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The Devil in the Deal, by Kim Meredith
We all do deals, big ones, small ones, and in between. The purchase of your house or business, the lease, raise, job, or who will look after the kids for the weekend. I mention this only because I cannot think of anyone who would not benefit from reading this very accessible book.
The author, Kim Meredith, spent a significant part of her professional life doing deals and now teaches others what she has learned. “The Devil in the Deal” is fifty such teachings.
When you run your finger down the list of the world’s richest people you will quickly see that they are, first and foremost, dealmakers. Lest you think that this puts them into a special category of people who have unnatural deal making abilities, it is worth noting that every kid appears to be a brilliant dealmaker. Consider the following deal making traits that so many children seem to have been born with.
Children know that if you don’t ask you don’t get. They also seem to have a plethora of ideas and alternatives with which to close the deal. They don’t take “no” as your final answer. They are ready to proffer alternatives, and often with wily creativity. They are happy to link bedtime with the trip to the Lion Park, or bathing without a fuss to an ice-cream, or being quiet to not having to eat their vegetables. And, unlike the adults, they don’t seem to care about the ego issues and ‘losing face’. (Meredith makes effective use of various familiar examples and analogies that make the complex simple and memorable.)
A full fifth of the book is devoted to preparing for a deal. This is not “back of an envelope” work, it is the painstaking rigour of clarifying all the issues that are involved in the deal and then to prioritising them according to your desired outcome. This will help you address three critical facets of the process: The identification of what you are likely to get from the other party, what would be the lowest you could go, and what your opening offer should be.
Sitting down and doing the hard work will also help you identify your strengths and weaknesses as well as theirs. Your aim in a deal is to get everything you want and can realistically expect to get, and nothing less.
To get what you want you need to be aware of what the other party needs from a business as well as from a personal point of view. If you can offer them “a carrot”, something that they desire, you are more likely to get what you require in return. Of course, “carrots” only work if they are of value to the other party. Offer a lion a carrot and he will probably eat you instead, offer him an impala and you may well have a deal. Mediocre dealmakers, Meredith contends, believe that considering what your counterpart wants from the deal at a personal level, is a waste of time. It is prudent never to forget that you are negotiating with a person, not a company.
The section on preparation opens with the quote from Benjamin Franklin, “Failing to prepare is preparing to fail.” Consider only one aspect of the process, your closing strategy. If you have not prepared you probably only have one close, and if that is not possible it will be you thinking on your feet against their carefully crafted strategy. No contest.
Rigorous preparation also has the advantage of allowing you the opportunity to identify and bolster your power in the deal-making process. This is not an inconsequential issue when you understand power as the leverage you need to get what you want. When you cautiously and carefully consider who needs the deal, what are all the “carrots” you can offer them to get what you want, and how can you influence their perception of you, your power could increases consequentially.
In the deal-making encounter what you communicate is going to determine a great deal about the outcome. If you give away the farm you are unlikely to get it back so you are well advised to communicate clearly and carefully. One of the guides Meredith suggests is to use the format “If you…, then I…” “If you do this for me, then I will do this for you.” If you are asked for a concession, you need to determine what it is worth to them so you can get a concession in return that is of real value to you.
One of the differences between the professional dealmakers and the second tier is the use they make of adjournments. “It is at middle-management level that people seem to hold the distorted view that taking time to catch one’s breath is a weakness,” says Meredith.
The book is full of practical gems and sound guidance. It is an accessible and entertaining way to introduce yourself to the field of deal-making if you are new at it and a valuable refresher for the seasoned.
Readability Light +---- Serious
Insights High --+-- Low
Practical High +---- Low
*Ian Mann of Gateways consults internationally on leadership and strategy.
