EFFECTIVE HOSTAGE-NEGOTIATION

Earlier this week, the Philippine National Police embarrassed itself and the nation by bungling the outcome of a hostage situation. (Click here, here, and here for three accounts of the incident: by a local TV station, by Reuters, and by CNN.)

A good friend of mine sent me an email describing how Chinese authorities, in a situation with many similarities, handled their hostage situation. Here it is:

FIRST, I have three demands. Meet them or I shall kill this hostage.

SECOND, The authorities confer in the next room.

THIRD, The head negotiator speaks with the hostage-taker.

FOURTH, Negotiations continue.

FIFTH, Negotiations conclude.

SIXTH, The mess is cleaned up and life move on.

As you can see, the situation was resolved quickly, inexpensively, and effectively. To illustrate one similarity between this situation and the recent Philippine incident, the photo below shows the hostage-taker in the recent Philippine incident. It was was taken during his negotiation with the Philippine authorities.

Why wasn’t he just shot at this point?

Another example of the police’s mistake occurred when they attempted to shatter the bus windows with a sledgehammer. The windows simply bounced back. They should have used a spring-loaded pointed tool or even this $15 pointed hammer:

UNSAFE IMPORTS FROM CHINA

It can seem like a hassle when you learn that a product you recently bought has been recalled. Will you go through the hassle of returning it?

It depends, right? If the product was inexpensive, you may not.

Take flip-flops, for instance.

I received an email from Asia that contained these photos of injuries suffered by a woman who purchased flip-flops from Wal-Mart.

I googled it and was led from this site to this one. The latter belongs to the woman whose feet are apparently in the photos.

Quoting from her site's homepage:

For those of you who are not familiar with this story, I will sum it up for you.

I bought a pair of cheap flip flops from Wal-Mart. I got what appears to be chemical burns from them. I took pictures.

I was blown off by Wal-Mart, they actually told me to call China. I put up these pages because I was feeling a bit betrayed after their attempted dismissal and to my surprise, I have gotten several emails telling me that the sender is experiencing or has experienced the same thing.

Now it is September and the shoes are no longer being sold, but I can not seem to find much out yet, they are being very quite (sic) on the issue. They have also said that they only have 9 reports, actually, they said that in July, and they said the same thing in August, and they said the very same thing in Sept.

I am wondering what is going on here ... read my story and you will see what I mean.

Her account of the reception she received after she brought it to Wal-Mart's attention screams of bad customer service. Her story reinforced some of my emotional feelings about Wal-Mart. On the one hand, it's made many products more affordable. On the other, it's success has decimated many independent stores.

In this instance, what's galling is the indifferent attitude exhibited by the front line manager who dealt with her.

This is the letter she posted on her website that apparently came from Wal-Mart's vendor's representative.

WHY STACK LEGOs WHEN YOU CAN STACK EGGS?
What else can we accomplish?

I enjoyed LEGOs growing up. I wholeheartedly recommend them as educational tools.

But eggs! Now that's something else. Here are two video links:

YouTube-2 YouTube-1

YTube-2 was created in response to the YTube-1.

YTube-2 runs for six and a half minutes but if you watch it, you'll notice it took longer to stack one egg on top of another. That's only one egg on top of another.

How long do you suppose would it take to construct a city consisting of stacked eggs?

I don't know but it can be done. In China, at least.

REMEMBER SCHWINN BICYCLES?

How bad management destroyed an American icon.

Our personal accountant was (and, may be, still) married to one of the manufacturing executives of Schwinn Bicycle Co. She was our accountant from 1989 until they moved to Colorado in 1994. She was our accountant for both our business (printing) and personal affairs. We had several good discussions about Schwinn’s decision to outsource practically all of its manufacturing to China.

It began with the decision of two generations of Schwinn family descendant. The first descendant inherited a bureaucratic and complacent company. He decided to stay the course and that must have contributed to Schwinn’s failure to recognize the BMX craze that began in the 70s. This was followed by hybrids (road and off-road models). Schwinn missed that too. Then, the market started looking for more exotic metals (like titanium and much later, carbon fiber) to use for bicycle frames. Schwinn also missed that.

Schwinn lost market share and, worse, visibility among the younger generation. Management decided to look overseas for a solution. They decided to downsize and outsource manufacturing. (Of course, terms like “downsize” and “outsource” did not exist at that time but they accurately describe their activities.) Along the way, they antagonized their suppliers and dealers. Their suppliers entered the U.S. market themselves. Their dealers defected. Good grief, what a mess!

Their moves were all band-aid solutions. Schwinn’s decline continued. At about this time, the second (and final, as it turns out) generation took over.

(FYI: New tabs or windows will open for each hyperlink.)

As this Wikipedia article states, this descendant was a great believer in MBAs. (This degree was in its ascendancy at that point. I recall reading an article questioning whether the management of business could really be taught in schools.)

At any rate, the vicious cycle continued. In addition to quality and supplier problems, engineering and marketing were slow to catch up with trends. I suspect that the centralized decision-making had a lot to do with their lack of nimbleness.

As the Wikipedia article states, the firm declared bankruptcy in 1992 and Zell (the Chicago billionaire who now owns The Tribune Co.) bought it. Zell moved corporate to Colorado and that’s when our accountant relocated with her husband to Colorado.

In 2004, another Schwinn descendant, was featured in an article by the Washington Post.

This last one is a beauty. It features a timeline. Read the entries from 1975 on.

This story has many business management-related lessons. Most of them, in my opinion, stem from fossilized management.

Just in case, those links no longer work, I saved archive copies:

1. The Washington Post article
2. The Wikipedia entry