I want to share with you a personal story. Since one of the companies I’m talking about is well known and this all actually happened, I won’t be naming names.
I joined a small, innovative company some years ago, and they were on the verge of closing a landmark deal with a huge company in their industry. When I say “huge company”, take my word that this company is a global brand and you likely have used its products.
Everyone needed this deal to happen in my new (small) company. The Board was eager for it. The venture capitalists saw its importance. The employees were eager for it to happen. There was just one problem, and it was a biggie: “deal fatigue” had set in.
Deal fatigue is when two groups negotiate so long, and make so little progress, that they lose sight as to why they liked each other in the first place. In our case, both parties had been locked in conference calls with expensive attorneys for multiple months, and when I joined the company and was asked to turn this around it was within days – perhaps hours – of completely and utterly imploding. It was ugly.
A few weeks later, we signed the deal and everyone was happy. Today I occasionally will cross paths with someone who was on one side or the other of that deal, and they’ll bring up how close it was to being irretrievably lost, and how the deal was “saved” in the nick of time. I want to boil down what we did, and why, in the event you see opportunities to improve your own strategic negotiations and partnerships. Readers who are familiar with Stephen Covey’s Seven Habits will see some of them at play here.
I fired the lawyers. This was a vitally important step. There is a time and place for lawyers to argue with each other over legal issues, but I sensed immediately that there were profound business disagreements between the two companies, and having a bunch of lawyers on the phone arguing with each other is great for law firm bonuses but rarely solves fundamental business disagreements. Since the calls were unproductive, stopping those calls immediately was critical.
I listened and documented. I then reached out to the top executive at the other company, and went through a process where he would articulate exactly what their concerns were, and why they were taking the positions they were. I didn’t argue. The only time I would speak was if I were asking a clarifying question. After I had spent a lot of time trying to understand their issues, I rigorously documented what I thought I heard and sent it to him to see if I “got it”. This accomplished several important things: first, he calmed down because for the first time he felt like someone was listening; second, I was able to isolate the key issues that needed real attention; and finally, I created a personal relationship based upon mutual respect.
I rekindled internal enthusiasm. The deal fatigue affected both parties, and although there was pressure to complete the deal, the emotional momentum within my own company had waned. So I took the unusual step of writing a faux press release “announcing” the deal, and shared it with the key stakeholders in our company, inviting them to comment. The press release represented a perfect outcome, and although that was unlikely, it accomplished two things: first, it made sure everyone was pushing toward the same objective, and second, it got people excited again about what this partnership could mean for our company.
Eventually, the process of listening/clarifying created the emotional space I needed to articulate our own concerns, and eventually I came to an agreement with my counterpart that we both could sell inside our own organizations. Since I thoroughly documented our shared agreement on each key issue (with my counterpart’s participation/agreement), we were in great shape once we re-invited the attorneys back into the process, and we finished it up from there without a lot of difficulty.
The signing of the agreement took place in the CEO’s office. Pictures were taken, backs were slapped, and a special Board call was convened to share the news.
Certainly not everything about that deal went the way we planned, which I may write about later, but in terms of this particular situation here are a some quick takeaways:
Business first. Legal last. Sounds simple, but companies frequently make this mistake because they only think they have business agreement in the first place. Usually the tough questions aren’t surfaced in a sales cycle when the participants are driving toward a deal.
Business agreements require active listening. Two ears, one mouth. Listen more than you speak. Ask more questions, make fewer assertions. Confirm understanding without judgement.
Closing your own stakeholders requires as much time as closing the other party. Internal objections are usually thornier than customer objections. Keep in mind that your counterpart has the same problem. If you want to see the havoc internal objections play on external negotiations, look at Congress.
Good luck on your own business partnership issues.