The cornerstone of all business is the; art of business deals. That’s the way it is, the way it has always been. ~Max Markson
We live in a ‘deal’ economy where everybody needs to make ‘deals’ in order to succeed. We call people who sell illicit drugs on street corners ‘dealers’. There is the unsavory little word ‘ pork’ used in America to describe lucrative (and often seriously tangential) side ‘deals’ included in legislation to ensure its passage in Congress.
Also, there are ‘double-dealing’, double-crossing, ‘dirty-dealing’, fraud, and mortgage derivatives – all bad, bad words associated with ‘deals’. Politicians and Wall Street traders and investment bankers all make their livings doing ‘deals’. We tend not to trust them, tolerate them at best – especially these days. History is a wrecking yard of botched ‘deals’.
According to Douglas Glover, “deals are the gears of exchange: they make things work, they propel us into a future, willy-nilly, sanguine or otherwise. A good ‘deal’ is a moment of clarity, of sudden understanding, of practical adjustment: one absolutely fascinating element of ‘deal-making’ is the negotiation of functional equivalents between apparently incommensurable entities.
There is art and elegance here, along with the ambiguity and the ever-present possibility that the guy you are talking to is a crook. ‘Deals’ create its own hermeneutics, its own systems of definition, interpretation and appeal. In the end, the ‘deal’ sits at the center of every relationship; political, business, commerce, social…”
“I have found no greater satisfaction than achieving success through honest dealing and strict adherence to the view that, for you to gain, those you deal with should gain as well.” ~Alan Greenspan
In the article “The Growing Importance of Negotiation Skills and Deal Making” by Clive Rich writes: The most successful people in selling and deal-making are those who are the most effective negotiators. Effective salespeople know the importance of managing the three essentials of successful negotiation; attitude, process, and behavior.
Research shows that good salespoeple have a strong ‘attitude’ to win , and they also know that a win for the other-side (customer or partner) is critical for a lasting partnership: ‘Win-win’ is the most effective selling strategy, and so is negotiating ‘attitude’. Effective salespeople know how to manage the negotiation ‘process’.
Most negotiations follow a set pattern, with a number of recognizable and distinct stages. If you know what stage you are at and how to handle that stage, then that automatically gives you an advantage…The first stage is ‘preparation’: It’s an investment of time – fail to prepare and you prepare to fail.
The next stage is ‘climate setting’ for the negotiation, for example: Engage with a ‘warm’ (friendly atmosphere), ‘hostile’ (very pressurized and fast-moving), ‘cool’ (very objective and data driven) or ‘wacky’ (fun and off-the-wall). The third and fourth stages are exploring ‘wants’ and ‘needs’: It’s important that each party understands what the other side ‘wants’. ‘Wants’ are organizational requirements like; price, quantity and delivery dates.
It’s even more important to understand what the other side ‘needs’. ‘Needs’ are the underlying emotional requirements that each side has from the ‘deal’. These are critical to understand, and yet they are often unspoken or misspoken, e.g., …’I want’, ‘I need’ and ‘I require’ are all far more effective than ‘Would it be ok if…?’ or ‘Could I possibly have?’
Different ‘behavior’ is apprpriate for different stages and different opponents – choosing the right behavior for the right occasion is critical: Sometimes ‘push’ behavior is called for – focusing on your own agenda. Sometimes ‘pull’ behavior is required – focusing on the needs of the other-side. This is when it’s important to listen, explore, and focus on common ground – all very useful in the early climate-setting and exploring stages.
The good salesperson or deal-maker knows that effective behavior is not just a question of selecting the right behavior for the right occasion, but also a question of ‘modelling’ that behavior effectively. Research shows that 93% of what we say consists not of the ‘words’ we use, but of the ‘music’ and the ‘dance’. The ‘music’ includes the way we use our voice – its pitch, rhythm, pace, tone.
The ‘dance’ is the way we use our body – our facial expressions, eye contact, gestures, the way we fidget. If you find that your chosen behavior doesn’t work it may be that you are either ‘out of tune’ with the required music or ‘out of step’ with the required dance, so the impact of your behavior is reduced…
“People get caught up in wonderful, eye-catching pitches, but they don’t do enough to close the deal.” ~Donald Trump
In the article “Making Deals: The Business of Negotiating” by Marvin Gottlieb and William J. Healy writes: We are all ‘deal-makers’ and we all make deals daily, whether you know it or not — no executive who sits down to cut a ‘deal’ wants to stake the outcome on instinct, intuition, or the force of another’s personality and position. You need a ‘plan’ for the deal.
Your reputation, and maybe your career, depends on it. Better deal-makers create a problem-solving, collaborative atmosphere that produces satisfying results for everyone. They turn dead-lines and the timing of the deal to their advantage, and gather information that strengthens the deal… and knows how to circumvent the power plays of others.
And since, you’ll inevitably go up against hard-nosed, positional bargainers from time-to-time, you’ll need to recognize and counter their tactics of– ‘all’s fair in love and war’. In the best deals, both sides must win; it must be a ‘win-win’ outcome, which can only be successful accomplished with an effective ‘plan’…
In the article “Final Meditations on the Wheel & Deal” by Douglas Glover writes: Making ‘good deals’ involves making ‘good decisions’ throughout and beyond the process of doing the deal: Deals that deliver ‘anticipated’ values and benefits. The process begins with the ‘formulation of clear goals’; and continues through the process until all anticipated benefits are obtained with a minimum of surprises.
The thoughtful deal-maker preserves value by tending to the relationship: The lifeblood of the relationship is effective communication; keeping the lines of communication open with all parties involved. A thoughtful deal-maker studies the ‘numbers’, and the business decisions behind each and every negotiating item on the agenda, knows there value, and cultivates a negotiating atmosphere that favors the desired outcome for both sides.
The ‘thoughtful’ deal-maker is aware of goals and is steadfastly focused: They are perceived to have the ability to satisfy needs for both sides and this is a source of power and influence. The thoughtful deal-maker sets the climate, direction, and content of negotiations… doesn’t ask their counsel (i.e., legal, financial) what to do, but asks to be educated on the alternatives, opportunities, risks, and means to handle them to achieve a deal that delivers the goals….
‘Preparation’ is critical for any negotiation, but in international negotiations it can be the difference between a good contract, while building a solid long term relationship with the other party, or a disastrous outcome. Understand the cultures, subtleties of the laws, and how you work with gatekeepers and middlemen to accomplish your goals.
Create an ‘agenda’ and a ‘roadmap’ of how you would like the negotiation to go and determine the various positions that your counterpart would likely take. Look at all possible risks with the negotiation and develop mitigation strategies for the positions that the other parties might assume. Know the ‘detours’ on your roadmap and how to use them, if necessary.
Some business deals can be completed on a handshake, but this has become the exception, not the rule in global business dealings. Most deals follow a flow of ‘pushing’, ‘pulling’ and ‘just letting go’. The secret to managing the agenda is to know ‘when to push’, ‘when to pull-back’, and ‘when to simply let the other party drive the discussion’. As you go through these iterations of pushing and pulling, always be cognizant of not backing the other party into a corner that prevents them from saving face.
Remember, you are trying to complete a deal and at the same time create a long-term relationship with the other party. The alternative is that you may win the battle, but in the long-term lose the war…it’s a delicate balance…
“The challenge for deal-makers is not just to structure a negotiation in which two rational adversaries would win, but to develop work-around that prevent adversaries from being thoroughly irrational”