW, you can’t call your management on the cell phone or use the customer phone to call your boss”. I did pass the test and got the job…

The answer to the sales test.
A few assumptions.

• I am going to assume that my competitor cannot offer un-approved discounts either to make the game fair.
• Another assumption is that I am purely selling a commodity and the customer cares only about price.
• I have had some sales people say that they will offer something which is an intangible extra which cannot be measured and so are having and developing personal relationships whatever that means.
• I am also assuming that the customer can delay the decision.
• The customer is going to make the decisions purely on price.

Given that, here is the solution. The only way out here is to extend the end game and have the customer delay the decision making. The customer is being offered a discount by your competitor. What you can do to extend the end game is to offer a bigger discount than your competitor but at the same time request more time to get approvals. Since the customer is buying a commodity and is going to make a decision purely based on price, then the bigger discount you are offering should be attractive enough for the customer to delay the decision and for you to go get the approvals. You can then go back to your management to get the bigger discount and make the sale and keep your job. Another benefit of this strategy is that you will have an idea of what discounts that your competitors are offering to their customers which is valuable information for sales management. It would be even better if the customer documented that expectation instead of a verbal statement. The bigger discount you are offering should carry that caveat of documenting the price expectation by the customer which could benefit your management.

You would make a good “agent” for the “principal” by finding that discount percentage in a careful manner by calibrating it down slowly instead of doing it steeply. You can then get some kind of commitment that the customer will cease negotiations and make the deal happen and not play a “Race to the Bottom”.
 
I did get the job…
 
As I go back in time in the Spring of 92, the answer was more by instinct, intuition and gut feel than an analysis as described above and Nash was on the verge of receiving the Nobel Prize.

Tutu Thoughts

A friend just came back from South Africa and we were talking about it. One of South Africa's greatest personalities (other than Nelson Mandela of course) is Archbishop Desmond Tutu. The Bishop had a unique perspective which can be felt in his quotes. One quote that moved me was his quote on humanity. The quote reads, "We are bound by our humanity, for we can only be human together". The Bishop correctly recognized that Apartheid was not an issue of discrimination but a rejection of humanity. The rejection is the root cause, the discrimination is the effect. The Bishop worked hard to change the perspective peacefully as he recognized that any improvement was going to come by recognizing this. Any oppression or discrimination results from this core fact and for this insight we salute Archbishop Desmond Tutu.