Bend, Not Break

by Ping Fu

  “Thanks,” Jon said in a low voice.

  I continued: “We probably both said some ugly things to and about each other back then. But the truth is, I learned a lot from you. Without observing you and your team in action, I wouldn’t ever have dreamed as big or imagined what might be possible for Geomagic. I really wanted to thank you for that.”

  By this time, Jon had become a little emotional. He said, “I’m so glad that you reached out to me and we had this talk, Ping.”

  Jon and I remain friends to this day. Whenever reporters try to make him out to be a villain, I leap to his defense. He has thoroughly impressed me by never saying one bad word against me in public or to the press. When asked about his time at our company, Jon always says, “I admire what Ping Fu did with Geomagic.” Jon even advised my team on Russia when we first started working there, and we found his insights invaluable.

  —

  The Buddha famously asked, “Who can say what is good or bad?” That question has proven itself a source of great comfort in my life. Good people can make poor choices; and bad contracts can turn out to be excellent decisions. Good and bad is not a matter of black and white; in life, we are regularly confronted by shades of gray.

  When I was young, Shanghai Papa made me memorize many classical Chinese stories. Here is one of them:

  Among the people who lived close to the border, there was an old wise man who led a kind and peaceful life. Without reason, his horse escaped one day and fled into barbarian territory. Everyone in the village pitied him. But the old man said: “What makes you think this is not a good thing?”

  Several months later, the old man’s horse returned, and a superb barbarian stallion accompanied him. His neighbors congratulated the old man. But he said: “What makes you think this cannot be a bad thing?”

  The old man’s grandson enjoyed riding the new horse. But one day, he fell while riding and broke his hip. Everyone pitied the old man once again. But he said: “What makes you think this is not a good thing?”

  One year later, a large party of barbarians invaded the border region. All the men from the village drew their bows and went to battle, where nine out of ten of them died. But because he was lame, the old man’s grandson did not have to go to war. His life was spared.

  “Who can say what is good or bad?” is a widely known Buddhist teaching about radical acceptance and nonjudgment. My life journey has taught me not to count on a better outcome before life presents you with it, which is quite different from the Western desire to “think big.” Perhaps—like my arrival in America at age twenty-five with no language or relevant career skills, or my stepping down as CEO of Geomagic only to watch it stumble—an unpleasant event will open new doors and teach even greater lessons. It often does. I know that I am a wiser, more compassionate person with a deeper understanding of myself and the world as a direct result of looking at “hardship” and “success” through a different lens. Our choice is how to interpret what happens to us on our journeys and how to treat the people we meet along the way. Our choice, always, is to love and to understand.

  { SEVEN }

  The Number One Strategy Is Retreat

  NEGOTIATIONS AND EXPANSION: 2002–2005

  THE CHINESE HAVE a proverb: “The number one strategy is retreat.” I have often called it to mind during times of personal crisis. Mao Zedong famously used this tactic in battling for control of China in 1945. When it became clear that he would not be able to conquer Chiang Kai-shek’s Nationalist army—which was backed by Western nations—by fighting in the cities, Mao retreated to the countryside in what came to be known as the Long March. He built up his peasant army and starved the cities of their food supply. Eventually, Mao won the Chinese Civil War and claimed the role of China’s leader, driving General Chiang and his troops to Taiwan.

  Time and again, we witness the harm done by people’s unwillingness to compromise, no matter what the cost—in war, divorce, or politics. We underestimate the value of stepping back because we are trained to perceive a willingness to make concessions as a weakness, or looking for alternatives as being inconsistent. Yet my childhood taught me that retreat is not about being weak or allowing others to manipulate you. It is about finding an alternative solution. “The number one strategy is retreat” holds true in the business world as it does in other realms of human relations.

  Not long after I resumed the CEO role at Geomagic in 2002, I realized that I didn’t know how to negotiate. Business would suffer if I did not quickly develop this critical skill. Whether arranging contracts with customers, setting priorities with employees, creating quotas and commissions for the sales team, or establishing target delivery dates and feature sets with engineers, I needed to grow my ability to listen with respect, communicate with clarity, and influence with authenticity in order to reach agreements.

  As I so often do, I wound up wandering into a bookstore in search of answers. In the business section, I found the bestseller Getting to Yes by William Ury, Roger Fisher, and Bruce Patton. I loved the book, which lays out a concise yet compassionate method for achieving desired outcomes in negotiations. The book’s principles align to an uncanny extent with my Chinese philosophy of being open to seeing the opposing view in life. I felt validated, able to look back with pride on how I had handled challenging situations as a child and teenager. It was as though I had a personal connection to the authors. (Years later, I had the good fortune of meeting Bill Ury face-to-face. I thanked him profusely for the positive impact he has had on my life.)

  Getting to Yes talks about “going to the balcony” during the negotiation process—giving yourself and the other party space to think clearly and gain a big-picture view. It calls to mind another of my favorite Chinese proverbs: “Take a step back: the ocean is wider and the sky higher.” Overall, the book emphasizes how important it is to approach the negotiating table with respect for the other people involved and a global sense of our interconnectedness as human beings. You must do this, the book instructs its readers, even if you don’t agree with what the other party has to say. You will be most likely to attain positive results if you come from a place of believing in people’s inherent goodness.

  Negotiating is not about winning a battle, or even positioning yourself to win. It is about not getting into a fight in the first place. By resolving conflicts before they escalate, respecting mutual interests, and engaging others with compassion, you can achieve something far greater than victory: peace.

  —

  An opportunity to put the lessons from Getting to Yes into practice arrived quickly. In 2002, when Geomagic was still teetering at the brink of bankruptcy and I was not drawing a salary in order to keep us afloat, two large multinational technology companies served us with a lawsuit. The sheriff walked right into my office to deliver the subpoena. My heart pounding, I tore open the envelope. Two customers, both large global companies, claimed that Geomagic had violated the non-disclosure agreement (NDA) while negotiating business contracts with them.

  I immediately called a meeting with our board members. We all cried foul. “We need to fight this! We have done nothing wrong. This is a typical tactic deployed by large companies in order to threaten a small company into giving them a better deal.”

  Our corporate attorney, on other hand, expressed reluctance at diving into a lawsuit. “I have two big concerns,” Fred Hutchison explained. “First, these are massive multinational corporations who have millions to spend on lawsuits, whereas we have almost no funds at our disposal. Second, one of the companies is based in New Jersey. The courts in that state are notorious for their protectionism. They undoubtedly are going to side with one of their largest employers.”

  Fred is a highly respected attorney specializing in high-tech start-ups, so we all valued his opinion. I asked him what we should do. “You need to find a litigation attorney who is licensed in the state of New Jersey,” Fred advised.

  Th
at afternoon, I went on the Internet and began searching for a firm in New Jersey to represent us. It proved to be quite a challenge. The first attorney I called said, “Ping, you sound like a nice person. I’d like to help, but I can’t.”

  The second attorney asked, “How much money do you have to defend yourself?”

  “Geomagic is a struggling start-up,” I replied.

  “I’ll get back to you,” he said, and hung up the phone.

  The third attorney I contacted gave me another polite no, but at least she explained why. “Ping,” she said, “I know this is not what you want to hear, but you are the defendant. Even if you win, we can’t collect any money from the corporations who are suing you—there is no contingency fee. We would have to collect our payments from you, and your company is cash-poor right now. I’m sorry, but this case just doesn’t make sense for us to take on.”

  I refused to believe that there were no attorneys willing to represent us. I changed tactics and started searching for the best intellectual property (IP) firms in the country who had offices in New Jersey. My rationale was that a larger firm might be willing to take more of a risk on a small client like us. What’s more, a great defense attorney ought to hold dear the value that everyone, regardless of money, is entitled to representation. My instincts and trust in the American legal system paid off.

  My search landed me on the Web site of Hale and Dorr, LLP, one of the nation’s top IP firms. I checked with Fred, who confirmed that they had a great reputation. As I looked up the profiles of their various attorneys, my eyes were drawn to a picture of a junior partner, Victor Souto. I picked up the phone and dialed his number. Miraculously, his assistant patched me through. I spent a few moments introducing myself and explaining Geomagic’s situation.

  “Why are you talking to me?” Vic asked. “Did anyone refer you?”

  I had little hope, given the rejections I had received thus far, but I had nothing to lose, either. “No references,” I said without editing my thinking. “I need the meanest defense attorney possible to take on our case. Your picture on the firm’s Web site called to me. It told me that you are fearless—scary actually.”

  Vic started laughing. “That’s some criteria.”

  We spoke for a while longer. It turned out that Vic knew of and respected Fred.

  “So,” I said, taking a deep breath, “will you represent us?”

  “I’ll book a flight down to Raleigh-Durham tomorrow,” Vic replied. He did not even ask for a retainer.

  —

  Vic and his assistant arrived from New York City the next day. He proved to be a compassionate and intelligent litigation attorney.

  I told Vic that I didn’t understand why these two large companies would sue us. I had met with the executives from each organization separately many times in the past, and we had always enjoyed a friendly, collaborative relationship.

  After we had reviewed the case in detail together, he said to me, “Ping, winning is losing in this case. Geomagic will run out of money before you even get to court, not to mention the time and energy you will waste if the case drags on for years. If you want me to fight, I will fight for you. But to what end? You’ll just wind up stuffing my pockets and those of the other attorneys on the case.”

  I learned from Vic that in New Jersey’s local courts, if we won the case as a defendant, we would walk away without penalties. This was the best-case scenario. If we were found to be even a little at fault, we could end up paying all the legal fees for the companies who were suing us along with whatever settlement resulted from the case.

  “Do you think that such powerful companies will ever admit that this problem is their fault?” Vic argued. “They have money to throw at this lawsuit. They will fight you until the bitter end.”

  I felt powerless to protect our company and our people. “Are there any alternatives?” I asked.

  Vic nodded slowly, his eyes narrowing. “There is one, but I don’t know if you will be willing to consider it.”

  “Go on,” I said.

  “You could back out and settle out of court,” Vic offered.

  “What do you mean?”

  “Well, you said earlier that you know the decision makers at these companies and have enjoyed a friendly relationship with them in the past. Do you believe they’re good people?” Vic asked.

  I nodded. “Oh, yes. I know them and have the highest respect for them.”

  “That’s good,” Vic said. “I suggest you call a meeting with them and tell them not to bring lawyers. I will not come with you.”

  “What would I do in that meeting?” I was puzzled.

  Vic said something that surprised me. “If you believe they are good people, you can rely on some common sense. I’m telling you—there is no way two white males would gang up against a woman. We are not raised that way. If you genuinely want to resolve the issue, one if not both of them will be fair and help you.”

  It seemed as though Vic’s suggestion was my best option. I immediately thought about how taking this approach would utilize the retreat strategy. It fit so well with my own experience and what I had just read about in Getting to Yes. I called my contacts at the companies behind the lawsuit at once and suggested that we meet without our attorneys. Both graciously accepted my invitation. We set a date for two weeks out, and one of them booked us a conference room at the Marriott airport hotel in Newark, New Jersey.

  In the meantime, I had homework to do. I needed to find out exactly why the companies were suing Geomagic for violating the NDAs, something that I couldn’t imagine our employees doing. I also didn’t understand why the two companies were collaborating on the lawsuit, when previously Geomagic had been dealing with each of them separately.

  The events had occurred when Jon Field had been CEO. I discovered that salespeople who were no longer with Geomagic had handled the two accounts. When I investigated the details, it turned out that we had made an innocent mistake, but a mistake nonetheless. These two companies had been competing to sign exclusive contracts with Geomagic; they were competitors. We had signed an NDA with each company, which specified that Geomagic would not reveal their corporate identities. A Chinese firewall had been established within Geomagic to prohibit one team from talking to the other.

  One fateful day, a salesperson from each client team had approached the same engineer and asked him to send a beta version of our software to their prospective customers. They forgot to caution him about the firewall. The engineer, who did not know about the contract negotiations, sent the beta software to both companies in the same e-mail. As a result, the companies had learned about each other—they knew who else was bidding on exclusivity with Geomagic. This action had indeed violated our NDAs with them.

  I wondered why, rather than revealing the seemingly small, harmless error to us, the two companies had decided to team up and file a lawsuit against us. I speculated that perhaps they believed they would get a better deal on our software.

  “Maybe when they saw each other’s names on that e-mail, they realized that they would have more collective bargaining power with Geomagic as a team than as separate entities bidding each other up,” Vic agreed. “Legally, it doesn’t matter what their reason is in the end. They can find fault, and therefore you can’t win the case.”

  In addition to investigating the facts, I also prepared for my meeting by picking up Getting to Yes again. I studied it closely, then practiced several of the techniques. With my senior management team, I established my floor, the lowest deal I would accept in the negotiation. I also had coworkers role-play the parts of the two corporate executives with whom I would meet, asking them to act as devil’s advocates and disagree with every option I put forward. Could I leave a back door open so that they wouldn’t feel stuck? Could I actively show my respect for their opinions, even if they attacked my company or argued with every point I made? How could I seek out
and identify what mattered most to them?

  By the time the meeting date arrived, I felt ready for anything.

  —

  I flew into Newark that morning and met with the two executives—let me call them Adam and Bob for the moment—at the Marriott hotel conference room. Looking official in their formal black suits, they were friendly with each other and polite to me. I began by thanking them both for their willingness to meet me without their attorneys present. Then I took responsibility for our being there. “Please accept my sincere apology for our mistake. We never should have sent that e-mail revealing both of your identities to each other. The error showed that we didn’t have adequate firewall processes in place. I feel really bad about what happened.”

  The two gentlemen paid close attention as I spoke. Bob responded, “Well, Ping, there really isn’t much harm done here. You shouldn’t feel too bad.” Adam nodded in agreement.

  I continued. “Geomagic almost went bankrupt this past year. The truth is we have no money to fight this case. I called this meeting because I believe it is not your intention to put Geomagic out of business. There must be something else you want that is not expressed in this lawsuit. Can we talk about it and see if we can settle out of court?”

  The two executives hadn’t expected this. They were accustomed to people positioning themselves to win an argument, not asking for help. Their demeanors shifted as they leaned back in their chairs, staring thoughtfully at the ceiling. Bob once again led the way in responding to me. “You’re right—we certainly have no intention of destroying your company.”

  Adam nodded and then got to the point. “Ping, the trouble is that Geomagic filed patents in our field. We consider that unacceptable because you used the knowledge we had given you during our negotiations with Geomagic to develop these patents.”

  I caught myself reacting to what Adam had said, thinking, If you were after our patents, why didn’t you fight us in patent court? This is not fair. But I had practiced enough in the office before the meeting to keep myself from saying anything aloud. Retreat is the best strategy, I reminded myself.