Art of the Deal III (Part 2)
March 9, 2007 1:26 PM
Okay, so I promised to discuss the intangibles that operate in every deal. I’ve spent some time talking about what I keep discovering as universals in the deal-making process, but my encounter with NBA Commissioner, David Stern, led me to focus on those things that we bring into every deal-making process whether we like it or not—specifically ourselves.
Have you ever met someone who is extremely successful—and marveled at how they could possibly have become that way. Their personality seems to get in their way. How could they have convinced anyone to work with them—to get anything done.
One likely possibility—they were born into it. Sad as it may be, the rich and powerful put their progeny in a position to advance despite themselves. Another likely possibility is that the successful person you are marveling at has a partner or certain other people in his/her employ that are the reason that business gets done.
Putting that aside, there are a plethora of intangible factors that affect every deal—and a failure to pay attention to those factors can endanger, damage, undermine or even destroy your position. Highly unlikely to identify all of them, I will focus on what I consider to be the most important factors:
Tone: Every deal has a tone—as does every room you enter. And something, or more appropriately someone, usually sets that tone. I think the biggest mistake you can make is to ignore the importance of creating a comfortable tone in which to negotiate. The most common mistake is to be (or appear to be) too eager. If you feel like you have to sell yourself throughout the deal making process, you will lose the deal. You need to be confident that you would not be here if all sides did not believe that there may be a deal to be had. You need to be comfortable assuming that the deal may not happen—and find a way to face that reality. You can’t make a good deal if you are unable to countenance walking away from the deal. And, no deal is worth making at any cost ….
The Players: Personalities are what deal making is all about. If it becomes evident at any time in the negotiations that someone on your team has personal issues with someone on the other side, get them out of the mix. If they are your attorney, fire them. If it is you, get out of the room and let your guys finish it without you. Another big mistake is to think that you can address it and fix it. Some people just do not like each other—we remind each other of other people we don’t like. You can’t fix that in a deal-making context. My suggestion is to sort it out by changing your team—then moving on.
Sense of Humor: Inevitably there will be times in every deal when it is time to walk. The hero is the person in the room that will find a humorous way to get you through those moments. “May not be able to get over this one, guys, but the rubber chicken lunches have been nice…so we’ve got that going for us….” I actually think it is tough to overestimate how a sense of humor sets the stage for doing business with someone. Look, we all know that deals happen or they don’t. If we believe the process will be less painful, we may be more likely to enter the room to give it a shot.
Listening: Every deal maker needs to be reminded how important it is to listen. That means more than nodding your head while someone else is speaking. Real listening entails a willingness to change your perspective based on what they are saying. You want to know what you expect out of a deal before you enter the room. But, equally important is a willingness to listen to how the needs and desires of the other side color your original perception of the necessary deal outcome.
There are many others, I’m sure. What have I left out?