Ted Benson was sitting in a conference room in China. He and his colleagues had spent days negotiating a business contract with a local company, and the terms and pricing of the contract had been agreed upon.
Everyone was prepared to sign on the dotted line; Ted could see the balloons and champagne in the next room. But all of a sudden, one of the representatives mediating the contract came in abruptly.
“I’m sorry, we want 25 percent off your price,” he said.
Ted cast a look at his colleagues. With a nod to each other, they rose and gathered up their paperwork.
Testing the limits during international business negotiations
Ted turned to the rep. “Thank you very much, it’s been a pleasure doing business with you. We’re leaving tomorrow morning at 8 o’clock, if you want to discuss this further, that’s fine.”
Ted and his colleagues left.
An hour later, they got a frenzied phone call from the company retracting their statement; they wanted to sign the contract. Ted knew immediately what had happened; the Chinese businessmen had been testing him. They wanted to make sure that Ted wouldn’t sell for less than originally negotiated.
By refusing to budge, Ted had passed the test. Later, Ted’s team popped the bottle of champagne and all laughed about it.
It all started with a simple passion to work overseas
Ted Benson has over forty years of experience in international trade. He has learned through trial and error, time and again, the skills he needs to be successful in the industry.
In his spare time, he also marks course projects for the Forum for International Trade Training (FITT), and is helping compile an international business glossary for FITT.
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After graduating with a degree in geology, Ted started his career as a pilot in the air force, and had the opportunity to do some international programs. Later on, he found his calling in negotiating contracts for the Canadian Commercial Corporation (CCC), on behalf of Canadian companies.
Ted’s passion for Asian culture, coupled with his contracting experience, earned him a spot as a Trade Commissioner for the Foreign Service in Beijing. From there, he did exchange postings in Shanghai, Bangkok and Hanoi before returning to Canada and the CCC years later.
It was then that he saw the shortage in global trade skills.
Because I mark exams, I have to be current on my skills and knowledge. I see skills that are lacking, and incorrect impressions from those who currently work in this industry.
Learning from a ‘not so friendly’ pricing strategy
He recalls a Canadian company he worked with that would typically use penetration pricing as a way to enter a new market. The company was headstrong and their product had value. However, their Chinese counterparts had an expression: ‘Friendship Pricing’.
The Chinese company insisted that because they had such a large market, the Canadian company could give them a really good deal and the size of the market would more than make up for the lower margins the Canadian company might receive. The Canadian company, eager to tap into such a large market, agreed.
But because the Canadian company had agreed to the low ‘friendship price’ once, when they returned to do business in the future, the Chinese company made it a rule to start at that fixed price, and wager down from there.
Needless to say, it didn’t end well, and the Canadian company earned little to no profit.
Ted has specialized in large-scale sales in Asia for years, and through all his experience he has developed the skills to avoid such massive mistakes.
Attention to detail and cultural competencies are vital to success
Some years ago, a colleague of Ted’s worked with a Canadian company that had signed a contract with another company based in Shanghai— but the goods were late getting to China.
This kind of mistake could cost a company thousands of dollars. The Canadian company’s one reprieve? The company in Shanghai had forgotten to put a Liquidated Damages clause in their contract.
The Shanghai company argued that even though it wasn’t written in the contract, the intent of their agreement was a penalty for late delivery of the goods. Therefore, the Canadian company would have to pay the fee.
The Canadian company firmly stated that they operated on the basis of what was in the contract. The Shanghai company, enraged, argued all the way to the airport.
Ultimately, the contents of the contract were legally binding.
The Canadian company had been lucky, but many companies would have had to pay penalty fees.
You have to know every aspect of drafting a contract. You have to know that 70 percent of letters of credit are invalid in most cases, and that for every day you’re late delivering your goods to the buyer, a Liquidated Damages fee could be charged. Educate yourself on these terms; develop those skills.
But it isn’t just sales and negotiating competencies that can make or break your global trade deals. Culture and language skills are also crucial to success in foreign markets.
Years ago, Ted was enjoying his breakfast in a hotel in Beijing, and his competitors were sitting nearby. They hadn’t recognized him, as he was new, and they were speaking openly about their strategy in Chinese.
Ted listened carefully, and then raced back to his team to relay all the information he had gleaned. He knew how important his language skills were, right then. He currently speaks Mandarin, French, Thai, Spanish and a social amount of Vietnamese.
Skills development is key to building a global business career
While working in Vancouver for the CCC, Ted took the FITTskills courses and found that the comprehensive international trade skills he developed were essential to his job. He then went on to teach the FITT courses in British Columbia, and eventually became a project marker.
Ted believes that in addition to taking international trade courses to hone the skills needed for global business, the job profiles being developed through FITT’s ICS project will also be necessary to ensure global trade professionals are fully equipped to do their jobs.
The ICS job profiles will identify which skills are needed to do the jobs core to international trade. This will enable practitioners to build on their existing skills through professional development, and it will ensure students are learning the skills they need to begin their global business careers with the tools to succeed.
There is an absolute demand for these competency profiles. You can’t play tennis unless you know how to hold the racket, right? You have to have the skills.
What does Ted think is ultimately the key to success in global business?
“Enthusiasm is so important,” he says. “You have to enjoy the multi-cultural experience, be persistent, determined and focused on the objective.”
Are you interested in participating in our International Competency Standards Project? Join international trade experts from all over the world. Come be a part of setting world-class industry standards and defining exactly what it takes to compete in international business!