Value is key
Wednesday, 7 September 2016 | Admin
There is a tendency to think that a dealmaker must “win” and the other side must “lose.” If the only thing being negotiated is money, then yes, in that circumstance, a deal can be that straightforward. But I have very rarely been part of a deal scenario where money is the only factor at play. However, the goal of creating a good deal for both parties through mutual value satisfaction is not only possible, but also the only really sustainable way to do business.
To assist with the exchange of value, I have found it very useful to think through the deal landscape from the point of view of the other person before beginning discussions and, indeed, right the way through the deal discussion process. By doing this, you give yourself the best chance to potentially foresee the other side’s “must haves” and conversely their objections, thus enabling you to better assess their value drivers.
This begs the question “How do you know what the other person will value?” The short answer is to ask them. But then don’t just hear them; actually listen to the answers. Gaining an early awareness, and understanding, of each party’s value drivers is critical in building the requisite trust for the collaboration to eventually successfully transpire. A successful deal is where both sides achieve or receive what they need.
Extracted from DEALMAKING FOR CORPORATE GROWTH: THE 7 P APPROACH TO SUCCESSFUL DEAL EXECUTION by Simon Haigh, #54 in the NuBooks series.