Issue No. 456 of Your Weekly Staff Meeting recommends a page-turner that checks all the buckets. Read Money Games: The Inside Story of How American Dealmakers Saved Korea's Most Iconic Bank. And this reminder: click here to download free resources from the 20 management buckets (core competencies) and click here for my previous review (giving equal time to North Korea!), The Great Successor: The Divinely Perfect Destiny of Brilliant Comrade Kim Jong Un.
Therapy for the Negotiator’s Nightmare: Whac-A-Mole!
After the co-chairman of the private equity firm Newbridge Capital (now TPG) interviewed Weijian Shan, former professor at the Wharton School, David Bonderman told a colleague, “This guy has no clue what private equity is about.”
But he liked Shan’s personality and hired him anyway. “I figured you could learn,” the chairman told Shan years later! And, oh my, he did learn. As a partner at Newbridge and co-managing partner of what became TPG-Asia, Shan led the team that facilitated a huge buyout deal—the acquisition of what used to be South Korea’s largest bank.
Honest (honest!)—this is a riveting read! If you’ve ever negotiated anything—or plan to—you and your team members must read this hot-off-the-press page-turner, Money Games: The Inside Story of How American Dealmakers Saved Korea's Most Iconic Bank, by Weijian Shan.
First—some fascinating facts for context:
• The Asian Financial Crisis (starting in July 1997) had devastated the economy of South Korea—and the profitability of their nationalized banks was extremely low. The return on assets “was just one-tenth that of world-class banks.”
• South Korea was on the verge of defaulting on its foreign debt—money was fleeing the country and “its foreign exchange reserves had plummeted to just $8.9 billion by December”—just enough to last a week or two.
• The International Monetary Fund (IMF) and World Bank offered a $58 billion rescue package—but with “conditions on austerity and restructuring, including a mandate to sell off to foreign investors two failed banks, Korea First Bank and Seoul Bank.” A new credit culture was desperately needed in the banking system.
Yikes! The author’s firm had been invited to buy a bank—but what was the upside? The author asked himself, “Who would want to buy a failed bank in a failed economy in the middle of the worst economic crisis the country has ever experienced?” I’m not a finance guy, but this technical term came to mind: lose/lose/lose!
Yet, “David Bonderman, co-chairman of Newbridge, had experience with failing banks.” His colleagues appreciated his contrarian style—“buying businesses most other investors would shun.” And if you’re still reading this review, indulge me with at least one more paragraph on why you and your colleagues must read this book.
In the contrarian book, The Contrarian’s Guide to Leadership, Steven B. Sample, the former president of USC, writes about the discipline of reading outside your routine—and why younger leaders, especially, should look for ideas outside of their established fields. So don’t reject Money Games because it appears to be a finance book. It is not. Money Games literally checks all of my 20 management buckets (core competencies). Check. Check. Check. It’s amazing! I couldn’t put it down. Here’s why:
STREET CRED. The author, Weijian Shan, is now chairman and CEO of PAG, a leading Asia-focused private equity firm that manages US$40 billion in capital. Prior to his role at Newbridge (the book’s setting from 1997 to 2004), he was a managing director of JP Morgan, and an assistant professor at the Wharton School of the University of Pennsylvania. His previous book (2019) chronicles several years, in his youth, working as a laborer in the Gobi Desert of China—and his journey and career in America. Shan holds an M.A. and a Ph.D. from the University of California, Berkeley, and an M.B.A. from the University of San Francisco.
METICULOUS METAPHORS. Concerned you won’t understand the financial terminology? No problem. In addition to his helpful appendix, “A Primer on Commercial Banking,” the author is a master at meticulous metaphors—serving up understandable pictures of complicated scenarios. Stunning, actually! Example: when the government lawyers wanted to use legal language unacceptable to Newbridge, Shan’s team added the phrase “to enable…” The author explains the term to the reader with a running shoes metaphor. (Shan’s a disciplined morning runner). Ah, now I understand! Brilliant!
WHAC-A-MOLE! Have you ever been up to your eyeballs in a never-ending negotiation only to groan—as Shan did when rushing to close the deal? “Hashing out deal terms with the FSC [the government regulators] was like playing Whac-A-Mole: As soon as we agreed on one issue, another would pop up.” Enriching the book’s novel-like suspense (deal or no deal?) are dozens of negotiating tactics (wrapped in integrity).
FULL REFUND OFFER. This one is spectacular! At one point, the negotiations had slowed to a snail’s pace because the government’s bureaucrats and lawyers were painstakingly reading every sentence and obsessing on every word—for fear they would “make costly and irreversible mistakes.” So the author made a radical offer. “We would not mind if they retracted their decisions if they later thought they had made a mistake; meanwhile, our side would keep our word for whatever we proposed.” (His metaphor to the reader: the “full refund offer” he gave his wife—she could return any gift he bought her when she didn’t like it, which was apparently often!)
THERAPY. Whew. You think your negotiations have been arduous? This book is helpful therapy for all negotiators. Your life is easier! The Newbridge deal to buy Korea First Bank was breathtakingly complicated—and involved painstaking detail with hundreds of people. There’s the teaser invitation, then the MOU, then the TOI (Terms of Investment), then the final document 15 months later (not a typo). Add in missed deadlines, marathon all-night sessions (pizza for lunch and dinner—three days straight!), conference calls at inconvenient hours (Hong Kong, London, Seoul, and San Francisco time zones—all hands on deck!), innumerable international flights, and one officer’s preference for faxes. (Oops— the hotel's fax is on the fritz. Oops—no paper in the receiving fax machine. Oops. Oops. Oops.)
THORNY. “Even though the TOI served as a basis for the final agreements, the documentation process was like turning a book outline into a real book. Imagine the thorny process of two proud co-authors who must agree with each other on every word. Now imagine if each author also had to consult a team of editors and assistants who also had to agree.” (As the co-author of five books, I now wonder what my co-authors really felt about me!)
Here are more leadership gems—don’t skip ‘em!
Seriousness Meter. Hong Kong’s weather service measures typhoons on a scale of intensity: 1, 3, 8, 9, and 10 (10 is the strongest). When the author (who lives in Hong Kong) decided not the take an official’s “seriousness serious anymore,” I thought…maybe leaders should use those numbers for a “Seriousness Meter” when negotiating.
Push Back. I won’t divulge the details or issue a spoiler alert here, but there’s a fascinating chapter, “The Hard Part,” that discusses a leadership misstep based on a cultural norm prevalent in Korea, also discussed in Malcolm Gladwell’s book, Outliers. Shan pushes back on Gladwell’s analysis—another reason to learn from contrarian thinkers. (Click here to read my review of Outliers.)
SMART Goals. In the chapter, “Change Agent,” read how one bank CEO set an easy-to-remember corporate target and how he would “explain it in meeting after meeting with both executives and employees, for hundreds of hours, until everyone was on board with his objectives.”
Slow. Normal. Fast. Was it a negotiating tactic, or did the South Korean regulators seek to slow down the sale of Korea First Bank for other reasons? They should have read this 2020 book (had it been written!): Fast Times: How Digital Winners Set Direction, Learn, and Adapt, by four McKinsey & Company leaders. Example: a normal product launch takes six months, but per Fast Times, a “fast” product launch should take only two weeks. (Watch for my review this month.)
The fast pace at Newbridge reminded me of Patrick Lencioni’s comments on “urgency” in his HBR article on core values (read my review). “The CEO who claimed his company’s core value was a sense of urgency, for instance, was substituting an aspirational value for a core one.” Newbridge actually lived their values!
Rocket Science. I had the privilege of serving on the Supervisory Committee and then the board of Christian Community Credit Union from 2007 to 2019, including six years as board chair. I’m not a finance guy (I’m a governance guy), but I did manage to pass the U.S. regulator’s financial literary examination. So I suppose that perspective heightened my interest in Money Games, but—trust me—your CFO, your CEO, your board members, and any curious leader or manager will appreciate this fast-moving book. (Did I mention “riveting?”) With 400 bank branches, you’ll learn why the new CEO formed a “Decision Science Department” (aka Rocket Science Dept. or today—AI Dept.). Stunning!
Finally, I was unprepared for the author’s “James Bond movie” reference when a banker showed Shan photos of a damaged car, riddled with bullet holes and a car seat stained with blood—the banker’s blood! (He had been HSBC’s bank head in Argentina.) Shan writes, “I had never thought of banking as a life-threatening occupation.” Ditto and Yikes!
To order from Amazon, click on the title for Money Games: The Inside Story of How American Dealmakers Saved Korea's Most Iconic Bank, by Weijian Shan.
YOUR WEEKLY STAFF MEETING QUESTIONS:
1) When you study the relational interactions (think the four social styles) and the cultural nuances in Money Games—you’ll experience a crash course in all 20 core competences (the management buckets). For example, the author learned (after a negotiating session) that his forceful defense of a methodology left little room for the other side to challenge him. But when a colleague told Shan that his methodology was incorrect, the author immediately apologized the next morning. How do you invite feedback—and what do you do with it?
2) Weijian Shan is a master at metaphors especially when explaining complex information and scenarios. Example: “…instead of cutting the oversized clothes to fit the body, he would grow the body into the clothes.” Think back over recent staff meetings—what was the most helpful metaphor someone used to explain a complex issue or challenge?
______________________________________________________
Kiss, Bow, or Shake Hands?
Insights from Mastering the Management Buckets Workbook
Weijian Shan, the author of Money Games, has an artist’s eye for detail, and an entrepreneur’s nerves for deal-making. Every chapter is embellished with fascinating cultural references and there’s something for everyone: Asian food delicacies, Hong Kong architecture (his 57th floor office overlooked Victoria Harbour), why the eldest Korean is given deference, the credit culture (few had checking accounts and credit cards in Korea in 2000), and much more.
When working internationally, understanding your customer is crucial. I’ve been blessed to visit more than 50 countries (often working with nonprofit ministries) and I’ve found two books, especially, to be immensely helpful:
• Kiss, Bow, or Shake Hands: The Bestselling Guide to Doing Business in More than 60 Countries, by Terri Morrison and Wayne A. Conaway, will help you avoid the proverbial faux pas. In South Korea: “Be careful not to overly admire an object belonging to another person. He or she may feel obliged to give it to you.” And “do not sign a contract or write a person’s name in red ink. This indicates that the person is deceased.”
• Leading Across Cultures: Effective Ministry and Mission in the Global Church, by James E. Plueddemann, asks what if your church desires to “partner” with a church in another country? Watch out, warns the author. “The idea of ‘equal partners’ is foreign to most of the world. Partnership in much of the world assumes a junior or senior member.”
For more resources in the Customer Bucket, click here.
___________________________________________________________
JASON PEARSON: UNEXPECTED CREATIVE. As you grow, are you planning to partner, locally and internationally? Don’t go it alone! Check in with Jason Pearson at Pearpod Media (branding, digital, print, and video).
___________________________________________________________________________________
Your Weekly Staff Meeting is emailed free one to three times a month to subscribers, the frequency of which is based on an algorithm of book length, nap duration, and client deadlines. We do not accept any form of compensation from authors or publishers for book reviews. As an Amazon Associate, we earn Amazon gift cards from qualifying purchases. PRIVACY POLICY: Typepad, Inc. hosts John Pearson's Buckets Blog. We use Mailchimp as our marketing platform for Your Weekly Staff Meeting eNews. By clicking (above) to subscribe, you acknowledge that your information will be transferred to Mailchimp for processing. Learn more about Mailchimp's privacy policy here.
Comments